Daily Speculations

The Web Site of Victor Niederhoffer & Laurel Kenner

Dedicated to the scientific method, free markets, deflating ballyhoo, creating value, and laughter;  a forum for us to use our meager abilities to make the world of specinvestments a better place.

 

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James Sogi

10/06/04
The Tightening Knot

The US budget and account deficits are a long-term problem for the economy and the dollar. The negative accounts have been held up by loans from Asian treasury bond purchases. They need to keep the dollar up to preserve the high US consumer demand for their products, but both sides of the equation are unsustainable.

Oil and rising interest rates will also negatively affect the US economy. US government and private sectors have mismanaged their politics, finances by overspending and under saving and over leveraging.

Other emerging markets do not have these same problems and are cutting rates and spurring their economies. The aging of the US population will lead to slower growth. The JPM Hedge fund article mentioned that economic stalemate has lowered US equity volatility but interest rates and currencies continue to present good opportunities. These moves in currencies and interest rates may be reflected in emerging and other non-US market moves. The dollar range seems to be a tightening knot.

In May, India had a panic and some aged Brahmins hobbled to their brokers to buy. With a meager portion of overplus, they rest on their oars until the next panic somewhere, which occurs sometimes oftener than once a year.

 

James Sogi is a philosopher, Juris Doctor, surfer, trader, investor, musician, black belt, sailor, semi-centenarian. He lives on the mountain in Kona, Hawaii, with his family