The BOND CRASH didn't materialize and a lot of hedge funds are in
Hell now.
This spring the Fed changed directions on rates and everyone thought
that there was only one place for bonds to go: DOWN!
They didn't. Why?
Probably because the REAL ECONOMY is soft, even while the PAPER
ECONOMY profited mightily from Greenspans ultra-low rates.
THE RISE IN PAPER ASSETS SUPPORTED THE DOLLAR; EVEN AS JOBS AND
INCOMES SLIPPED DANGEROUSLY LOW.
ALSO THE BELIEF THAT THE FED WILL DO WHATEVER IT TAKES TO SUPPORT
IT'S BELOVED "PAPER ASSETS." INCLUDING BONDS.
Still, on a macro level the US economy is a slow motion train wreck.
DEFICITS OF EVERY KIND ARE SOARING. COMMODITIES ARE THE NEW BIG
THING. YET THE DOLLAR HAS HELD UP BETTER THAN ANYONE EXPECTED; WITH A
LITTLE HELP FROM OUR FRIENDS.
HERE'S THE PROBLEM:
The Hedge Funds WERE NOT WRONG, .....JUST EARLY! It happens all the
time.
The problem is that overly-intelligent people tend to over-think the
markets.
They don't realize that there are PLENTY OF FUDGE FACTORS that can be
used to DELAY, BUT NOT PREVENT THE INEVITABLE DECLINES. Turning a Battle Ship, Molasses in January, like that, you know.
SO, AFTER THE MASSIVE "JUNK RALLIES" OF LAST YEAR; THIS HAS BEEN A YEAR OF MERELY TREADING WATER; and IN TRUTH, THE US ECONOMY IS SICKER NOW THAN EVER BEFORE.
NEXT YEAR, A REAL MACRO-HELL COULD BREAK LOOSE; ESPECIALLY
IF DUBYA IS RE-ELECTED.
DUBYA'S RE-ELECTION WILL COMPETELY TRASH THE GLOBAL ECONOMY AND USHER
IN A "NEW ERA" WHEREIN "AMERICAN EXCEPTIONALISM" IS ABANDON, AND WE
REVERT TO "TEXTBOOK" MACRO ECONOMICS;
JUST LIKE THE HEDGE FUNDS PLANNED...........AND IT WON'T BE PRETTY.
IF DUBYA WINS IN NOVEMBER; GOLD COULD BE AT 450 BY FEBRUARY, AND
NEARING 600 BEFORE THE END OF 2005..... And, oil in 2005? Try $60
for openers. This whistling passed the graveyard is going to end
soon.
THAT'S TEXTBOOK MACRO ECONOMICS, HEDGE FUND STYLE.
It's coming.......in 2005. BECAUSE LATE IS NOT NEVER
