The Turtle and the Hair(cut)

I had a haircut in Seattle yesterday. Business was noticeably down. The guy who cuts my hair said that he's finally seeing it now. Some customers are actually increasing the number of weeks between visits. I told him not to plant dangerous thoughts in my head. I still get it cut every six weeks.

I had my car worked on today. When I called to back out this morning (had serious second thoughts about spending the money on such an old car), they knocked nearly another 28% off the price of the work (that's on top of the 14% I haggled off of the price yesterday). I opted to do it. I asked how business was doing. They said it was down 30%. People don't seem to be buying new cars OR fixing their old ones. I don't think that can work long-term.

Watched "The International" while waiting for my car. I was alone in the theater. I laughed every time I saw "FATHOMEVENTS.COM" ads in the previews. The crashing housing market and economy must be getting to me. I was supposed to see Fathom_Events but I kept seeing Fat_Home_Vents, lol.

The movie was about evil banks controlling the world and one man's attempt to bring one down. Yeah, I was watching some fiction as an escape from reality. So sue me! My favorite line from the movie was (and I paraphrase from memory), "If you can't dig yourself out of a hole, then dig further in."

Drove home from the auto shop. I saw one of those lit up construction signs that normally tells us to expect delays and what not. This time it said $2,500 reward for the arrest and conviction of those who stole equipment from the job site.

Flipped on my computer. Noticed that my TIP fund got a haircut compared to the non-inflation protected counterpart even as oil jumped in price. Meanwhile, gold couldn't hold $1,000 an ounce, again.

I have a theory to explain this. The stagflationists are exiting TIPS, gold, and silver and piling back into oil while it is still relatively cheap. They certainly weren't exiting TIPS to buy stocks.

Meanwhile, the deflationists stand pat in nominal treasuries and refuse to buy stocks. Go with what works I guess. How can I even heckle? It really has worked, and quite well.

Just a theory of course.

Treasuries: Inflation Protection (TIP) vs. No Inflation Protection(IEF)

I was on the wrong side of that trade. I really can't complain though. I could be doing a LOT worse.

Treasuries: Inflation Protection (TIP) vs. The Stock Market

Just doing my part to play the role of the turtle. I figure it's only a matter of time before the bottom falls out of The Old Shell Game again. Regardless of what happens, I'm sticking with the turtle defense.

Here's yet another prediction. At some point (maybe years from now), financial advisors will tell us that rising oil prices are deflationary again. The long-term stagflationists will do well as inflation actually does pick up in the face of rising oil prices again. Shocking! Then the global economy will tank again. That's when the long-term deflationists will do well again. The cycle can repeat again, and again, and again. Just a hunch.

Bernanke confident can keep U.S. inflation at bay

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke said on Wednesday that he had an exit strategy from the U.S. central bank's recent massive monetary expansion that will keep inflation under control...

I think my prediction is consistent with Bernanke's exit strategy.

I'm not quite sure at what point the long-term stock market investors do well again though. I'm not going to be holding my breath, let's just put it that way.