2008 Review in Pictures and 2009 Forecast - Eric Janszen

[tree]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

We see it as an issue of interpretation.

Yes, many are surprised when I inform them of Greenspan's association with the Russian temptress.

History and Literature: Can't beat it!

[bill]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

Once this horror show is finally over, Asia will have closed ranks. If there is one region where the demographics are still favourable for growth it'll be there.

http://www.foreignaffairs.org/200901...rash-2008.html

audio:http://www.cfr.org/publication.html?id=18007

[ax]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

We are working on a specific analysis and forecast for iTulip Select subscribers that draws more from the book research. The title?

2009: Year of the Jump Ball

I think you guys have already provided a suitable framework for the next year if not the next several years. Gold will rise, hyperinflation hits at some point, many retailers will go bust, CRE will implode.....this is plenty of info to position your portfolio around.

[tastymannatees]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

Singapore Dollars. Once this horror show is finally over, Asia will have closed ranks. If there is one region where the demographics are still favourable for growth it'll be there. And Singapore has the potential to be the new Switzerland in due course.

I was leaning Singapore Dollars but after looking it over I found that half the GDP was fire economy based. I am back to the hard assets at this stage of the game.

[dtimwinn]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

To me your two most specific forecasts concern (1) the Fed's eventual success in stimulating inflation and (2) oil prices will go nowhere. Hopefully, we'll see more threads along the lines of Best Car Deal in 2009 to inform us about opportunities to buy before prices jump. As part of my year end portfolio revisions, I have been leaning toward going long an oil ETF. I think I'll give that one further thought.

If the thought is that oil prices will not go anywhere in 2009, does the same rationale apply to natural gas prices -- or is there any liklihood that oil and natural gas prices will uncouple?

[raja]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

The only event of twelve noted that has not occurred since then: a currency dislocation. We do not know how it will unfold but expect to see a major currency event this year.

What is a "currency dislocation"?
Can you please provide an historical example, so that I may read up on it?

Thanks

[Chris Coles]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

What is a "currency dislocation"?
Can you please provide an historical example, so that I may read up on it?

Thanks

You wake up and find that overnight your government has devalued your national currency by, say, 14% and as we once heard our Prime Minister say; "It does not mean that the pound here in Britain, in your pocket or purse or in your bank, has been devalued." Prime Minister Harold Wilson

http://news.bbc.co.uk/onthisday/hi/d...00/3208396.stm

[cobben]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

Again, if anyone else has some comments or other currencies they think will hold up during this race to print the most money.

SEK + NOK.

The Norwegians have oil but not much else, the Swedes have no oil but most other resources. Both countries are stable and rather, er, well, boring, which works to their advantage in times like these.

Neither country has great demographics compared to the Islamic areas, you should invest in them if you believe demographics will save you. Uz is one of the best demographically, that should mean the "sum" is a great currency to hold longterm.

50 EUR converted to Uzbek sum:
http://www.youtube.com/watch?v=hxPvufIivaQ

(Full disclosure: please buy some SEK to help support my future Swedish pension.)

[Guest]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

Good day and a Happy New Year! I was wondering if someone could expand a bit on the notion of "currency event" and "currency dislocation"? What is meant, broadly, by these two? A USD collapse or something else as well? Thank you very much!

[Adeptus]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

Hi,
Please excuse my newbie question, but how exactly does one go about shorting US Treasuries? Can somebody provide some examples? I'd like to be ready for when iTulip says "go".

Thanks,
Adeptus

PS. I'm Canadian.

[krakknisse]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

SEK + NOK.

The Norwegians have oil but not much else, the Swedes have no oil but most other resources. Both countries are stable and rather, er, well, boring, which works to their advantage in times like these.

Hate to dampen your illusions, but the property bubble here (Norway') was quite severe. Real estate prices down 15% in 2008 (according to official statistics), but if you actually want to sell, you're talking a 25% hair cut. Banks are reeling. Real estate prices are up 171% inflation-adjusted from the last bottom in 1992, and up 54% inflation adjusted from the very bubbly 1987 top. Linky: http://www.nef.no/asset/1939/1/1939_1.pdf (page 5, figure 6 of the PDF shows nominal and real (inflation-adjusted) prices 1985-2008). Our last crash lead to a very severe recession (top 5 post-WW2 financial crises).

Doom and gloom is commonplace now, but it has slowed a little. Everybody think's we'll be saved by interest rate reductions.

I'd think in Norway in terms of oil. If oil rebounds, we'll be less hard hit. The key word is "less hard". Our government is a net creditor to the world, which is also very good. But there's always the big question about unfunded pension and social obligations. And private debt exploded during the last few years. Not quite Iceland, though.

And don't forget, we only have about 20 kg of gold left. So we're last in line in case a gold-based international currency regime pops up.

I live here, have a quite secure job, good career and no debt. But I'm still looking for a farm or smallholding. I'm not enthusiastic about the NOK.

[GRG55]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

Hi,
Please excuse my newbie question, but how exactly does one go about shorting US Treasuries? Can somebody provide some examples? I'd like to be ready for when iTulip says "go".

Thanks,
Adeptus

PS. I'm Canadian.

Click here for an active thread on iTulip that is discussing one way to short Treasuries.

[You can put your location in your profile so others can see where you are from/at]

[GRG55]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

You wake up and find that overnight your government has devalued your national currency by, say, 14%...
http://news.bbc.co.uk/onthisday/hi/d...00/3208396.stm

...and you discover all that talk about DEflation forever and ever, really was complete hooey...because suddenly everything you need to survive requires more of your newly devalued fiat currency to acquire.

It's not nice to fool with Mother Nature. Or your friendly local Central Banker...

[rchdenton]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

Yes, excellent stuff as usual.

I too would like know more of your thoughts on currency issues.

As regards the Renminbi and the Yen, it occurs to me that the Chinese and Japanese economies will very likely be far harder hit than the US economy. Yes, they have their best and brightest as their government officials, but I suspect a large part of their "wealth" is in fact due to false book entries.

Remember, it takes two to create a bad debt - in this case a debtor who is a bad credit risk (in this case America) and a lender with poor credit control (China and Japan).

So, did the credit bubble originate in America or in Asia? The US silliness has been at least partly exposed, but the Asian stupidity has yet to be widely acknowledged. If you have messed up you will lose face sooner or later.

I read elsewhere that Keynes, in discussions after WW2 put forward an international currency mechanism that would have prevented foreign currency surpluses as well as deficits, both being part of the same problem. A debt cannot exist without a corresponding credit somewhere. Of course the US was top dog then so we all got what the US government of the time thought best. We are all now reaping the harvest.

I feel I have learned a great deal about the nature of credit and the expansion and contraction of credit on this site. It seems suspiciously similar to the expansion and contraction of my own balance sheet as I buy and sell properties, taking on additional borrowing or paying off debt as I go.

However, I feel I have never really got a proper handle on what drives currencies, although I do remember a comment by George Soros that exchange rate trends tend to be quite long lasting and that in general it wasn't actually that hard once you understood it.

[Chris Coles]

Re: 2008 Review in Pictures and 2009 Forecast - Eric Janszen

So, did the credit bubble originate in America or in Asia? The US silliness has been at least partly exposed, but the Asian stupidity has yet to be widely acknowledged. If you have messed up you will lose face sooner or later.

Look at it this way, you are a senior individual in a relatively minor department of a second tier government department and someone from an organisation called, for example, Goldman, or Lehman's - invites you to their huge office staffed by zillions of "bankers" and looking for all intents and purposes like the banking equivalent of IBM, the Big Blue, and you fall for it hook line and sinker. Why, because everybody else has already. You fall into the same instinctive 'follow the leader' sheep like state that everyone else has adopted.

Once the US regulators took their eye off the ball and permitted the vast expansion of Vapourware Bonds to create that mythical "Wall of Money" that was chasing YOU for all it was worth, then no one stood any chance of not getting swept up into the Maelstrom that followed.

So, for the record, I do not place any blame at all on the likes of China or Japan. The core responsibility for the systematic failures lay at the feet of the regulators in the United States and those failures were, and remain, theirs.