Europe

Greece is big. China is bigger.

This article is a fascinating analysis of the global economy by the managers of the Forester Value Fund.  I’m watching events unfold in Greece and at this point it seems that we cannot really predict what will happen.  It is possible that the euro, as a currency, may be redefined. Even more attention getting was the Chinese government’s very overt support of their own crashing stock market. Our portfolios are diversified so we have the relative luxury of watching all of this unfold from a distance. If markets decline, we will be hunting for bargains wherever they reveal themselves.

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Interest rates go positive in Europe

As one of many deadlines approaches, normalcy is actually returning to some financial markets. The spiking blue line is the yield on the German 10 year bond. It SHOULD be spiking. Given the hazards of the potential Greek mini-default on June 30th, the decline in bond prices is actually quite rational. The insanity was driving bond prices so high that yields actually went negative.

Yes, we might see some volatility in coming days, but it appears justified to me. And we’ll be looking to buy bargains.

 

06242015 Bund versus Euro