Things look risky

This is my first post to I’ll be adding a few past client communications for context, but this is the first… here goes…

Over the next few days, I will be adjusting my client portfolios to raise cash and lower risk until things are a little more clear. The risk of financial loss  is greater, in my mind, than the risk of missing a big rally in equities, and I’m not comfortable that a big drop in stocks would be cushioned by a rally in bonds, given their already high levels.We are on the verge of the 4th or 5th (I’ve lost count) Greece / Italy / Portugal (etc.) debt crisis. This time, however, the entire Greek government could enter a disorderly transition. Quietly in the background is the approaching deadline for the US special committee to figure out how to stop spending more than we bring in. US dollar denominated bonds are near the high levels (low rates) they reached at the depth of the 2008-2009 crash, but stocks are much higher. Two significant financial institutions (one of them MF Global headed by Mr. Corzine, an alumnus of Goldman Sachs) have recently gone belly up.

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