LOTMs Guru’s Corner:
Bill Gross is recognized as the world’s bond king. Gross very publicly said to avoid US Government debt and in fact sold out of his position in US Government bonds. Recently he has purchased US Treasuries though likely a small amount. Linked here are Gross’s comment on the debt ceiling.
Warning to Washington: Don’t mess with the debt ceiling July 13, 2011 Bill Gross, Washington Post
Diane Swonk, economist at Mesirow Financial. “We expect a re-acceleration in growth from the summer, and 2012 might be a year of solid gains in activity levels, although job creation will remain subdued,” said Diane Swonk July 14th 2011 Reuters
Marc Faber, the author of the closely-watched Gloom, Boom and Doom report in an interview with CNBC on Thursday. “It is mind boggling that people would consider buying 10-year U.S. Treasurys with yields trading at around 3 percent. I don’t think the U.S. will default in terms of not paying the interest on its debt. They will though default via a falling dollar as Bernanke begins printing more money.”
Q: For more than 40 years, you put money in emerging markets. They are accustomed to debt and currency crises. What lessons do you draw from?
Mobius: The fact that the meaning of the Greek crisis is hung too high. How many people live in the country? 11 million. This is a medium sized city in China.
Is the S&P Small Cap 600 on the verge of breaking out? It is leaning in that direction!
The LivingOffTheMarket.com technical opinion on the chart linked here is that the S&P Small Cap 600 (IJR) above hit a new 2011 high price in early July. The current pull back is opportunity to buy before the next higher high which we believe will happen, “if” a debt ceiling resolution is reached. In the event the price of the S&P Small Cap 600 closes below its 150-day moving, sell the trade – closing the position.
The price action of this index is suggesting a debt ceiling resolution will be reach before the Aug 2 deadline.