Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
What are your strategies going forward for 6-12 months? I think data maybe stating that another recession is looming. maybe better keep the powder dry for at least another few more wks/months. fyi - I am still buying little safe short term munis/corp bonds [bb+ or higher for corp and bbb+ for munis]
Buying Kinder Morgan Management (KMR) and added to Graincorp (GRCLF.PK) - two instances of I like the business and very nice yield - and looking at a number of other things.
I remain largely in foreign telecom, hard assets (commodity/infrastructure related) and a few other odds and ends, as well as a set of various funds. Lightly hedged. Collecting/reinvesting dividends and not really seeing much need to change over the next year.
The link below is the lowest rated sector in junk land. Unlike the overall junk bond market this sector did give a heads up via declining prices prior to the last two recessions. Obviously it can change in the blink of an eye but no recession looming in the chart below. Being 98% (2% in European stocks) in bonds of various stripes and colors, primarily junk but an increasing amount in RMBS would love to just see the U.S. continue to muddle ahead in slow growth mode. But my fear is a stronger economy than many are expecting led by the continuing surge in housing then spilling over to other areas. Have you seen the housing stocks the past x amount of months - full bull mode.
If I voted with my pocketbook instead of my heart and head, I would be 110% behind President Obama and more stimulae, bailouts, and easy money. From December 2008 to the present has been my best stretch ever (profit-wise albeit not percentage wise)
Also where we reside has to color our view of the economy. I live in a small farming community with a few scattered factories. The farmers here have been enjoying boom times and the factories (primarily auto related) have been humming along and can't find enough workers.
Reply to @catch22: I think the issue becomes that there is no real desire to make difficult decisions and really try to fix the structural issues of the economy that have been papered over, or any attempt to learn from what happened in 2008. We will likely have another crisis not far down the line, but until then, it's government taking the easy route and propping things up and going deeper and deeper into debt.
Those who have financial assets will probably fare okay-to-well (because they will continue to benefit or at least keep up with the effects of continued easy monetary policy), and those who don't, unfortunately probably not as much. The issues of "haves" and "have nots" and the divide will likely get worse, and many problems will continue to go absolutely ignored.
This was discussed superbly by Pimco's El-Erian the other day.
I don't see much data about a looming recession. Mostly I hear more of the same... low percentage growth plodding along. I anticipate another pull-back only because that has been the pattern for quite a while - new S&P high - fall back - high - fall back...
The caveat though will be the Greek-Europe soap opera. Anything, including a recession, is possible if that goes haywire. The other drama will once again be the ideological nonsense from Congress dealing with the budget later this year.
"Sadly, neither Obama nor Romney has yet offered a meaningful, forward-looking economic reform program to address problems such as a malfunctioning labor market, unsustainable public finances, a broken credit system, inadequate infrastructure, and a lagging education system."
I am a little puzzled at the suggestion that it is within the ability of a US president to significantly affect "a malfunctioning labor market". Other than proposing some sort of preferential tax subsidies for selected businesses or industries, what exactly is within the power of the executive branch in this area?
As has been amply demonstrated recently, if a president does make an effort to help in this area, there are loud accusations of "crony favoritism", "picking winners and losers", "government give-aways", and causing even more problems by "creating an atmosphere of uncertainty" which presumably causes all business to immediately completely freeze in panic because they are incapable of making a decision since "something might change" in the future. Surely the least that any decent president can do is to guarantee a future without any pesky changes.
Of course it would be relatively easy for a president to correct our problem of unsustainable public finances, as this relatively new (surely no more than 30 or 40 years) issue would easily sail right through congress, with all sides recognizing the need to compromise and help to bring this area under control.
And the "broken credit system"? Well, hell! I just don't understand why the president doesn't pick up his phone, call all of his buddies on Wall Street, and point out the problem to them. They probably don't realize that there is a problem of that sort, and I'm certain that once someone mentions it to them it will be soon taken care of. Certainly there's no need at all for "more government regulation", "strangling the free enterprise system", "or "throttling the capitalist system under the socialist yoke", and there's surely no doubt that congress will be more than happy to set aside their differences and assist the president in this area.
Inadequate infrastructure? Now here we're talking! I really can't imagine why the president doesn't suggest spending more in this area, as it would certainly benefit the US not only now, but for many years to come. Wait... oh, he did? What happened?... oh, congress, you say? But surely,even the loyal opposition can see the benefits here... what? they didn't?... they said WHAT???
Well, ok, maybe infrastructure is off the table right now. But there's certainly no reason a president (any president!) shouldn't be able to take care of the educational problems. Surely congress, the states, the local city and town school boards, and for sure, each and every religion, union, politician, parent and family out there can agree on the nature of the problems, and come to some reasonable answer to fix this thing. I just wish that some president would take an interest in this... I'm sure it can't be that hard to deal with.
I know!! Forget Obama and Romney! Let's go with Mohamed El-Erian for president and get all of this stuff under control once and for all!!!
Reply to @Old_Joe:I believe it was directed towards both sides, but...
Ok, how about this, I'll take it to the basics: "Sadly, neither Obama nor Romney has yet offered a meaningful, forward-looking economic reform program."
"As has been amply demonstrated recently, if a president does make an effort to help in this area, there are loud accusations of "crony favoritism", "picking winners and losers",
Uh, yeah, when you give an s-load to your bundlers and backers, that is actually "crony favoritism" and "picking winners and losers".
"Wait... oh, he did? What happened?... oh, congress, you say? But surely,even the loyal opposition can see the benefits here... what? they didn't?... they said WHAT???"
Oh, ok, well, then I have a suggestion for the president - do nothing and don't even try because the meanies on the other side will just be against anything you say. Heck, there's no winning so why attempt to actually lead? What a delightful excuse for BS political games. "Hey, I brought up an idea, but the other side didn't like it so I'm going to sit and pout and point at them."
A broken political system - which is what we have - gives "leaders" (and I use "'s) excuses to get nothing done, blame each other and it does nothing but be not helpful to the country in the slightest - it also divides the country. As for the whole dividing the country thing, many people would rather not really face the faults of their own political party and demand change and instead go along with their political side's mantra of, "It's not our fault we can't get anything done and things are the way they are, blame those guys on the other side." Both sides do it, and there's even an array of media choices to emphasize and stir up those talking points about those awful people on the other side.
And people do and it turns into the circle of getting nothing done, as problems get worse. If people actually questioned their side and demanded answers rather than spending lots of time viewing the "other side" as villains and realizing that both sides are at significant fault, maybe we could actually get something done in this country. Yeah, that's not likely, as it would appear that many would rather continue getting upset at "those liberals!" or "those right-wingers!"
"creating an atmosphere of uncertainty" which presumably causes all business to immediately completely freeze in panic because they are incapable of making a decision since "something might change" in the future. Surely the least that any decent president can do is to guarantee a future without any pesky changes."
Um, let me quote Nancy Pelosi - "We're going to have to pass this bill so you can find out what's in it."
Now, if that's not clarity people can make decisions on, I don't know what is.
We have had the absolute worst climate of regulatory uncertainty and political f'ng games in years. Does that mean no one does anything? OF COURSE NOT! However, many have said that they have delayed or stopped important decisions because when you have as little regulatory clarity as we've had in the last few years, that's their view. But you are welcome to go to the ridiculous and absurd extreme of saying "Surely the least that any decent president can do is to guarantee a future without any pesky changes".
"Of course it would be relatively easy for a president to correct our problem of unsustainable public finances, as this relatively new (surely no more than 30 or 40 years) issue would easily sail right through congress, with all sides recognizing the need to compromise and help to bring this area under control."
Would attempts to 'correct unsustainable finances' sail through as easily as the "unsustainable finances" have been made worse over the last several years? Because, wow, especially the last few years, it's been really easy to take the easy route rather than attempting to make any actual decisions (again, why do that because that would be unpopular and it's way better to maintain popularity than fix things) and pile on WAY MORE debt than we could ever pay off.
However, if we spend money to get NASA really going again, maybe we can find bailout sources from other planets. Mars, perhaps? Or is the red planet too close to a red state for some people, hmmm?
"And the "broken credit system"? Well, hell! I just don't understand why the president doesn't pick up his phone, call all of his buddies on Wall Street, and point out the problem to them."
Well, that would be because he cares more about catering to what they would like.
As for education: " I just wish that some president would take an interest in this."
Haha, yeah, so do I! But, oh wait - this one is instead doing things like talking about releasing oil from the SPR for short-term political points, which - I will give him this - is probably a first. Not a good one, but a first. Education does not seem to be in the top five priorities, which all, oddly enough, seems to be "What can I do for Wall Street"? It is, of course, not ever, never, "What can Wall Street do for, well, anyone else but Wall Street?" Because that would be just silly, as would attempting to regulate Wall Street.
"I know!! Forget Obama and Romney! Let's go with Mohamed El-Erian for president and get all of this stuff under control once and for all!!!
Hmmm... he has been the co-CIO of one of the largest bond companies in the globe, his economic discussions are very highly regarded by many, he headed the Harvard Endowment and spent fifteen years at the IMF, he is on the board of the important Treasury Borrowing Committee, various degrees from Oxford and Cambridge, regarded as "Foreign Policy’s list of “Top 100 Global Thinkers” for 2009, 2010 and 2011" There's also various boards and committees he's on, such as the International Center for Research on Women, the Peterson Institute for International Economics and the IMF's Committee of Eminent Persons. He is currently a board member of the NBER, the Carnegie Endowment for International Peace, and Cambridge in America.
Yeah, okay, I'd rather have El-Erian than either of these two and I'd have WAAAAAAAAAAAAAAAAAAAAAAAY more hope that he would actually, you know, be able to change things for the better - even a little bit better.
Thanks.
And BTW, I'm not sure who said he was "GOING TO GET EVERYTHING UNDER CONTROL!" or why you took such offense to the article. No one ever said fixing any of the nation's core problems would be easy, but taking a step in the right direction would be a start. Or we could just do nothing and argue and blame the other side for nothing getting done.
Hey Scott- actually, didn't take any offense at all, and my commentary was made simply to point out that NO president, from EITHER party, is going to get much of anything done, no matter what slogans they shout. The Executive can only make significant efforts when aided or abetted by the Legislative, and that just ain't gonna happen any time soon.
Reply to @MikeM: hello sir. I think you are right. I don't know if you watch 'ground hog day'. we'll probably talking about same stuff 3 yrs from now [up then down then up then down.] My predictions dows 13350 end of 2016 - LOL. Then Obama will be voted in as the president [2nd term]... after people get tired of romey first term
Probably not - unless the politicians in Washington are even crazier than I think. We're still in the wake of the "Great Recession" as they call it. Growth is anemic. On the other hand, you have a very accomodative Fed at present which will do whatever necessary to keep the ship upright. Albeit, a little handcuffed until November. Linked article mentions rising U.S. home prices 5 months in a row. Good news unless you're shopping for a house. Than again, many buyers may have held off hoping prices drop even lower - so you never know. -
Comments
I remain largely in foreign telecom, hard assets (commodity/infrastructure related) and a few other odds and ends, as well as a set of various funds. Lightly hedged. Collecting/reinvesting dividends and not really seeing much need to change over the next year.
http://research.stlouisfed.org/fred2/series/BAMLHYH0A3CMTRIV?cid=32413
If I voted with my pocketbook instead of my heart and head, I would be 110% behind President Obama and more stimulae, bailouts, and easy money. From December 2008 to the present has been my best stretch ever (profit-wise albeit not percentage wise)
Also where we reside has to color our view of the economy. I live in a small farming community with a few scattered factories. The farmers here have been enjoying boom times and the factories (primarily auto related) have been humming along and can't find enough workers.
Those who have financial assets will probably fare okay-to-well (because they will continue to benefit or at least keep up with the effects of continued easy monetary policy), and those who don't, unfortunately probably not as much. The issues of "haves" and "have nots" and the divide will likely get worse, and many problems will continue to go absolutely ignored.
This was discussed superbly by Pimco's El-Erian the other day.
http://www.zerohedge.com/news/both-presidential-candidates-full-hot-air-el-erian-warns-populist-anger-returning
The caveat though will be the Greek-Europe soap opera. Anything, including a recession, is possible if that goes haywire. The other drama will once again be the ideological nonsense from Congress dealing with the budget later this year.
I am a little puzzled at the suggestion that it is within the ability of a US president to significantly affect "a malfunctioning labor market". Other than proposing some sort of preferential tax subsidies for selected businesses or industries, what exactly is within the power of the executive branch in this area?
As has been amply demonstrated recently, if a president does make an effort to help in this area, there are loud accusations of "crony favoritism", "picking winners and losers", "government give-aways", and causing even more problems by "creating an atmosphere of uncertainty" which presumably causes all business to immediately completely freeze in panic because they are incapable of making a decision since "something might change" in the future. Surely the least that any decent president can do is to guarantee a future without any pesky changes.
Of course it would be relatively easy for a president to correct our problem of unsustainable public finances, as this relatively new (surely no more than 30 or 40 years) issue would easily sail right through congress, with all sides recognizing the need to compromise and help to bring this area under control.
And the "broken credit system"? Well, hell! I just don't understand why the president doesn't pick up his phone, call all of his buddies on Wall Street, and point out the problem to them. They probably don't realize that there is a problem of that sort, and I'm certain that once someone mentions it to them it will be soon taken care of. Certainly there's no need at all for "more government regulation", "strangling the free enterprise system", "or "throttling the capitalist system under the socialist yoke", and there's surely no doubt that congress will be more than happy to set aside their differences and assist the president in this area.
Inadequate infrastructure? Now here we're talking! I really can't imagine why the president doesn't suggest spending more in this area, as it would certainly benefit the US not only now, but for many years to come. Wait... oh, he did? What happened?... oh, congress, you say? But surely,even the loyal opposition can see the benefits here... what? they didn't?... they said WHAT???
Well, ok, maybe infrastructure is off the table right now. But there's certainly no reason a president (any president!) shouldn't be able to take care of the educational problems. Surely congress, the states, the local city and town school boards, and for sure, each and every religion, union, politician, parent and family out there can agree on the nature of the problems, and come to some reasonable answer to fix this thing. I just wish that some president would take an interest in this... I'm sure it can't be that hard to deal with.
I know!! Forget Obama and Romney! Let's go with Mohamed El-Erian for president and get all of this stuff under control once and for all!!!
Ok, how about this, I'll take it to the basics: "Sadly, neither Obama nor Romney has yet offered a meaningful, forward-looking economic reform program."
"As has been amply demonstrated recently, if a president does make an effort to help in this area, there are loud accusations of "crony favoritism", "picking winners and losers",
Uh, yeah, when you give an s-load to your bundlers and backers, that is actually "crony favoritism" and "picking winners and losers".
"Wait... oh, he did? What happened?... oh, congress, you say? But surely,even the loyal opposition can see the benefits here... what? they didn't?... they said WHAT???"
Oh, ok, well, then I have a suggestion for the president - do nothing and don't even try because the meanies on the other side will just be against anything you say. Heck, there's no winning so why attempt to actually lead? What a delightful excuse for BS political games. "Hey, I brought up an idea, but the other side didn't like it so I'm going to sit and pout and point at them."
A broken political system - which is what we have - gives "leaders" (and I use "'s) excuses to get nothing done, blame each other and it does nothing but be not helpful to the country in the slightest - it also divides the country. As for the whole dividing the country thing, many people would rather not really face the faults of their own political party and demand change and instead go along with their political side's mantra of, "It's not our fault we can't get anything done and things are the way they are, blame those guys on the other side." Both sides do it, and there's even an array of media choices to emphasize and stir up those talking points about those awful people on the other side.
And people do and it turns into the circle of getting nothing done, as problems get worse. If people actually questioned their side and demanded answers rather than spending lots of time viewing the "other side" as villains and realizing that both sides are at significant fault, maybe we could actually get something done in this country. Yeah, that's not likely, as it would appear that many would rather continue getting upset at "those liberals!" or "those right-wingers!"
"creating an atmosphere of uncertainty" which presumably causes all business to immediately completely freeze in panic because they are incapable of making a decision since "something might change" in the future. Surely the least that any decent president can do is to guarantee a future without any pesky changes."
Um, let me quote Nancy Pelosi - "We're going to have to pass this bill so you can find out what's in it."
Now, if that's not clarity people can make decisions on, I don't know what is.
We have had the absolute worst climate of regulatory uncertainty and political f'ng games in years. Does that mean no one does anything? OF COURSE NOT! However, many have said that they have delayed or stopped important decisions because when you have as little regulatory clarity as we've had in the last few years, that's their view. But you are welcome to go to the ridiculous and absurd extreme of saying "Surely the least that any decent president can do is to guarantee a future without any pesky changes".
"Of course it would be relatively easy for a president to correct our problem of unsustainable public finances, as this relatively new (surely no more than 30 or 40 years) issue would easily sail right through congress, with all sides recognizing the need to compromise and help to bring this area under control."
Would attempts to 'correct unsustainable finances' sail through as easily as the "unsustainable finances" have been made worse over the last several years? Because, wow, especially the last few years, it's been really easy to take the easy route rather than attempting to make any actual decisions (again, why do that because that would be unpopular and it's way better to maintain popularity than fix things) and pile on WAY MORE debt than we could ever pay off.
However, if we spend money to get NASA really going again, maybe we can find bailout sources from other planets. Mars, perhaps? Or is the red planet too close to a red state for some people, hmmm?
"And the "broken credit system"? Well, hell! I just don't understand why the president doesn't pick up his phone, call all of his buddies on Wall Street, and point out the problem to them."
Well, that would be because he cares more about catering to what they would like.
As for education: " I just wish that some president would take an interest in this."
Haha, yeah, so do I! But, oh wait - this one is instead doing things like talking about releasing oil from the SPR for short-term political points, which - I will give him this - is probably a first. Not a good one, but a first. Education does not seem to be in the top five priorities, which all, oddly enough, seems to be "What can I do for Wall Street"? It is, of course, not ever, never, "What can Wall Street do for, well, anyone else but Wall Street?" Because that would be just silly, as would attempting to regulate Wall Street.
"I know!! Forget Obama and Romney! Let's go with Mohamed El-Erian for president and get all of this stuff under control once and for all!!!
Hmmm... he has been the co-CIO of one of the largest bond companies in the globe, his economic discussions are very highly regarded by many, he headed the Harvard Endowment and spent fifteen years at the IMF, he is on the board of the important Treasury Borrowing Committee, various degrees from Oxford and Cambridge, regarded as "Foreign Policy’s list of “Top 100 Global Thinkers” for 2009, 2010 and 2011" There's also various boards and committees he's on, such as the International Center for Research on Women, the Peterson Institute for International Economics and the IMF's Committee of Eminent Persons. He is currently a board member of the NBER, the Carnegie Endowment for International Peace, and Cambridge in America.
Yeah, okay, I'd rather have El-Erian than either of these two and I'd have WAAAAAAAAAAAAAAAAAAAAAAAY more hope that he would actually, you know, be able to change things for the better - even a little bit better.
Thanks.
And BTW, I'm not sure who said he was "GOING TO GET EVERYTHING UNDER CONTROL!" or why you took such offense to the article. No one ever said fixing any of the nation's core problems would be easy, but taking a step in the right direction would be a start. Or we could just do nothing and argue and blame the other side for nothing getting done.
I'd rather have El-Erian too.
hello sir. I think you are right. I don't know if you watch 'ground hog day'. we'll probably talking about same stuff 3 yrs from now [up then down then up then down.] My predictions dows 13350 end of 2016 - LOL. Then Obama will be voted in as the president [2nd term]... after people get tired of romey first term
http://www.foxbusiness.com/industries/2012/08/28/home-prices-rise-for-fifth-month-in-row/