Monday, 26 January 2009

in the CAT house?

CAT numbers today were worse than expected, forgetting its status as a bellweather, the 20k job losses on a day were the total was greater than 50k of announced job losses is stomach turning. The interesting point to note for the Raven is how much the market cared?!? +2% in the SPX on a small change in VERY seasonally adjusted housing data really does say something. (adding to this is clearly that the market doesn't like these results for THIS stock, its down 7%)

Geithner gets done today and there seems to be more of a focus on the trilllllllion bucks about to be showered on the economy on "infrastructure". The real question to ask is whether these 'investments' are actually going to be that prudent? or are they going to be Japanese style bridges to nowhere? we've seen how poorly the US public invested their cash in housing and consumer spending, how can anyone think that the government is going to do a better job.

The Raven felt the pain on this gold rally, he's still a bear, although is hiding in the woods. His birds eye perspective and relative valuation still holds:
1) its "rich" in a regression to oil
2) what was the price action in october to panic? pfff. its therefore trading as an inflation bet - well then why is oil at 40 and other real assets trading like crap?
3) central banks still hold huge reserves
4) you still can't eat it, live in it, make cars out of it, etc.
The Raven would much rather own stocks like RIO, OXY and CVX rather than bars of gold in a vault. That doesn't negate the argument for holding onto jewellery or the like for the end of the world scenario trade.

The Raven has several questions that are bugging him:
1) when is the RMB going to appreciate?
2) how far will trade barriers and competitive devaluation go? is that in the price of the dollar?
3) what is the effect of the swiss central bank saying they'll do what it takes to knock off the swissy? BOJ doesn't look like its going to do the same?
4) when is Trichet going to shove that compass where the sun doesn't shine and start looking through the windshield and not the rear view mirror?

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