Wednesday, December 8, 2010

Macro stuff from FPA Capital

I am not a macro guy but it doesn't hurt to hear some really smart people talk about macro issues. Even Seth Klarman has become very macro sensitive in past year. These guys were very early in recognizing the credit crisis and I put lot of trust in their research work.

Worth a read
"Based on the initially published size of the QE2

program, we expect the Fed will struggle to increase
the rate of inflation. Persistently high unemployment,
uncertainty about government regulation and its scope,
and a limited appetite for capital investment mean the
Fed will have to shock markets to have inflation achieve
its desired outcomes. The Fed will potentially have to
buy more than expected for longer periods if it wants to
make the most important impact — a shift in
psychology. After more than thirty years in the U.S.
with the experience of negligible inflation, dramatic
actions are required to shift thinking of individuals and

For the full article,%202010.pdf