THE LONG VIEW - AMAZING VIDEO YOU MUST WATCH (FT)

Please watch this video from the Financial Times, it is a strong piece that I highly recommend.

From http://www.ft.com/
"Felix Zulauf, former head of asset management at UBS, warns that storm clouds are gathering over the markets. He discusses with John Authers, head of Lex, his grim outlook: that Europe faces a double dip, China is slowing, bonds "look awful" and an overheating commodities sector will be hurt badly. He was interviewed at the CFA Institute Annual Conference in Edinburgh."

Unfortunately, I cannot embed the item, so click here and it will open a new window that will allow you to watch this video.

http://video.ft.com/v/950633944001/Long-View-Storm-clouds-over-markets

Overall, Felix is suggesting that the next few months will be rocky due to tightening in the emerging world and poor growth in the developed world.  Europe is dangerous he says.  I cannot stress enough how good of a use of time this 10:30 seconds is.  There is clear, focused, and is unambiguous. 

EUROPE
Germany is at risk because it exports much of its product base to the PIIGS, which is a high source of risk. 


CHINA
A dramatic slowdown in Chinese construction is ahead.

Chinese leadership will continue to tighten to attack inflation. 

Emerging currencies may rise a bit, but their outperformance is over and we will see a significant correction and a resurgence in the USD.  This will begin in the fall of this year.

QEIII or SOMETHING ELSE?
Yes, we'll see some type of stimulus from world governments

COMMODITIES
Base metals and commodities sectors will suffer a huge setback, especially with that slow down in China and emerging countries.

IF YOU HAD TO OWN STOCKS, WHERE WOULD IT BE? - (Only Defensive Areas)
Utilities, Consumer Staples, and Food & Beverages

TREASURIES
5 years out, bonds look awful!

WHAT WILL TIP US OFF THAT BOND YIELDS ARE GOING HIGHER?
We have seen the lows.  It could take another 2 or 3 years before bonds really take off.  The use of stimulus will be the key to really accelerate this.  As soon as the authorities see that asset prices are failing there will be a global coordinated effort to reflate.

Be Careful!

GOATMUG