It is good to have company!

I mentioned Mr. Gross from PIMCO, the world's largest bond fund, having some issues with our current recovery. He is not alone, now Paul Krugman, a Nobel Prize winning economists, and others are seeing other problems in our future. Now, I must say I do not wholly agree with Mr. Krugman's mantra about throwing massive amounts of more money at the situation, but I do agree with his view that we are in a world of hurt. The fundamentals simply do not indicate any other alternative.

http://www.nakedcapitalism.com/2010/01/guest-post-krugman-says-american-economy-will-not-recover-for-a-long-time.html

And This Folks Makes Me Sick

Geitner, probably Obama's key financial operative, was head of the New York Fed when it allegedly required AIG to hide the fact that it was paying 100 cents on the dollars (with our taxpayer money) to entities on swaps. Entities like Goldman, another entity tightly tied to an Obama operative, got much more than they ever dreamed of and the NY Fed apparently tried to push AIG to illegally hide it all from the SEC - and us. Now I put a lot of allegedlys and other qualifiers in this because I have no personal knowledge of this. But if it is true, I am truly sick. The rules apparently never have and never will apply to the A-holes that got us here.

http://www.nakedcapitalism.com/2010/01/ny-fed-told-aig-to-hide-details-of-swaps-payouts-to-banks.html

Disclosures: None.

This is Gross.

I do not have a long post tonight. I am merely posting the monthly newsletter from Bill Gross of PIMCO, the world's largest bond fund. Now I think he is a very smart guy. I certainly hope so as I have good chunk of my retirement in his hands. In any event, Mr. Gross seems to think that all the fiscal stimulus this year and quantitative easing will come home to roost in 2010. He also has some bad news for the carry trade folks (it is mostly just about playing big dollars and leverage to take advantage of interest rate differentials between countries - but don't tell anyone), which if you do not understand, join the club. Hopefully it has little impact on the regular folks like us. [Okay, I say hopefully, but if the carry trade bets go bad, which I think they will this year or next, it will have an impact, probably significant, on anyone invested in the market. So perhaps you do need to worry about it and should worry about it, but my point really is that individuals have little they can do to stop it and it is a very difficult market to understand.]

I also like Bill's prose and his understanding of some things not so financial, like literature. Enjoy the read of his newsletter. I did.

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2010/Let’s+Get+Fisical+January+2010.htm

Disclosures: None.

It will come. . .

Okay, I have been predicting doom and gloom for a long time but to be honest I have for some time been saying it can take a long long time for the obvious flaws in our system to come home to rest. So let me start with a disclosure. I bought more put options on December 31, which is in keeping with my statements on this blog. Obviously today I lost money. Quite a bit actually as I have a lot of put options, but the point today is that I bought 2012 options last week as I am firmly believing, as Keynes warned, that irrational exubereance can last longer than my solvency. It will happen, I just do not know when.

And now I present you with Ambrose Evans-Pritchard. I have linked his articles before. He writes for the Telegraph in England. He is, if anything, more doom and gloom than me and he does so for a major news outlet. And so I refer you to his piece, which I think is more pessimitic than reality, but it sells newspapers:

http://www.nakedcapitalism.com/2010/01/ambrose-evans-pritchard-apocalypse-2010.html

I am not going to say anything about this article otherwise but I have to point out one FACT contained within it:

"Household debt as a share of GDP sits near record levels in two-fifths of the world economy."

This is one of my two plus two facts. I cannot see how we can get over this without debt repayment big time. Go figure.

Disclosures: None.