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Nassim Nicholas Taleb, author of "The Black Swan," said "every single human being" should bet U.S. Treasury bonds will decline, citing the policies of Federal Reserve Chairman Ben S. Bernanke and the Obama administration.
It's "a no brainer" to sell short Treasuries, Taleb, a principal at Universa Investments LP in Santa Monica, California, said at a conference in Moscow today. "Every single human being should have that trade."
Taleb said investors should bet on a rise in long-term U.S. Treasury yields, which move inversely to prices, as long as Bernanke and White House economic adviser Lawrence Summers are in office, without being more specific.
The Fed and U.S. agencies have lent, spent or guaranteed $9.66 trillion to lift the economy from the worst recession since the Great Depression, according to data compiled by Bloomberg. President Barack Obama has increased the U.S. marketable debt to a record $7.27 trillion as he tries to sustain the recovery from last year's recession. Obama projects the U.S. budget deficit will rise to a record $1.6 trillion in the 2011 fiscal year.
It's "a no brainer" to sell short Treasuries, Taleb, a principal at Universa Investments LP in Santa Monica, California, said at a conference in Moscow today. "Every single human being should have that trade."
Taleb said investors should bet on a rise in long-term U.S. Treasury yields, which move inversely to prices, as long as Bernanke and White House economic adviser Lawrence Summers are in office, without being more specific.
The Fed and U.S. agencies have lent, spent or guaranteed $9.66 trillion to lift the economy from the worst recession since the Great Depression, according to data compiled by Bloomberg. President Barack Obama has increased the U.S. marketable debt to a record $7.27 trillion as he tries to sustain the recovery from last year's recession. Obama projects the U.S. budget deficit will rise to a record $1.6 trillion in the 2011 fiscal year.
- Bloomberg
The US debt is on track to hit a congressionally proposed debt ceiling of 14.3 trillion dollars by the end of February, the Treasury said Wednesday, a day ahead of a key vote to raise it to that level.
"Based on current projections, Treasury expects to reach the debt ceiling as early as the end of February. However, the government's cash flows are volatile, making it difficult to forecast a precise date," the Treasury said in a statement.
The current limit on the public debt of the United States is 12.374 trillion dollars.
The US debt exceeded 12.349 trillion dollars on Monday, according to Treasury data.
The US House of Representatives will vote Thursday on whether to raise the US debt limit to a historic 14.3 trillion dollars, allowing the United States to borrow another 1.9 trillion dollars.
"Based on current projections, Treasury expects to reach the debt ceiling as early as the end of February. However, the government's cash flows are volatile, making it difficult to forecast a precise date," the Treasury said in a statement.
The current limit on the public debt of the United States is 12.374 trillion dollars.
The US debt exceeded 12.349 trillion dollars on Monday, according to Treasury data.
The US House of Representatives will vote Thursday on whether to raise the US debt limit to a historic 14.3 trillion dollars, allowing the United States to borrow another 1.9 trillion dollars.
- AFP
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How You Can Get Paid by a "Gold Bank" Today
By Matt Badiali Thursday, February 4, 2010 How You Can Get Paid by a "Gold Bank" Today -
When This Crisis Will End
By Dr. Steve Sjuggerud Wednesday, February 3, 2010 When This Crisis Will End -
The Great American Liquidation Sale
By Tom Dyson Tuesday, February 2, 2010 The Great American Liquidation Sale -
How to "Bank" Dividends Whether or Not the Economy Recovers
By Tom Dyson Monday, February 1, 2010 How to "Bank" Dividends Whether or Not the Economy Recovers -
It's Time to Bet Against the Euro
By Dr. Steve Sjuggerud Saturday, January 30, 2010 It's Time to Bet Against the Euro
Even the Best Investors Make This Huge Mistake... Make Sure You Don't!
By Dr. Steve SjuggerudFriday, February 5, 2010
Personally, I have just one rule: Avoid big mistakes.
If I do that, I know I'll be fine. I know I won't "blow myself up" in my investments. Knowing that gives me peace.
I can't believe how many brilliant, successful people fail to do this one simple thing... and lose what they have... or even lose everything.
Look, if you do nothing else, remember this: Avoid big mistakes. And the biggest of the big mistakes is STILL DANCING when the music stops.
Get the heck out of there, my friend! If you're a little late to realize it, then STILL get out. Better late than never. Let me show you what I mean...
Chuck Prince, the former CEO of Citigroup, is a perfect example of a guy who kept on dancing...
In the summer of 2007, just as the banking crisis was getting underway, Chuck actually told the Financial Times he was "still dancing."
About the banking business, Chuck said, "When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing."
But the music had already stopped when he was speaking. Shares of Citigroup are down 93% since he said that... just a year and a half ago. And Chuck lost his job less than four months later.
I've also seen it close to home...
Most of the wealthy investors where I live made their fortunes in local real estate – that's Florida real estate.
The music stopped in Florida real estate a few years ago... But even today, they're STILL dancing. If they had acknowledged the music stopped early, they might have been able to keep much of their wealth.
I could go on, with examples throughout history... from Sir Isaac Newton in the 18th century South Sea Bubble to George Soros in the 2000 tech bubble.
The message today is incredibly simple...
When the music stops, STOP DANCING.
Get off that dance floor... and do it fast. Do NOT allow small mistakes to become big ones.
It sounds simple. But as I briefly showed, even the smartest people succumb to it.
We are all vulnerable to the risk. So you must make a conscious choice here... you must tell yourself you will never let a small loss become a big one.
You can use whatever "system" works for you to reinforce this idea: stop losses, trailing stops, NOT averaging down a losing position, NOT taking too big a position in anything.
I actually use all of the above.
Whatever works for you, do it. The important thing is, do NOT let a small loss become a big one.
Want to be just fine, forever, in your investments? Then don't forget my one rule... Avoid big mistakes!
Good investing,
Steve
If I do that, I know I'll be fine. I know I won't "blow myself up" in my investments. Knowing that gives me peace.
I can't believe how many brilliant, successful people fail to do this one simple thing... and lose what they have... or even lose everything.
Look, if you do nothing else, remember this: Avoid big mistakes. And the biggest of the big mistakes is STILL DANCING when the music stops.
Get the heck out of there, my friend! If you're a little late to realize it, then STILL get out. Better late than never. Let me show you what I mean...
Chuck Prince, the former CEO of Citigroup, is a perfect example of a guy who kept on dancing...
In the summer of 2007, just as the banking crisis was getting underway, Chuck actually told the Financial Times he was "still dancing."
About the banking business, Chuck said, "When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing."
But the music had already stopped when he was speaking. Shares of Citigroup are down 93% since he said that... just a year and a half ago. And Chuck lost his job less than four months later.
I've also seen it close to home...
Most of the wealthy investors where I live made their fortunes in local real estate – that's Florida real estate.
The music stopped in Florida real estate a few years ago... But even today, they're STILL dancing. If they had acknowledged the music stopped early, they might have been able to keep much of their wealth.
I could go on, with examples throughout history... from Sir Isaac Newton in the 18th century South Sea Bubble to George Soros in the 2000 tech bubble.
The message today is incredibly simple...
When the music stops, STOP DANCING.
Get off that dance floor... and do it fast. Do NOT allow small mistakes to become big ones.
It sounds simple. But as I briefly showed, even the smartest people succumb to it.
We are all vulnerable to the risk. So you must make a conscious choice here... you must tell yourself you will never let a small loss become a big one.
You can use whatever "system" works for you to reinforce this idea: stop losses, trailing stops, NOT averaging down a losing position, NOT taking too big a position in anything.
I actually use all of the above.
Whatever works for you, do it. The important thing is, do NOT let a small loss become a big one.
Want to be just fine, forever, in your investments? Then don't forget my one rule... Avoid big mistakes!
Good investing,
Steve
Further Reading:
For more from Chris on why the long-term trend in precious metals is inevitably higher, check out his must-read essay: The Greatest Currency Trade of the Millennium.
A huge concern facing anyone who owns precious metals – and anyone who has even $1 in the markets – is whether we're headed for inflation or deflation. Check out Chris' take in An Answer to the Biggest Question Investors Face Right Now.
OUR CURRENCY TRADE IS OFF TO A GREAT START
For folks holding lots of euros in the bank, 2010 has become "the year of watching my savings disappear."
When looking for stocks, commodities, or currencies to bet against, market expert Dennis Gartman recommends targeting assets that exhibit weak price action compared to their peers. This is like "throwing rocks into a wet paper sack," according to Dennis.
Right now, mark the euro down as the "wet paper sack" of the currency complex. We identified the euro's "1-2-3 top" back on December 16th. Just after that piece, the euro plummeted to the $1.42 level. It then staged a brief relief rally before heading back down.
Lately, the euro has fallen nearly every day with no support whatsoever. Currency traders: Here's your wet paper sack. Currency holders: Here's another reason to keep a good portion of your savings in gold.
When looking for stocks, commodities, or currencies to bet against, market expert Dennis Gartman recommends targeting assets that exhibit weak price action compared to their peers. This is like "throwing rocks into a wet paper sack," according to Dennis.
Right now, mark the euro down as the "wet paper sack" of the currency complex. We identified the euro's "1-2-3 top" back on December 16th. Just after that piece, the euro plummeted to the $1.42 level. It then staged a brief relief rally before heading back down.
Lately, the euro has fallen nearly every day with no support whatsoever. Currency traders: Here's your wet paper sack. Currency holders: Here's another reason to keep a good portion of your savings in gold.