Salient to Investors: Robert Baltzer at Baillie Gifford said corporate bonds will make less in 2013 after 4 years of annualized gains of at least 15 percent. Baltzer has become more nervous while the market has become less nervous, and has reduced banking securities because he sees significant systemic risk in European banks. Since the collapse of
READ MORE... →Salient to Investors: In 2001, Bain and Co. found that from Aug. 16, 2000, to Aug. 15, 2001 companies that laid off 3 percent or less of their workforces rose 9 percent for the period versus 4 percent average increase for the S&P, versus flat for companies that laid off 3 to 10
READ MORE... →Salient to Investors: Peter Richardson and Hussein Allidina at Morgan Stanley said: Calls for the end of the commodities super-cycle is too simplistic as commodities are cyclical but the elasticity of supply and demand and length of the cycle vary significantly. Gold, silver and corn will outperform other raw materials next year
READ MORE... →Salient to Investors: Homeowners and banks are accelerating short sales as the 2007 Mortgage Forgiveness Debt Relief Act expires at year-end, after which homeowners will be taxed on the forgiven principal and short sales will drop and foreclosures rise. Short sales and sales of bank-owned homes accounted for 41.5 percent of home purchases in
READ MORE... →Salient to Investors: Mary Brinton at Harvard said Japan suffers from a play-it-safe mentality which focuses more on potential downsides rather than on opportunities. Brinton and Toshio Yamagishi at Tamagawa University say the breakdown of the lifetime employment system may be the main anxiety that leads people to play it safe – there’s still a prejudice against hiring
READ MORE... →Salient to Investors: Caroline Baum says: the effect of raising tax rates on labor supply is small since most don’t have the option to work less. the cut in marginal rates is minimal compared with earlier cuts from 70 percent to 50 percent to 28 percent in 2001 and 2003, which were followed by a decade of mediocre
READ MORE... →Salient to Investors: Mayra Rodriguez Valladares at MRV Associates said being big and global isn’t what it used to be, and sees global banks jettisoning divisions abroad and at home. UBS, Citigroup and RBS are reversing decades of global expansion. Charles Dallara at the Institute of International Finance said globalization of financial markets said reversing decades of going
READ MORE... →Salient to Investors: Professor Koichi Hamada said the BOJ’s efforts to end decades of deflation are very weak, as is its policy of buying short-term government bonds. Instead it could buy foreign bonds and debt with longer maturities, and increase purchases of REITs and ETFs. Any inflationary concerns could be eased by raising interest rates. Hamada said the
READ MORE... →Salient to Investors: David Rosenberg at Gluskin Sheff said: the economy is stuck in the mud and it will be a wageless recovery – the fiscal cliff would trigger a recession. Housing is bottoming out. and banking is on the mend and banks are more willing to lend money. likes gold-mining stocks and utilities, dividend-paying healthcare, utility and consumer-staples stocks. likes
READ MORE... →Salient to Investors: Morgan Stanley and Municipal Market Advisors says investors should prepare for the first year of muni-bond losses since 2008 Bank of America Merrill Lynch says munis have earned 20 percent since the start of 2011, the best two-year run since 2001. The median analyst expects 10-yr T-bond yields to rise
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