Posted on 09/08/2009 10:53:18 AM PDT by FromLori
The U.S. dollar tumbled against other major rivals Tuesday, including hitting a new yearly low against the euro, as investors continued to show a rising appetite for risk.
The greenback's weakness came against a backdrop marked by a push higher in equities and improving economic data abroad -- as well as renewed questions about the role of the dollar as the world's premier reserve currency.
The dollar index (DXY 77.21, -0.81, -1.04%) , a measure of the greenback against a trade-weighted basket of rivals, earlier fell to 77.093, the weakest since September 2008. It stood recently at 77.229, down 1.1%.
(Excerpt) Read more at marketwatch.com ...
It's all part of the plan.
We need a new term “Obama-dollars”
Here is the new term/comment to any jackass that supports the HO — tell them, Barack U.
New jobs aren’t being created. There is no growth. Where is the risk, other than in the futures market, driving up the price of energy for people who are struggling to survive? The dollar might do better if Wall Street were moved to the Las Vegas Strip.
I’m not an economist. The above is just my lowly observation.
Gotta like what the worlds opinion (and faith) of Obama running the economy!
Junk bonds have returned over 40% year to date.
Process that, please.
Would that also be the Zero Dollar Bill??
“Junk bonds have returned over 40% year to date.”
I hope you were in on that.
We are now going to pay a terrible price for the Clinton/Gore destruction of the patent office, for the then Republican controlled Congress adding to the damage and for it growing worse under George W. Bush, who did noting to straigten out the problems. We will see the words of Schumpeter borne out as breakthrough products move to IPO’s elsewhere than on Wall Street. There is no incentive to fill the pipelne that leads to prosperity here compared to other markets.
The bottom was set by sentiment and projections, counteracted by real world policy action by professionals above party fray, and not by political factors. And it is long since past.
I’ll take the wait and see position. My opinion is that we are in for round two, and there aren’t too many more borrowed trillions to throw at the problem. As for my comment that I hope you’ve done well with junk bonds, I meant it. High risk bonds can be great in times of tight credit, and junk bond booms are fun rides, like 98 and 03, but there is always that point where people want to get their money out the deal. That could be now. There is also money to be made by downsizing and streamlining for efficiency. It makes those efficiency numbers per dollar invested look great. I hope the growth, measured by employment follows. In seven months we’ve gone from 4.5 percent unemployment to 10 percent, and that number is still headed up. We are still losing hundreds of thousands of jobs per month. While this might not reach Great Depression lows, we are fast approaching, and likely to surpass Carter depression lows. ...I see that oil is back over $71 per barrel.
Again, I’m not an economist,(obvious) and I don’t want to play one on the Internet. I just don’t see many reasons for optimism. I’m glad you do.
Last November, seeing credit spreads at unjustified depression levels, I recommended to one who asked here on FR that they buy corporate bonds, and if they didn't want to do it directly to use a specific bond fund, Loomis Sayles Retail Bond Fund. It was selling at $10 to yield 10% after expenses. It was mostly in investment grade corporates, right at the A and BBB sweet spot, but held a 25% position in the higher junk ratings. Today it is priced at $12.50 to yield 6.3% after expenses, having paid out about a dollar in dividends in the meantime (including a large year-end special last December). The return has been around 35% over 10 months, in the hardest economic conditions imaginable.
This was readily foreseeable, and foreseen, and acted upon, and recommended to others. Why was it obvious then? Simply because credit spreads hit great depression levels already, last October. Meaning it would take another great depression unfolding from then forward, to justify the cratered prices of existing bonds, and it was obvious that no such development was in prospect, that the banks would not fail, that credit markets would recover given Fed policy and TARP, etc.
All the pain of a depression was already priced end the day Bush left office. When that didn't happen, and it clearly wasn't going to, those bonds recovered and credit spreads fell back to something like normal. Maybe 1% wider than their long run sustained levels, to reflect marginally higher corporate default rates these days. But that is all.
As I explained it then, lend to sound US corporations and put only the coupons into stock. It could have taken 2 years, or 3, or 5 for that to pay off. But once rates got as high as they got early last winter, it was purely a question of "pay me now or pay me later".
>>Markets are discounting mechanisms, they look into the future and not at the past. <<
Yeah, which explains why the Nasdaq was over 5,000...for a while...
>>Meanwhile bears like Abelson at Barrons have been singing the same Its all overvalued and we are all going to die song since the *Dow* crossed 5000 - in 1995.<<
I haven’t.
>>Meanwhile bears like Abelson at Barrons have been singing the same Its all overvalued and we are all going to die song since the *Dow* crossed 5000 - in 1995.<<
I haven’t.
In fact, to be specific, I took ALL my portfolio out of the market in February of 2000.
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