Re : S&P Rating a Moot Point – It's the Debt Bomb, Stupid
yalanand
8/9/2011 1:54:24 AM
Scott,
What role will emerging markets play. Do you think countries like Indian/China/Brazil will help the diffuse this debt bomb ?
Grading on a curve
Greenbone
8/9/2011 1:15:09 AM
I think in the days or weeks ahead, the panic will subside, the vomit and blood will crust over, and people will realize that the downgrade simply lowered the curve. There's still a "best" / "safest" country for investment - and all those that stack up beneath it.
Where else is there to invest? Somewhere off-planet? You can't eat gold. if you're really in a panic about this, I suggest top-ramen and a water filter.
I say...pick some equities that will shrug off all of this nonsense, and pile in. Tomorrow, will people eating at McDonalds suddenly decide to skip the burger and just go for the apple slices? No. Buy MCD.
Will the inevitability of population growth and the rise of the middle class in India and China somehow magically decouple from the fact that every last drop of oil in this world will be extracted, processed, distributed, sold, then burned? No. Buy oil and nat. gas stocks. (heck, buy Canadian, like PGH, which now has a crazy yield thanks to the dog-days-of-summer 2011crash, and then you're even hedged in Canadian dollars).
Will iPads and iPhones become unsexy starting tomorrow morning? No.
Will companies stop paying for Google search engine love? No.
Will people need less groceries, less shampoo, less hemerroid cream? No.
...wait for the crust to appear, then buy like a wigged out Warren Buffet. Buy this foolish, short-term panic, because after this tsunami, the water does come back.
Re: Other than gold, buy what exactly?
Broadway
8/8/2011 10:17:30 PM
I think that is obviously where all the rage comes from from the "average Joe" investor with his 401(k) and his IRAs and his college savings accounts ... you get the point. They haven't been warned about this debt bomb, and now they're realizing they're the generation who's stuck with the bill, and now you're saying there's no way to protect yourself from it but gold?!
Scott, I agree that we're in for some debt reduction, or deleveraging and I want to prepare myself financially. I know it's good to have some of our money in gold. But not all of it, right? What else makes sense for the economy we'll have in the next 6 - 10 months? I would have expected individual stocks, with strong fundamentals to be a good hedge against money printing, Quantitative Easing, and inflation. The last three days make me wonder.
The emperor's new clothes
Value Hiker
8/8/2011 6:36:48 PM
US government has being paraded with its new clothes made by weavers from Fed & Wall Street for a long time. SPY is just like the boy who cried out, "But he isn't wearing anything at all!"
Now Geithner told the US government to hold itself up proudly and continues the procession of Parade ...
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