Marketwatch - As the SEC complaint against Goldman Sachs seems to be slowly unraveling, we now learn from yesterday's conference call that John Paulson, who famously shorted the housing market in 2007 and 2008 to the tune of billions in profits, now sees little chance for a double dip recession. In fact, he envisions a strong V-shaped recovery, a "vibrant" credit market, with housing prices stabilized and poised for an 8-10% run-up in 2011. Only time will tell whether he's right or not, but he's putting his money where his mouth is and has covered many of his short positions. It was also disclosed that Paulson is the largest investor in the SPDR Gold Trust ETF (GLD), with the expectation that inflation is coming due to the quantitative easing of the US Government which has increased the monetary base by 150% since the start of the financial crisis.
Interesting. I'm not sure about gold but I think he's probably right about inflation. The Fed and other central banks will have a difficult time removing the punch bowl.
ReplyDeleteAnd we get the headline today that wholesale food cost jump the most in 26 years. Maybe Jim Rogers and Marc Farber are right about agricultural commodities.
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