Courtesy of Tyler Durden
Recently, the most trendy (not to mention profitable) socio-political class is not that of capitalists, socialists, communists or even fascists (despite what some would claim), but that of the "bailoutists": those enlightened individuals who have bet everything on black, when black is the certainty that global governments will stop at nothing to, well, bail out the worst of the worst (to an extent explaining the continued outperformance of the worst stocks compared to quality names, a fact which as we predicted a year ago will make traditional long-short investing obsolete). For the full agenda of what a bailoutist believes in, we present today’s follow up David Tepper interview with CNBC. In it, in addition to explaining what the creme of the crop of today’s hedge fund world sees as the upside in a bailout driven world, the Appaloosa manager touches on such things as his market target for 2011 (S&P earnings of over 100 and a P/E multiple of 15, you do the math), corporate efficiency (the realization that companies can get away with much more, by firing many, and paying the remaining far less), the reasons for his caution (not many, though certainly the balls and the wall made legendary from his prior interview have no certainly diverged), but mostly why the same investment strategy that worked in the past (the central bank cartel rescuing everyone and everything) should continue to work indefinitely. And why shouldn’t it: with taxpayers around the world apparently ok with transferring their wealth to the oligarchy in the form of a record steep yield curve, an unrepayable debt load, and increasing inflation, governments and bankers have a carte blanche to do as they see fit. And last, say what you will about the tenets of bailoutism… at least it’s an ethos.
Part 1: where he discussed his recent charitable activity:
Part 2: where he drops the humanitarian facade and actually talks about what people came to hear him say.
