Who Is Going To Lend Us The Money To Fund Our Exploding Debt?

(businessinsider.com) PIMCO's Bill Gross joins the chorus of folks concerned that our exploding deficits are leading us down the road to ruin.

The key questions here are:"Who is going to lend us the $2 trillion a year necessary to fund this spending?" and What interest rates are they going to demand to do it?"

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Buffett Is Less Bullish on U.S. Than You Think:

(Bloomberg--Alice Schroeder) To the unschooled ear, Warren Buffett’s reassuring words that “America’s best days lie ahead” and that he’s buying U.S. stocks sound prescient, not preposterous.

But fair warning -- he’s not as bullish as he sounds.

Buffett has been right so often that what his words mean, and whether he is right now, are important questions. His skill as a forecaster has a lot to do with his psychology: a buoyant optimism tempered by extreme caution that let him score killings on stocks such as Geico and American Express Co. while steering clear of speculative bubbles, leverage, subprime mortgages, and trying to figure out a rescue for his pal Hank Greenberg’s company American International Group Inc.


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Julian Robertson's Steepener Swap Play

(marketfolly.com) Simply put, Julian Robertson is the definition of a hedge fund legend. And, his success is noted by the fortune he has amassed as he now graces the Forbes' billionaire list. He has pioneered a successful investment methodology, he has generated outstanding returns at his famous hedge fund Tiger Management, and his influence has sprouted some of the most successful modern day hedge funds in the form of the 'Tiger Cubs.' And, most importantly, he predicted the financial crisis two and a half years ago in an interview with Value Investor Insight. When he talks, you listen.

For those unfamiliar with Robertson, we'd highly recommend checking out the profile/biography we just wrote on him this morning. In that piece, we have outlined exactly why you should follow him (and the Tiger Cubs for that matter too). As we detailed in his profile, Robertson has a unique investment methodology. He takes a macro approach, finds a smart idea, researches it exhaustively, and places a big bet. And, when he feels he is more than correct, he will 'bet the farm.' And, it looks like we have identified Robertson's next play where he has and will continue to 'bet the farm.'


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CHART OF THE DAY: The Trash Rally

(Businessinsider.com)


Skeptical bears have dismissed the nearly 3-month old rally as just a lot of short-covering and piling into beaten down trash, like financials. With this chart, you can see what they mean. Since the lows in early March, the S&P 500 is up less than 50%, but the NASDAQ OMX Government Relief index -- a basket of companies that have taken government support in one way has more than doubled. Though interestingly, the financial heavy index has slipped a bit since early may. Major banks, which were once the most volatile stocks, have become a snooze.

See the chart here

Reflections and Outrage

Transcript of Robert Rodriquez's recent speech at the Morningstar Conference.

(fpafunds.com)

I want to thank Morningstar for this honor of speaking to you today. We go back a long time, beginning in 1986, when Don Phillips became the very first analyst to cover my two funds, FPA Capital and FPA New Income. I am deeply grateful for having been selected three times for the Morningstar Manager of the Year award and being recognized for my work in both equity and fixed income management.


For those of you who do not know, I will be taking a sabbatical beginning next year. My trusted partners, Dennis Bryan and Rikard Ekstrand will assume leadership of FPA Capital Fund while Tom Atteberry will do the same for FPA New Income. These three outstanding managers are here today should any of you wish to meet and speak with them. Having a high degree of confidence in them as well as FPA, I will be leaving all my personal investments in the various funds and will retain my equity ownership in the firm. Many executives say they have confidence in their associates but few demonstrate this in such a tangible way. I will return 2011 in a supporting role. My decision to take a sabbatical has nothing to do with the current tumultuous market or my health. More than six years ago, I discussed this as a possibility. I consider this step part of the process of succession planning and execution.

Read the entire speech

Jeremy Grantham's Warnings to Investors

Another excellent article explaining Grantham's 2009 battle plan
(advisorperspectives.com)

Read the article here

Chinese Students Laugh At Tim Geithner

(www.businessinsider.com) Poor Tim Geithner. He already comes off as kind of nervous and insecure when talking in public, but at least in the US, the only people who ever bother him are crazed Code Pink activists.

But in China, representing the country as chief bond salesman, the man named to People's 50 most beautiful people list was openly mocked.

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