Both President Obama’s and Senator Kennedy’s healthcare plans are estimated to cost $1 trillion over 10 years. I’ll believe it when I see it. When was the last time the government completed any project on budget?
The big daddy of underground investors, Jim Rogers, says the best way to play this downturn is to focus on commodities and agriculture ETFs (hat tip The Daily Crux). The primary logic behind this play is simple to understand.
The Treasury is having a tough time hawking US debt these days. This from today’s Financial Times: The 30-year Treasury yield rose to 4.30 per cent on Thursday from 4.10 per cent the day before after bids at the government auction came at lower prices than expected.
The news this morning is as grey and damp as the weather. First, the U.S. stock market did nothing yesterday. The Dow ended down 9 measly points. The Dow is about 10% above its November low; have we seen the rebound already?
There was a photo of Tim Geithner, the former Governor of the Federal Reserve Bank of New York who is going to be the next Treasury Secretary of the USA, on the front page of the Financial Times last Thursday, and it is spooky in several ways.
We’ve been in a thirty-year bull market for US Treasuries, says Matthew Collins. And near-zero yields mean little reward for the risk of potentially buying into a bubble. Matthew says investors would do better to put their capital in select high-grade corporate debt or gold.
Every market period, just like the one we are in right now, has the silver lining of giving the experienced investor the very real chance of making a fortune. Conditions are perfect for the run of a lifetime.
Look in any direction and there are bargains. Stocks, commodities, even corporate bonds, after their recent run up, have started to drop off to the point where there are nice discounts again.
Options, usually the Vegas of investments, have had huge potential in the last few months. I have sold covered calls in the last two months that have given me returns as high as four to five percent per month.
Once again, though, the average Joe is being driven to inaction and all the…
As I write, I’m here at The Oxford Club chapter meeting at the Intercontinental Hotel in Managua. When we’re not eating tortillas and sipping margaritas, my colleagues and I – along with about 60 Oxford Club members – are surveying the global economy, making assessments about what lies ahead for world stock and bond markets.
The money-printing hand writing is on the wall, says Justice Litle. A severe inflation threat is on the horizon. But the bond market is still pricing in a bout of deflation. And that makes Treasury Inflation Protected Securities (TIPS) an amazing deal right now.
Tax-free municipal bonds with historically high yields might look attractive to many investors. But Matthew Collins says the risk is still too high. Bloated and inefficient local governments are facing funding emergencies as revenues tumble and credit is squeezed. As the recession deepens in 2009, Matthew says muni bonds should be avoided.