Thoughts

In a likely response to more economic ambiguity, the yield on the 10-year U.S. note is at a new low, 3.07%.


PEP and the rest of the consumer nondurables have started to roll over a bit.


Why AIG when one can buy LNC?

After all, while AIG trades at about 60% of book value with a return on equity of only 6% to 7%, a smaller Lincoln National (with a somewhat similar business profile) trades at only 70% of book but has a return on equity of nearly 10%. Moreover, Lincoln National is buying back shares and doesn't have the supply overhang (as the U.S. government still owns a large percentage of AIG).


Be sure to check out Knowledge@Wharton's piece on the effect of speculators on volatility.