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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (100677)	1/15/2009 9:32:02 AM
From: forceOfHabit	Read Replies (1) \| Respond to of 110194

Hawk, Then, if I understand you correctly, 5-6 billion people cannot reasonably expect to achieve the same standard of living as the American consumer? Well, no, not exactly. What I meant to say was that achieving something approaching our standard of living for all 6+ billion people of the world (rising to 10+ billion peak) requires a much more thoughtful and efficient use of our decidedly finite natural resources. (Natural resources being broadly defined to include things like oil, metals and minerals, and also ecosystems like forests, watersheds, oceans, and atmosphere.) I stand by my assertion that recent levels of consumption are unsustainable, but I didn't mean to imply that our standard of living was. For example, would it be sustainable for everyone in the world drive as many cars per capita as Americans? Unequivocally, no. Can everyone in the world enjoy fast, convenient, flexible transportation in and around their community? I am confident the answer is yes, with significant changes to our approach to transportation (More efficient vehicles and oil free alternative. More flexible and reliable public transportation, including vehicle sharing arrangements. More efficient long distance transportation (e.g. more rail than trucks). And whatever other innovations we will inevitably come up with when we really engage these problems. But enough of the airy-fairy stuff. The market opens in 9 minutes and I want to make money. If I understand the latter half of your post correctly you think going long US financials is worth looking at because "...financials have always led the way out of recession." And against this you might short European financials because "...European banks ... had been "gearing" up to even higher ratios for some time. I still submit that Europe is the next shoe to fall later this year. They have also see tremendous growth in their real estate prices." I like the idea of long financials, but maybe for somewhat different reasons. My reasoning is along the lines of the "inflation spiral" I mentioned in earlier posts. If all this money printing results in a (hyper)inflationary spiral (I think it will), then those who get access to the newly printed money first (banks) will benefit most (be hurt least). So maybe long a little JPM and GS (whose financial strength and close government ties put them first in line for new money). The trouble with this thesis is the timing of when the inflationary spiral starts, and how much pain the banks might suffer between now and then. I also like the idea of long strong banks and short weaker ones. I don't know much about European banks, but here I might say the play is long Canadian banks (which seem to be in much better shape than American ones) and short American banks (which seem to be much more exposed to mortgage lending, real estate, credit card debt, asset backed securities, you name it). But I don't really know enough to put my money where my mouth is on this idea. habit