Friday, June 10, 2011


Buy the insurers - XL, BRK.B, MET, PRU, LNC....

There were vague reports circulating around the end of the day that the capital charge on big banks will only be 2.0% - 2.5%.

There are huge reservoirs of reserves that will find their way back into equities when confidence begins to return.

They are always attracted to higher prices!

Fear is clearly rising, as reflected in the pounding of spread products (especially mortgage) -- and, of course, in the shellacking of world equity markets.

Libor is now trading below the fed funds target. The last time three-month Libor traded below fed funds was in first quarter 2008, a difficult period for risk assets. This could signal that banks are now hoarding cash.

The mounting pressure on the middle class is manifesting itself in many quarters.

Yesterday CBS News highlighted the record amount of borrowings from individuals' 401(k) plans as evidence of the financial and economic pressure on the Average Joe.