Penny Stock Guide

Financial markets have continued to be buffeted by bad news, which was almost ignored. Meanwhile, key indicators such as bond spreads and capital levels have recovered, and in many cases improved beyond where they were when Lehman Brothers was forced to say goodbye.

Thus, it seems we are in the phase of the cycle of greed greed fear / but how this phase term?

Perhaps more than you think, as long as the restructuring continues.

Let's start by sovereign debt problem and one of the cradles of civilization, Greece. The problem of obtaining all the major European economies (except Great Britain) to agree on a single currency and a single source of monetary policy, but leaving the fiscal policy of each member state is finally arrived …. with the largest debt reduction followed by the biggest Releveraging in world history.

Greece is just the first with several European states that will face the music of maturing debt. Ointment of a European / IMF is a solution temporary solution. And, despite assurances to the contrary by his finance minister, the only way the problem of Greece is the restructuring debt.

With more money in Europe sovereign ready to follow the path Greek, there are two alternative restructuring unthinkable: Get the EU countries agreed to have a single ruling body of the pan-European fiscal policy, or at the end of the experiment single currency.

Oh, it is actually a most unthinkable, yet possible alternative: That each troubled country bankrupt and restructure its debt. Sounds like the restructuring on the end before would be much better.

Restructuring must also occur on Wall Street.

Although Goldman Sachs is now in the crosshairs of the SEC, does not think the rest of the street has clean hands. As mentioned in last week In the Northwest quadrant (on the website Strategic Alliance Assets), the issue here is one of the conflicts that must be fulfilled integrated with a strong dose of caveat emptor.

Regardless of what Jaw is on the DC, the street must come to the realization that some kind of restructuring in the way of doing is to occur. What it means the solution Volcker, the trade of all derivatives on an exchange and / or something else is unknown.

Expect sounds Restructuring ahead of Wall Street once they realize the obvious this time: All the protection money they want Congress will not stop throwing our commissioned sales in Washington to be more concerned with getting re-elected (in the middle of a Sea Wall Street anti-anxiety) than to cash payments.

Next on the list are the restructuring of credit rating agencies lackeys of the street wants to multiply more complex, opaque securities. conflicts rooted in the side to pay the evaluators are obvious bloviating and ripe for Congress. Maybe rating agencies will also come out with a proposal to restructure their own good, it will take more bloviating for that to happen. Rating agencies are rather nebulous creatures for the average voter. The big banks have large buildings that make them much easier for voters to despise.

And, before leaving the rating agencies have recently undertaken a restructuring of their ratings municipal bonds. The result – many states now have better grades – despite the difficulties municipal finance generally sweeps the U.S.

If you try to level the playing field, if you really lowering the bar at the same time? Yes, say the agencies, stressing the coherence between their global platform. Proving that consistency can be the hobgoblin of minds rating agency.

Meanwhile, the administration tries to growing residential mortgage restructuring, major lenders to commercial real estate projects are also forced to restructure they recognize large Unrealized losses – or what they believe. Using the old bank / bad bank approach and applying for mortgage commercial challenge is a way to "solve" the problem while not solving the problem at all.

It is certainly begins to feel as if we enter the phase of the greed of the markets and the creativity behind the restructuring will undoubtedly enable to ride for a while. But, as in the subprime craze, we must ask, "How long will this happen?"

Or as the rock band of the 70s Ace sang both prophetic:

How long has this been goin on?

Well, with your friends their convictions of Fancy

Do not want to admit that this is part of a plan,

But I can not help my suspicions

Because I was not as dumb as it seems.

And you said you were never intendin '

To break up our scene in this way,

But there is not any use of this masquerade, "

It could happen one day.

Alton Cogert, CFA, CPA, CAIA, President and Chief Executive Officer, founded Strategic Asset Alliance (www.saai.com) in 1994 as the first investment consulting firm that exclusively serves insurance companies.

Mr. Cogert is the author of “Uncertain Times: A Chief Investment Officer’s Journey,” and has more than twenty years of financial institution experience, with more than half of that time in senior financial management. He is a Chartered Financial Analyst, Certified Public Accountant and Chartered Altenative Investment Analyst. Mr. Cogert holds a BS from the Wharton School of the University of Pennsylvania and an MBA from the University of Southern California.

Always contact a professional before acting on any recommendations or opinions noted in this article.

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