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GT (France)

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About GT (France)

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    Deepest Darkest France (and Straya)
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    Financial markets, aktraty
  1. From the Five Minute Forecast, regarding US housing... "You can never go wrong with bricks and mortar" is the sort of stupid platitude that was promulgated by a bunch of people who benefited from a concatenation of circumstances that we simply cannot get to from here: the 1970s - sustained inflation with rising real wages, and low, fixed-rate mortgage obligations. The subsequent leg up in house prices was entirely driven by accumulation of ever-greater debt loads as a proportion of household income, to the point where debt service requirements as a proportion of household income reached historic highs. And everything that has happened since was eminently predictable - unless you were a politician, a real estate agent, or a stockbroker. Cheerio GT PS McBroon is as big an idiot as Greensplatt - something else that was palpably obvious even when McBroon was playing second fiddle to Bliar the war criminal. We need Jim Bell's "Assassination Politics" to take root to a greater extent so that we as a species can slough off the human leeches that live at our expense and behave as if we're their livestock. If the shitbags who offed Jean-Charles de Menezes went to work each day thinking that their name could wind up on the betting pool, they might have thought twice about assassinating the poor bugger.
  2. And another thing... "If you thought that today was the start of something big, you were right. It's not the start of Days of Wine and Roses, however. It is the beginning of the end of a generational market, and the terminal phase of Life As We Know It. That is, today is not the first day of the next leg up; if one was to short today and ride the tiger, one would retire mind-bogglingly rich within a year. The next week or so would give one pause for thought (since there might be some follow through once tomorrow's pullback is finished), but for position types with moderately deep pockets this is the best shorting opportunity since May, and the odds of a significant new high in ANY of the global equities markets is as near to zero as makes no odds." That's me, nailing my colours to the mast on August 20th 2007 - having called a short rally before then (the title fo the post was "Who predicted a rally? Oh Yes... ME")... I called for another rally on January 22 of this year (after 12 straight declining sessions), reversing on Feb 1 (title of the post" "Rally.Over") and on November 20th I declared "One thing which is ever-so-slightly irksome, is the fact that some jerkwad decided to have a punt on the long side in the last five minutes. Had the Dow dipped below 7500 and closed there, I could have tooted about how we were at the lowest closing level since October 2002, and that from here we should rally 20 or 30 percent quite quickly. But no... some dill had to go and generate a rally to close the Dow above 7550. " I specifically did not remove hedges from portfolios at that time because the market's move was (and is) a government-orchestrated charade: it doesn't matter if the rally turned out to be the aforementioned 20-30% (particularly since at the same time we bought AUD which has insulated us against USD weakness since that very day). Cheerio GT GT's Market Rant
  3. You're kidding, right? Markets have only just bounced back to levels they were at when you called a "successful retest of a prior low" (Nov 14: FTSE 4233... yesterday 4324 (after a 2-day rally). Conversely, I had everyone out (and short) in November 2007, reiterated in Feb 1 2008, and shorted again last week. We've also been long EUR since 1.27 and $A since 0.6117 (and short bonds since 127-16... that sucks at the moment). Check the links at bottom and you'll see that this market stuff isn't hard... The Dow will bottom with a '5' handle in USD terms, and will drop by more than half (from here) in EUR terms. Notice CNBC - champions of 'the S&P is at a low multiple of forward earnings' ... now they are citing TRAILING earnings multiples as evidence of undervaluation. The US is finished, and its overlords have decided that we are going to have a race with their European counterparts to see who can rape their taxpayers the most before there is a bloodbath. I'm glad I'm going back to Australia shortly - the 'Strayan government sold a bunch of assets in the 1990s and early 00s so the country has ZERO government debt. They're still parasitic scum though... Cheerio GT GT's Market Rant (Read this post from August 29th 2004 to see if the 'subprime' mess was foreseeable - reprised it in January of this year. I was bearish on GM at above $30 in 2005, and warned Citigroup was dead in late 2007. I declared thatthe cost of the bank bailout would be $5 trillion BEFORE it was announced. More recently, I called a re-buy on Gold at $877)
  4. I know this idea as the "Parish spike": I was led to believe that it was first proposed (puckishly) by Ross Parish, who was one of my early mentors in Economics. Parish came up with the idea while he was at the University of Chicago. It is an example of a solution that has perfect theoretical outcomes - it will solve perfectly the problem it is designed to solve - but which would never get adopted because people would rather accept that 1000 die indirectly, than be party to a regulation that makes it certain that some smaller number of people will get a spike through their chest as a result of their own stupidity. The broad idea is that if you make cars safer, people will drive more recklessly - they are forced to buy a car with 'safety' features, and they can 'spend' some of it on additional risk-taking. So they will 'trade away' some of the additional safety, and it will turn out that even if in-car deaths fall ,there will be more accidents and more PEDESTRIANS and CYCLISTS will be killed (that is, the costs of the additional risky behaviour will be EXternalised.) Swedish research showed precisely trhis result when mandatory seat belts were introduced. The Parish spike INternalises the costs of risky behaviour - a consistent theme of Parish's work.. Ross Parish would never have supported the bank bailout. The public (being 99% morons) would never support the Parish spike, because it makes d!ckheads responsible for their own idiocy. Cheers GT France
  5. Oops. I meant as the bloody sergeant blah blah blah. Never typo your senior NCOs... that's a good way to get fragged. My poor parents... all that money they spent on seeing to it that I became overeducated, and three years in France has me spelling like a moron. Next thing you know I'll be eating garlic for breakfast and surrendering to any passing German. Chin chin GT France GT's Market Rant
  6. Well, as the bloody seargent might have said "Doubtful it stood, as two spent swimmers blah blah blah...". I admit it - I was almost convinced that the bounce might stick right through to the close of the US session. However as I said in yesterday's USRant (USRant: Reaping the Whirlwind) A 400-point slamdown in the last half hour stopped me from looking like a goose. How funny is that? By the way... anybody who wants the most compelling evidence that one can be a complete nuffnuff and still be Chairman of the Fed, read my rather delightful excursus on Mr Magoo (Greasy Al Grease-span) which I resurrected from the archive today. Cheerio GT France GT's Market Rant
  7. Any bounce will be very short-lived. Professional investors are repricing western equities to account for what they have just been taught - that the regulatory environment (and thereby the rule of law under which investments are made) can descend into a moving farce at the drop of a hat. Anybody with half a brain already suspected that, but the turnpike theorem (from optimal control theory) implies that you don't act on a policy until it becomes concrete... and since half the investment market is now managed by frustrated mathematicians, they applied the turnpike theorem without thinking, because they model investment as if it is an engineering system with little if any feedback. Anyhow - thinking about the moving farce of regulation... What it means, is that analysis of the investment merit of a stock should now incorporate an additional risk premium - the sort of 'political instability' premium that one applies to investment in emerging markets or in countries with investment ratings which are barely investment grade. Governments who make explicit their readiness to ransack the national balance sheet in order to window-dress an overvalued market (housing, and housing related bonds on balance sheets), are as much of an investment risk as governments like that of Mugabe... and you don't see the Zimbabwean market trading at 15-17x aggregate trailing earnings. Think of the other things that have been revealed by this latest set of problems - we have discovered that a number of large apparently-sound companies can go toes up within the space of six weeks, while politicians and CEOs tell us that everything is just tickety-boo. Furthermore, we have discovered that many large firms had to use the commercial paper market to MEET PAYROLL. How on earth does cash flow management get to the stage where firms have to sell commercial paper to pay their workers? Well, it makes the entire structure smell like a prawn trawler on a hot day. Cheers GT France GT's Market Rant
  8. You would think, given Brown's record as a gold trader (selling a huge chunk of the UK's stock within $10 of a 20-year low), that people would be somewhat skeptical of any claim that he is a better judge of asset values than the market. To my way of thinking, nobody should ever be bailed out of the foreseeable consequences of an action: if people are stupid enough to refuse to inform themselves about the ramifications of an investment, a mortgage, or any other project, then they should eat the result. The folks I feel sorry for (somewhat) are the poor buggers who have lived frugally, an have refused to take on leverage: their tax rates will go up in order to pay for the consequences of the dullards who bought houses in order to impress each other. That said, my pity is limited. Any population that elevates parasitic scum like Sarkozy, Brown, B-liar, Bush the Dumber and Little Johnny Howard (in Australia) to political power, should not be surprised when the result is a debacle (albeit after a decade of false prosperity financed by putting trillions 'on the tick', including accrued pension liabilities). Let's just accept that demographics means that governments will default on their promises to Baby Boomers (western governments CAN NOT afford to fund the aged-pension Ponzi scheme when workers per retiree will fall to 2.5:1). Let's just accept that people who claim to have 'paid taxes all me life' have, in fact ,been part of a system that was going backwards the whole time, and covered it up with accounting shenanigans that make WorldCom and Enron look honest by comparison. A retired farmer might not be aware that his tax contributions were nowhere near enough to pay for all the things that government has been giving away ('for free'), but ignorance is not an excuse: government does nto have a magic pudding (and in fact people like me argue that government is always a source of death and wealth destruction, relative to where we otherwise would have been). If a business owner knows that he has to mak accruals in his accounts for future obigations, hee has no excuse for not knowing that the government does NOT perform accrual accounting in its own budget. If a worker expects that his leave entitlements are intact when a company goes under, he ought to be able to think hard enough to understand that the same thing is happening with his pension. Cheerio form the land of the Runt King... GT France
  9. Having read some limited support for Brown in this thread (admittedly. not a great deal) one thing appears to be missing. I'm sure somebody must have mentioned it somewhere, although this factoid dropped out of the UK media never to resurface, even as Brown was trying to fulfil the politician's final ambition - slithering toward a leadership role without having to face the electorate. The thing I'm on about: that Brown organised the sale of TONNES of HM Govt's GOLD within $10 spot of a 20-year low. That ONE TRADE tells us two things. (1) Brown wouldna ken if ye wa innum (sorry - poor attempt at a written Billy Connolly accent... Brown wouldn't know if you were up him); and (2) Brown and his ilk are extremely lucky that they dedicated their entire careers to trying to claw their way up the Party hierarchy, in order to suckle at the public paps for the rest of their lives. As Brokeback Cowboy Bush might well have said after Gordon's Gold SuperTrade... Heckuva job, Brownie Cheerio GT France PS... don't you Poms EVER gripe about the idiocy of Yank TV. We get Pommie TV here in France and frankly the ads are verging on insulting, they are so naff.
  10. Tony Blair has a degree and he is a bag of putrid excrement with less class than my foreskin (which has not been sighted since 1965). Ergo, being degree-educated (even at OxBridge) does not make someone middle class. And could you imagine if the working definition of 'the British middle classes' included that ghastly wife of his? Christ - I would pour petrol on myself if I awoke to think that a slash-gobbed harpy like her belonged to the same PHYLUM as me. This is a good thread, if you've already made your way through a litre-and-a-bit of Rosé... Cheerio GT France I just thought of another possible taxonomy: middle class chaps join a Lodge for the drink and to get away from the ladies for the odd night. Others do so to try and garner some form of social or economic advantage.
  11. Hi Carrington, I think you've got it back asswards; lavatory is non-U. Like 'serviette' instead of 'napkin'. Me and my chums say (in order of drunkenness at the time): loo (when sober), bog (half-drunk, lads only), crapper (3 sheets, lads only, Scotch accent mandatory)... and dunny or poo-chute when the Ocker is decloaked (after about 20 G&Ts). Toilet - never (it's almost French, and Frenchified English is non-U even if you live in France). I bet Her Maj says 'toilet', 'coz she's a Kraut married to a Bubble (she was lovely in her day though). Krauts have no idea of manners - any time six of them get drunk they invade France (usually successfully). Cheerio, GT France PS... above all, there is no 'off-side' - no subject is so serious that one can't take the p!ss. In other words, the middle class are the antithesis of those who try to ape the middle class (e.g., working class Tories) who think it's about being serious al lthe time, being interested in politics (or feigning same), observing silly manners, having pressed table linen and such like. Like a bunch of Methodists in a bad mood - dead scared that someone will see them having fun. Although he's a Turk, Boris Johnson had the act down pat until he became a politician.
  12. In places other than the United States, I think that 'middle class' has little (almost nothing) to do with income or wealth; one can be middle class but have patches worn through on the elbows of one's jumpers and not have two pennies to rub together. Journalists have an intelligence approximately equal to American Fox viewers, they think that middle class is what you call anybody who feels the needc to show everybody that they've 'made it' by borrowing 8x income for a house and 1.5x income for a shiny new 4x4. I think the best way to think of it is that a middle class lad might wind up being a jobber, but you'll be able to tell the difference. My chums Jerry and David are great examples - one went to Winchester and found himself in his late 40s working in a factory; the other failed his exams for Tonbridge (from memory) and now runs a gîte in France. Both of them are civilised and both are middle class. Both have an almost conceited lack of conceit. The problem these days is that the whole system has been stuffed up since you Poms allowed politicians to dole out peerages - ensuring that the Lords is full of scum. Now you have it so back-asswards that you think that your Royals are aristocrats - a bunch of inbred Krauts who were nobodies in Krautland but who lucked in because you lot refused to have a Stuart on the throne at the time. Whereas folks whose forebears rode with Charlemagne - and others like good old '******er' Fulford - are the only people left in Blighty who know how it's done. Poor old Charlie Saxe-Coburg-Gotha has to pretend to like a moth-eaten tweed jackets in order to try and be taken sertiously by the likes of Jerry and David. One last thing - if you care how much you paid for a bottle of wine (except to brag that it was 80 centimes a litre) then you're not middle class. But you should be able to complete "amo amas amat..." without recourse to the Google. Your French should sound no different to your English, and you should know that Boris Johnson is a Turk who tries a little to hard to be a muddle-headed Etonian. Spouting Shakepeare in the scrum at Oxford was just trying too hard... and now he's a politician, and thus unutterably not middle class. Cheerio (or, dare I say, toodle-oo - a bastardisation of à tout a l'heure)... GT France PS What the hell would I know? I'm a Strayan (someone who comes from Straya, formerly known as van Deimen's Land), and to paraphrase Peter (from Reeves and Mortimer) we Strayans are all economy class, except Wensdees, Sundees 'n' Bank Holidees, when we upgrade to Super Saver Class. PPS Dare I say it? U versus non-U. Knowing where the term 'snob' comes from. Thinking Evelyn Waugh was a plonker and P.G. Wodehouse was a genius.
  13. Hi there Cartmandua51 It as been my view or a while that the 'Reconquista' was going to work (eventually) and that the parcel of land that the US stole in the mid 1800s would wind up back with Mexico (or perhaps as its own identifiable country). That would be New Mexico, California, Texas, Nevada (from memory) and all the way up the left-hand side to the top of Oregon and the Canadian border. The right hand side - the strip down the coast from New England to Florida - is, like the southwestern deserts, basically useless except for scenery. It produces bugger-all by way of industrial output (it produces loads of services - haircuts and retail, plus financial services) and has not many natural resources. The middle is half desert and half arable land (but the arability of the land has been sorely tested due to overwork lo these last centuries with SOME natural resources, but not much. The southwest is like much of Australia - completely uninhabitable unless you're prepared to be cretive with recipes in which the main ingredient is SAND. The Anasazi had the good sense to walk away from bits of New Mexico when the water dried up, lo 500 yeas or so ago. Like ******, they urned up during a relatively rare period of high rainfall, which made think "Hmmm... this area's pretty nice. Let's build us some pueblos." Then the rain stopped and the place had one of its little 200 year droughts, so the Anasazi buggered off. Some time later ****** turned up (again with rainfall being uncharacteristically high) and thought "This place looks pretty good - let's steal it from the Mexicans... what with all the empty ancient pueblos?" And the rest is history (although some of it is yet to be written). I forget where I read it, but I have it on som authority that the 'default' level for the Rio Grande is about ten feet below current (depressed) levels. That is to say, if you picked a decade at random from the last 2 million years, the likely level of the major rivers in the SouthWest is much much lower than today (and today is so low that agriculture is pretty much impossible). So you'll wind up with SouthWestia, Eastralia, and Centralia. And life in all of them will be absolutely awful for more than a generation, because the rest of the world likes nothing more than to teach hard lessons to fallen tyrants. Britain was able to hide its post-Empire malaise by pretending that it was because of the war(s), but in fact part of it was a reduction in trade volume thanks to folks shunning the Poms and realigning themselves (sometimes by quasi-force) with the Yanks. Cheerio GT PS... might be more than three - easy to see a central strip stretching from Lousiana to Canada, being a Canadian protectorate. But that would require a war.
  14. Hey there WilliamDB That proverb ought to be re-phrased to "All good things come to those who wait, but only to those who don't then jump onto the same side of the boat as every other mug." The investment world is full of people who wait until they are being chided by their neighbours, before they finally jump on a bandwagon which is in its death throes. People who take their stock investment advice from CNBC and their property investment advice from real estate agents. I recall when I was head of a team of equity analysts, and (in Feb 2002) I declared that the best bet 'going forward' (how I hate that phrase) was long gold, long oil, and long Euro (or more broadly short USD); regionally i liked Japan. You should have heard the howls - people wanted me sacked, long gold was the dumbest call of my career, EURUSD was 0.8465, oil was at $19 a barrel and nobody was writing "Be a Samurai Businessman" books anymore. Everybody in the world was on the same side of the boat, but nobody had done the slightest bit of forward-looking behaviour... and they had forgotten the prime rule - that investment markets do not exist in order to help the masses to get rich - they exist in order to periodically transfer great gobs of wealth AWAY from the masses. The last time that an investment community had this level of recklessness regarding due diligence, people were buying tulip bulbs. If people think that this little retracement represents a sensible washing out of the sorts of excesses that built up over the last 20 yers theyn they have got another think coming. I will tell you what drove this boom - it was the fact that the previous generation lived throug ha very very specific concatenation of circumstances: a period of extremely high inflation which struck just AFTER a lot of them had struck long-term fixed rate mortgages. Despite inflation, real wages ROSE (i.e., wages rose faster than inflation). Mortgage rates were fixed and so mortgage service obligations on pre-OPEC shock mortgages as a proportion of take home wages became smaller and smaller. By the end of the 1970s everybody's house was worth five times what they paid for it in 1965, and everybody had imbibed the "Ye can't beat bricks and mortar" mantra - mortgage service obligations on a 1960s mortgage were almost irrelevant as a proportion of 1979 wages. Those people had kiddies (although not enough kiddies to prevent a demographic hump which we slide off of in about 2015... subsequent labour cohorts will become smaller for the next 50 years which will mean that governments MUST default on state pensions). Those kiddies grew up learning that you can't go wrong in bricks and mortar - as relayed by someone who had a once in ten generation streak of luck but was prepred to just assume that every lifetime would have the same lucky break. No mention of 30-yr fixed interest rates at 3.2% for the life of the mortgage, followed by a period of 20% inflation (although inflation over the 1970s 'only' averaged about 10%... it still means that real mortgage rates on pre-1970s mortgages went negative). tn You really need to follow the Rothschild mantra: buy at the sound of the cannon, and sell when the people are dancing in the streets. with NET rental yields still woefully inadequate relative to any forward guess at inflation, property will be a dead zone for a generation. (And the US will be 3 countries by 2025 - it is failing much faster than the UK did after WWII). Cheerio GT PS Oh... and I forecast the subprime/CDO mess in 2004. Three cheers for me.
  15. As someone who has lived pretty much everywhere in Anglo-centric bits of France (first in Paris in the 16th and 7th arondissements, then in the Vendée with all the "Orright Trev?" nouveaux-gîtiers) as well as non-Anglo-riche places (Maine-et-Loire and Auvergne) I can tell you that the inflow of English MEW money is (was?) staggering. All you need to do is compare Vendéen prices with those in the Maine-et-Loire (two departments across and 35% cheaper... we lived in a tower in a 15th century chateau for 1300€ a month) or the Auvergne (Deepest Darkest Central France with so few Poms that even Australians like us are mistaken for English). In fact there are more DUTCH in our local countryside, and the last Anglo-Scot couple we know left for China six months ago (and could not get a Frog to pay their ask on their house). There is still a Scotswoman married to a Frog in a local pizza place; that's the only anglophone I can think of between here and Clermont (70 km away). A local place (almost entirely renovated) which is really lovely, with 2000m.sq. of land, was on offer recently for 85000€ (and we think that the Dutchies who moved in got it for less). And it was overpriced at that level - no Frog would go within a bull's roar of it. You can buy a convertible stable less than 500m from our house - for 30k euro, but nobody around here would do such a dumb thing. Contrast that with the Anglo-centric bits of yon Frogland - e.g., the Vendee. Every man and his dog in the Vendée is up to his scrotum in equity withdrawal from an overpriced digs in Blighty. I say this without a hint of schadenfreude - one of my very dearest friends sold a lovely place in the Forest of Dean and bought a very very very very very nice maison bourgeoise in the Vendée and converted part of it to gîtes. Unfortunately he did that before he met me (I would certainly have counselled agin it); he paid top-dollar for the house (in Frog terms), spent hundreds of grand (euros) doing it up - at a time when the cost of French tradesmen has been exorbitant (but only in the regions inhabited by beaucoup d'anglais). If a Frog roofer or plasterer gets a whiff of a Pom with a building project, they rub their hands together and think of all the wine and fags they will be able to buy for their children. Anyhow as I was saying... although my friend is a delightful fellow and not in the least like the "orright Trev" types which infest the Vendée (those who used to go to Benidorm I guess), he is already probably underwater (and he's been here four years). Par contre, the real newcomers (like the 60-odd English families in Vouvant - a town of maybe 600 souls - who don't even speak bloody French) USED to sit around in the Cafe de Cour du Miracle and babble about how the house in Norwich is worth 400k (poundies)... might want to revise that down a tad nowadays, but the equity was taken out to buy the Frog house and (of course) re-do the kitchen with everything priced at top whack. So for those who think that there will be little effect in France as a result of the unwinding of a tulip-mania type investment whackery in the UK housing sector, think again. An awful lot of people who shouldn't be in charge of a set of genitals, were given access to buckets of cheap finance as a result of inflated housing prices. Those folks came and - until recently - gave great custom to the Vendee Chippy (a local institution in the area who used to stop outside the Cafe du Bon Coin in Thouarsais-Bouldroux on a Thursday night... those were the days... cod 'n' chips for 6€50). It is beyond me why anyone (including us) would migrate to a country whose idea of breakfast is five dhurries, coffee, yesterday's bread and some jam - when any civilised chap needs four rashers of HM's Best Middle, a couple of eggs, some toast, two sossies and maybe even some kedgeree. Plus they speak some form of gibberish. But the wine's cheap. So in sum... Frog property to be smacked about the dangly bits in any place which is infested with Poms or Yanks. Spillover effects of somewhat smaller magnitude everywhere else (because, dear Reader, yon Pom and yon Yank priced yon Frog out of his own market in some departments, and yon Frog went to adjacent departments and drove up prices therein - relative to where they would have been). Aaaah... nice to know that seven years in one of Australia's best economic think tanks wasn't wasted... I can blather on in some forum somewhere. Cheerio GT France
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