Tuesday – August 31st, 2010

  • Carmen Reinhart: Beware those who think worst is past: FT
  • Treasuries Rise, Head for Biggest Monthly Gain Since 2008, as Stocks Slide: Bloomy
  • Europe Inflation Slows to 1.6%, Unemployment Holds at 12-Year High of 10%: Bloomy
  • German Unemployment Drops for 14th Month as Rising Exports Bolster Economy: Bloomy
  • Second Leg of Crisis Beginning: Hedge Fund Manager (CNBC)

We’re still in recovery mode from a large power outage in our area that impacted over 70,000 people. Good news is that our opinions haven’t changed much and the power has been restored. Bad news is there are many noticeable ‘omissions’ on the attached pdf. If it doesn’t look clickable, it isn’t. We’ll be back up and running full steam by tomorrow, though. In the meanwhile, we’d point out story in FT that caught OUR eyes and we HOPE it lands itself on Wesbury’s desk. The Reinhart’s wrote, “Beware those who think the worst is past”. It’s only couple pages and worth a look. In as far as ‘other things’ go, we learned a short while ago the JPM ‘client survey’ indicated both longs and shorts UP a couple (at expense of fence-sitters) AND more importantly, the ‘all clients’ metric showing most LONGS since late 2009. We could either be very afraid the boat is tipping OR we can lean back on the visual we had yesterday (2/10s flattening and RSIs that STAYED over-bought from July 2004 until April 2006. Technically, at any point during that 20month period of time, one might have argued the flattening was OVER-DONE. From an RSI point of view, maybe. Looking out the window, though, might have kept you IN and that is all we’re trying to do. Stay IN the game. With that, we’ll hit send and keep going through emails and press. Anything of importance will find its way to your inbox directly OR up to the website – have a look and sign up for updates (www.thebondbeat.com ) and have a great start. Best, Saul/Steve

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