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Dear ,
Have you ever been in such a target rich environment that you didn't know where to shoot first? That's how I feel today as I prepare this weeks No BS Weekly Update. Let's start with the Fed's proposed "Sterilized Bond Buying". What does sterilized bond buying, the Toothfairy, and Santa Claus have in common? I'll let you answer that for yourselves after reading the article.
http://www.moneynews.com/StreetTalk/Fed-Sterilized-Bond-Buying/2012/03/07/id/431777
You know what that looks like to me? Picture a guy telling you that he's figured out how to get rich. You recycle money. You take it out of your left pocket and put it in your right pocket. Then you take it and move it back to the left. See how easy that is? You just keep doing that over and over again and you build wealth.
Isn't that about as silly as the idea of continuing to print money out of thin air, buy U.S. Treasuries with it and expect the world to continue to go along with that charade? Seems like a recipe for disaster to me. Now let's move on to the next target.
Greece is saved! - again
So says the President of France.
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Two quick reasons why it is not. Let's take a look at a couple of the assumptions that support the bailout agreement. The agreement assumes that the GDP of Greece will return to growth from 2013 forward. Take a look at these two charts.
The GDP of Greece has been negative for the last 7 quarters in a row and negative 12 of the last 13 quarters. With all of the cuts in wages and benefits that the Greek citizens have had to endure as well as an unemployment rate of 21%, How likely do you think that is to happen?
The other assumption is that Greece will be able to issue new debt at "sustainable" interest rates. Here is what is Greek bond is selling at now that the agreement is in place. As Bill Gross of PIMCO points out in this article:
"Traders are offering to buy and sell the potential new bonds at yields on 11-year securities of 22 percent, according to a person yesterday familiar with the prices who declined to be identified because he wasn't authorized to comment. Pimco has said that the firm doesn't own any Greek debt."
Read more: Pimco's Gross: Greece Diminishes Bond-Contract Sanctity
22%! Does that seem like a "sustainable" interest rate to you? I don't think most of us even need a calculator to answer that one.
A Prediction
As we've said over and over, you have to watch these folks and you have to read beyond the headlines. Here is a prediction for you. Start watching for headlines about how the ratings of local governments are improving. These articles will be cited as further proof of how well the economy is improving. Now when you start seeing these articles, see if any of them mention a change in the rating methodology.
What am I talking about? Take a look at these two articles.
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Now they may have a perfectly valid reason for making the change but I personally find it highly suspicious.
ATTN: United Development Funding Shareholders - Apple building in Texas
Many of you who are clients of Reames Financial will be interested in this news.
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This is just another example of how well things are going in Texas and in turn why United Development Funding has been able to execute their business plan so well on your behalf!
For those of you who are not clients of Reames Financial, if you'd like to see if you qualify for investments that can take such great advantage of current trends, please give me a call or send me an email! preames@reamesfinancial.com
Until next week , Protect Your Wealth!
Sincerely,
  
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