What can the investor expect in this market cycle? This week we have an article by John Mauldin and Ed Easterling about long market cycles in general and this one in particular. Next, we turn to yet another banking scandal involving the LIBOR (London Interbank Offered Rate.) In addition, we look at how banks outside of the U.S. are providing stimulus for their economies to promote economic growth. Finally, we refer to an article where the SEC warns about annuity risk.
Are We There Yet? – John Mauldin and Ed Easterling have worked together over the years on investment cycle research. In this article, they address the question: When will the current secular (long-term) bear market cycle be over? Obviously, no one knows the answer to this question. They graphically show how this cycle compares to other secular cycles over the past 110 years. http://advisorperspectives.com/commentaries/millenium_063012.php
Banks Are Involved in Another Scandal – One of the primary interest rate benchmarks used in many loan agreements is the London Interbank Offered Rate (LIBOR). This benchmark is calculated and issued by the British Banking Association. We are now learning that banks have been manipulating this rate. http://www.cnbc.com/id/48068669
Additional Stimulus in China and Europe – Policy makers around the globe continue to be concerned about local economic growth. We see this in the efforts of foreign banks to try to stimulate their countries’ economies. The Peoples Bank of China cut its interest rate today. This was followed by a Bank of England confirmation of increased asset purchases and a reduction of interest rates by the European Central Bank. http://www.ft.com/intl/cms/s/0/24dfe892-c3f2-11e1-966e-00144feabdc0.html#axzz1zm01HFLL
SEC Warns About Annuity Risk – Some of the large and established insurance firms have stopped selling variable annuities or curtailed their offerings. The SEC warns investors about these complex products and the need to do proper due diligence before purchasing one. At Day & Ennis we do not sell any products, but we have helped many clients evaluate existing products or potential purchases. http://www.lifehealthpro.com/2012/06/27/finra-and-sec-warn-about-annuity-risks
We hope you enjoy reading these articles along with us and that you find them informative. Please forward this to your friends and family.
John R. Day and Bill W. Ennis