sahtt

A few minutes after the open I doubled my cash position to almost 40% in my long term account. I strongly believe there is a massive rate cut in the works but am not willing to risk holding oil stocks until that time comes. When I saw the VIX hit the levels it did and we were down 700+, I went ahead and nibbled but I need to restructure my portfolio for what could end up being a strong deflationary environment.

I had one of my best trading days so my losses in tech didn't bother me much.

lOOkatme

There is a strong possibility of deflation....which is basically everyone hoarding cash, or not making loans, etc.


At some time....when all this money is printed....it will circulate....it will increase in velocity and we will have inflation.

the only risk here is.......How are other countries currencies in relation to ours....will they continue to inflate? and how much?

cthree

We are already there. Statistics being what they are don't come out for a couple of months but I can tell you right now that the financial crisis is exactly what you say. the junk bond spread is up to 13% as of today. That's over 15% interest to borrow money for a huge segment of the economy.

cthree

I expect oil to be $40-$60 by 2009.

cthree

Cash is king. Put it in a nice interest bearing insured account.

GPMike

Damn!

The system is ill. A vaccine would be a massive increase in interest rates. This would entice Americans to hopefully save money in a bank....something they do not do (practically a near zero savings rate.)

But instead Bernanke will make it worse and do precisely the opposite.

cthree

^ I disagree. Raising interest rates is 100% wrong not just because it was done before and led to a catastrophe that got it's own noun but because it's just the totally wrong thing to do.

sahtt

I think they need to do everything they can right now, including coordinated rate cuts. Some European rates are still fairly lofty.

I think $60 is very possible. I've been saying deflation for a while now and I can't say that while having 25% oil service etc., I cut that in half today.

sleeper_s2k

i bought FCX today. holding long. don't flame me

cthree

^ your money.