Will volatility in stocks and bonds subside or escalate?
*Barron's, by Jim McTague, November 21, 2011:
''The congressional supercommittee isn't expected to agree to
meaningful deficit reduction by this week's deadline. Prepare for
an added element of volatility in stocks and bonds.
Brace your portfolio: The global debt crisis returns to the U.S. this
week. Let's face it, the Joint Select Committee on Deficit
Reduction, or supercommittee, is unlikely to come close to cutting the
nation's red ink by the $3 trillion to $4 trillion fiscal experts say
is necessary to head off a European style debt crisis. Given the
climate of interparty intolerance, you could consider it a political
miracle if the committee's six Democrats and six Republicans agree on a
10-year, $1.2 trillion debt reduction -- the bare minimum needed to
avoid automatic cuts that size between 2013 and 2023, with half from
defense spending.
The committee's deadline to produce legislation for an up or down vote
by Congress is Nov. 23. If no agreement is reached, further
downgrades of U.S. debt are expected.
Going into the weekend, the committee's four-month-long negotiations
were deadlocked. Republican have insisted that the Bush tax cuts
become permanent in exchange for the elimination of loopholes that
could bring in an estimated $300 billion in revenue. Democrats have so
far refused serious cost cuts on entitlement programs like Social
Security and Medicare.
To be sure, a meaningful supercommittee deal is still possible, however
unlikely.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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