Before everyone gets together and sings Kumbaya over Europe solving their sovereign debt problem, let me remind you. We’ve heard this song before, and the fat lady hasn’t sung yet, so it ain’t over.
For instance, the latest European bailout fund is being characterized as a way for Euro countries to “borrow” from the proposed bailout fund “without increasing debt”. HUH???
Here’s my best advice:
1. Treasuries are the cleanest dirty shirt in the investment closet
2. Chose quality over yield
3. Chose optionality over long term maturities
Don’t try to predict what is going to happen in Europe or the U.S. Vegas bookies have better track records than economists’. Build liquidity into your investment portfolios so that you can take advantage of opportunities that come along. We’ve been on a bumpy economic ride and it ain’t over yet.
Economic Stuff
Economic Event | Period | Economic Survey | Actual Reported | Original Prior | Revised Prior |
Personal Income | MAY | 0.2% | 0.2% | 0.2% | |
Personal Spending | MAY | 0.0% | 0.0% | 0.3% | 1.0% |
PCE Deflator MoM | MAY | -0.2% | -0.2% | 0.0% | |
PCE Deflator YoY | MAY | 1.5% | 1.5% | 1.8% | 1.9% |
PCE Core MoM | MAY | 0.2% | 0.1% | 0.1% | |
PCE Core YoY | MAY | 1.8% | 1.8% | 1.9% | 2.0% |
Okay, I am not an economist, but I feel safe in saying the Personal Spending neither increased or decreased in May.
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“The Fed has gone about as if the problem is a shortage of liquidity. That is not the basic problem. The basic problem is uncertainty that the balance sheets of financial firms are credible.”
~ 2009, Anna Schwartz, Economist, 1915-2012
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John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
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