Playing Ball

To say the least amazing times.....

We have heard this week.....

1) Credit will shrink $2 trillion in 2009 in credit card related debt. Banks capital will not be high enough to lend for home mortgages also in 2009. The consumers get squeezed even more!
2) New predictions for $25 oil is in short order due to lack of demand particularly China and the USA.
3) All banks will have to raise yet more equity capital in 2009. And have to "shrink to grow."
4) That the reaction in commodities and the equity market will actually over shoot to the downside...just like they overshot to the upside...the "counter bubble."
5) Treasuries at these rates are now "priced to perfection" just like we used to say about .com and technology stocks in 1999-2000.
6) QFC's (qualified financial contracts)...the new rules being put in place by the FDIC requiring all institutions to detail all counter parties in all derivatives ...problem..."they (the banks) don't know the details because no one has ever forced them to know".....big problem coming...will it be like the mark to market accounting rule that hit so hard last year?? But the beginning of the end to these ridiculous toxic worthless pieces of paper.

No one knows what America's financial institutions will earn for the next five years....we do know they will pay zero taxes. This is a big problem that will be headline news for the next six months. The financial crisis is just coming out with all the States and their budget shortfalls.

Capital preservation remains a key focus for now.....maybe the bears sitting in treasuries will be right for a bit longer.

Dollar feels heavy, oil seems cheap (but gets cheaper by the day) and the Gulf Region is in real hurt now...so will be Russia and Venezuela...funny too Iran is no longer in the news.

Famous investors say, "Be afraid, Be bold, Listen to your kids, Embrace inefficiency, Heed your inner cockroach, Innovate, Become Swiss, Head for the hills."

Danny Boy likes to play with the big ball too.