http://www.grandich.com/2011/02/update-28/

Half the time I am forced by point of a gun to listen to the D&G crowd lately, I keep waiting for the punch line, thinking this same story, now very long in the tooth, can’t actually encompass the depth of their analysis?  There must be more.  There must be something new.  There must be something even the usual self-disrespecting scaremonger and self-promoting hack hasn’t already blared at us on their website, promotions, CNBC perch, or ridiculous webinars.  There must be more!
But alas there’s no more!

Nothing new flows from the D&G crowd we didn’t already know for a while.  But sadly much flows to our D&G heroes, which might help explain the tenacity of their views.  Many of us are nothing more than investment lemmings who want our worn out views validated.  What we may see as rationale analysis in retrospect seems nothing more than a quest for someone to validate our religion (faith in self-mutilation is strong among the investment lemming breed, I know from experience).  Interestingly, what flows from this religious validation to the D&G promoters are those much despised Federal Reserve notes distributed most efficiently and effectively through the US banking system with the much dreaded Fed at the core of this payments system; a system that, despite the “massive government intervention,” works without flaw billions of times a day.  We never hear the D&G crowd complain about the Fed’s complicity in these transfers of stores of value.  Hmmm…

But Jack, haven’t you ridden in a tight formation with the D&G crowd in the past?

Currency Currents 16 February 2011

At a time when bullish investor sentiment has soared to extreme levels, we can see some storm clouds coming:

At a time when bullish investor sentiment has soared to extreme levels, we can see somestorm clouds coming. Yesterday’s market reaction to the +0.3% MoM print in U.S. retail sales attests to the view that a whole lot of growth is being priced in. Meanwhile, the real economic data are going to be deflated by a surging deflator — U.S. import prices of food has risen at a 30% annual rate in the past three months and fuels by a whopping 60%. That will surely cut deeply into spending power insofar as these costs get passed on. A flat reading in the NationalAssociation of Home Builders index at a depressionary 16 level confirms that the housing sector is going nowhere fast (see Banks Push Home Buyers To Put Down More Cash on the front page of the WSJ — median down payments are up to 22%!). If you are looking for real estate that is hot, it would seem as though the “ag” sector is in a full-fledged secular bull market (see Rising Crop Prices Lift Farmland Values on page A2 of the WSJ).

Meanwhile, U.K. inflation has already risen to a two-year high of 4% — double the Bank of England’s target. The central bank is caught in the box here because the run-up in inflation has occurred alongside a Q4 contraction in the economy. In fact, growth was surprisingly weak across the continent — a mere 0.3% inch-up in eurozone real GDP in Q4. The ongoing unease in the Mideast should also command a higher risk premium in the markets from a geopolitical standpoint (all the more so if the Muslim Brotherhood were to ever emerge victorious in Egypt).

Looking for an asset class with possibly way too much risk priced in? Try muni bonds — they are probably going to like to see more articles like this too — State Cuts Rattle Unions on page A3 of the WSJ and Minnesota Considers Top-Tier Tax Boost on page A5 (the Governor is aiming to boost the top marginal income tax rate to 13.95%, which would be the highest in the country).

….to read more items in this mornings dispatch register at Gluskin Sheff HERE

http://www.grandich.com/2011/02/interesting-interview/