Another day, more problems in Europe and more jobless claims.

If you were expecting the few recovery days last week were the trick to get the stock market going again, think again. Better yet read some of my posts last week when I opined about nothing having changed and the bears would be back. This morning it could be with a vengeance and expect the market to start out down 200 points or more.European  banks are a mess and France and most importantly Germany yesterday said they were not going to bail the rest of Europe out of this mess. Maybe Germany has finally had enough?  Jobless claims moved up smartly this morning from last week to be above 400k again. Stupid is when people do the same thing over and over expecting different results.  Maybe this continued drip, drip, drip of bad economic news for the next 15 months will focus the mind to the perils and opportunities in the 2012 election or maybe it will not. But this will not end until we resolve long standing debt problems.

 

Once again I will note that the safe investments are NOT in US government bonds where everyone seems to be heading with yields keeping pushed down due to investor buying. US bonds not only do not protect you from inflation, they yield so little than when prices do start up your principal will be ravaged. The late great Louis Rukeyser called the bond buyers the "bond guolls" since buyers there are always pessimistic and always wondering why when they buy at low yield they never get their entire principal back unless they wait until maturity. Of course then you have always got damaged by inflation. Smart bond buyers buy when yields are high and wait for yields to decline and sell taking in the capital gains.

 

With corporate balance sheets of the large cap companies well endowed these companies are raising dividends, starting or adding to share buyback's and are the smart money now.  You can almost pick any solid blue chip and win here. The agency REITS continue to be a great buy here and yesterday there was a new ETF issued for this class of stocks.  Symbol MORT, it projects a payout of 16%, and has a basket of stocks in this sector that lowers the already low risk there. Once derivatives are launched on this security I will buy it and make it a top holding. If Obama is reelected president I will load up even more.