DisQ Posted August 11, 2010 Share Posted August 11, 2010 OK guys get ready this the big one, its just round the corner now FTSE falling, DOW down. its all happening. Taleb Says Government Bonds to Collapse, Avoid StocksBy Renee Bonorchis and Miles Weiss - Aug 11, 2010 7:47 PM GMT+0100 Nassim Nicholas Taleb, who warned that unforeseen events can roil markets in "The Black Swan," said he is "betting on the collapse of government bonds" and that investors should avoid stocks. “I’m very pessimistic,” he said at the Discovery Invest Leadership Summit in Johannesburg today. “By staying in cash or hedging against inflation, you won’t regret it in two years.” Treasuries have rallied amid speculation the global economic recovery is faltering, driving yields on two-year notes to a record low of 0.4892 percent today. The Federal Reserve yesterday reversed plans to exit from monetary stimulus and decided to keep its bond holdings level to support an economic recovery it described as weaker than anticipated. The Standard & Poor’s 500 Index retreated 16 percent between April 23 and July 2, the biggest slump during the bull market. The financial system is riskier than it was before the 2008 crisis that led the U.S. economy to the worst contraction since the Great Depression, Taleb said. Prior to the collapse of Lehman Brothers Holdings Inc. in September 2008, Taleb warned that bankers were relying too much on probability models and were disregarding the potential for unexpected catastrophes. His book labeled these events black swans, referring to the widely held belief that only white swans existed until black ones were discovered in Australia in 1697, and said that they were becoming more severe. http://www.bloomberg.com/news/2010-08-11/-black-swan-author-taleb-says-he-bets-on-collapse-of-government-bonds.html Quote Link to comment Share on other sites More sharing options...
Guest Noodle Posted August 11, 2010 Share Posted August 11, 2010 OK guys get ready this the big one, its just round the corner now FTSE falling, DOW down. its all happening. “I’m very pessimistic,” he said at the Discovery Invest Leadership Summit in Johannesburg today. “By staying in cash or hedging against inflation, you won’t regret it in two years.” Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted August 11, 2010 Share Posted August 11, 2010 Maybe he means burning it to keep warm when fuel prices are unaffordable. He thinks it is going to crash again, outcome, still undetermined - all depends on reactions by the money printers. Quote Link to comment Share on other sites More sharing options...
Guest Noodle Posted August 11, 2010 Share Posted August 11, 2010 Maybe he means burning it to keep warm when fuel prices are unaffordable. He thinks it is going to crash again, outcome, still undetermined - all depends on reactions by the money printers. I just thought staying in cash and hedging against inflation were polar opposites of each other. Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted August 11, 2010 Share Posted August 11, 2010 I just thought staying in cash and hedging against inflation were polar opposites of each other. Yes, that is why it suggest to men that he sees another big problem but not the outcome as the orchestrators of the outcome are so unpredictable. Nice bit of sitting on the fence in that respect. Quote Link to comment Share on other sites More sharing options...
AvidFan Posted August 11, 2010 Share Posted August 11, 2010 (edited) He's a bit early with his 2-years prediction. 2 years for asset price falls - I agree. Bond collapses - maybe in the EU in 9-12 months time. Bond price falls on higher IR... 3 years away. Edited August 11, 2010 by AvidFan Quote Link to comment Share on other sites More sharing options...
yellerkat Posted August 11, 2010 Share Posted August 11, 2010 However, from ZeroHedge: To be sure this is not a new position for Nassim, who in February had the same message , when he said that "every single human being" should be short U.S. treasuries. Indeed since then bonds have gone up in a straight line as the bond bubble has grown to record levels, and with the ongoing help of the Fed, is it any wonder. The only question is when will this last bubble also pop. Who TF knows? Quote Link to comment Share on other sites More sharing options...
lowrentyieldmakessense(honest!) Posted August 11, 2010 Share Posted August 11, 2010 too early later this year methinks Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted August 11, 2010 Share Posted August 11, 2010 I just thought staying in cash and hedging against inflation were polar opposites of each other. these are two things...stay in cash for the deflation, and hedge against inflation...with summat else....the result is you stay where you are. Quote Link to comment Share on other sites More sharing options...
AvidFan Posted August 11, 2010 Share Posted August 11, 2010 too early later this year methinks Maybe even next year... Quote Link to comment Share on other sites More sharing options...
Guest Noodle Posted August 11, 2010 Share Posted August 11, 2010 these are two things...stay in cash for the deflation, and hedge against inflation...with summat else....the result is you stay where you are. I get it now. Cheers. So he's saying it's a big either or situation, but not sure which. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted August 11, 2010 Share Posted August 11, 2010 Bonds are shaken...not sturred. Quote Link to comment Share on other sites More sharing options...
AvidFan Posted August 11, 2010 Share Posted August 11, 2010 I get it now. Cheers. So he's saying it's a big either or situation, but not sure which. Depends how cheap your hedges are. Isn't it Taleb who keeps banging on about deep out of the money puts on gold? They're cheap I suppose... Quote Link to comment Share on other sites More sharing options...
AvidFan Posted August 11, 2010 Share Posted August 11, 2010 Bonds are shaken...not sturred. You're hilarious. Can I buy you a Martini? Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted August 11, 2010 Share Posted August 11, 2010 You're hilarious. Can I buy you a Martini? only if you have a rescusitator in the glovebox. Quote Link to comment Share on other sites More sharing options...
mdman Posted August 11, 2010 Share Posted August 11, 2010 Short bonds and stocks Go on... You know it makes sense Quote Link to comment Share on other sites More sharing options...
AvidFan Posted August 11, 2010 Share Posted August 11, 2010 (edited) Short bonds and stocks Go on... You know it makes sense If that were true, cash should be yielding something positive. Just checked my money-market fund - it ain't. Edited August 11, 2010 by AvidFan Quote Link to comment Share on other sites More sharing options...
AvidFan Posted August 11, 2010 Share Posted August 11, 2010 Yes. He just permanently bets on deep out of the money puts and keeps his fingers crossed. If he's predicting a Black Swan then it's not a Black Swan event is it. More like dark grey? Quote Link to comment Share on other sites More sharing options...
lowrentyieldmakessense(honest!) Posted August 11, 2010 Share Posted August 11, 2010 Maybe even next year... possibly - less than 12 months though Quote Link to comment Share on other sites More sharing options...
AvidFan Posted August 11, 2010 Share Posted August 11, 2010 possibly - less than 12 months though I find myself in total agreement, which is unusual Quote Link to comment Share on other sites More sharing options...
lowrentyieldmakessense(honest!) Posted August 11, 2010 Share Posted August 11, 2010 He's basically saying that, yes. Bet on deflation and hedge for the exact opposite - (hyper)inflation with dirt cheap options. He's said it before. who could pay out on the options if we get hyper-inflation - if hes doing that he's clueless Quote Link to comment Share on other sites More sharing options...
AvidFan Posted August 11, 2010 Share Posted August 11, 2010 possibly - less than 12 months though I've got the next 6 months pegged as "benign" with outbreaks of "quite nice" and a very occassional "lovely". Quote Link to comment Share on other sites More sharing options...
AvidFan Posted August 11, 2010 Share Posted August 11, 2010 (edited) who could pay out on the options if we get hyper-inflation - if hes doing that he's clueless That's Taleb for you. Pick a really well capitalised bank and cross your fingers. UBS? ( <- My Jim Rogers impersonation, just for you ) Edited August 11, 2010 by AvidFan Quote Link to comment Share on other sites More sharing options...
lowrentyieldmakessense(honest!) Posted August 11, 2010 Share Posted August 11, 2010 I find myself in total agreement, which is unusual could be the planetary alignment Quote Link to comment Share on other sites More sharing options...
AvidFan Posted August 11, 2010 Share Posted August 11, 2010 could be the planetary alignment That was end of July, with echoes in September and on into the new year, wasn't it? Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.