McAlvany Wealth Management | McAlvany Weekly Recap

McAlvany Wealth Management | McAlvany Weekly Recap: Here’s the news of the week – and how we see it here at McAlvany Wealth Management:

1. Will European Storm Clouds Bring Rain? The IMF, the World Bank, and a growing number of central bankers (present and former) from around the world are gravely concerned about 2012, and have been adjusting growth expectations down yet again. We wonder if these groups aren’t trying to influence the ECB, the BOE, the FED, and the BOJ, along with the PBOC, to liquefy the markets ahead of any crisis rather than in response to it.

Mixed signals in the market leave observers upbeat, but cautious. Take Germany as an example of confused currents. The DAX has seen a 12% recovery off its January 1 levels, but, interestingly, a tremendous amount of money still favors the German bond market instead. Thirty-year Bunds have traded in recent weeks with yields less than 2.5%, impressively low compared to US treasuries of similar maturity that yield an extra 40-50bps (UST30YR right around 3%). Purchases of long bonds at these historically low rates indicate real concern over eurozone stability.