T Nation

The Next Bubble to Burst: Hedge Funds

Dude, that bubble has been bursting for the better part of a month, now.

Rueters often displays their 20/20 hindsight.

News to me Rainjack. Do you know of any other horrors on the horizon?

The collapse…the collapse…

"4 Reasons to Favor The Baltic Dry Index

Of course, there are other reasons to favor the Baltic Dry Index over other leading indicators, including:

(1)No room for speculation. The index is not tradable, which means the only people booking cargo ships are those with actual cargo to ship. That makes the Baltic Dry Index, as economist Howard Simons put it, ?totally devoid of speculative content.?
(2)Not subject to revisions. Unlike almost every other piece of economic data, the Baltic Dry Index is not revised on a monthly or quarterly basis. The price is the price. And it?s completely reliable.
(3)An inability to be manipulated. Governments, both here and abroad, love to ?massage? economic data, especially inflation figures. Obviously, it?s difficult to base investment decisions off incomplete or ?mostly? accurate data. But because of the way the Baltic Dry Index is measured, that?s simply not possible. Again, the price is the price. And it?s completely reliable.
(4)Real-time, daily updates. We all know markets shift fast. And in turn, we need indicators able to reflect those sudden movements. At best, we only get weekly updates for other leading indicators. And all are backward looking. The Baltic Dry Index represents the only indicator with ?real-time? updates. And such frequency dramatically increases its relevancy and value.
In light of the above, it doesn?t take a market maven to predict what direction the index?s been heading lately - practically straight down."

http://www.investmentu.com/IUEL/2008/November/baltic-dry-index.html

[quote]GumsMagoo wrote:
News to me Rainjack. Do you know of any other horrors on the horizon?[/quote]

The oil bubble will completely burst, sending prices to the lowest price in over ten years. I wouldn’t be surprised if you saw sub-$20/barrel oil in the next 12 months.

Not really a horror story, but the free fall in oil will trigger a free fall in alternative energy such as wind and solar. I wouldn’t be buying oil, or alt. energy stocks for the next several months.

[quote]GumsMagoo wrote:
News to me Rainjack. Do you know of any other horrors on the horizon?[/quote]

Baby Boomer entitlements? They’re all set to gobble up the national GDP.

[quote]rainjack wrote:
Dude, that bubble has been bursting for the better part of a month, now.

Rueters often displays their 20/20 hindsight. [/quote]

Which is hilarious because it was started by a European Jewish investor to bring him news 3 days before everyone else got it.

[quote]PRCalDude wrote:
GumsMagoo wrote:
News to me Rainjack. Do you know of any other horrors on the horizon?

Baby Boomer entitlements? They’re all set to gobble up the national GDP. [/quote]

Exactly. We’re already borrowing (and printing?) to pay for wars, financial bailouts, etc. And when the boomers really start hitting the entitlement system? It’s going to be devastating.

[quote]Sloth wrote:
PRCalDude wrote:
GumsMagoo wrote:
News to me Rainjack. Do you know of any other horrors on the horizon?

Baby Boomer entitlements? They’re all set to gobble up the national GDP.

Exactly. We’re already borrowing (and printing?) to pay for wars, financial bailouts, etc. And when the boomers really start hitting the entitlement system? It’s going to be devastating.[/quote]

When does this begin?

[quote]GumsMagoo wrote:
Sloth wrote:
PRCalDude wrote:
GumsMagoo wrote:
News to me Rainjack. Do you know of any other horrors on the horizon?

Baby Boomer entitlements? They’re all set to gobble up the national GDP.

Exactly. We’re already borrowing (and printing?) to pay for wars, financial bailouts, etc. And when the boomers really start hitting the entitlement system? It’s going to be devastating.

When does this begin?[/quote]

It began January of this year.

[quote]GumsMagoo wrote:
Sloth wrote:
PRCalDude wrote:
GumsMagoo wrote:
News to me Rainjack. Do you know of any other horrors on the horizon?

Baby Boomer entitlements? They’re all set to gobble up the national GDP.

Exactly. We’re already borrowing (and printing?) to pay for wars, financial bailouts, etc. And when the boomers really start hitting the entitlement system? It’s going to be devastating.

When does this begin?[/quote]

It began January of this year. The first Baby Boomer began collecting social security and medicare this year. Medical costs are already growing at 14%/year, while the economy is currently in a recession.

Once the government starts paying EVEN MORE than the 46% of all medical costs it pays now, teh collapse will accelerate. Socialism never works.

[quote]rainjack wrote:
Dude, that bubble has been bursting for the better part of a month, now.

Rueters often displays their 20/20 hindsight. [/quote]

Seriously. Hedge are down a lot as a group. And there have already been plenty of layoffs.

[quote]rainjack wrote:
GumsMagoo wrote:
News to me Rainjack. Do you know of any other horrors on the horizon?

The oil bubble will completely burst, sending prices to the lowest price in over ten years. I wouldn’t be surprised if you saw sub-$20/barrel oil in the next 12 months.

Not really a horror story, but the free fall in oil will trigger a free fall in alternative energy such as wind and solar. I wouldn’t be buying oil, or alt. energy stocks for the next several months.
[/quote]

I think you’re overstating here. I doubt we see the $150+ barrel of oil anytime soon… but it still will be very cyclical in price with low winter prices (just like right now and every winter forever), and will still spike over the summer, just like every other year.

OPEC will still cut production, and our SUVs didn’t magically disappear. We’re so shortsighted, it’s ridiculous. Oil is ALWAYS cheaper throughout the winter time…

I’m accumulating shares of USO during the winter (dollar cost average down should it keep falling, and I expect it to), and plan to sell off going into the July 4th weekend 2009. I won’t get rich, but I think it’s silly for a $55 barrel of oil in November will still be $55 in July. Demand has not fallen enough.