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Thoughts from the Frontline

The Monster That Is Europe

December 16, 2013

(Special note from John: The letter is later this week, and I apologize. The rule is that you don't want to know about the storms I encountered, just whether I got the ship to harbor. So, back in the harbor, here is the letter, which will give you a head's-up on a brewing banking crisis in Europe.)

This week, Geert Wilders and his Party for Freedom in the Netherlands and Marine Le Pen of the Front National (FN) of France held a press conference in The Hague to announce that they will be cooperating in the elections for the European Parliament next spring and hope to form a new eurosceptic bloc. Their aim, as Mr. Wilders put it, is to "fight this monster called Europe," while Ms. Le Pen spoke of…

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Sidney Heath

Dec. 21, 2013, 6:39 a.m.

Your article is enlightening and sobering about the next potential black swan. However, you and many others may be underestimating how quickly the market reaction will be to the next issue. Blackrock is just one of many that is suggesting that you be prepared to pull out at the first signs of trouble. I expect there are automatic trades already in place at most major institutions. When this “grain of sand” falls on the mountain, the avalanche will be too quick for most investors to steer clear. Blackrock’s advice to get the last bit of profit from this market will turn out to be a true sign of greed taking over for good financial advice. I am presently hugely in cash and expect to buy from the greedy investors on the next “big correction”—learn from the Greek ship companies.

Dec. 18, 2013, 2:12 a.m.

One point I find hard to accept and that is over a period of 5 yrs ship design has advanced to the degree that they can find a 25-30% fuel efficiency. That’s a monumental jump!

Dec. 16, 2013, 3:06 p.m.

Mr. Mauldin,

Your posts are always thoughtful, highly analytical and well-written. My only criticism is that they could be more brief or that you might consider an executive summary of sorts for those of us who want just the ‘Cliff Notes’ on the subject under consideration. That summary could be available alongside the detailed analysis while the summary whets the appetite for those who want a thorough understanding of the subject.

Thank you for your contributions to the discussion of the complexity of our economic/financial world.

C. Mayer

Dec. 16, 2013, 9:28 a.m.


Do you have any thoughts regarding the frenzied buying of Single Family homes in Southern California by Chinese Nationals? My wife and I gave the keys to our expensive coastal home in 2010 (I’m glad I did, thank goodness for non-recourse loans!) and have been happy renters for the last 3 years.  We’ve recently discussed getting back into the market and buying a home, but I keep thinking a major bear market is going to hit SFRs again soon.  But then I’m wondering if this foreign money leaving China for the US is a short term anomaly that will pop when the bubble pops, or is the another “new-paradigm” that will push SFR prices even higher.  Thoughts?