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Debt is going to be the ending of the developed world, says The Smartest Man in Europe,...

  • Tuesday, July 3, 2012, 8:43 AM ET
    Debt is going to be the ending of the developed world, says The Smartest Man in Europe, according to Byron Wien. Politicians can keep staving off catastrophe, but not forever, and in the meantime, the standard of living in the developed world will continue to converge with that of the developing. What's he buying: IBM and Apple (AAPL). Go figure.
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This news story has 45 comments:

  • I think gold and silver might be a good choice too
    3 Jul 2012, 08:46 AM Reply Like
  • His top pick was actually gold:

    "So what am I doing with my money? It is hard to hide in stocks. Even Danone is reporting disappointing earnings; people are so worried they aren’t even buying yogurt. The French auto companies are in trouble. I think gold is going much higher. I am buying energy stocks because I want to own something real. Preserving capital is my focus now, not making money, but I like IBM and Apple. Also some Swiss multi-nationals. If Obama wins in November the market will go down. A Romney victory will create a rally, but once he gets into office he will find there is not much he can do to make things better.”
    3 Jul 2012, 09:05 AM Reply Like
  • Romney would without doubt struggle to make things better but keeping him out will definitely prevent things from becoming much worse, Geopolitically, socially,economically and ethically. The man would sell his own mother to gain power surely that should make him unsuitable for one of the most important jobs in the world. I think we have all seen the ramifications of having such individuals in power.
    3 Jul 2012, 09:29 AM Reply Like
  • jdm: I am confused . You think Obama is going to be good for the stock market? Better than Romney?
    3 Jul 2012, 09:47 AM Reply Like
  • Romney will not get into office if Americans do the right thing. Why would you support the people that stabbed you in the back.
    3 Jul 2012, 09:55 AM Reply Like
  • please explain how Obama has made things better. highest level of unemployment (real unemployment) since the great depression, more people on food stamps (45ml), most anemic recovery after trillions of dollars spent, largest fed debt and deficits in the history of our country and 20 new taxes on the american public to pay for obamacare. yes give me four more years of that please@!
    3 Jul 2012, 10:59 AM Reply Like
  • Federal spending has gone down under Obama. Bush's deficit was higher. Republicans consistently create market crashes. Just look at the data.

    As early as 2005 predictions were for increased deficit due to the Bush tax cuts. That was baked in before Obama was elected.

    Romney may be able to lie his way into office, but then reality bites. Between two bad choices, Romney is much worse.
    3 Jul 2012, 02:42 PM Reply Like
  • Actually, Bloomberg had a great article showing that the stock market and private sector employment are better under Democrats.

    http://bloom.bg/Mtzo6m

    http://bloom.bg/Nuif6x

    In addition, Bloomberg's poll of global institutional investors favor Obama over Romney:

    http://bloom.bg/MtzqLj

    I look at actual economic policies and results and come to conclusions.
    3 Jul 2012, 02:50 PM Reply Like
  • Do yourself a favor and read "Reckless Endangerment" by Gretchen Morgenson for the Truth...Dems were right there too.
    3 Jul 2012, 09:03 PM Reply Like
  • "please explain how Obama has made things better."

    Backward looking statements like this have zero value.

    We cannot know how McCain would have performed in the same situation since he wasn't elected, and this is why the right question to ask is 'how is Romney going to do better?'
    4 Jul 2012, 09:42 AM Reply Like
  • Deficits lower under Obama? Fed spending lower under Obama? Dude what planet do you live on? Another uneducated democrat. Try reading. It works.
    4 Jul 2012, 10:18 AM Reply Like
  • http://cbsn.ws/GAFF6W
    4 Jul 2012, 10:36 AM Reply Like
  • @rgauntt - I really hate when people don't understand the real drivers behind the deficit/debt numbers. I will help you out:

    http://bit.ly/t24ESB
    4 Jul 2012, 11:22 AM Reply Like
  • @kmi - Romney will do better by cutting taxes, pushing deregulation and possibly go to war with Iran.

    These same policies worked wonders under Bush.

    (note heavy sarcasm)
    4 Jul 2012, 11:27 AM Reply Like
  • Another bush blamer. Stacked all the Obama deficits in bush corner. Who said if you provide $800bn in stimulus money unemployment will stay below 8%. Who primed the gse's and forced banks to lend to lousy borrowers? I'm not a fan of either party as they have both been lousy stewards of our economy however to think Obama is on the right course is nuts. Worst recovery in 100 yrs with most amount of money spent ie 20 % of GDP. No new jobs created and socialized medicine on the way. Europe tried this program and we need to stop this nonsense of deficit spending ASAP. Take the pain and medicine vs printing over the problems. Clinton and a republican congress pulled it off so perhaps there is hope of a balance of power getting the job done.
    4 Jul 2012, 02:22 PM Reply Like
  • BTM, I wont go into the glaringly obvious and state the continuation of failed neoconservative efficient free market unregulated mantra. I,m sure all semi informed individuals have come to the conclusion (Mr Greenspan included) that these Regan economics continued by all post administrations where a complete disaster.

    I would simply say that Mr Romney's top priority is Mr Romney and his fellow plutocratic self indulgent, unpatriotic, friends.They do not care for the future of the USA or its populous he has made this very clear in his completely inconsistent policy's and pursuit of ever more concentration of wealth in the country. I am no historian but I'm unaware of any banana republic plutocracy producing a sustainable healthy economy.

    As many problems as there are with the other lot I would favour their approach until something better comes along. I like most people wouldn't trust most politicians as far as I could throw them, however it is very clear to me the Republican party of today have been completely infiltrated by a very disturbing element and gone is the basic premise of conservative Republicanism long ago.

    Ultimately a sustainable healthy stock market needs a sustainable healthy economy, we probably wont achieve that with the Democrats but IMO it is a definite lost cost with these people who stand in the place of the ideology of Lincoln/T Roosevelt and the true Republican party. I do not even consider them Republican they are simply a mechanism for corporate plutocrats and intolerant religious nuts.

    Thank you for your Question.
    5 Jul 2012, 05:39 AM Reply Like
  • Morgenstern's book, for those who haven't read it http://amzn.to/MWTkwW, blames both parties for what happened. Fannie Mae for the Democrats, Gramm-Bliley for the Republicans.

    Fact is, though, it blew up over the course of a decade in which it was convenient to have a bubble to cover up a war.
    5 Jul 2012, 09:19 AM Reply Like
  • Yes, Clinton also increased taxes, gave us four balanced budgets (or were they surpluses?), and created 20M jobs.
    5 Jul 2012, 12:37 PM Reply Like
  • Clinton only Signed the R Congress budgets (at least they could pass a budget).

    “Congressional Budget Office baseline deficit forecast released just before the Republican Congress enacted its first budget blueprint in April 1995. That forecast gives us a snapshot of the "Clintonomics baseline." The accompanying chart shows that the deficit was expected to hover at or above $200 billion well into the next millennium.”

    “The cumulative budget deficit from 1996 through 1998 is now expected to be $415 billion below the Clintonomics baseline. Mysteriously, that information appears nowhere in White House press releases.”

    “…1995, when R’s seized control of Congress, the budget deficit fell by two-thirds.”
    http://bit.ly/LOJzOJ
    11 Jul 2012, 10:08 AM Reply Like
  • Wars that Congress approved...that Dems voted for, then against.
    11 Jul 2012, 10:11 AM Reply Like
  • You are right. But it was a war that Republicans proposed and prosecuted, took credit for and own. You broke it, you own it.
    11 Jul 2012, 12:17 PM Reply Like
  • If the 29 Senate Dems don't vote YEA, Iraq does not pass…They ALL own it. The vote count was YEAs 77, NAYs 23.

    Huffpost : http://huff.to/MkRC6J
    11 Jul 2012, 12:38 PM Reply Like
  • YOU ARE WRONG. You proposed it, you bought it, you broke it, you own it, and that will be the fact no matter how many times you try to wash your bloody hands of it. Now and forever.

    Or, as Howard Dean said, "YEEEEARRRGH!"

    (And now I'll return to my normal calm demeanor.)
    11 Jul 2012, 12:44 PM Reply Like
  • Ha, I didn't propose anything, I’ve never subscribed to Your party system. Your adamant and emotional response is your opinion, backed by your ideology.
    11 Jul 2012, 01:20 PM Reply Like
  • Denial ain't just a river in Egypt.
    11 Jul 2012, 02:16 PM Reply Like
  • He's buying AAPL as the ultimate socialist tool. The dumbing down of everyone glued to an iphone, and the resulting loss of personal liberties. One day I get a feeling people will rue the day they held Steve Jobs in such esteem. Don't get me wrong he was brilliant, but with horrible social consequences. Maybe he should be buying Facebook too, as they force people to change their email addresses. Yep I agree with the convergence between developing & developed too bad those of us in the states are on losing side of the issue.
    3 Jul 2012, 09:47 AM Reply Like
  • ron284, if it wasn't Jobs then someone else would have created something similar to the iPhone. It was inevitable that technological advances would shift to mobile.
    3 Jul 2012, 10:12 AM Reply Like
  • @ron284
    horrible social consequences? please expand....
    3 Jul 2012, 10:16 AM Reply Like
  • Cavemen also hated plows and agriculture, because they had horrible social consequences....
    3 Jul 2012, 10:39 AM Reply Like
  • The stupid is thick this morning.
    3 Jul 2012, 10:49 AM Reply Like
  • How many reasonable jobs still exist? Jobs are scarce due to cheaper labor in other countries which has been going on for years. Schools aren't producing the quality people we need here to take things as a whole to greater heights. As for jobs how many of us have been displaced or had to reinvent themselves several times over and very often in lesser positions. The computer has also taken over a great many jobs themselves. So you either have exceptionally paid & wealthy people, a declining middle class , and poorer people. As for society. The burden has been put onto the gov't to provide healthcare, transfer payments, & debt relief to the individual by piling it up on Uncle Sam's balance sheet. Upward mobility now seems like a dream. In the meanwhile we have Costco, Amazon & Walmart to spoon feed us all stuff we need at minimal cost just to move product out the door. It just doesn't feel very good.
    3 Jul 2012, 11:34 AM Reply Like
  • Agree. And do things ever get better when you look at the unemployment numbers in our cities ? Do people really think that training everyone to be machinists, hvac, plumbers, or programmers will make a dent ? Is some company gonna build a manufacturing facility close to Chicago, Detroit, Buffalo, etc, when it's cheaper to go off-shore ? Blu collar work, which used to provide liveable work, is rapidly disappearing. Kinda scares me to see where we are headed. And there's also my boomer generation expecting free med care for everything including Alzheimers. Back to my solution - Erin Burnett for President.
    3 Jul 2012, 11:51 AM Reply Like
  • @ron284
    lets stick to the original premise you had about the advent of technology bringing horrible social consequences as the rest of what you brought up can be topics on their own...

    let us assume that you are correct. what do you think would happen to us here if say....Gates and Jobs were Russians or Indians or Africans or Chinese?

    let us assume that you are correct. what kind of world would we be living today without the internet, mobile phone or PC? would the strides in medicine, communication, arts, engineering, etc be possible without computing devices?

    let us assume that you are correct. what could explain the loss of our competitiveness after WW2?

    let us assume that you are correct. what do we do now given that our world has definitely changed vis a vis our parents' era?
    3 Jul 2012, 01:53 PM Reply Like
  • @ron284, I couldn't agree more. With all the technological advances our quality of life has only gotten worse. People are now so dependent on devices for information, automation for production, and media for information and entertainment that we could no longer survive without them. I am as guilty as anyone, I find myself staring at a TV, computer, or phone most of the time. It's almost like an addiction to technology, soon there will be big money to be made with techno-rehabilitation....
    3 Jul 2012, 03:00 PM Reply Like
  • Actually there is already big money to be made in teaching people to use technology correctly, efficiently, and to walk away when that's appropriate.
    3 Jul 2012, 03:47 PM Reply Like
  • Support OWS with action and money . They are the only thing we have going for us. Vote for Romney if you are insane.
    3 Jul 2012, 09:58 AM Reply Like
  • If you want to kill American Free Enterprise compeletly vote for Obama again If you want European type govt vote for Obama. If you want experience and debt reduction vote for Mitt
    3 Jul 2012, 10:15 AM Reply Like
  • Please tell me exactly how Obama has killed free enterprise. Corporate profits and the stock market are booming and we've seen 27 straight months of slow/moderate job growth under this President. Under Bush, we had no real job or median income growth and a financial crash. Sure, times were good under Bush during the speculative real estate bubble, but we now know that was unsustainable.

    Before you post partisan dribble, please look at the facts.
    3 Jul 2012, 02:55 PM Reply Like
  • There is a certain amount of partisanship in every election, and investors have a long tradition of supporting Republicans, regardless of the facts.

    I personally think the history of the last 12 years indicates that faith may have been misplaced. But you can't expect people who've been raised on a set of political assumptions all their lives to suddenly wake up and see that those assumptions no longer fit the times.

    Many Republicans argue as though it's 1972 and they're running against George McGovern. It's not. They're not. Times have changed, and economic prescriptions with them.
    3 Jul 2012, 03:50 PM Reply Like
  • Predicting the weather is easier, as there is no human will component. "The Smartest Man in the World" (presuming he is real) and his courier aren't going to explain global warming to anyone in two pages, any more than they can encapsulate a much more complex entity like the global economy. Finally, predicting a rally for a Romney win is the heights of hubris. Predicting ANY rally composed of chaotic components is as successful as rolling dice. I call bullsht. Obama is a centrist republican for all I can tell, just like Romney. The only difference is the part of the population they respectively piss off by being centrist.

    "Someone said" stuff on the internet is easy to find. Sad to see it here. WHo is this dingbat, SMitW? Out with a name or just file your notes with the used kleenex, bud. I'm not buying.
    3 Jul 2012, 10:21 AM Reply Like
  • Justice Roberts may be much more cunning than his opinion on Obamacare makes him out. He is being characterized as unsophisticated by applying the Taxing powers of Congress as his rationale for constitutionality. But a more astute and proper interpretation shifts the issue away from Supremes to its rightful origin:Congress and "the people"
    Lets pray enough people get what happens under a second term leader the likes of which the US has never before elected including President Carter.
    3 Jul 2012, 10:25 AM Reply Like
  • I'm thoroughly sick of American politics. I wish Erin Burnett would run. If she won at least I'd have a cute face to look at while the economy tanks. She's kinda smart too. My apologies for my sexist comment. At least I'm being honest. No matter who wins the election, there will still be opportunities. Stay vigilant. Go Erin.
    3 Jul 2012, 11:09 AM Reply Like
  • I agree Erin Burnett would make a great President.
    Smart,cute and last but not least she understands money.
    3 Jul 2012, 12:48 PM Reply Like
  • Political emotion prevents clarity in the markets. There are great opportunities to capitalize on regardless of the election outcome, but most don't see them because they are blinded by their political biases. Stay focused on good companies, solid metrics, and a wide moat and we'll all make money.
    3 Jul 2012, 11:51 AM Reply Like
  • There are two views of debt. It will crush the debtor, or it will force the creditor to write something off. Byron Wien can't conceive of write-offs, but when they're necessary you do them, then create new money and go on.

    This hand-wringing "the world is going to end" because people owe loans they may not be able to pay is getting tiresome. If the loan is bad, write it off. If the write-off kills the creditor, tough -- you made too many bad loans. It's really that simple.
    3 Jul 2012, 01:34 PM Reply Like
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