The Labor Share Fell. So What?
1 hour ago
Wednesday, October 12, 2011
Warning
There are present and increasing signs of an incipient meltdown in the European financial system. There are also signs that the shadow banking system in China is experiencing a liquidity crunch. There is a significant and growing risk of a post-Lehman type panic occurring in the next weeks to months. Protect your assets.
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2 comments:
Pat,
Does this basically imply that the stock market will generally take a significant dip? Government bonds might be the safest thing?
I think that a sell-off in equities is probable. It is, however, ultimately a political decision, so while leading indicators are currently showing a probable recession in the US beginning nowish, concerted effort by central banks and legislatures could push equities higher regardless. Given that 'austerity' is the word of the season for Europe, and that a similar sentiment has taken Washington, I doubt that they will.
Some government bonds are safe in the short term (US, Japan, Germany, others), but not just government bonds. Non-financial corporate bonds, preferably for companies with global reach, and with a rating of AAA to AA- would also be fairly secure.
In short: yes, probably; yes, but others as well.
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