My financial advisors Monthly Newletter

[i_am_the_swammi]

FYI, for those that have followed the prior month's postings:

 

From yesterday:

 

Good afternoon all:

 

After a swift kick in the shorts yesterday, the bulls are off and running again on the Street of Dreams, if not the Streets of Pamplona. The Dow gave up 212 points yesterday and today is rallying up about 55. I don’t expect that yesterday will be the last big down day, I do think it will be the precursor to a bit more volatility than we’ve had as the bulls and bears struggle to find middle ground at fair valuation. The word on the street was that the selloff yesterday was due to Greece’s impending default on $70B of upcoming debt.

 

I’ll call this right now – The IMF and the EU will not let Greece default on its sovereign debt; they simply won’t allow that to happen because it would be a throwback to 2008 and would result in far heavier borrowing costs for even sound EU countries. It would spell certain doom for marginal countries such as Poland and Turkey and choke off any economic recovery in Europe. So, Germany to the rescue!

 

As discussed previously, Greece alone isn’t the issue; the impending debt crisis in Portugal and now Spain is. The debt crisis is spreading in Europe and many European economic policies are beginning to show their cracks through the government’s inability to repay debt and the IMF and the EU can only do so much right now. New regulations prevent short selling in Greece, so that should ease the volatility somewhat but look for Europe to do much what the USA did and package some of this debt into pools and sell interests in the pools to institutions. If they don’t, at some point, Greece and other PIG countries won’t be able to raise taxes fast enough to pay the interest on their debt. The result won’t be good.

 

Where does this leave us? Right now, still mostly in fixed income in one form or another. We got the signal we expected today from Bernanke ion the way of a promise not to raise rates anytime soon, so bonds and other fixed income investments still have a ways to go. For those of you in managed money, we’ve discussed the shelf life of this investment strategy and that remains unchanged at this point. Once we see a significant move in the job market, then we can start thinking inflation down the road and look for ways to position ourselves for that eventuality. I think we may see inflation in Europe before we see it here because their debt is in far worse shape than ours. Treasuries are still the safest refuge and despite claims to the contrary by those who are looking for a short term profit, everyone knows it.

[TimC]

That world market is working out great for us, ain't it? We need to worry about ourselves so when a crapload of European countries fail because they decided one currency with a bunch of different fiscal and social policies was a good idea, it won't affect our markets.

 

But hey, it's all about making the world a better place at the expense of America. Send all the jobs overseas, send all the manufacturing overseas and we should be just fine in the world economy. How'd that experiment work out?

[dmarc117]

That world market is working out great for us, ain't it? We need to worry about ourselves so when a crapload of European countries fail because they decided one currency with a bunch of different fiscal and social policies was a good idea, it won't affect our markets.

 

But hey, it's all about making the world a better place at the expense of America. Send all the jobs overseas, send all the manufacturing overseas and we should be just fine in the world economy. How'd that experiment work out?

 

 

tim, now come on!!! obama is number 1 in their eyes!!!