Lilguy

Time for California Muni Bond Investors to Take a Stand

You may be late to the TIPS pot--at least for the appreciation--but you're wise to cut back on Ca. munis.

I share your views on investment: looking for opportunities to make a fair return based on hard, smart work in well-managed entities. Now, after 40 years, I am finding that those US stock market "opportunities" in the US are increasingly, if not predominantly, manipulated at the exchange by machine trading, the books of the companies I've researched are totally cooked, the regulators who are to keep this all in balance are stupid, lazy, and corrupt, and now the economy as a whole is deteriorating at an unprecedented pace, led by the substantial disappearance of the American middle-class that has been the backbone of the country's growth.

So, while you are shifting out of Ca. munis, I have shifted out of stocks and don't plan to return until the playing field is level, transparent, and robust.

Credit Crisis Watch: Gaining Positive Traction?

A number of analysts and commentators have noted the reduction in credit spreads across credit types--from CDSs to LIBOR--in the last couple of months. But I think these closing spreads are misleading, at least as far as economic stimulus is concerned. Business and personal loans continue to shrink despite the lower spreads (& rates), in large part because qualification standards have been raised excessively. I doubt (if one could do it) that the spread/qualification ratio has declined--and indeed it has probably increased.

For the moment, I also tentatively question whether the declining credit spreads actually means the financial sector is "safer" (more solvent, more liquid) than it was a few months ago. Most of the reduced spread is based on US & other government policies aimed at keeping/making banks solvent. It is pretty clear now that their efforts so far have been woefully inadequate (despite the $trillion spent or committed), and prospective programs do not promise to fill the gap. Moreover, financial instiutions remain opaque as ever about their true financial condition. If you doubt me, just as Ken Lewis, CEO BAC, about his purchase of Merrill Lynch....

Drastic Times Don't Necessarily Call for Drastic Portfolio Measures

This reads like a Chinese fortune cookie or an astrologer's commentary on the day for Sagittarius. No insight, no help.