Europe and the Lost Decade

[sags]

Lots of money printing........but it has had no velocity.

Much of it is sitting on bank balance sheets, where it has no economic impact.

[Belguy]

The Great Recession:

http://www.cbsnews.com/8301-18563_16...ion/?tag=stack

During recessionary times, instead of investing in exciting growth stocks, invest in stocks of boring companies. The shares of companies that make products and services that will be needed regardless of economic circumstances, things such as health products, food staples, fertilizer, energy or discount stores. You want to buy companies that produce things that we need, not necessarily things that we want. (consumer staples versus consumer discretionary).

--Cramer/Toronto Star

Because of the severe U.S. drought, consumers will be spending more money on food than at any time in the past several decade and this will negatively affect the entire economy.

--Cramer

[Belguy]

Scratching for pitiful future returns:

http://www.theglobeandmail.com/globe...rticle4453313/

Little upside potential but high risk going forward.

Forget about the VIX!! Look at bonds instead:

http://www.theglobeandmail.com/globe...rticle4453148/

[Miser]

Increase in food prices will be infationary......we all gotsta eat!
Fuel is the 2nd part of it......deflation or inflation is my quandary!

[Belguy]

In an economic climate such as we are currently experiencing, many would expect the markets to remain flat or move slightly lower. So far, with seven full months of the year behind us, the TSX at least is performing according to these expectations and is down 2.43% YTD.

On the other hand, with more diversification and a lower commodity play, the S&P 500 is up 9.68% YTD.

Lesson learned: Don't rely too much on commodities during recessionary periods.

Boring old consumer staples, utilities, and health care might be better places to put your emphasis rather on exciting growth type stocks.

[Belguy]

Fed statement today showed that the economy is visibly slowing and there is significant uncertainty going forward.

Even if the Fed did something significant, it wouldn't have any significant results.

Nonetheless, they changed the wording from "may" to "will" offer additional accommodations in the future--just not quite yet.

[Belguy]

When I first started this thread, many months ago, a lot of folks indicated that they believed that I was being far too negative. Nothing that I have seen since has convinced me that we are going to avoid a catastrophe as a result of the mess in Europe. In fact, many believe that parts of Europe are already in a depression and that the strongest European nations do not have the ability to save the day. If I had to guess, I would say that we might have the month of August to muddle along as we have but watch out for September!! I sincerely do hope that I have been crying wolf too much and that we somehow come out of this without a worldwide economic collapse. Take care.

http://www.infowars.com/11-signs-tha...ancial-system/

[londoncalling]

Europe has the ability but like their American cousins they do not have the political will to do what is necessary. Massive spending cuts and increased taxation never result in re election.

[Belguy]

Well, they just might be able to get re-elected even in the midst of an economic depression that they themselves helped to bring about but, if I were them, I wouldn't count on it.

[Belguy]

More verbiage and can kicking today by Draghi but still no positive ACTION.

Words are cheap.