Cyprus Who?

“Opportunity is not a lengthy visitor.” – Anonymous

Headlines announced a shocking development in Europe in mid-March, “unsecured depositors and unsecured debtors of Cyprus-based banks were going to lose a lot of their money”.  Granted that the first round of the “troika” (ECB, IMF, and EU)¹  foolishly demanded that depositors under the Euro 100,000 level would also lose money but cooler heads prevailed.  Yet many still rebelled against bank investors losing any money.  Read the rest of this entry »

Look Out Below

“It is not prudent to sacrifice principle for the sake of yield” – Anonymous

Muni bonds can be hazardous to your financial health.  After providing good income and even better total returns, intermediate and long maturity municipal bond investors are at risk to losing value.  Almost $2 trillion of municipal bonds are directly owned by individual investors today.   The income from these bonds has been exempt from Federal taxes.

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Fiscal Prudence

“Common Sense is Not so Common” – Voltaire

Investors started 2013 visibly exuberant with US politicians’ last minute crafting of a tax compromise a day after the U.S. technically went over the “Fiscal Cliff”. Equity markets reversed their late December weakness and rallied hard. After the S&P 500 lost 2% in the second half of December 2012, it rose 2.5% on January 2, 2013 to 1462. Characteristically, Congress claimed “victory” in “reducing” taxes (after they let them rise). You just can’t make this stuff up. Negotiations now turn to the unfinished business of expense reductions and expanding the debt ceiling a couple of months from now.

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