• Sprott Money
    05/06/2016 - 06:03
    The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”

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Tyler Durden's picture




 

via Mark J. Grant, author of Out of the Box,

For those of you that are centered on safety I would consider Municipal Bonds and especially the maturities of 12-20 years where there is a call around ten years. Forget the tax break and just focus on absolute yields and you will quickly come to the conclusion that this is one of the most attractive segments of the fixed-income markets now. This has only happened two or three times in my thirty-eight years on Wall Street and it has always been a good play when available. You can get outsized yields on many State credits and on other high quality and highly rated names which are now better than correspondingly rated corporate bonds and certainly than Agencies or other mortgage backed securities. I advise you to take a look at some of the options here as I think there is very good value in this sector of the market now.
 
The Chinese Stock Markets are returning to the lows of 2009 and the Europe is mired in a recession. The American Stock Markets are not far off their highs and I do not think this will continue. I am quite negative, for all kinds of reasons, about our equity markets now and I would be taking profits and returning to the more assured bets of getting yield from bonds and not from dividends. A dividend may be reduced or cancelled by the wave of some Boards’ hand one afternoon while senior debt cannot be cancelled without the company or the municipality going into bankruptcy so that the top of the capital structure is far safer than relying upon dividends for income. If I am correct and we are done with appreciation for the moment then a return to bonds is in order in my opinion.
 
In the next sixty days we are faced with Greece, Portugal, Spain, Italy and ECB issues that are quite serious both economically and politically. You may think what you like but there is a lot of risk on the table; of that you may be assured. The elections in the Netherlands are coming soon and here we may find one more government tossed out as the citizens of Europe turns from grand dreams of Federalism to the protection of their own country. Austria and some other countries have now proclaimed that they are done funding other nations and the groundswell of Nationalism should not be discounted. I think the days of the Three Musketeers “One for all and all for one” are now over on the Continent. September and October will mark the red flags on some very real decisions that can no longer be shoved down the road and I predict that some of these deciding moments will redefine the boundaries of what is possible and what is not possible in the European Union. Vacation is over and the angst will begin anew.
 
The American elections are coming and the candidates are about equal in the polls. Here is more risk on the playing field as the choices between the two candidates are stark and deeply rooted. I am not particularly political nor have I donated money to either side but I will state that I think our country is better off with Romney than with Obama. It is not that I agree with everything the Republicans tout but I frankly think Obama has done a lousy job leading the country both abroad and at home. I am decidedly not a Socialist and I have always felt that while there should be a safety net underneath all Americans that a redistribution of wealth was not in the best interests of the United States. I have always felt that one of the primary reasons America has prospered is that you can come from any country and with hard work, a few decent ideas and a little luck that you could stand on your own two feet and make a better life for yourself and your family and I continue to believe in this American tradition. I am firmly in favor of providing tax breaks and incentives to get people back to work and I am firmly opposed to providing handouts to people who can work and do not. In any event, America will make a choice and I think if Obama is re-elected it will be a significant negative for the financial markets as the guy has done nothing but bash both Wall Street and the banks. America also needs to face up to the economic reality that only so much can be afforded and make the tough choices necessary to bring our country back to a responsible economic position; of that much I am dead certain!
 
We face a Fall pock-marked with uncertainty and risk. Where ever I turn my gaze, to China and her economy’s grinding halt, to Europe and her deepening recession or to America and our elections this is a lot of risk on the table. For both the EU and the United States I think it is going to become quite apparent that someone has to pay for all of this and that there is going to be a severe pushback from the nations and from the people that are picking up the tab and a widening division between the people that are making the money and the people that are lined up for hand-outs. Real choices are going to be made in the upcoming quarter that will end the speculation and most likely end the bottomless pit of optimism that seems to be found in the equity markets these days. “Preservation of Capital,” I think, will not be a thing but the only thing of importance as we face the balance of the year and I continue to take a quite conservative approach to investing.
 
When someone says, “Buddy can you spare a dime” I would like to be the one being asked and not the one doing the asking. It is here where I stand and wait.

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Wed, 08/29/2012 - 12:47 | 2746941 LawsofPhysics
LawsofPhysics's picture

"as the guy has done nothing but bash both Wall Street and the banks. "

Where is John Corzine?

Actions speak louder than words you dumb fuck.

Wed, 08/29/2012 - 12:48 | 2746945 magpie
magpie's picture

in safety

Wed, 08/29/2012 - 12:54 | 2746965 LawsofPhysics
LawsofPhysics's picture

LIBOR? PM manipulation? Helllo numbnuts, neither "candidate" will be "hard on banks".  Stupid fucking sheep.

Wed, 08/29/2012 - 13:01 | 2746991 AlphaDawg
AlphaDawg's picture

"I think our country is better off with Romney than with Obama"

Thats when I stopped reading, its a 2 headed beast, whoever wins the elections will make no difference

Wed, 08/29/2012 - 13:08 | 2747024 OutLookingIn
OutLookingIn's picture

Agree.

"If voting made any difference they wouldn't let us do it."

- Mark Twain

Wed, 08/29/2012 - 14:47 | 2747390 Roandavid
Roandavid's picture

I'm pretty sure it was Emma Goldman, although maybe it was both.

Wed, 08/29/2012 - 15:26 | 2747539 Panafrican Funk...
Panafrican Funktron Robot's picture

Mark Grant is a spectacularly stupid and/or corrupt individual.  Yes, lets buy munis, vote for Romney, and short the stock market.  I'm sure that will work fabulously well. 

Wed, 08/29/2012 - 21:23 | 2748487 monad
monad's picture

"If voting changed anything, it would be illegal." - George Carlin. if you can find his Life Is Worth Losing video, its all in there.

Wed, 08/29/2012 - 13:32 | 2747098 MFLTucson
MFLTucson's picture

If you dont think it makes a differnce who wins then dont vote because your vote negates a person who is both interested and believes in one of the two candidates. 

Wed, 08/29/2012 - 13:40 | 2747118 LawsofPhysics
LawsofPhysics's picture

Spoken like a true sheep who enjoys the nanny state. Someone who really cares? Ron Paul 2012.  I believe in the individual, you should too (unless of course you really think that any institution can gaurantee your happyness or freedom - nanny state).

Wed, 08/29/2012 - 20:30 | 2748370 AlphaDawg
AlphaDawg's picture

i dont vote

GROW UP!

Wed, 08/29/2012 - 15:30 | 2747552 Panafrican Funk...
Panafrican Funktron Robot's picture

"If you dont think it makes a differnce who wins then dont vote because your vote negates a person who is both interested and believes in one of the two candidates. "

There are actually four candidates, you forgot Gary Johnson and Jill Stein. Oh wait, you didn't, because you're head is so far in the sand that you're not even aware of these people. 

Sat, 09/01/2012 - 22:09 | 2755733 MeelionDollerBogus
MeelionDollerBogus's picture

Vote for your new saviour - Mr Black

Sun, 09/02/2012 - 18:28 | 2756738 monad
Wed, 08/29/2012 - 12:56 | 2746966 madcows
madcows's picture

Planning his next heist, I mean filling out the paperwork to create his next Hedgefund.

Wed, 08/29/2012 - 12:53 | 2746963 Popo
Popo's picture

...and there are thousands of new Corzines on the way:

http://www.youtube.com/watch?v=UzLGuJt8Qbg&feature=youtu.be

Wed, 08/29/2012 - 13:07 | 2747012 Dr. Engali
Dr. Engali's picture

That has to be a joke or something. Did you pull that off the Onion?

Wed, 08/29/2012 - 13:48 | 2747141 Popo
Popo's picture

Unfortunately, that video is 100% real.  You can Google it.   Her name is Stefanie Woods.  There are lots of news reports.

Pure sociopath.   Pure evil.

FYI -- She's now serving a life sentence for kidnapping.    I guess she figured an actual girlscout was a better score than girlscout-money. 

 

But that's a general mindset of most people on Wall Street.   She's pissed that she got caught.  But doesn't have a shred of remorse for what she did.   As she says,  "It's just money. And money's money".... whatever that means...

Wed, 08/29/2012 - 15:11 | 2747496 LMAOLORI
LMAOLORI's picture

 

I just watched your video that girl is reprehensible but she is just a symptom of our country's moral decay we no longer have leader's who will punish thieves at the top. She couldn't have had any values taught in her home either.  Young people are impressionable as they say the Rot begins at the Top.

Wed, 08/29/2012 - 12:47 | 2746943 Yellowhoard
Yellowhoard's picture

All bullish! Buy! Buy!Buy!

Wed, 08/29/2012 - 12:50 | 2746950 tocointhephrase
tocointhephrase's picture

Silver?

Wed, 08/29/2012 - 12:54 | 2746968 Yellowhoard
Yellowhoard's picture

In today's high tech command control economy, bad news is good news and awful horrible news is super awesome!

If only WWIII would just break out, woo wee, the DOW might just go to 100,000!

Wed, 08/29/2012 - 12:58 | 2746974 tocointhephrase
tocointhephrase's picture

Could also go to 0 if the nuke backfired...EDIT:if only the nuke would back fire!

Wed, 08/29/2012 - 13:03 | 2746997 Yellowhoard
Yellowhoard's picture

If we all get nuked and mankind ceases to exist, well then, that would be the ultimate bullish indicator.

Buy! Buy! Buy!

Wed, 08/29/2012 - 21:31 | 2748496 monad
monad's picture

Well of course we can't nuke our enemies, they'd like, bring charges. Money's money. Now I'm like super pissed. They have all these cameras and stuff, and we'd get caught.

Wed, 08/29/2012 - 12:51 | 2746953 q99x2
q99x2's picture

Just about out of bets. Nearing the nerve rattling end of one of my Martingale patterns. Do I wait for QE or before the false flag and attack on Iran. 

Wed, 08/29/2012 - 12:51 | 2746954 Newsboy
Newsboy's picture

I'm betting on fruit trees, avacado and mango...

Wed, 08/29/2012 - 12:51 | 2746957 madcows
madcows's picture

How am I supposed to bet when the Casino manager has the ability to change the rules in the middle of the game?

I assume we're at a market top.  Thus, I'd like to move into a secure position like bonds.  BUT, if the market tumbles, Bernanke will light a QEn Bonfire, thus propping up the stock market and likely devastating the bond market.  But, if I stay in the market and Bernanke doesn't prop it up, I also get blown up.  It's a lose-lose.

My bet is to not play.  Thank you very little FED.  You can blow me.

Wed, 08/29/2012 - 14:18 | 2747291 NoClueSneaker
NoClueSneaker's picture

It's about risk taking. Casino manager allows you to play, and if u win on red, you have to admit the ball stopped on black ... or else ...

Wed, 08/29/2012 - 12:53 | 2746962 Glass Steagall
Glass Steagall's picture

 “Preservation of Capital,” I think, will not be a thing but the only thing of importance as we face the balance of the year and I continue to take a quite conservative approach to investing.

Has this not been the case since 2009?

What wonderful insight. <sarc/>

Wed, 08/29/2012 - 13:38 | 2747069 intric8
intric8's picture

Based on their political records, there is not much difference between the two candidates. Were fucked because we cant vote for neither - we gotta pick one of em. Do you want 4 more years of the politically schizophrenic Obozo who is willing to sacrifice our countries borrowed fiscal solvency on stupid and unnecessary shit like the interests of millions of illegal immigrants, or would you prefer financially fit Mitt, who is out to fulfill the existential mandate of the republican party - keep taxes at their lowest possible rate for the stinking upper class while the lower classes hold the fort? It's a no brainer, you pick neither

Sat, 09/01/2012 - 21:57 | 2755724 MeelionDollerBogus
MeelionDollerBogus's picture

You could vote Gary Johnson http://www.youtube.com/watch?v=4x9bkXVccAs

Wed, 08/29/2012 - 21:39 | 2748506 monad
monad's picture

Apparently all that pot Bernanke smoked as a teenager is catching up... we need to get younger stoners in there, stat!

Stefanie Woods is available.

Wed, 08/29/2012 - 12:56 | 2746976 Renewable Life
Renewable Life's picture

Pump.....Fear........Panic..........Pump

Repeat until collapse, then flee to Singapore!

Wed, 08/29/2012 - 13:09 | 2747029 Toronto Kid
Toronto Kid's picture

Repeat until collapse, then flee to Singapore!

 

This is why I stack.  So when my employer finally drives me past the point of enduring the mindless red tape that makes up my day and a good part of my evening, or zombies hit the local streets, I can flee with my stack and my passport to Somewhere Else.

Wed, 08/29/2012 - 12:58 | 2746981 fonzannoon
fonzannoon's picture

"Look at Europe look at Europe"

 - The biography of Mark Grant

Wed, 08/29/2012 - 12:58 | 2746982 Jlmadyson
Jlmadyson's picture

Like I've said for over a year now this fall/winter will be epic.

My bets: Unending QE, Greece falls out, Isreal bombs Iran, ECB powerless, debt ceiling bomb blows up and Fiscal Cliff turns into a mountain.

Good times ahead folks.

Wed, 08/29/2012 - 14:05 | 2747221 Zap Powerz
Zap Powerz's picture

Someone once said to never let a crisis go to waste.  I plan on doing just that.

Wed, 08/29/2012 - 12:59 | 2746986 risk-reward
risk-reward's picture

Grant is stating the obvious to folks who read ZH, but it is surprising, to me at least, how many think tomorrow will be just like today and everything is going to be OK.  No need to worry, prepare etc.

Wed, 08/29/2012 - 13:03 | 2746999 pazmaker
pazmaker's picture

Did he just say buy Municipal Bonds??  Like as in San Bernadino, Stockton or Mamoth Lakes type bonds???

Wed, 08/29/2012 - 13:03 | 2747001 SmittyinLA
SmittyinLA's picture

This is investing for brain dead zombies, global population 7.X billion and growing X hundred millions more people a year, every year.

The bonds are a sucker bet, ask those GM guys, when things go to shit even more the bonds will eat shit, especially if they have unfunded pension liabilities like GM, some solvent companies operating not on bullshit and poltical influence but actual skill at delivering a product or service are going to make more money, their bond debt with be a free gift from the fed, everybody will be chasing cheap fuel with their worthless fiat currency and gold that you can't power a tractor with. 

 

Fuel, water, food, , shelter..and of course Ipads to find that stuff.  

Wed, 08/29/2012 - 14:13 | 2747266 Zap Powerz
Zap Powerz's picture

I think what your recommendation is is to invest in your survival.  Not bad advice.

Imagine how many zombies will die simply because they lack theretofore readily available fresh, clean drinking water.  Most people totally overlook water.

Im glad I have a well with generators to run it.

Wed, 08/29/2012 - 13:08 | 2747022 kito
kito's picture

For those of you that are centered on safety I would consider Municipal Bonds...

 

ha ha...this guys gives himself the title of "outside the box".......too funny........

 

http://articles.chicagotribune.com/2012-08-28/news/chi-states-debt-tops-4t-illinois-has-5th-highest-20120828_1_debt-tops-budget-gaps-state-budget-solutions

enjoy your muni bonds when the states get cut off from federal funding after the federal govt gets cut off from the candy store clerk...........sorry son, no more ju ju bees and smarties on credit..............

Wed, 08/29/2012 - 13:11 | 2747038 OutLookingIn
OutLookingIn's picture

"outside the box"...

and into the Kitty litter box maybe more like it!

Wed, 08/29/2012 - 13:20 | 2747066 kito
kito's picture

exactly and what puzzles me is how tyler puts grants ridiculous call for munis in bold type, as if tyler, who makes it clear meredith whitney will have her day in the sun, and who has made it clear that the system will collapse, and that holding any type of "security" in an insecure, counterparty risk world, actually endorses grants advice.....puzzling, very puzzling.....................

Wed, 08/29/2012 - 13:08 | 2747023 linrom
linrom's picture

I am firmly in favor of providing tax breaks and incentives to get people back to work and I am firmly opposed to providing handouts to people who can work and do not.

 

Instead of providing tax breaks and incentives, how about offering unemployed people JOBS. Do you think that this is possible?

 

I remember back in 2006-2007, the biggest complaint of the managerial class was: I CAN'T FIND WORKERS TO FILL JOB OPENINGS.

 

 


Sat, 09/01/2012 - 21:55 | 2755722 MeelionDollerBogus
MeelionDollerBogus's picture

"I CAN'T FIND PEOPLE TO WORK!" ... "at two dollars an hour, so I'm out-sourcing to China!"

derp.

Wed, 08/29/2012 - 13:14 | 2747043 tahoebumsmith
tahoebumsmith's picture

Everybody is completly naked now. The global ponzi has become one big nudist colony. If you can't see the difference between a voluptuous breast and a sagging utter, that's your problem. They don't even try to cover up with fig leafs anymore. Where we are today DWARFS the so called crisis of 2008. A world where corruption is rewarded and honesty is looked at as plain stupidity. The next 6 weeks are going to shock and awe even the most critical thinkers. The extremes that have been seen thus far to keep the clothes on have run out of cloth, silk, figs and cotton. The man behind the curtain will be revealing himself soon, prepare yourselves accordingly... This my friends is something you should actually take to the bank!

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