Salient to Investors: Swedish Prime Minister Fredrik Reinfeldt said the US will never afford the welfare benefits enjoyed by Europeans unless it raises taxes, and America’s federal deficit is unsustainable. The OECD says the US has the 4th smallest tax burden relative to GDP, after Mexico, Chile and Turkey. Global investors say the
READ MORE... →Salient to Investors: Joseph Stiglitz said: The richest 1% of Americans have doubled their wealth since 1980 and now hold 25% of the country’s wealth, yet the median income level in the US had not changed since the early 1990s. The American dream has gone: the US has one of the worst
READ MORE... →Salient to Investors: Kristin Forbes at MIT says: There is complacency over the risk that financial turmoil will spread beyond a single country, despite Europe’s struggles. Regulators are not doing enough to bolster preventative oversight, and we’ve seen softening of regulatory requirements. Requiring more capital may reduce the availability of
READ MORE... →Salient to Investors: Joseph Stuber writes: Stocks could reach the all-time high on the S&P of 1576 in 2013 driven by its momentum, but then the market will broadly sell-off to October 2011 lows of 1074. A correction to the 2009 low of 670 is possible on pure fundamentals, given
READ MORE... →Salient to Investors: The Fed is expected to affirm its accommodation on Jan. 29-30. Julia Coronado at BNP Paribas said we’re in uncharted territory, and as the easy money flows through financial markets and into the real economy at some point, the US faces many risks. Michael Hanson at Bank
READ MORE... →Salient to Investors: Shane Brett at AllAboutAlpha writes: The long-term outlook for the US economy is broadly positive with housing stabilized, consumer confidence slowly returning, political instability solved by Obama’s decisive win, and as health spending increases under Obamacare. Cheap domestic energy will continue and the US will seriously expand
READ MORE... →Salient to Investors: John Overstreet writes: Real commodity prices are highly correlated with equity yields. The most significant breakdowns in the correlation between equity yields and bonds occurs when short-term yields approach or break below 1.0 – as during the Depression, and for the last decade: i.e. the “risk premium”
READ MORE... →Salient to Investors: Phil Mause at Pacific Economics Group writes: Investors should buy up dividend stocks, business development companies (BDCs), REITs and other investments yielding more than bonds. A dividend stock led stock market could rise considerably – dips will be shallow as many investors will be waiting to get in.
READ MORE... →Salient to Investors: Exports from the US are set to pick up in 2013 as global growth strengthens. Gary Hufbauer at Peterson Institute for Intl Economics said competitive US industries include agriculture, medical supplies and aviation, and exports are a very high-paying sector of the US economy – jobs are more steady in export-oriented
READ MORE... →Salient to Investors: The world’s biggest investors are moving away from allocating money to government bond markets based on their amount of debt – a preference that has favored the largest borrowers for three decades. Allocations of bond funds based on GDP are still a small part of the total. Indexes based
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