Outlook

This Financial Times article prompted a question: "Why are relatively good hedge funds in trouble?"



Easy answer: rich people who put money into these funds now need it back. What started as a collapse of toxic assets has now dragged the good down as well. Which begs another question: "When does it come back?" Not sure, but it seems to me that the crash phase of the Credit Bubble is now passed. First the guillotine, then the sandpaper, as Russ Winter says.



If we are in a sandpaper, or jagged-shaped downtrend, I need to trade more quickly. Take profits more quickly, as well as look for some opportunities to bottom-fish. I'll probably look at more high-yield bonds, maybe an ETF. Some of these are so low that they offer equity-like capital appreciation opportunities, while paying much juicier income streams than the typical dividend.

However, my macro view continues to be extremely pessimistic for the world economy. Chinese manufacturing has collapsed, and there is now talk of a DEVALUATION of the Renminbi. I had this one spot on a month ago, but CNY and
CYB are not marginable.