Notable item over the weekend – a European bailout deal for banks in Cyprus now includes a haircut provision. But not for bank bondholders. Of course not for bank bondholders. No – it provides for a haircut on depositors that is being called a “stability levy” amounting to 9.9% on deposits over 100,000 euros, and 6.75% below that level, exchanging their deposits for shares of stock in those teetering banks. So insured bank deposits are now effectively subordinate to uninsured European bank debt. It will be interesting to see how that works out. Alan Greenspan suggested on Friday that there has been a “removal of tail risk” from the global financial system. I doubt it, but we’ll take the data as it arrives. (www.hussmanfunds.com)
A sobering view of future equity returns based on current market conditions. Dr. Hussman has been defensive since 2007.
Before you dismiss his article, understand what he says about the current market valuation and forecasted earnings vs. normalized earnings. I am not a market maven but I don’t find many cheap stocks except for mining companies in the precious metals sector.
Getting seamanship advice from the Captain of the Titanic (A. Greenspan pontificating on the markets) http://www.cnbc.com/id/100556999
A Documentary on Warren Buffett