Buffett deepens dollar worries

Financial Times ^ | March 5 2005 | Dan Roberts

[nopardons]

Okay! :-)

[<1/1,000,000th%]

So Buffett was buying dollars while the dollar fell against the Euro and we should believe him about the direction of the dollar??

Sounds like he's trying to talk the dollar down so he can keep buying for the later rally.

[nopardons]

I think that those poor shlubs just want an "easy" way up and think that they'll be given some secrets that they can use, by reading Trump's books/watching his show. But there is NO "easy" way and these people aren't "optimists",but rather, naifs.

[nopardons]

Oh noooooooooooooooooo....LOL

I'll tell you more in private! :-)

[durasell]

You know, I've lived in New York a long time. I don't have many illusions left about how the world works. Do you really want to pillage the last remaining few?

[nopardons]

Maybe not. ;^)

They are a funny lot.

[longtermmemmory]

I am surprised such "talking up" or "talking down" to advance your own contrary financial position is not illegal. Somehow it smacks of insider trading, but I am no securities expert.

[Cold Heat]

It would be news if a Republican did it.LOL!

I think that in the case of futures, the game is such that things like this are expected, and never are prosecuted unless it is a republican doing the talking up.

[Cold Heat]

Actually Longterm, I think Buffet's motives are not to make money on shorts, (just something he is playing), but to force the Fed to do a intervention and protect the dollar.

That would ease the pressure on China and make him a happy man!

But it would buy China more time to reform and we would pay that price in spades.

This is all about politics and China, with EU overtones.

Not about the dollar or the deficit in my opinion..

It's about Iraq, Iran and Bush preemptive policies, and not about the deficit, the debt, or the Eurodollar.

[longtermmemmory]

anytime I see an ad that says comodity X is going to go up, it usually means it is going to go down. Usually heating oil or gold.

There was also that case of a child who was talking up stocks in chat rooms in an effort to boost his margins.

oh well

Caviat Emptor.

[Cold Heat]

There was also that case of a child who was talking up stocks in chat rooms in an effort to boost his margins.

Yeah, that was over some penny stocks IIRC.

A market that the big guys ignore and abhor.

But they can freely do the same in the futures markets and in derivatives.

Life just ain't fair!

[nicollo]

If you asked any forex trader right now where to place money, a large number would say short the dollar. Why? The fundamentals are terrible.

A good time to start thinking contrarion, then.

Here's the paradox for you dollar shorts: if the dollar cannot support U.S. deficits that are driven by strong U.S. growth, then how can weak overseas economies support strong local currencies?

You can't have it both ways.

cc: nopardons

[nopardons]

Great reply! :-)

[Trueredstater]

Part of the situation is simple oversaturation of dollars. For example, Asian banks want to get out of the dollar partially because of overexposure to diversify their risk exposure.

While the EU economies are weaker right now, their debt levels are nowhere near US levels.

The trade deficits don't help for obvious reasons.

The problem with the contrarian perspective right now is there have been no shifts in the fundamentals to warrant it. The Federal deficit isn't meaningfully decreasing. The trade deficit isn't measurably improving (exports did increase last year, but imports increased at a faster rate). And, there hasn't been a cataclysmic event to shake out the problems.

[nicollo]

I just don't get how smart people like Buffy can't see outside of themselves. Nobody is disspassionate, especially when they love the deal, as folks here seem to defend Buffy.

Btw, I haven't heard anyone going much long on the dollar beyond $1.19 on the euro or so, where it was last Spring. I'm not that sanguine in the short term, but I damned well know that the euro can't hold it's own. Where's Buffy gonna go when the euro gets all weak in the knees?

Hang tough, Buffster, ya gonna need it.

[longtermmemmory]

Life is never fair but there should be a fair disclosure.

The sage of omaha knows if he had to disclose he is sitting on hundreds of millions of euros every time he said something bad about the dollar he might look a tad biased.

[durasell]

He's already said he was buying up euros...

[Cold Heat]

Well..............We know!

[nicollo]

The exact same argument goes against the dollar shorts: there's been nothing -- nothing -- that's changed over the past year either pulling down the dollar or, especially, driving up the euro. The trade and budge deficit's are unchanged or trending lower. Above all, the fundamentals read U.S.

What's happening is that the Forex is all a pu**y right now, just scared, and reaching for any little thing, cuz it's got nothing good to grab.

Btw, there are too many dollars out there, but it has to be that way since the U.S. is the only live wire there is. That's why the dollar won't strengthen much. But neither will the other currencies gain. When the dollar reserves tighten, and they will, you'll see it first in gold and oil. The amazing thing is that neither of those has broken further. They can't, for nothing but the dollar can sustain them... which gets us back to my original point...

[hugorand]

Buffet reminds of the guy that walks up to a crowded Craps table in Vegas and puts a handful of black chips on the don't-pass line... It's just not right.