Posts Tagged ‘Downgrade’

The Quarter in Review and Unintended Consequences

The first quarter was a strong quarter, particularly for the unmanaged US stock market indexes. But what is going on in Europe? What might the unintended consequences be of the Cypriot banking issues? I talk about all of this in my video, so I highly encourage you to take a few minutes and listen to my thoughts.    Graphs referenced in the video: Full Graphs Transcript: Good morning. Mike Brady with Generosity Wealth Management, a comprehensive full service wealth management firm here in Boulder, Colorado, and I am so pleased to talk with you this morning because we’re going to ... Read More

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IMF to Kick Out Greece

August 20th is a pivotal date when 3.8 billion Euros are due from Greece to the European Central Bank. The IMF is saying that if this isn’t paid, they’ll stop loaning money to Greece. Once the IMF is done with Greece, will the European Monetary Union be far behind? In my opinion, Greece will exit the Euro sooner rather than later, and this is good for the long term strength of the Euro. How will this affect our US markets? Always the big question. More stability and stronger private balance sheets makes the US a better investment I believe. Here’s ... Read More

China Had a Trade Deficit in February

China had its largest trade deficit in 22 years this past February of $31.5 billion. Why? Weaker demand from Europe and the United States is one reason. Factories being temporarily shut down due to Chinese New Year could be another reason. Is this seasonal anomaly or one more bad sign coming out of China? Stay tuned  CLICK FOR FULL ARTICLE   Read More

Japan Slowly Awakening to Debt Situation

One of my goals in my newsletter is to bring to your awareness things that I find interesting or alarming. The article below is in the “alarming” category. Japan borows more than it raises in taxes, and its debt amounts to two years’ worth of Japan’s economic output. Japan has the highest debt-to-GDP ratio in the world. Half of the country’s tax income is directed to simply servicing it’s debt. In addition to Europe and China (which I’ve written about in the past), Japan is one of the next huge players we’ll be unraveling in the future. I have great ... Read More

Information, Communication, Back to Basics

What an interesting month! Who would have thought it would turn out to be such a good month just a short 3 to 4 weeks ago? Many people actually, if you seek out alternative voices to that which you see in the daily paper or newscast. I talk about this in this week’s video below. Also, I talk about how you should assess the level of communication in the past 2 to 3 months from your adviser. Did you hear from him/her? You sure as heck should have. Lastly, now is a great time to get back to basics. Click ... Read More

A Spectator’s Guide to the Euro Crisis

By far the easiest and best chart I’ve seen to explain the European problem was published last weekend in the New York Times. If you’ve been wondering if you’re the only person confused by what all the hub bub is about, this is your opportunity to get caught up. Click for an outstanding chart on the European problem Read More

Special Update – Tuesday Evening

Here are my current thoughts after 2 volatile days TRANSCRIPT: Hi there, Mike Brady with Generosity Wealth Management, I am recording this on a Tuesday afternoon, kind of late Tuesday afternoon. I promised that I would communicate as much as possible to share with you some of my thoughts and that’s the purpose for this video. Yesterday’s video was about 13 ½ minutes, and I definitely am going to make today’s much shorter and pithier, I think, as much as I can. Monday was a very bad day and we can’t isolate that day and say every day afterwards is ... Read More

Should you Freak Out? – Part 2

Part 1 was 1.5 weeks ago. This is part 2, updated as of Monday morning. It’s a particularly long video, but filled with my current thoughts * What does the S&P downgrade mean? * What should you have and not have in your portfolio? * Should you move everything to cash? * Is this emotional selling or fundamental? I’m going to have 2 or 3 videos this week since so much is going on. One of the aspects of my job, in my opinion, is to over communicate with you as the adviser/client relationship is a partnership. TRANSCRIPT:  Hi there, ... Read More

Municipals to be Downgraded?

One of the effects of a US Government downgrade is a municipal downgrade to follow. If you’ve been following my newsletters over the past few years, you know I’ve advised you to watch your municipal holdings closely if you have any at all. The free (relatively) capital market ultimately determines the cost municipals will have to pay to borrow money. Municipals to be Downgraded? – Link Read More

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7,000 Muni Bonds at Risk of Automatic Downgrade

If the US Gov’t is downgraded (I argue when not if) then 7,000 municipal bonds will be automatically downgraed as well. At least according to Moody’s. This really hurts retirees as they’re the largest part of this market. 7,000 Muni Bonds at Risk of Automatic Downgrade — Link Read More

US Government Bonds Downgraded from AAA to AA by German Rating Agency

One of the big drags on the economy in the coming years will be our fiscal deficits and budget problems. I’ll be writing this summer about the US ability (and struggles) to sell bonds and finance the debt, particularly as QE2 ends and the Chinese bubble bursts (at some point in the future). This article talks in depth about an issue we may see more of in the future–US debt being downgraded. This is from a German, not US, rating agency, but it could be just the beginning.   LINK TO FULL ARTICLE Read More

Who Will Buy the Bonds?

You’ll see me in the coming months talk about the bond markets, particularly as the Quantitative Easing (QE2) comes to a close this summer. We have a huge federal deficit. We need people to buy Federal bonds to lend money to the government. With the huge influx of money from the Fed in the past few months, foreign investors were squeezed out. Will they come back? The answer is not as simple as you’d think. I’ll be writing more and more about this as the year goes by, particularly it’s impact on you. CLICK FOR FULL ARTICLE   Read More

S&P Downgrades Japan from AA to AA-

Japan has been in a continued recession for the past 20 years. The deficit levels of the Japan government are among the highest of the developed countries, and expected to increase in the coming years. This is not good news for Japan. As the rating decreases, the extra premium paid to borrow money goes up. So, a 3% cost of borrow might increase to 4%. Anyway, this is something to watch as the United States deficit to GDP is increasing rapidly. CLICK FOR FULL ARTICLE – S&P DOWNGRADES JAPAN FROM AA TO AA- Read More

Just When You Thought the Euro Was Out

You’ve been reading my newsletters and saying “boy, that Mike Brady knows everything”. That may be true, but it’s good to remember the markets have a mind of their own. The Euro has rallied against other currencies recently. Do I think this is a short term rally? Yes. Do I think the Euro and Europe in general still have long term problems? Yes. CLICK FOR FULL ARTICLE – JUST WHEN YOU THOUGHT THE EURO WAS OUT Read More

Lessons from The Big Short

Every wondered what the 2008 Financial Crisis was all about? The Big Short by Michael Lewis is a good, gripping book that explains much of it. I highly recommend it. But what are some of the lessons we can take from this crisis as outlined in the book? That’s what this week’s video is about. Take 4 minutes to watch/listen to it.   Read More

Is This Your Average Secular Bear?

In my blog I like to present both sides of the argument and then give you which side is more persuasive to me. This article states what I feel, which is that we’re in a long term bear market, but we’ll have years that are good (like 2009 and 2010). Secular bears end when the excesses that caused the prior bull are extinguished. I’m not convinced we’ve addressed the excesses yet.  CLICK FOR FULL ARTICLE – IS THIS YOUR AVERAGE SECULAR BEAR? Read More

Predictions Coming True

If you’ve been reading my blog for the past 2 years you’ve been hearing me talk about the slow disaster that is Europe and our municipal governments. We’re now seeing the worst falls in Municipals since Lehman’s collapse back in September 2008. Ouch! I also say that the worst is before us, not behind. To do: Watch your municipal holdings and know what your exposure is! Ireland has a bailout (thank you EU and IMF) and now the yields for Portugal, Spain, and Italy are going through the roof. This does NOT bode well for the rest of the PIIGS, ... Read More

What’s Wrong with Muni Bonds? Everything

I’ve been warning about the municipal bond market for some time now. I think the problems are starting to hit and 2011 will be a big year of reckoning. Look at the chart to the right. Ugly. Why is this happening? There’s the looming end of the Build America Bonds program, questions about how state and local governments will manage their debts, and the impact of huge pension and health care obligations that seem unsustainable. CLICK FOR FULL ARTICLE: WHAT’S WRONG WITH MUNI BONDS?  EVERYTHING . Read More

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FDIC on checking accounts going to infinity

Starting next year, the FDIC limit on checking accounts will increase from $250,000 to an unlimited amount. What? Isn’t the FDIC broke already? Yes, but why let that get in the way of a government (or quasi-government) policy. This coverage amount will last until the end of 2012.  CLICK FOR FULL ARTICLE – BROKE FDIC EXPANDS CHECKING INSURANCE Read More

Taxpayers on the Hook for $3 Trillion in Pensions

The reason I include this article is to reinforce my belief that Municipal Bonds are something to avoid. State pensions are in a world of hurt, and you and I will be subsidizing them in the future. Do you think this will cause some slowdown in state revenues and resources? Of course. Please click for Full Article   Read More

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