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In the face of a nasty Greek exit from the eurozone, investors have little choice now but to...
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Thursday, May 24, 2012, 7:40 PM ETIn the face of a nasty Greek exit from the eurozone, investors have little choice now but to cling to low-yielding U.S. government debt, says Pimco's Bill Gross. Despite our own debt mess, a flight from risk assets is going to continue to send money into Treasurys. "It's what we call the cleanest dirty shirt," Gross says; "at the moment the cleanest dirty shirt is the United States."
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If Europe meltdowns, of course, then it won't matter.... but as of right now treasuries are looking toppy.
Yep, that's exactly right. One has to ask how happy are those who brought those dividend payers and are now down 25-50+% on their equity purchase prices. There are many many equities down 25-50+% from their 52-week highs. It really is only the mega-cap multinationals that are holding up now, and their turn will come for significant price declines as well.
Please list those dividend payers down 25-50%. Go ahead, if for no other reason than I want to buy some.
Since this is an investment site, shouldn't the take-away here be to start buying those "beaten down" dividend stocks? That's what I've been doing, including the mega-cap multinationals. Those big companies aren't going away no matter what happens to Greece and all the other EU countries. I don't think the folks at Shell, Nestle, Glaxo, etc. are really worried too much about Greece. And yes, as Tack says, please let me know some that are down 50% so I can buy them.
Simple as that.
The "Bond King" isn't going to sell you on something he would like to buy cheap but he may sell you on something he would like to sell while expensive.
But capital and people flocked to our shores nevertheless.
Today, we are in a similar, albeit less severe situation.
And again Germany will become the culprit.
Excess debt is the culprit and that is global.
This Is Why I Am Buying U.S. Bonds [View article] 7:48 AM "Not suddenly, but over time, gradually higher rates of inflation should be the result of QE policies and (endless ZIRP)," writes Bill Gross, the bond man turning goldbug (?) as he urges a higher allocation to real assets as a way to combat this. Gross also recommends shortish-duration fixed income as well as stocks offering 3-4% yields
So is this code from the Bond King to start exiting the long Treasuries ASAP?
How would that effect the Euro - Up or Down my guess is down or is it net zero if people put Euros in coffee cans out of banks instead of local currency?
Ugly!
If we see any "run" on German banks, it will be to put money in, not take it out.
If there's a broad panic in Europe, money will flow firstly to where it always does, the good-ol' U.S. of A. Even Switzerland would be a distant second.
Use the cash to buy the EUO $21 ATM straddle on the JAN13 option.