Monday, April 30, 2012

Deja Vu All over Again and Again??

It has been awhile since my last email commentary on the markets, but there are some important developments playing out. For those of you I have had the opportunity to meet with in 2012 I’ve shared my theme of “Policy Driving”. Policy being driven by Governments and Central Bank actions are continuing to have a substantial effect on the markets. You turn on CNBC or Bloomberg there is constant talk of “QE”, “LTRO”, “Stimulus”, etc. The latest iteration of that was the European Central Bank (ECB) Long Term Refinancing Operations (LTRO) that was in effect from December 2011 until February 2012. The market responded extremely well. So I must have a Mae Culpa for not predicting the effect this would have on the markets as a lot of our positioning was defensive. However a lot of the funds in the portfolios by design did take advantage of the rally. 

Going forward the market since March and really April has been hitting some resistance. This seems to be playing out similarly to 2010 & 2011 where the US stock market tops around April then runs into trouble during the summer followed by stimulus from governments/central banks making the markets take off. So I think remaining in the defensive positioning going into summer is very prudent. Especially when one of my main concerns is that the US Debt Ceiling is projected to be breached after August in an election season no less! When the debt ceiling was extended it was suppose to be good until 2013, but the government deficits so far have been larger than projected. I will be monitoring this extensively as we get closer to the date. So for the time being let's hunker down and wait for intervention. Hopefully the market takes to the "medicine" like in 2010 and 2011. What I fear and what keeps me up at night is when the "medicine" doesn't take. But that's another post in the future because it's not a question of if, but when....

Saturday, April 14, 2012

Truth can also be Scarier than Fiction: Fukushima Meltdown

I guess Friday the 13th got me looking at horror stories. And a murdering deranged man in hockey mask at my age doesn't frighten me as it did in my youth. Since March of 2011 something far more sinister and terrifying to humanity occurred in Fukushima Japan in aftermath of a massive earthquake and tsunami. The Fukushima Nuclear meltdown.

The BBC does a great job reporting this scary moments over the last decade if not longer. The Fukushima Meltdown that the video documents is eerie, what is even more frightening is that it hasn't been solved. After doing more research as a result of this catastrophe I have gone 180 on nuclear energy. The risks are just not worth the benefit. What continues to concern me is that the US and many other nations has these older model reactors that are obviously inadequate against the risks.

If you would like to continue to scare yourself then I recommend following these links:

Happy belated Friday the 13th!

Thursday, April 12, 2012

Rick Santelli Exposes the Buffet Rule

He loses it on the air, but really why is Santelli one of the few that are outraged at our predicament.