Special - Buffett & Paulson Have Lunch Discussion...

US Empire Like Spanish Empire?... William Hawkins: "Yet, Spanish leaders were deluded by a sense of false prosperity. This is testified by the statement of a prominent official, Alfonso Nunez de Castro in 1675: “Let London manufacture those fine fabrics of hers to her heart's content; let Holland her chambrays; Florence her cloth; the Indies their beaver and vicuna; Milan her brocade, Italy and Flanders their linens...so long as our capital can enjoy them; the only thing it proves is that all nations train their journeymen for Madrid, and that Madrid is the queen of Parliaments, for all the world serves her and she serves nobody.” A few years later, the Madrid government was bankrupt. The Spanish nobleman had foolishly elevated consumption, a use for wealth, above production, the creation of wealth... Today, the American “empire” is also trying to consume more than it produces... Americans must learn ... from the Spanish experience ... and take corrective action while they still can."... http://www.americaneconomicalert.org/view_art.asp?Prod_ID=1086 (4*)

Courtesy of Nilus Mattive

40%-50% Chance Stocks Will Crash To New Low... says Gary Shilling, recommends buying Treasury bonds & the US$... emphasizes the world has overcapacity in many areas... thinks the US$ will rise back to parity with the Euro...

Europe Risks Another Global Depression... Simon Johnson feels that Europe is entering a serious economic crisis... "it’s not just about Greece any more. Worries about government debt and associated public sector liabilities (e.g., because banking systems are in deep trouble) have spread through the eurozone to Spain and Portugal. Ireland and Italy are next up for hostile reconsideration by the markets, and the UK may not be far behind."... http://baselinescenario.com/2010/02/07/europe-risks-another-global-depression/ (4*)

Stiglitz: `No Risk' of Greece Defaulting on Debt

Click on image above to activate Bloomberg video

Where is the Money in 2010 ?

Russia Forum Conference

with Nassim Taleb, Marc Faber & others

(click on image above to activate,

then click on Eng for "English"bottom right beside "pyc" )

(1 hour)

Oil Shortage in 2015?...

Did the Groundhog see its shadow this year? Courtesy of Duffy

Don't Expect Lasting Stability... thoughts on global disequilibria from Boeckh Investments...

Volume_202.1_20Global_20Disequilibria_20Feb_203_202010 -

What Happens to Things When the US$ Rallies... David Rosenberg gives a history lesson: "Since the onset of the credit crisis in 2007, there have seen three occasions when a surge in risk aversion caused a period of U.S. dollar strength on flight-to-safety trades — July 15, 2008 to September 11 2008 (around the GSEs); September 22, 2008 to November 21, 2008 (post-Lehman financial collapse) and then from December 17, 2008 to March 5, 2009 (the final leg down in the financials). Here is what happened, on average, during these dollar-rally episodes — ultra-defensive strategies and heightened volatility:
■The DXY (U.S. dollar index) rallied an average of 12.3%.
■During these episodes, the Canadian dollar sank 11% against the U.S. dollar, but was only down 1.9% against a basket of non-U.S. currencies.
■The S&P 500 corrected an average of 18.5%. Underperforming S&P equity sectors included materials, energy, industrials and financials. Outperformers included utilities, staples, health care, tech and telecom.
■Despite the downdraft in commodities, the TSX performed in line with the S&P — losing 18%.
■In the TSX sectors, the winners and losers were different than in the U.S.A.: Financials and industrials actually outperformed. Only materials and energy seriously dragged down the Canadian market. As in the U.S., staples, health care, utilities, tech and telecom outperformed. Outside of resources, the TSX sectors actually outperformed their S&P comparable.
■Still, it pays to note that we are talking about “relative” performance. Every equity sector on both sides of the border was down during these periods.
■The oil price, on average, fell 26%, and gold was off an average of 11%. The CRB index corrected an average of 22%.
■The VIX index surge an average of 34% during these U.S. dollar-rally episodes.
■We saw a bull steepening in the bond market — 2-year T-note yields plunge an average of 36bps while 10-year T-note yields dipped 8bps.
■Baa corporate spreads widened an average of 54bps; and by 268bps for high-yield bonds."

Classic Bullish Inverse Head & Shoulders

on Bond Yields? - Bond Market to Tank?

Click on chart to enlarge,

courtesy of Barry Ritholtz & The Chart Store