Sunday, April 15, 2007

Peter Thiel on Bloomberg.

Bloomberg: Peter Thiel.

To summarize Peter Thiel's views in this interview:

- Continues to believe that ultimately we have a hard landing in housing/consumer led recession in the US due to the aftermath of the housing bubble, though obviously this is taking longer to play out than he thought (he's not alone there - I'm guilty too).

- Bullish on the dollar; believes that the Fed will be unable to lower rates as it has to try to contain inflation and that the dollar is undervalued versus other currencies (references the British pound in particular).

- Bullish on oil, Canadian oil sands stocks (Opti Canada, Nexen, Encana), and oil service companies (Schlumberger).

- Believes China will be a great growth story for the next 20 years, but has no investments there and isn't interested in them as the market is overvalued and the stocks available to invest in are losing money. Believes the best way to invest is via multinationals that export there.

The interviewer raises an interesting question: Could a rise in US exports, and the concurrent stimulation to the US economy that would come from that perhaps head off a looming recession? With the dollar weakening, there is some support to this theory, as a weak dollar gives foreigners more purchasing power in US goods, it also boosts US multinationals foreign earnings when translated back into dollars.

Interestingly, we're not really hearing much squawking on the dollar from the Treasury secretary (ala how they used to roll out John Snow with his "we've got a strong dollar policy" line - boy was that guy a terrible actor). So I'm wondering if perhaps they're looking the other way on the dollar with exactly that idea. After all, a US recession isn't good for anybody, Chinese, Germans or Saudis.

Thankfully, I didn't start a blog on currency trading so this is less of a concern to me, and I personally never trade currencies. [Peter Thiel, on the other hand, was once a currency trader.]