Investment Wisdom from select sources
Most U.S. portfolio managers seem to view the EU sovereign debt crisis as they would a pesky mosquito that refuses to fly away. If only the mosquito would leave, the asset managers could concentrate on the U.S. where the economy is said to be showing so much improvement and stocks are incorrectly perceived...
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John Mauldin looks at the economic implications of the payroll tax cut, some thoughts about Europe and what would have to happen for a country to leave the euro and he closes with some thoughts and graphs about the Keystone XL Pipeline.
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We have two bits of commentary from Kyle Bass today. First he gave his usual straight forward views to CNBC this morning. Second his latest letter. Unfortunately I cannot find a version of the letter that can be printed or downloaded, so you will need to read it online.
From the Interview
“If you get out a blank piece of paper and have a look at it, that’s the plan they’re working from right now. Everything is an agreement in principle. There are no details. It’s very difficult to arrange such a disparate group of people, and get them all to cede their fiscal sovereignty to call it a central taxing authority, and in the absence of that, it won’t work.
…I think that if you look at this last agreement, from the last summit, it’s somewhat of a doomsday machine. What they’re talking about, are the ECB and governments guaranteeing the debts of the banks which in turn buy the debts of their country that’s making that guarantee, pledging it at that central bank and getting more money to go buy more debt of those countries.
It’s somewhat sophomoric if you ask me. It is a circular reference that I don’t think institutional investors around the world are going to buy, they might hoodwink some retail investors into buying these things. When you look at the periphery today, there are no buyers of peripheral bonds.”
Some of the best commentary I have read on the Euro, and from several different directions, from Gavekal. Truly a must read.
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I've definitely developed an acute case of wishing Europe would go away already, and after this week I'm cautiously optimistic that may actually occur in an acute sense for a least a few months. The combo of the ECB announcements on Thursday with what appears to be coming out of the EU summit provides...
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We have come to the end of yet another European Summit that was supposed to be the one to fix the problem. If you are confused as to what happened then you are not alone. There are two main points to be taken away from this week's meetings. First, the Germans really took control....
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As everyone knows the EU is meeting today and tomorrow in what is being billed as a last-ditch effort to save the Euro Zone. It is, of course, impossible to come up with a lasting solution in two days after almost two years of a patchwork series of conferences that have spurred short market...
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Despite markets having more moves than a MLB shortstop hitting .200, not all that much has changed in the past three weeks. We are still awaiting the latest iteration of a "plan" out of Europe, coincident economic data for the US remains ok, though leading indicators continue to forecast that a recession is already...
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Today's contribution from John Mauldin's friends at Gavekal is a must read. I often disagree with Gavekal, which is easy to do since as this debate shows they often disagree amongst themselves, but they always make me think.-Lance
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This week we saw a coordinated effort by central banks to use their bazookas to head off another 2008-style credit disaster. The market reacted as if the crisis is now over and we can get on to the next bull run. Yet, we will see that it wasn't enough. Something more along the lines...
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An emergency ejection of liquidity to prevent immediate Armageddon is not even a first step toward solving Europe's deep-seated problems. It's more or less the equivalent of the proverbial doctor telling a patient to "take two aspirin and see me in the morning". It treats the symptoms, but not the disease. ...
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Investors should recognize that Euroland’s problems are global and secular in nature, reflecting worldwide delevering and growth dynamics that began in 2008. It will be years before Euroland, the United States, Japan and developed nations in total can constructively escape from their straitjacket of high debt and low growth.
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Legendary value investor Seth Klarman sat down with Charlie Rose have a marvelous interview discussing Klarman’s involvement with Facing History, his cult investment classic, “Margin of Safety” and his approach to investing. Buying the book is prohibitively expensive ($1200.00 on Amazon) but you can e-mail me and I will gladly send you a pdf copy for free.
An Interview with Seth Klarman and Charlie Rose from Facing History and Ourselves on Vimeo.
Angela Merkel is leading the call for a rule change, a rewiring of the basic treaty that binds the EU. But is it both too much and too late? Then I glance over the other way and take notice of news out of China that may be of import.
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The Eurozone must find at least €3 trillion (give or take) to pay for the sovereign debt “haircuts” and bank losses. Some argue it is only €2 trillion and others argue for €6 trillion. Whatever it is, it is such a large number that it cannot be found by borrowing or creating a special...
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Long-time readers will be familiar with Michael Lewitt, one of my favorite thinkers and analysts. John Mauldin has permission to use the first half of this most recent letter as today’s Outside the Box as he examines the empire of debt the world creaks under.
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The European sovereign debt crisis is rapidly approaching what could be a significant tipping point as it threatens to spread to the heart of Europe. In recent days Italian 10-year bond yields have soared to 7.22% and today Spain was forced to pay 6.975% at its auction. Even French 10-year yields have climbed to...
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There are no good options for Europe. Today John Hussman and I look at what is at stake and how it is likely to play out. The point is that there are no "good" options from Germany's point of view. However, a tanking economy may be a small price to pay compared to endless...
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David Rosenberg of Gluskin Sheff joined Consuelo Mack this weekend to discuss the economy.
Rosenberg says we are 4 years into a depression that will likely last almost a decade. He says the economy is likely contract in 2012. He believes investors should stress income at a reasonable price and corporate bonds.
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