tag:blogger.com,1999:blog-14963913.post1695760613251614226..comments2023-10-27T20:27:57.900-04:00Comments on Kid Dynamite's World: David Einhorn's NY Times Op-edKid Dynamitehttp://www.blogger.com/profile/17475987512856310577noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-14963913.post-8292341788685544032010-05-30T12:48:51.140-04:002010-05-30T12:48:51.140-04:00" (For this reason, higher short-term rates c..." (For this reason, higher short-term rates could very well stimulate additional lending to the private sector.) "<br />- I'm so glad someone else finally wrote this. The rock bottom rates clearly aren't making it through to small businesses and consumers (and the jury's still out on whether that is a supply or demand problem).<br />Why not lift them a little, and reduce the possibility of another bubble down the road?<br />While I'm still in the deflation camp - for demographic reasons over anything else, a ZIRP seems seems to be benefiting only the banks and the government - resulting in reluctance to address serious fiscal policy deficits, and of course more moral hazard.<br /><br />Disclosure - I trade/sell bonds - higher short rates would make my life easier... there I go talking my book.<br /><br />Just to play devil's advocate KD, your parking might be 0.25c more, but your car is probably 10 grand cheaper than it was two years ago :), especially if you buy used like I do!JPhttps://www.blogger.com/profile/05990669895595100151noreply@blogger.comtag:blogger.com,1999:blog-14963913.post-71447763451030146682010-05-27T18:13:32.073-04:002010-05-27T18:13:32.073-04:00The best work I've seen recently on inflation ...The best work I've seen recently on inflation is <a href="http://www.clevelandfed.org/Research/commentary/2010/2010-2.cfm" rel="nofollow">from the Cleveland Fed</a> (always your go-to bank on inflation, I find), where they disaggregate sticky from non-sticky prices. Non-sticky prices are very responsive to economic conditions. Sticky prices, by contrast, contain a component of inflation expectations. Those are the ones uoi watch.<br /><br />So, where are the sticky prices? As the <a href="http://macroblog.typepad.com/macroblog/2010/05/stickyprice-cpi-up-slightly-in-april-wait-what.html" rel="nofollow">Atlanta Fed notes</a>, <em>..the sticky-price part of the CPI that seems to be most forward looking is only limping ahead, up 1.25 percent in April, and is less than 1 percent on a year-over-year basis.</em><br /><br /><a href="http://www.cepr.net/index.php/blogs/beat-the-press/looniness-in-the-cause-of-deficit-reduction-at-the-nyt/" rel="nofollow">see Dean Baker has some critiques of the thinking</a>. Ignore the gratuitous sniping, a Baker specialty, and focus on the main points: that asset price changes are neither in- nor deflation, and price measures that include health care do not show inflation. To buy Einhorn's thinking here, you need to disagree with both, which I don't.<br /><br />The signals I track are not flashing inflation warnings. Like Einhorn I am talking the bigger portion of my book, of course. It'll be interesting to see who's right.wcwhttps://www.blogger.com/profile/16307608293310560164noreply@blogger.comtag:blogger.com,1999:blog-14963913.post-28291818129569874972010-05-27T15:52:30.872-04:002010-05-27T15:52:30.872-04:00the great thing about Einhorn is that he's not...the great thing about Einhorn is that he's not afraid to tell people what's wrong, because he knows they won't do what they should do to fix it! In other words, he was short Lehman, and tried to explain how they could fix themselves so that he would no longer be short. I view this piece similarly<br /><br />Einhorn does a terrific job of explaining WHY he is in the positions that he's in.<br /><br />it's usually a good assumption to ALWAYS assume that someone is talking their book - so then you have to get past that point and figure out if the argument is a good one or not! I think Einhorn's argument is a good one.<br /><br />WCW, i think the comments on that WSJ article are dead on: "Einhorn is telling us what he thinks. Naturally, he will have put his money where his mouth is. That doesn’t detract from the value of his comments."<br /><br />"So EInhorn has a rational basis for his investment positions and is willing to articulate his rationale. Good for him. He also wants to alert people to problems while there is still some time to respond with something other than full-fledged panic and mayhem. Good for him."<br /><br />also, WCW - if you are seeing deflation in your life, congrats to you. that's what matters. however, in my life, Concord just raised parking meter rates from 50c to 75c an hour - and the violation fine from $5 to $10! MASSIVE inflation ;-)Kid Dynamitehttps://www.blogger.com/profile/17475987512856310577noreply@blogger.comtag:blogger.com,1999:blog-14963913.post-22392018998487246422010-05-27T15:39:05.636-04:002010-05-27T15:39:05.636-04:00What Matt Phillips said (wsj.com)...we don’t blame...What <a href="http://blogs.wsj.com/marketbeat/2010/05/27/on-einhorns-blatant-gold-book-talking-in-times-op-ed/" rel="nofollow">Matt Phillips said</a> (wsj.com).<br><em>..we don’t blame Einhorn for using his bully pulpit to talk his gold book. And he might be right. Others are making big bets on the shiny rock. And Gold is up about 11.4% so far this year, as the S&P and Dow have fallen more than 3%. Still, we just wanted to call the book talking what it is.</em><br /><br />Couldn't have said it better myself, especially given where inflation data actually point (down, pace imaginary math and tinfoil-hat intimations).<br /><br />Full disclosure: my portfolio has a roughly 3% levered-long-gold exposure in the form of a high-political-risk junior gold. But I know better than to pretend it is a long-term inflation play.wcwhttps://www.blogger.com/profile/16307608293310560164noreply@blogger.comtag:blogger.com,1999:blog-14963913.post-73226765734370211402010-05-27T15:34:16.546-04:002010-05-27T15:34:16.546-04:00This is why I won't buy TIPS--who wants to own...This is why I won't buy TIPS--who wants to own something where the borrower gets to decide what the payment is (within certain limits)?But What do I Know?noreply@blogger.comtag:blogger.com,1999:blog-14963913.post-23329672325608022472010-05-27T12:34:31.197-04:002010-05-27T12:34:31.197-04:00This comment has been removed by the author.irrationalexuberancehttps://www.blogger.com/profile/05772420700972282324noreply@blogger.com