Sovereigns, Discouraged Workers, and the markets
OK - hard to miss all of the "hullabaloo" so a few comments here:
Firstly, the Greek, Portuguese, Spanish, and other European debt (sovereign) issues are coming to a head finally. Most belief is that very soon the European Government will begin a bailout - though Greece has been hiding the problem a bit and perhaps ... well, we shall see, but it would be quite interesting if Greece was eventually cut out of the Euro as the government will be very hard to get to a 3% deficit soon (especially given the peoples' propensity to demonstrate when they do not like what's happening).
The U.S. is MUCH stronger comparatively and therefore the dollar versus the Euro and Pound Sterling has exhibited that strength. I believe the dollar strength WILL continue. America was MUCH bolder in stimulus compared to Europe and the U.S. continues the tendency to help out the "average Joe" so far.
Secondly, the broadest measure of unemployment (U6) dropped from 17.5% to 16.8% in January!!! That is HUGE and shows the strength of future tendencies towards decreasing unemployment. AGAIN, one report does not make a trend, however there are many economists now seeing more of a "V" recovery than a "U" recovery. We shall see!! (U3 is the "official" rate of unemployment which does not include marginally attached, part time workers who would have been full time in "normal" times, or the discouraged worker.)
Finally, there is a market tendency to have a knee jerk reaction. Why, because everyone likes to follow the herd, so if you do wish to invest, listen to Warren Buffet, find stocks that have been beaten down but are VERY strong companies, with a special competitive advantage which can not easily be matched. Then buy those companies and hold, if no major surprises with the company occur.
Brief and to the point I hope - back to vacation and skiing! grin
Firstly, the Greek, Portuguese, Spanish, and other European debt (sovereign) issues are coming to a head finally. Most belief is that very soon the European Government will begin a bailout - though Greece has been hiding the problem a bit and perhaps ... well, we shall see, but it would be quite interesting if Greece was eventually cut out of the Euro as the government will be very hard to get to a 3% deficit soon (especially given the peoples' propensity to demonstrate when they do not like what's happening).
The U.S. is MUCH stronger comparatively and therefore the dollar versus the Euro and Pound Sterling has exhibited that strength. I believe the dollar strength WILL continue. America was MUCH bolder in stimulus compared to Europe and the U.S. continues the tendency to help out the "average Joe" so far.
Secondly, the broadest measure of unemployment (U6) dropped from 17.5% to 16.8% in January!!! That is HUGE and shows the strength of future tendencies towards decreasing unemployment. AGAIN, one report does not make a trend, however there are many economists now seeing more of a "V" recovery than a "U" recovery. We shall see!! (U3 is the "official" rate of unemployment which does not include marginally attached, part time workers who would have been full time in "normal" times, or the discouraged worker.)
Finally, there is a market tendency to have a knee jerk reaction. Why, because everyone likes to follow the herd, so if you do wish to invest, listen to Warren Buffet, find stocks that have been beaten down but are VERY strong companies, with a special competitive advantage which can not easily be matched. Then buy those companies and hold, if no major surprises with the company occur.
Brief and to the point I hope - back to vacation and skiing! grin
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