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Please refrain from sending any more advice about toning down the critique or following subjects that are too far out there. You are not alone in reading these pages anymore, international stats are always available for perusal upon request if only to prove there’s genuine interest in our brand of justifiable cynicism because our ideas will only make sense when we demonstrate their efficacy. Tender your resignations today if you don’t believe ‘stories’ in the Press aren’t just more herding technique visited upon edumacated masses. Our Moringa project in full bloom resolves the issues mentioned in this article and the bankers aren’t the only game in town. If you wish to be helpful and to impress everyone, get mainstream to cover commodity coins, spread the notion of true VALUE!
Amid all the challenges facing the markets — Greece, Facebook, JPMorgan — investors face an even larger potential problem: They soon could be running out of traditional safe havens for their money. Much has been made recently of how gold no longer offers its traditional buffer against financial turmoil, with the yellow metal in a sharp pullback since early March.
But some strategists are beginning to worry that other places where investors are stowing their money — high-grade bonds, Treasurys and defensive stocks in particular — also could be losing their protective shields.
“The problem is we’re seeing safe-haven flows with shrinking instruments into which you can run,” says Kim Rupert, managing director of global fixed income analysis at Action Economics in San Francisco. “Once the run for the exits gets started it’s going to be an absolute stampede.”
The search for safety comes as markets are in daily tumult over the debt crisis in Greece and its reverberations through Europe. The Facebook [FB 33.03 1.03 (+3.22%) ] initial public offering had been viewed by some as a potential market turning point but has failed to live up to its billing. And JPMorgan Chase [JPM 33.97 -0.29 (-0.85%) ] has struck another blow at investor confidence with the fallout from its $2 billion trading loss due to the so-called London Whale.
All of it has added up to major headaches for investors trying to restore their battered confidence. Rupert’s milieu is Treasurys, which have continued to attract buyers despite historically low yields and indications that the Federal Reserve plans on keeping rates near zero until the U.S. economy shows concrete signs of recovery.
The safe-haven flows of which she speaks have occurred at a dizzying pace, from mutual funds that invest in stocks and into those that are concentrated in bonds. Mutual fund investing is considered a proxy for what individual retail investors are thinking.
In the most recent week, money market funds, where investors stow their cash before deploying it for investment, lost another $5.3 billion and now sit at a post-credit crisis low of $2.56 trillion, according to the Investment Company Institute. However, equity funds lost $3.56 billion while bond funds gained $7.2 billion, most of which went into taxable bonds.
Rupert worries that once the Fed is forced to raise rates — either because of inflation or economic recovery — those holding Treasurys could get hammered with principal losses. Compound that with the European debt crisis and the burgeoning debt and deficit problem in the U.S., and it makes for a troubling future for government debt. Read more…>>