Deflation link (must listen) & Early thoughts on 2010 2nd half

Long note this week-end but here is a must see interview w. John Makin:

http://www.businessinsider.com/aei-john-makin-2010-8

http://www.aei.org/scholar/40

Still got the same views:

* Collapsing US growth - my old theme...

* Gold long

* Stocks short

* Short SEK since early August on Debt office planned selling of SEK
plus cyclical growth top in place....

* Looking at shorting deflation industries: Autos, housing and banks.......

* Looking at how "equity premium in stocks - the fact yoy get paid for
owning something less liquid than cash/bonds is going to collapse" -
ECB put it as 500 bps when investing in banks in 2008/2009 - is it
likely we will get less than 100/200 bps going forward as holding
cash/bonds even at these low rates - earning pretty much zero after
inflation is better than owning stocks w. negative 5-7 pct ? The
whole "spiel" in last built up phase was Yale model - getting paid to
own illiquid instruments - 2008 proved it did not work - now we are
all realising owning 60/40 stock/bonds allocation is really weighted
80/20 stocks.. (volatility higher than bonds meaning you need to own
80 pc bonds and 20 pc to be truely 60/40) ... this has massive impact
on pension schemes ...

* Looking at demographics - getting convinced that both Current
Account & growth highly correlated to ratio of "prime age" population
to total population - meaning we have seen peak in growth potential -
forever! ...

Nice week-end