We did a conference call for subscribers to our data service last night, and I was impressed with the breath and depth of the questions.

Here’s a sample:

(1) In light of the recent Moody’s downgrade of 15 banks, and the previous downgrades of European banks by both Moody’s and Fitch, what is the prognosis regarding the Eurozone, particularly in light of Germany’s refusal to agree to the Euro bond?

(2) How much exposure is Greece’s, Spain’s, or Italy’s default or collapse expected to have on US banks or US markets?

(3) How likely is Germany to get fed up with the constant whining by the ECB and the PIIG countries for more bailout that it, Germany, or Finland will leave the Euro?

(4) Therefore in light of the above questions/statements, where should you put your money now, and would you consider “cash in dollars” within your portfolio to be an “investment” in this market….or is there a better place to park non-vested money until the market establishes a trend??

(5) As we move through the remainder of the year and into 2013 my biggest fear is that of a ‘Black Swan’ type event. By definition these are outlying events that occur outside of normal patterns. How well do you capture this type of event?

(6) I have this nagging feeling of insecurity, not in your process, but in the world’s seemingly propped-up ponzi like system. How does this play out?

7) How are you setting client portfolios in the current environment?
a.    In terms of stock vs bond vs cash %
b.    Are you more income or growth oriented?

8)    Any recomendations on setting allocations for conservative, moderate and aggressive investors?

9)    Would you estimate the likelihood of market correction in the fall? What levels should we be looking for?

10) On Tuesday, BR linked to a John Hussman comment discussing the likelihood that the U.S. economy has entered a recession — Hussman comment discusses the possibility of an S&P 500 correction into the 850-950 range. BR, what is your gut (not that cognitive-error-prone mind J ) telling you to do over the next three and six months?

11)  There is supposed to be a bull market in Natural Gas coming.  How would your software help me invest in that?

So here’s the offer for blog readers: Put any question you feel like in comments, and I will do my bnest to try to answer them. It should be a blog post next week in Q&A form.

Have at it.

 

 

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

77 Responses to “Q&A: Ask any question you want

  1. GYSC says:

    Curious as to what weight you may be giving market weakness between Euro news flow and very possible US recession as a driver for equity weakness last few months? To be honest, I think a US data deterioration and bigger slowdown trump Europe since May, but would love your take.

  2. Alex says:

    A lot of B2B companies – and sectors – seem to be doing pretty well lately, or at least beating the S&P. Office REITS and reinsurance are two examples. And the reinsurance market itself seems flat, at best, as the stocks do well. What is the significance of this?

  3. Petey Wheatstraw says:

    What is the airspeed velocity of an unladen swallow?

  4. DiggidyDan says:

    African or European-

    In all seriousness, how do you, and Fusion IQ deal with the unprecedented (in our lifetimes) fiscal policy decisions, announcements, and rumors?

    Investing in this environment has been rather treachearous, witj the market oftentimes not following fundamentals and valuation. I try to gauge momentum, trends, and fear, but it is difficult in these times when the market can have a mind of its own.

  5. whskyjack says:

    Petey

    Is that before or after it bounces of the back of the cat’s head in the middle of the barn lot?

  6. DiggidyDan says:

    Also, for both amusement and edification:

    http://style.org/unladenswallow/

    Probably will get caught in the filter, but some should enjoy in the delayed amusement.

  7. How much do you depend on option strategies for portfolio hedging?

  8. Asymptosis says:

    Do you give any credence to the Rheinhart and Rogoff “90% of GDP” government debt line? Could Fed debt go (well) beyond that without hurting the economy?

  9. Can I have a million dollars? ;-)

    ~~~

    BR: Yes.
    Too bad you didn’t ask from whom.
    Sorry you wasted your question

  10. jaymaster says:

    What were your answers to those 11 questions? ;)

    ~~~

    BR: I’ll include them in the Q&A

  11. drew desmond ‏ says:

    Whats the best concert u have ever seen ?

  12. Greg0658 says:

    to A: the many lines above .. not really an answer .. but I always liked this sites response of:
    “if you owe the bank 10K$ its your problem .. if you owe the bank 10T$ its the banks”

    more of a real answer .. oil corn guns bullets potableH2O
    but I LIKE Teamwork & screw FMCitBPtP

  13. Pantmaker says:

    We are certainly entering recession here and Ritholtz will be remembered as one of the very few to even entertain the possibility. These are interesting days. Boomers are about to have their retirement portfolios fed into the shredder…cash is king. The goofy election year myth of prosperity will be shredded right along side every equity market on the planet.

  14. ersatzjulian says:

    Are there other ways of resolving the European problem other than dissolution or joint issuance of European bonds?

  15. GCF says:

    Looking at Shiller’s CAPE graph each time CAPE ascended through 24 times, 1901, 1928, 1966 it then eventually fell to under 10 times, 1921,1942,1982 in a secular bear market capitulation. We ascended through 24 times in 1994. Which horn of the dilemma do you pick? A fall to 650 on the S&P or the four most dangerous words in investing?

  16. Randlepmurphy says:

    It appears to me that we are headed for a financial crisis that tests the definition of what constitutes ‘collateral’. At the depth of the Great Depression it was cash. Cash bought real assets at a price that created multi-generational wealth. At that time cash and gold were synonymous. That is not the case anymore. Is gold the ultimate collateral that will provide the same opportunity at some point in the next few years?

  17. pcassell says:

    If everyone knows there is no painless resolution to the European problem (exit, massive central bank easing, etc) how come we haven’t seen a much greater decline in markets?

    The endgame call by everyone seems to be some sort of failure that will be traumatic either in the short term or long term and this has me puzzled as to why everyone hasn’t put their money where there mouth is via massive selling.

  18. brianinla says:

    When are you going to start living a much healthier lifestyle?

  19. bear_in_mind says:

    1) Do you expect an Election Year rally to materialize this Fall — or will the increasingly ugly macro picture squelch it?

    2) What do you anticipate your asset allocation positioning will look like for the remainder of 2012?

    3) What three stocks would you consider buying for your portfolio over the next 30-90 days for a short-term (<6 mos) trade? Why?

    4) What three stocks would you consider buying for your portfolio over the next 30-90 days that you'd be least likely to lose sleep over between now and 2020? Why?

  20. deanscamaro says:

    You have a pretty good grasp of other areas besides investing. What is your opinion of the overall appearance of the U.S. “slip-sliding” downhill (i.e. worsening education, lack of fiscal management, partisanship politics and ownership by corporations, broken banking system, continued job losses, broken infrastructure, high debts/little saving by citizines, overall loss of leadership in the world, probably the most overweight country in the world, the ongoing dumbing-down of TV viewers & on & on & on) and what does this country generally need to do to take back control? Not looking for a detailed plan, but how do we need to fix what’s broken in this country and get back on our feet?

  21. jaymaster says:

    Woo hoo! Over the past few years since I have been reading your blog, you have become something of a hero/inspiration/investment guru to me.

    I don’t follow you blindly. I agree with maybe 60-70% of your blatherings.

    But since you are my elder (by a couple years, I think), and the floor is open, I plan to ask you some non-investment related questions too. I hope you will share your insights!

  22. ameehan90 says:

    BR… this is about the fourth consecutive year of late fall run up in equites followed by precipitous drops in the S&P late spring and summer, not to mention accompaniment of redonkulous volatility… I understand these markets are visited by wacky unscheduled macro events and strafings (Europe), but how many consecutive “perfect storms” and 100 year floods must we endure before we must recalibrate our expectations? I suppose my question is also this – aren’t these patterns the product a simple (prosecutable?) game of signaling, collusion and “prisoner game” behavior writ large by the fast money usual suspects? it’s jst getting a bit predictable… like Lufthansa crew, and only time before someone gets sloppy and screws it up… (JPM). Suppose this is also attributable to the zero rate environment…

  23. mote says:

    Your view on closed end funds as an investment vehicle.

  24. Plissken says:

    Can I work for you (or in Fusion IQ) in any capacity? Disclaimer: PhD in Human Genetics, not taken any economics class, but love to follow it., also Mensa member, fast learner :)

    Had to try.

  25. advsys says:

    Those were really good questions. My favorite was “I have this nagging feeling of insecurity, not in your process, but in the world’s seemingly propped-up ponzi like system. How does this play out?”

    Expanding on that, what would be your best guess at the 2 most likely scenarios for some kind of a major economic event and what would be the 2 best holdings to have in each scenario. By economic event, I mean something that would result in a large loss in confidence in a government, a central bank, a currency or a part of our banking system.

    Thanks

  26. brianj997 says:

    What advice can you give an individual investor was a 30 year time horizon?

  27. brianj997 says:

    What advice can you give an individual investor with a 30 year time horizon?

  28. constantnormal says:

    What is the average length of time your fund has held positions over the past year?

  29. Joe Friday says:

    So when does RIM go down like an underweight runway model collapsing off her sky-high platform shoes ?

  30. ironman says:

    What is the best unconventional predictor for where stock prices are going?

  31. wrongway says:

    I find the general tone of comments here to be overwhelmingly bearish – end of the world bearish. Do you ever try to track the sentiment of comments and use the results as a contrary indicator?

  32. LostinATX says:

    Your thoughts on investing in E. Europe via Poland ETF (EWP)?

  33. kek says:

    I appears by their questions, that many people have not been very invested these past 3+ years.

    My question is when did market timing morph into the term tactical asset management.

  34. algernon32 says:

    A free question answered from BR ? Very kind of you sir.

    I’ll add to the original question 6.
    The trajectory seems obvious, everyone able to do so prints money until the cows come home.

    My question is timing. When is the next big ‘system discontinuity’ event.
    When even the FED admits to vaporizing 40% of household net worth in only 4 years via housing price collapse, there must be a few more ‘big ones’ out there.

    Enjoy the daily algo neck snapping volatility or wait for the next QE program?

  35. louis says:

    If you had a mortgage that was underwater by 25-50% how would you strategically structure your financial future?

    ~~~

    BR: 1. Walkaway
    2. Start over

  36. billybob says:

    Is buy-hold-rebalance a sucker’s strategy in this environment? What about over the longer term (15 years to go for me)? What is an individual to do in these nutty investing times?

  37. gps says:

    BR- What would happen to our positions if whole financial system collapses. Let’s say someone is long or short on something. Suddenly if EU Countries defaults what would happen to the financial system and what would happen to our positions. Would we get our money back from our brokers whom we’re putting our trades. Could you explain about counter party risk? How one has to position if something to this scale happens?

  38. BlackCat says:

    Currently we are in a correction, mabye the market will recover, mabye it’ll crash.

    What factors (technical, fundamental, macro or whatever) would turn you into a bull? What would turn you into a bear? And what yould be your trading style (eg: quick trades, sit in cash, buy-and-hold) as you make up your mind?

  39. scorp99cam says:

    Which major default comes first? Japan/ Euro zone / US /none of the above? How bad will it get if that happens?

  40. CincyDave says:

    Do you compile, edit, and write TBP by yourself or do you have assistance?

  41. formerlawyer says:

    As the father of 3 college aged kids, do you see them having better economic prospects than their parents? And why?

    (Yes I know it is two questions but here’s hoping;-)

  42. threin says:

    are the us and japan in a better shape then Europe??

    if yes, how comes that the usd is actual in not stronger??

    of interst to me is also how protect your investment?

  43. super_trooper says:

    Both Christine Lagarde and George Soros have indicated that EMU has 3 months to come up with a solution to the Greek crisis.
    What are the two most likely scenarios for the Greek debt crisis (and PIIGS+Cyprus)? From your perspective, is the EMU prepared for a Grexit? When do you think it will happen,. if at all?

  44. super_trooper says:

    How long do you think the CHF can continue to be pegged against the euro? What are the signs to look out for? What will make the Swiss central bank give up their stand on the exchange rate?

    ~~~

    BR: I have absolutely no insight into Eurozone currencies

  45. scottsabol says:

    Can we have a meaningful recovery with the housing market still distressed? Thanks!

    ~~~

    BR: Most likely No

  46. potomkinstrana says:

    Are your well-known views on precious metals changing at all in reaction to the events in Europe or to impending US “Fiscal Cliff”? What is the maximum percentage you are recommending in your asset allocation models? How else does one protect themselves from currency devaluation and other sequelae of central banks printing their way out of debt crises?

    ~~~

    BR: I have well know views on precious metals? Thats a surprise to me!
    My views are threefold:

    1) I recommended GLD (on Power Lunch) when Gold was under 400 as an inflation hedge.
    2) I have no way to value Gold, so its a bit problematic for me as an asset class;
    3) It has lost 25% of its value since the August 2011 peak

  47. philipat says:

    1.Equity prices have gone nowhere for 12 years and yet Corporate profits have reached all time hights. What gives?

    2.Secular Bear markets tend to last about 18 years. This one began in 2000 so does that mean we have another SIX years of this? Ot longer perhaps given that we are now in a “Balance sheet” deleveraging of epic proportions?

    ~~~

    BR: 1. P/E compression due to secular bear psychology
    2. They can last anywhere from 10-20 years. I expect this one will end sometime between next Tuesday and 2017

  48. Lx says:

    ok, a general theory question, in two (or more) parts:

    ever since the crisis of 2008, we have seen some truly absurd, VERY large numbers being thrown around in terms of the money being used for bailouts, quantitative easing, twisting, debit sterilization, etc.

    this first part of my question would be “where is all this money coming from?” — for each of these different types of massive transactions by national governments, central banks, etc.; because when it’s not coming directly out of government budgets, it pretty much seems to be coming out of thin air.

    the second part of my question would be “if it is acceptable to ‘magic’ money out of thin air for these ‘financial salvations’, why not use the same trick(s) to make money for other good & necessary purposes; like social programs, balancing gov’t budgets, eliminating national (& other debts), & cutting taxes?”

    & the third part of my question is “what happens to all this magical money; where does it go to & what effect does it have on the economy in its comings & goings?”

  49. gloppie says:

    What is the fourth function of money, which is missing from the classical definition: a medium of exchange; a unit of account, a store of value? Hint: we will soon discovered what it is, and the discovery will not be without pain.

    ~~~

    BR: #4 to be used as Tips for strippers

  50. TLH says:

    The problem is debt. Will this end with nonpayment or inflationary devaluation? The longer this plays out makes me afraid it will be nonpayment. Financial repression is nonpayment.

    To have growth we must cut private sector employment costs. The health care bill raises them. A single payer system paid by the government would free this cost from the employers. This would raise taxes.

    Where do you put your money? Stocks are supposedly cheap, but it will take earnings to maintain them. Taxes will go up next year and/or government spending will be cut no matter who is elected. Bonds are difficult to own at multiyear low yields. Should we sell options(covered call and put) and hope the market stays in a trading range? Will the dividend play become too crowded?

    ~~~

    BR: inflationary devaluation

    I dont see why you claim “To have growth we must cut private sector employment costs” — what matters is end user demand.

  51. machinehead says:

    BR — please tell me more about your data service. What factors lead you to offer it publicly by subscription, versus using it internally to manage money as an RIA or a quant-driven hedge fund? Would you consider forming a fund-management arm with asset-based fees, or would that be seen as competing with your customers?

    ~~~

    BR: I already have an asset-management arm with asset-based fees! 2% down to 55 bps, avg account about 1.1% fee

  52. Orange14 says:

    Given that the yield on US Treasuries is at an all time low and top rated corporate bonds are not all that hot either, what strategy should be used to provide an income stream to a retiree? Is a portfolio of decent dividend yielding stocks the way to go?

  53. billsch says:

    Re: November presidential election

    How do you see each candidate winning the election impacting equities in the short-intermediate terms? Not for you to handicap, but likely outcome from both scenarios.

    All the squabbling in the EU is at least bureaucrats doing their jobs, politicing their way to joint resolutions sooner or later. Here we just bump the debt ceiling cuz hey, who gives a sht right?

    ~~~

    BR: I see no difference between these two boobs. Obama is a disappointed for kowtowing to Robert Rubin & the banks; Romney is a slippery hypocrite. Choose your poison, it matters little.

  54. DR1 says:

    Barry, very long time reader, thanks for the opportunity.

    The convergence of Boomers retiring, the ending commodity story (for now), soaring debt levels, the emering Emerging Market consumer, global housing fatigue, and still in the (seemingly) last legs of the secular bear; What is the catalyst for you to go overwhelmingly and secularly long, and in which asset classes/industries do you favor for your own personal investment strategy?

    ~~~

    BR: Here is what I penned when I thought the last Bear market was ending: Contrary Indicators 2000 – 2003 Bear.

    I assume the catalysts for going long then will be similar – likely some mix of US and overseas equities, technology, and whatever else is really cheap.

  55. Oral Hazard says:

    You’re at the wheel of your dream car. What is it and what road/track are you driving it on?

    ~~~

    BR: Too many beauties to pick just one — these days, I really like the BMW 650 convertible and the Aston Martin V8 Vantage Coupe. For a 4wd sedan, I am partial to the Germans — Audi S7, or the Mercedes CLS (the Porsche Panamera will do in S or Turbo, but not base). If money is no object, than the Ferrari 458 Italia, the Ferrari California and the new Ferrari f12 Berlinetta are all rather striking in looks and performance.

    I love Lime Rock in CT, like lots of roads upstate CT/Mass/NY. Would love to see what the Swiss alps or German highlands are like to haul through . . .

  56. woolybear1 says:

    Barry,
    I read a while back that you went over to Double Line from Pimco. What are the risks with DBLTX.

    disclosure: I own DBLTX

    ~~~

    BR: Its mortgage backed (not subprime). The risks are that this sector runs into specific trouble, or that Gundlach messes up.

  57. Jim67545 says:

    The last two major bubbles (Dot-com and housing) were potentially profitable if one was long on the up and short on the down. What bubbles do you see developing? (Nat gas?, student loans?, treasuries?) And, any feel on when they will pop?

  58. ministerofsillywalks says:

    BR, can you address a 401k variant of question 7, where the available choices are equity mutual funds, bond funds, or a money market fund – and what are the most likely trigger event(s) you would be looking for that would cause you to change that allocation?

    ~~~

    BR: I have an issue with most 401k plans — overpriced, terrible choices (I prefer indexes).

  59. Greg0658 says:

    deanscamaro@1113 & Randlepmurphy@1036 LIKE

    advsys@1158 – to meld a couple blogger ideas – something even bigger than Fukushima or DeepWaterHoriz ? (with no reparations)

    philipat “Corporate profits have reached all time hights. What gives?”
    A: all of us to the corporations on their terms – & QE# is an illusion of growth for the future to hold on to cash out day

    Lx@600 – because that would be an ‘ism shift – and this system is what our brain thinks it wants (or can handle at this time – baby steps)

    many others too :-) :-|

  60. Gulfcoastm says:

    You have mentioned recently and a few times over the years that you are backing off from all of the media events ie tv, radio etc because it is too much. After the last time you seemed to back off of your market exposure. I get the sense that each time you have done this its near a market inflection point and you are really focusing on your money management business, fewer distractions. Am I reading too much into this? Thanks

    ~~~

    BR: I do media appearances for three reasons a) to mix it up discussing the key issues impacting markets; 2) to attract new clients; 3) its fun.

    When it interferes with clients & asset management, i curtail it. But also at a certain point, the sheer silliness of much it overwhelms my sense of decency.

  61. jpmist says:

    I read no end of articles describing how perilous the financial sector is. The stratospheric notional amounts of derivatives, the destabilization of the Euro, the perilous state of money market funds, the irrationally low pricing of Treasury bonds, the Fiscal Cliff etc. etc. The debt bubble seems ripe for collapse, once again. It seems foolish to just say, well, I can’t do anything about all that, so I’ll just hope for the best and react to it when it happens the best way I can manage.

    Since the odds of another financial crisis are just as good now, if not better than it was in 2007 what are the practical steps an individual investor can take to prepare for it?

    Should I move all my money out of money market funds? Should I have my assets in multiple sub $100K accounts? Are Muni’s safe? Should I open an Everbank account and buy Swiss Francs? Should I tell my broker to move my equities out of it’s account and send me the stock certificates?

    What can I practically do to escape as much damage as I can from the next Black Swan?

    ~~~
    BR: If you “read no end of articles describing how perilous the financial sector is” than I would make the bet that the next black swan isn’t likely to be from the financial sector . . .

  62. dead hobo says:

    Ordinary International Economic theory states that the Euro should be falling in value to compensate for the horrendous value of European debt and the low value of the assets that collateralize it. This, in theory, would lower the price of European secondary market debt and European assets for holders of non-euro currencies and make them available for bargain purchase.

    The result is a clearing of the books for Europe and a fresh start that does not require bankruptcy AND purchasers get bargain purchases. European problem solved without the need for summits and feeding off of Germany.

    Why does the euro still have value? What are the artificial forces that overpower normal economic functions? Thinking conspiratorially, is it possible the continual ‘crisis’ is only a distraction for a looting somewhere later?

  63. dead hobo says:

    My bad – my question above presumes responsible behavior among the south European countries and a willingness to live within their means. This is the conundrum. The only conspiracy is to wear down Germany to get them to agree to Sugar Daddy status in perpetuity. I just answered my own question.

  64. Singmaster says:

    I’m a subscriber to FusionIQ and I was not invited. Am I chopped liver?
    What drives the sentiment reading in your Market Risk Model?

  65. slocald says:

    Wow, I’m realizing after reading these other questions that I have totally underestimated your prophetic powers.

    Okay, seriously . . . given all the uncertainty, what would you say are the two most likely scenarios to play out on July 6th when they do the next MegaMillions drawing (please email specific numbers).

    Okay, no seriously. Can you comment on the relavence/use of country economic numbers like GDP (especially US) in a world where multi-nationals capture so much of the global activity? For instance, if Apple China sells a bunch of iPads to Chinese citizens, those sales don’t hit the US GDP number, correct? Nor do they make it in to the US economy unless Apple repatriates the earnings, correct?

  66. SANETT says:

    Seems like the fundamentals get trumped by the psychology — it’s what people think about all this stuff that motivates their investment decisions more than the stuff itself does. So my question is what’s the prevailing mindset — and that’s more of a koan than a question. Cognitive dissonance causing ……head…..to….explo(boom)

  67. darren69 says:

    Long time reader – one of the few blogs I check.

    I’d like BR to point me to an article/URL that I can forward to friends/family on some basic investment categories and principles to consider. To widen their eyes. Cash is not the only answer. Buying property because ‘it’s a good investment’ is not an answer or having everything in gold. What is a ‘good’ buy and what is not. Betting the farm on one pony is also not the answer.

    It seems the closer you are to be people, the less they want to listen. They prefer an independent third party information source. Unfortunately these tend to be 2 minutes pieces on the idiot box or a brief article in the newspaper. No more than a few pages as it won’t keep people attention span – partly the reason why I have not requested a book reference – most people will not read it!

    Something that is relevant to a 20 / 40 / 60 year old.

    Thanks BR.

    ~~~

    BR: I have two articles coming out on that exact topic. The first one will be in WaPo quarterly investment round up late next week.

  68. dead hobo says:

    darren69 Says:
    June 29th, 2012 at 1:00 pm

    It seems the closer you are to be people, the less they want to listen. They prefer an independent third party information source.

    reply:
    ———-
    One of life’s sad facts: “An Expert Always Comes From Somewhere Else”. Followed by people prefer easy answers to complicated questions and often get angry if you ask them to step up their game. These two facts make it easy to part a lot of people from their money.

  69. Oral Hazard says:

    @dh: On the plus side, it’s good to have family there to remind certain people that they’re FOS.

  70. vl says:

    George Soros mentioned in an interview earlier this week that Europe needs to solve both the banking crisis and excessive risk premium on sovereign debt at the same time, as they are “Siamese Twins”. Do you think it is possible to solve both at the same time? Doesn’t today’s agreement only solve partially the banking problem (in terms of liquidity)?

  71. boughtnheld says:

    Correlation of asset performance is higher than usual during a financial crisis.
    To what extent is the risk on/risk off trade aggravating this? Is there a way to avoid this other than trying to time the market?

    Also how well do your advisory service customers fare against a standard benchmark such as a long only 60/40 portfolio?

    Thanks.

  72. Giovanni says:

    Thanks @Petey Wheatstraw and @DiggidyDan, made my whole evening- plus I know what movie to watch next!

  73. g4ll4gher says:

    I saw your comment about inflationary devaluation vs. non-payment in response to one reader’s question about debt and I wonder what you think about deflation. Is it really a non-issue? Are you confident about the reply you gave or can you imagine some weirder, less likely outcome that also appeals to your sense of possible?

    ~~~

    BR: You cannot default if you own a printing press and paper.

    More impottantly is the deflationary period we have been in since the secular bear market began in 2000. Real Wages, rates, housing values, equity returns all flat to negative.

  74. Greg0658 says:

    BR I agree with your 0124 response and in the frame of the Q there are consequences tho

    1 everyone wants that easy game
    2 why imo that corporate stocks & bonds is the early on culprit (dual super-novas)
    3 undermines real working for value (now & future)

    “weirder” = this mornings new(er) top story on banksters .. and, the real manufacturers, service providers; without the umfph to not cut corners and future disaster … having said that last line – you would think money on their terms would have been the answer :-|

  75. DeDude says:

    For investors who are using a long-term “diversify and rebalance” strategy because they have little time to “manage” their investments:
    1) what asset classes would you recommend they invest in?
    2) how would you recommend that they invest in those asset classes?
    3) what type of rebalancing strategy would you recommend (frequency, triggers)?

  76. algernon32 says:

    http://us1.institutionalriskanalytics.com/pub/IRAMain.asp

    The Institutional Risk Analyst article of June 29, 2012 shows some crazy derivatives leverage being applied by some of the banks.
    15 thousand times leverage within opaque financial instruments seems a bit precarious to me.

    Would you care to summarize these findings into a layman friendly synopsis?

  77. Joe says:

    Given that bonds and savings have become “return-free risk” as the Fed has tried to make hiding out until the financial crisis and it’s after effects is over untenable, savers and risk adverse investors have been squeezed hard for years . If then, it turns out that the Fed has merely stretched out and delayed the inevitable bloody resolution of the crisis and if a collapse in Europe sets off a period of steep deflation and domestic write offs , could the US be looking at a “revenge of the savers”, where those left with liquid assets will get a once in a life time chance to buy at the bottom? Or will a world wide crash be equally damaging to those with cash flows and savings?