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> 2009-05-31 - Conventional wisdom

>The future is now in the hands of political forces. We can't predict that from fundamentals. So we have no further predictions at this time.

So diversifying ones portfolio based on ones portfolio exposure to "political risks"? Usually you see people trade on that in currency markets? If most of ones portfolio is dominated by a single currency (and hard to liquidate to another asset?) one will have the most exposure to the political risks in that particular locale?




That reflects the TARP bailout and the Fed's policy on interest rates. The Fed bailed out the banking system by lending money to banks at very low rates, which they could then profitably re-lend at much higher rates, allowing banks to pay back the TARP loans. My point was that this was a political decision, one not predictable by financial analysis.

Through all that neither the dollar nor the Euro moved all that much compared to other markets. Housing, oil, stocks, and gold all moved more.




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