people in motion

people in motion

mercredi 29 août 2012

The Black Hole

Jackson Hole 2012 and Dull Markets

The prices for stocks are now fake
So Kleptos can stay on the take
The bubbles Ben's blowing
May keep markets growing
But sooner or later they'll break

The Chinese Stock Markets are returning to the lows of 2009 and the Europe is mired in a recession. The American Stock Markets are not far off their highs and we do not think this will continue. Mark Grant is quite negative, for all kinds of reasons, about western equity markets now and would be taking profits and returning to the more assured bets of getting yield from bonds and not from dividends. 

A dividend may be reduced or cancelled by the wave of some Boards’ hand one afternoon while senior debt cannot be cancelled without the company or the municipality going into bankruptcy so that the top of the capital structure is far safer than relying upon dividends for income. In the next sixty days we are faced with Greece, Portugal, Spain, Italy and ECB issues that are quite serious both economically and politically. You may think what you like but there is a lot of risk on the table; of that you may be assured. 

When someone says, “Buddy can you spare a dime” we would like to be the one being asked and not the one doing the asking. It is here where we stand and wait.

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