What's the ULTIMATE contrarian play today?
Here are a few for starters - not recommending any of them (yet):
1) Buy and save US dollars
2) Buy homebuilder, retailer and financial stocks
3) Short China, India, Gold, Google and Apple
4) Trust the MSM to do their jobs
5) Support George Bush
6) Buy real estate, especially condos in Phoenix and Miami
7) Believe bubble-promoters like Kendra Todd, Nicholas Retsinas, Blanche Evans, Ben Bernanke, Hank Paulson, Greg Swann or Lawrence Yun
8) Shop at Home Depot and Circuit City
9) Tennessee vs. Giants SuperBowl
10) Book a vacation to Iraq
(PS, when the sheeple are repulsed by their houses, that's when it's likely time to buy)
33 comments:
You missed one:
11) Actually believe your Phoenix/Scottsdale house is going to triple in value from 2005 peaks.
Don't laugh, I can name several people who still believe this is going to happen.
"11) Actually believe your Phoenix/Scottsdale house is going to triple in value from 2005 peaks."
He's not joking. My roommate/landlord has been foreclosed on 2 houses and he's trying to short sell the one we are living in right now.
He is still on the waiting list to buy a phase 1 house from a development in Arizona...
I gotta stop posting here Keith, I think I am giving you too many ideas.
For people with 'guts' I'd be betting FOR the US dollar and against commodities (gold, oil etc....)
Real estate in a few years.......still way too expensive.
Whatever Warren Buffett is doing in terms of investment strategies. I think he just sold his Petro China position and he bought an international metal works company.
Vegas, Baby! Why gamble on Miami when you can Buy Vegas!
In all seriousness, I think a sound contrarian play can be made for US dollars. The (completely justified) outrage over rate cuts and skittishness towards the economy has hurt the dollar, and rightfully so.
But I for one think greenbacks will recover somewhat, as people realize that the other major currencies have their own weaknesses, and don't want to buy at peak for gold.
Get $500k mortgage and buy a house at a ridiculously inflated price. Wait for the 100x dollar revaluation. Pay of mortgage with one month's pay.
altough, the dollar can still go lower.
Other currencies, Euro / Pound
have a much steeper fall ahead.
So
1) Buy and save US dollars
Hey, concerned:
I agree with you on this.
Keith,
You are great for allowing everyone’s opinion to be posted.
As you know I strongly agree with you on many things and strongly disagree with you sometimes, but so far you’ve always published my thoughts.
And I want to congratulate you for this!
Enjoy your weekend.
I just read an article in the Bangkok post that even though Dewali (an Indian holiday) is coming up and is the auspicious time of the year to buy gold, demand is down due the relatively high prices, even adjusting for the increased strength of the rupee relative to the dollar.
So less people are inclined or are able to buy at the peak.
Funny how your posters can open your mind up to a recovery in USD when you were trumpeting it will go to zero over the last couple of weeks. But at least you keep your mind open - that's more than a lot of other people do.
BC
But I for one think greenbacks will recover somewhat, as people realize that the other major currencies have their own weaknesses, and don't want to buy at peak for gold.
fear of buying at the peak is a valid concern. The public has not even caught on to gold though. This could easily be analogous to seeing a bubble in house prices in in So Cal in early 2002, only to see it run up for another 3 years. Also, foreigners are seeing gold prices are barely budging versus their currency, even though their central bankers are printing money about as fast as ours. When they catch on, look out. Just one thought. Fiat sucks.
1) Buy and save US dollars
A realistic contrarian play based on solid historic trends.
It's still too early to tell what's going to happen. Even though HPers have been predicting this for years, the current situation is new for most people, so there's a lot of instability. Once the sheeple have to start dealing with the new status quo and aren't able to refi or go to plastic anymore, it should be clearer what direction the smart money will be going in.
At some point buying a condo in Miami might be a good bet. . .I like the warm weather, ocean, and Latin food. . .also great airport with flights to Europe and South America. . .agree with Anon - Dollar may be a little oversold and may recover a bit. . .but if Fed lowers again, it is all over.
But I for one think greenbacks will recover somewhat, as people realize that the other major currencies have their own weaknesses, and don't want to buy at peak for gold.
In modern finance, currencies are determined 96% by direction of interest rates.
When it looked like Heliben was opening the casino, and the ECB, and especially BOE were stern about higher rates, that's when the dollar plummeted.
As soon as the UK cracks *AND* the BOE gives in and lowers rates, that's when the pound (and probably euro) will go down, if Ben stays pat.
That's (almost) all there is to it now.
Carry trade uber alles.
Short GBP/USD if you think that the UK property bubble is really going to crack (a la August) enough to wreck the banks enough that BOE will lower despite inflation risks. (Remember, central banks care 99% about how well the other banks are doing, and 1% about everything else).
Don't be too early. I was way too early in shorting homebuilders and lenders (late 2005) and I got stopped out and then was too cautious. At last when it went down the toilet (August) I was on vacation. So I missed out profiting on a guaranteed trade.
Actually shorting highly levered UK banks with low deposits and high reliance on interbank funding---is there a "Kingdomwide"? --- seems like the next good bet.
PS: betting against London property seems like the ULTIMATE contrarian play.
Long Gold & Gold Stocks.
Short everything else.
Tm said:But I for one think greenbacks will recover somewhat, as people realize that the other major currencies have their own weaknesses, and don't want to buy at peak for gold.
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I dont know about that. The EURO may replace the Dollar as the world's currency and this may happen soon. There is talk from several OPEC countries to buy and sell OIL based upon EUROS and NOT Dollars. IF that happens, LOOK OUT, everyone, YOU AINT SEEN NOTHING YET!
I'm with tm. I see american dollars in cash/bonds/cd's as a sound investment.
Wealth is being destroyed right now. It actually never existed except on paper. Just as the Fed and then the banks and hedge funds created money out of thin air, it will disappear into thin air. As the $Trillions(!?!) of derivitive contracts are unwound or written off completely, the M3 money supply will rapidly deflate. I expect it to deflate faster than the Fed can reinflate it.
Gold will soon peak. Inflation will subside. Deflation is a real possibility.
Just my semi-educated hunch.
11. Buy in Las Vegas. It's landlocked, you know.
#10 has already been done. Go read Michael Totten's "vacation in Iraq" story at "his name" dot com
US dollar.
Pakistan just imploded, a nuclear power.
That's all good for the US dollar...
Anon said:
‘I dont know about that. The EURO may replace the Dollar as the world's currency and this may happen soon. There is talk from several OPEC countries to buy and sell OIL based upon EUROS and NOT Dollars. IF that happens, LOOK OUT, everyone, YOU AINT SEEN NOTHING YET!’
The rest of the world is beginning to catch up to America, will they ever be as successful not sure.
But it does not mean that the US is deteriorating at a faster pace then the rest of the world, its not.
OPEC countries do not represent ‘world's currency’; they actually represent the poorest populations.
The value of currencies is not determined by how many countries aknowldge it, it’s the exact opposite.
Unstable economies lean on stable currencies to float above inflation.
The Euro is a rookie currency and is questionable how it will hold up when the rest of worlds Housing bubble goes bust, as well as internal historical European nationalism that makes it a bit unstable.
OPEC countries are not exactly the brightest bunch, but they are smart enough to do what ever they can to maintain American consumerism, and to maintain streighnth in the Dollar.
Without the American consumer there is no OPEC, No China growth and No India growth.
OPEC oil money is a lot of money, but irrelevant in the over all world economy.
So even if everyone wants to stick it to the US, and trade in other color papers
The underlying value of the greenback will still be stronger because; as of today America is the only country where absolutely anyone legal citizen or not has the ability to ‘make it’ it is this underlying energy that forces the American currencie to the top, and even Fed does not have the power to keep it down for long.
common sense isn't so common after all. when everyone wants to be a contrarian, then the contrarians are the sheep
"Anonymous said...
I'm with tm. I see american dollars in cash/bonds/cd's as a sound investment.
Wealth is being destroyed right now. It actually never existed except on paper. Just as the Fed and then the banks and hedge funds created money out of thin air, it will disappear into thin air. As the $Trillions(!?!) of derivitive contracts are unwound or written off completely, the M3 money supply will rapidly deflate. I expect it to deflate faster than the Fed can reinflate it.
Gold will soon peak. Inflation will subside. Deflation is a real possibility.
Just my semi-educated hunch."
I agree
holy crap - pakistan declared martial law and suspended the constitution!!!
buy mo gold!
Buddy of mine bought a half-million dollar house recently. He and his wife are middle-income (both work at non-profits).
Since they moved in, kitty got stuck behind basement walls, which he had to rip up, basement flooded three times owing to backup in municipal line that came along with a battle to get them to fix it, and now the heater broke - another $7,000. Ka-ching! I'm forgetting something else - hasn't been there six months; endless costly repairs.
He's convinced the DC area will see a large in-migration, thus propping up our 150% bubble. According to him, "it's different here, and if I don't run out and buy a $500,000 or $750,000 house/condo right now, I'll be priced out forever". Am I just a DOPE? Comments?
#3 Gold (fear-driven) and China (big time bubble, govt. already trying to cool off overheated market and prepped to do more) are pretty obvious, I'd say.
All this time, you could buy a house if your work is portable. Just find one in a non-bubble area. Not really contrarian, but still...
long termer said:
The rest of the world is beginning to catch up to America, will they ever be as successful not sure
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I can see by your response that you aren’t keeping up with what’s been going on in the world these past few years. Because if you had been keeping track, you would have known that the Euro for the past several years has been above the dollar and the exchange rate between the Euro and the Dollar has only widened each successive year. Did you know that the European Union is the single largest economic entity in the world?
Did you also know that Europeans no longer emigrate to the United States. In fact, you have the opposite, you have Americans going over there. Case in point, check out the author of this blog, I believe he now is an ex-pat and lives in London. So to answer your question, Europe is NOT “catching up” to the US but they have already substantially SURPASSED us. (economically)
The other ridiculous issue you brought up : “OPEC oil money is a lot of money, but irrelevant in the over all world economy” HOLY COW! WHAT ARE YOU SMOKING!
The issue of the petro-dollar has been the single most important issue in the EURO-Dollar WAR. The hegemony of the US Dollar is vitally linked to the Petrol-Dollar (without this link, the dollar no longer is the world reserve currency but instead bows down to the Euro) . The real war is petro-dollars vs. petro-euros!
And finally, your last ridiculous comment: Without the American consumer there is no OPEC, No China growth and No India growth”
China is holding on to dollars until the 08 Olympics- after that forget it- the greenback will be dumped like a hot potato.
In fact, why do you think global banks and the FED have been infusing billions of dollars of cash into the economy these past few months?
Answer: Cause the Asians (China, Japan, Korea) are no longer buying US dollars and are instead dumping them as US credit takes a nosedive. Since the Asians aren't pumping up the dollar, the US government and the Banks themselves have to pick up for the slack. If these countries were to dump dollars and instead invest in Euros which already is beginning to happen, then bye-bye The merry-go round is over!
One word of advice to you: Start reading the writing on the wall. Yes, the dollar was once powerful. NOT ANYMORE. That and the housing collapse is what this whole blog is all about!
Short China, India, Google and Apple
Still long Gold...
In a depression, CASH would be the best asset...I mean oil demand should go down and gold...I don't know about gold.
The gov't can't MAKE people borrow money...so I'm not sure about there being inflation. There was DEFLATION during the 1930s, the last time debts were repudiated. No one had money to lend, they didn't want to risk it.
Maybe somehow the gov't will 'monetize' debt and create new money out of thin air instead of just creating debt out of thin air like they do now. I'm a little hazy on this.
"China is holding on to dollars until the 08 Olympics- after that forget it- the greenback will be dumped like a hot potato."
Yes and no. I think of China as the equivalent of the USA in the late '20s. It's a fast-growing export super power and its markets reflect hubris and lack of caution. Some government officials there have questioned the pace and sustainability of the growth but they are muted comments. The official line is that everything is A-OK, full speed ahead.
The U.S. today is like the British Empire of the late '20s. Basking on past glories, its currency accepted universally, living large on wealth pulled from far away lands, but its underlying finances are a wreck.
China (and Asia) faces a big economic fall that will make our Great Depression look like a tea party. The U.S. faces a slow, grinding decline where the average standard of living tarnishes like brass buttons on an old military uniform hanging in the closet.
Smart people with liquid assets at their disposal will do well in the coming chaos.
Anon said:
‘Did you know that the European Union is the single largest economic entity in the world?
So to answer your question, Europe is NOT “catching up” to the US but they have already substantially SURPASSED us. (Economically)
The real war is petro-dollars vs. petro-euros!
Blah blah blah.’
We are all well aware of the constant European media propaganda to ‘counter balance’ the US.
It happens to be Keefers blind spot.
(Human beings cannot outsmart their environmental influence)
I lived in Ireland (Galway County) for several months last year, and wanted to see with my own eyes the EU booming economy. I lived locally read the local papers and socialized with the locals.
What I found was very interesting
1) All the local media was basically anti American
2) All the local media said very much the same thing you are saying
3) Identical jobs pay approx. 30% less then in the US
4) Consumer items from food, cars, alcohol, energy products, clothing, toys, and of course housing etc. are all at least 30% more expensive.
5) Average person has very little purchasing power.
It is then when I realized that the fundamentals of Europe has not really changed
And there seems to be euphoria in the air that the US is bogged down with the Iraq war, and the centralization of the EU has created like you say ‘the single largest economic entity’.
This is were I disagree, if one looks past the smoking mirrors just like when looking past the RE hype in 05, one can clearly see that the EU boom is about get wacked.
Because it’s all based on hot air.
I am financially successful and have achieved it mostly by ignoring the hype and looking at the underlying fundamentals, it is clear that the EU economy is going to crash.
Being against the Iraq war is not sound financial strategy.
euro is gonna get whacked like no currency since the peso problems.
When the market finally crashes for housinfg in spain [I mean really crashes] it's gonna be a major rift between countries. The difference between the dollar and the eurois that individual countries can bail out, individual states cannot. As welfare countries continue the free ride they are getting with the increased value of the euro profitable countries will tire of losing jobs to them. Italy will be the first to bail, then a rush. The euro will be a footnote of history soon, maybe 7 years left tops, maybe 18 months until it ALL starts to fail.
A completly uneducated opinion from the worlds greatest Cassandra.
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