The last two days:
So the reasons for the two-day fall?
- Oil. Now under $50.
- Euro. Now under $1.20. Now at a nine-year low against the dollar!
- Fears of deflation in Europe (which increases the risk of bond defaults)
- Grexit. Greece leaving the Euro.
- Political unrest. 12 dead this morning in Paris from a shooting by three gunmen at a French satirical magazine called Charlie Hedbo.
As my Paris trader friend Patrick said, “Driven more by fear, than actual fact.”
Last night he wrote:
Yes Driven more by Fear than actual fact.
Greece will not exit, the EEC will pay the bill.
Euro fall will help European export (the few things “we” manage to sell, like the Airbus!)
Deflation will not last. At least in France will, is, “replace” by higher taxes. Post office, Trains, electricity all increased as of January 1st.
Oil lower might not be as beneficial in a long term. Who is going to buy all the real-estate in Paris, London, Cannes and NY?
Russia can’t “live” economically without Europe. I bet you that the Holland the French President (not the country) will sell the Mistral ship to Putin…
As I wrote yesterday, none of these are going to bring down the world’s economy. Stay invested.
Don’t buy oil stocks, though they’re “cheap.” Stay away from companies with heavy involvement in Europe.
This morning my 30-year treasuries are up from $105.404 to $109.965 as interest rates continue to fall. I wrote about buying long bonds a few days ago. The 30-year treasury is still yielding 2.52% which means it’s still a good buy. It’s yielding far better, for example, than Germany’s 30-year bund, which is at a miserable 1.18% (down again). If you were a German and saw what was happening to the Euro (now down to $1.19), and saw the yield on the U.S. treasuries, where would you put your money?
This is why I continue to study Motif Investing:
I’m reading the Finra report on them. Is Motif legit? Seemingly yes. Click here.
Here’s an excerpt from their email to me this morning:
For more on Motif, click here. Anyone had experience with them?
The Disappeared.
The story of September 26, 2014, the day 43 Mexican students went missing — and how it might be a turning point for the country.
Read the fascinating piece in California Sunday Magazine. Click here.
God bless the economists among us.
Old age creeps on all of us
He was a widower and she a widow. They had known each other for a number of years being high school classmates and having attended class reunions in the last 20 years without fail.
This 50th anniversary of their class, the widower and the widow made a foursome with two other singles.
They had a wonderful evening, their spirits high. The widower throwing admiring glances across the table. The widow smiling coyly back at him.
Finally, he picked up courage to ask her, “Will you marry me?”
After about six seconds of careful consideration, she answered, “Yes … yes I will!”
The evening ended on a happy note for the widower. But the next morning he was troubled.
Did she say “Yes” or did she say “No?” He couldn’t remember. Try as he would, he just could not recall. He went over the conversation of the previous evening, but his mind was blank.
He remembered asking the question but for the life of him could not recall her response. With fear and trepidation he picked up the phone and called her.
First, he explained that he couldn’t remember as well as he used to. Then he reviewed the past evening. As he gained a little more courage he then inquired of her. “When I asked if you would marry me, did you say “Yes” or did you say “No?”
“Why you silly man I said, `Yes. Yes I will.’ And I meant it with all my heart.”
The widower was delighted. He felt his heart skip a beat.
Then she continued. “And I am so glad you called because I couldn’t remember who asked me!”
Harry Newton who biked to tennis yesterday in 19 degree weather. It was awful. My hands froze. Good news, today it’s up to 21.
Maybe you left the Southwest a bit too early, Harry. 79+ degrees here today! Humidity high at 36%.