Investment Underground

Plastic Paddies… The now and future inflation… Spendaholics Anonymous… Waiting for the Treasuries bubble to pop… The perversity of ‘self-stimulation’… Paul Volcker’s two-tier financial system… Notes in “Fantasyland”… Going to ground in Ireland… And more!

*** Paddy’s Day celebrations are over. Yesterday, the streets of Buenos Aires filled up with lots of Latin “plastic paddies.” All very strange indeed. More on this below.

*** This morning, the Financial Times reports that Mr. Market is waiting to see whether the Fed will start buying long-term U.S. Treasuries to further ‘stimulate’ the economy.

And with rates at near zero levels, it’s running out of ammo. Talking to CNBC yesterday, Dr. Marc Faber, editor of the Gloom, Boom & Doom Report said

Pity the rich. Pity the CEOs. Pity the capitalists.

Poor Warren. He’s down to his last $25 billion. And Bill Gates can barely hold his head up; his pile has shrunk to barely $18 billion.

And do a Google search of “AIG outrage” and you will get 621,000 hits.

Alas, being rich isn’t as easy or as much fun as it used to be.

The rally paused yesterday. The Dow lost 7 points. It could be over. More likely, it will run for a few months. Gradually, people will come to think that this is the real thing. They’ll begin to imagine that it is 2003 all over again. Of course, it’s not…this market has nothing in common with the Great Rebound of 2003-2007. (More below…)

Oil traded at $47 yesterday; it is slipping toward the $50 level. And the dollar is slipping around too – it is losing ground against the euro, now

I am spending the next few days in Europe on a short business trip. First stop is Dublin where the temperature is icy, the mood is dour, property prices are plunging, the queues for jobless claims are five hours long, the soon-to-be-unemployed are holding protest strikes, and the banks are on the edge of a financial precipice. Yes, it may be a movie with different actors, but the plot is the same as in many other countries.

Meanwhile in the US, Treasury Secretary Timothy Geithner yesterday disappointed the markets with the lack of detail on the administration’s Financial Stability Plan. After all, he did say a few days ago (paraphrasing): ” We are not going to put out the details of our plan until we get it right.” (Please click

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