Are we only lacking certainty? Please forgive the duplication of a message but my colleague has some interesting storyline that I would like to share. TC- The big question in TMMR’s mind today is how the “new normal” will affect The results going forward of storied investors, such as Warren Buffett, who built Their fortunes on the “old normal;” the question is significant because the Omaha Oracle is making news today by shortening the duration of bonds held by his Berkshire Hathaway Company after warning that deficit spending could force Inflation higher – his holdings of Treasuries, municipal debt, foreign-government Securities and corporate bonds due in one year or less have increased as of June 30 To 21% from 18% in March, and from 16% a year ago (the reader should note that These are not huge increases – and that the bulk of his holdings, nearly 80%, still Are of longer duration); on the flip side, PIMCO’s Bill Gross has been advising Investors to buy longer-dated maturities; Warren is 79, Bill is 52 – presumably, the younger mind is more open to change? or more open to folly? again, it begs the question – has Warren adapted to the new normal, or can he adapt to the new normal? his realignment may be a sign that Buffett expects interest rates to start rising, maybe sooner than the conventional wisdom, but Stifel’s Shields is unimpressed and has downgraded Berkshire to a “sell” – obviously, time will tell,but it is beyond dispute that we have wandered into completely uncharted waters:
Two major powerhouses in the market on representing stocks the other Bonds. One has the idea that inflation is forthcoming the other is more concerned about deflation. Who to believe now? The current environment- Why the lack of direction? The stimulus bill has proven to be a less than efficient use of money that has failed to create jobs, generate economic growth or do much of anything with the debate still in full effect on how many potential jobs we saved? Uncertainty, the markets do not like. From the Washington examiner-As Romer fades back to her teaching post at Berkeley, Obama is adding to the economic misery by creating an environment of regulatory uncertainty. The Wall Street reform law Obama recently signed potentially requires 533 new regulations, 60 studies and 93 reports, according to the U.S. Chamber of Commerce. Obama's Environmental Protection Agency has 29 active rulemakings, and there are 100 new rules on the Labor Department's agenda and 26 at the Transportation Department.
Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/Time-to-admit-Obamanomics-has-failed-1008050-100154469.html#ixzz0wDwUhb7R