Tuesday, September 28, 2010


Is this why investors should steer clear and never chase takeover rumors?

According to Streetaccount, none of the nearly 80 deal rumors that circulated came through in 2010!

Run, don't walk, to read Bill Gross's 'Stan Druckenmiller Is Leaving.'

Confidence falls from 53.2 to 48.5. (Consensus was 52.1.)

Appaloosa's David Tepper had his due on "Squawk Box" on Friday.

Now John Paulson (hat tip to BTIG) has his due in a recent lecture at the University Club.

Here is what he said about the fixed-income markets:

Bonds -- The purchase of long-dated bonds, either Treasuries or corporates, should turn out to be a horrible trade. Rates are at record lows, and the economy is turning and should continue to churn higher. Paulson expects roughly 2% GDP growth for both 2011 and 2012. Quantitative easing should contribute to significant inflation over the next few years, with inflation possibly hitting low-double digits by 2012. This is bad for the 10- and 30-year and bad for the U.S. dollar. The U.S. dollar should fall and the yields on long-dated U.S. Treasuries should rise.

Economic/credit problems in Ireland are intensifying, and credit spreads are widening.

Monetary shock and awe might be replaced by monetary shucks and aww!

With a hat tip to John Mauldin, check out Ed Yardeni's excellent commentary on the subject, "Why QE Doesn't Work." (It's a subscriber-based newsletter.)

Bonds are down in the early going, likely reflecting the reaction to Hilsenrath's shucks-and-aww Wall Street Journal column.

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