ReutersDavid Einhorn of Greenlight Capital.
Posted on 10/19/2009 11:30:01 AM PDT by Ernest_at_the_Beach
NEW YORK (MarketWatch) -- Greenlight Capital manager David Einhorn said Monday that his hedge-fund firm is betting on the possibility of a major currency collapse and a surge in interest rates, citing ballooning government deficits in some of the world's most developed countries.
The hedge-fund manager, who warned about Lehman Brothers' frailty before it collapsed last year, also said financial institutions that are deemed as "too big to fail," such as Citigroup Inc. /quotes/comstock/13*!c/quotes/nls/c (C 4.57, -0.02, -0.38%) , should be broken up.
Reuters
Greenlight has been buying physical gold this year because Einhorn is concerned that efforts to save the financial system and fuel economic recovery are undermining the value of such currencies as the U.S. dollar.
On Monday, Einhorn said Greenlight has added new trades to this investment theme, buying long-dated options on much higher interest rates in Japan and other developed regions -- effectively giving the firm the chance to make big profits from a jump in rates. The options, bought from major banks, are tied to interest rates four to five years out, Einhorn noted.
"Japan may already be past the point of no return," he said during a presentation at the Value Investing Congress in New York.
(Excerpt) Read more at marketwatch.com ...
Lois Einhorn? Ray Finkle?
“...betting on the possibility of a major currency collapse and a surge in interest rates,...”
maybe he believes his timing will be better than those managing the Harvard Trust that just lost half a BILLION $$.
Thanks for the post.Einhorn is worth following
What’s sad is that when this whole thing goes south, guys like Einhorn, who were sounding the warning, will be blamed for profiting from what they predicted would occur.
Especially if the same party is in charge...
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Unlike Japan, the U.S. isn't past the point of no return,
the fund manager stressed. However, he criticized financial-reform proposals pushed by Treasury Secretary Timothy Geithner, arguing they provide a government backstop for the largest institutions, entrenching them further.
No institution should be too big to fail, Einhorn explained.
a cheery little piece. Thanks!
I’m going long in shorts futures..
And when the major banks collapse, how do you cash in your options?
he recommends gold.
Good thing wifey has that covered in her chest.. uhh, jewelry chests. ;-)
If they are exchange traded then the answer is the Exchange.
If they are over the counter, then you may be out of luck.
Finkle and Einhorn, Finkle and Einhorn, Finkle and Einhorn, Einhorn and Finkle
LOL, first thing that came to mind for me also.
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In conclusion: The REDISTRIBUTIONISTS- Public serpents, crony capitalists, CZARS and banksters - are angling to take almost $1.5 trillion dollars out of the economy in one poor policy or another beginning in 2010 and hand it to themselves in one form or another, out of an economy of less than $14 trillion; G7 governments are on the same path.
December 09 oil futures hit $80 intra-day today, partly in response to a weaker dollar today. I think next summer oil will move into the high 80s and gasoline will move over $3 in most of America. At that point, Pelosi, Reid, and the clowns in the WH will probably screw the situation up even more by demanding “windfall profits” taxes on oil producers. If congress is stupid enough to enact this new tax, then oil production will drop incrementally and oil prices will move even higher in 2011 and beyond.
We need major fiscal restraint, something like the Gramm/Rudman legislation, to rein in uncontrolled entitlement spending and pork barrel spending by the democrat-controlled congress. Unfortunately, Pelosi, Reid, and the WH appear to have no interest in spending restraint and instead want to impose new middle-class sales taxes and a new value-added tax (essentially just a fancy name for a sales tax.) All federal spending has to be paid for through three forms of taxation: 1) direct taxes, including sales and VAT taxes, 2) higher interest rates, and 3) higher inflation. I’m expecting all three forms of taxation to increase in the next few years until we get rid of this dreadful administration in 2012. True prosperity will be put on hold for most Americans until then, as taxes, interest rates, and inflation all increase. Income taxes on the middle class may not increase, but Pelosi & Reid will very likely push for new “hidden” taxes on the middle class through sales taxes and a new value-added tax.
Until we get entitlement spending under control, there will be massive pressure on the Fed to continue buying mortgage debt and other low-quality debt to create dollars that can be used by institutional investors to buy treasury debt. This is the indirect way that the Fed is now monetizing the federal deficit and creating future inflation. That inflation is effectively a tax on income and financial investments to pay for uncontrolled entitlement spending. I’ve been buying stock in companies that produce hard assets, such as oil, natural gas, precious metals, and base metals, and also buying a few commodity ETFs. That’s one way to protect your hard-earned investments from the ravages of uncontrolled liberal spending programs. The GOP also needs to support spending restraint and stop attacking the democrats for political gain any time they suggest reductions in the growth of entitlement spending. We need bipartisan responsibility right now and a summit meeting among congressional leaders to develop a plan to dramatically slow the growth of entitlement spending in the next decade.
This could mean the Free Trader Globalists will push their one-world currency on us a little sooner that we thought
This seems to fit here as well...
Drop in foreclosures called ‘very scary’
Mon Oct 19 2009 13:50:39 GMT-0500 (Central Daylight Time) · 46 of 51
RinaseaofDs to FromLori
Remember all the conspiracy theorists that said that the banks would one day ‘call all the mortgages’ so that they’d - overnight - own all the homes and put people out on the street?
This has literally happened, in that the properties are foreclosing/defaulting like mad, yet the banks are not anxious to snap up the property.
Funny when absurd scenarios come true and you find out how things play out in real life.
One simple but powerful step we should take to get entitlement spending under control is to apply means-testing to retirees who have already received more than they paid into the system in social security and medicare benefits. Just calculate the present value, in today’s dollars, of all social security and medicare taxes paid with a reasonable return on investment and an inflation adjustment. Then calculate the benefits received in today’s dollars, just using an inflation adjustment. Anyone who has already received more than he/she paid into social security in today’s dollars would then be means-tested and if they have enough income, their future social security benefits would be reduced or taxed more. Then do the same thing for medicare.
That’s the only fair thing to do for people under 40, because under the present tax and benefit system, higher income people under 40 are being absolutely destroyed financially by social security and medicare. Any person under 40 who earns more than about $60K is effectively an endentured servant of the United States, which now owns a large part of his income, and these young people will be getting hit with a huge negative return on investment by social security. That huge negative ROI subsidies the incredibly great deal that social security has been for many affluent seniors. I know because my late parents got that sweet deal too and I didn’t like paying for it.
Of course, we don’t hear one single congresscritter talking about the confiscatory taxes being imposed on higher income young people to pay for this super sweet deal for many affluent seniors, because congress is all scared out of their minds by the AARP and other aggressive, selfish senior lobbies. Well it’s time to change that cowardly behavior and call a summit meeting to get entitlements under control and stop these confiscatory taxes on young Ameicans, and also get cut our budget deficits back to reasonable levels.
California metal mine regains luster (- Mountain Pass Mine in the Mojave Desert.
Environmental Court suite seems to have gone away....since Chevron sold the Company ...to Friends of those on the Left....See post #8 by tcrlaf
Related article
The dollar collapse scenario that concerns Einhorn is certainly part of a double edged sword. It could happen, just keep in mind that at this point it has to come from international panic, since Bernanke hasn’t printed any money since February.
The smart way to play this market is to bet on volatility. Which ever way the pendulum is going to swing it is going to swing dramatically. Obviously if there is a dollar collapse, it will be huge. But a strengthening dollar will also be a major move in the other direction. Bet the volatility.
http://www.economicpolicyjournal.com/2009/10/einhorn-currency-death-spiral-ahead.html
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