Friday, October 30, 2009

Important Reading to Start the Weekend

These aren't the easiest readings, but they're what some pretty smart people are looking at, so I thought I'd pass along, with major props to Morgan Stanley:

* Roadmap for the Fed's exit strategy;

* Issues associated with excess reserves on the Fed's balance sheet;

* Outlook for inflation and why the Fed might want "controlled inflation";

* Prospects for hyperinflation;

* Stealth inflation will become manifest when Fed stops paying interest on reserves.
.

2 comments:

Jorge said...

Dr. Steenbarger,

See also John Mauldin's take: http://www.frontlinethoughts.com/pdf/mwo103009.pdf

Best trading,

Jorge

zircon-212 said...

Thanks for the links. I despise the 'funnymentals' hands down, but it does not stop me from reading them for entertainment value. I know this is cherry picking, but Page 7 of the MS piece illustrates that what these analysts write is a prediction and in terms of reality is as useless as an ashtray on a motorcycle. Nobody can predict the future, but at best only posit their best guess filling up research space. Not only did the analyst get the interest prediction re: Norway wrong, he got it VERY wrong. If one positioned relying on the analyst making the correct guess (of course he does he works at Morgan Stanley), one better be prepared to take responsibility for the trade going horribly wrong. As always proper money management and judicious use of stops should prevent a complete disaster. Reader beware when positioning on the back of what you read from so called experts.