Greetings!   

Our digest this month raises two policy debates, one of broad economic significance and one related to particular investment themes we've explored.  The first, the 800-pound gorilla, is the ongoing debate over how to reduce the federal deficit.  The other--the plight of the for-profit, post-secondary education industry--directly impact several investment choices we've made in Bristlecone's Large Cap Value portfolio. Though they can be foreboding to read, we suggest you at least take a moment to look through some of the charts and graphics.

The Federal Deficit

This is the mother of all policy debates due to its potential for sweeping economic, political, and social impact. Most Americans are currently willfully detached from this debate, but that stance is day-by-day becoming unsustainable, both because the debt is rapidly mounting and because the issue is likely to be a focal point during the current session of Congress and the 2012 Presidential election. Here are two links to help familiarize yourself with the outlines of the debate.

The for-profit education industry has grown dramatically over the last 20 years for several reasons. At first, the flexible schedules and career-focused curricula appealed to non-traditional students like working adults. Over the last five years, the recession and declining state support for public higher education have driven students by the tens of thousands to enroll in for-profit alternatives. That growth, and the resulting burden it has placed on the federally-supported student loan program, has brought upon the industry a level of regulatory scrutiny rivaled perhaps only by the hated banking industry.