Wave of Debt Payments Facing U.S. Government

NY Times

WASHINGTON — The United States government is financing its more than trillion-dollar-a-year borrowing with i.o.u.’s on terms that seem too good to be true.

But that happy situation, aided by ultralow interest rates, may not last much longer.

Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.

Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages. Continue reading

Read Top Fund Managers Comments on Economy

Will the Economy Rise from the Grave?

Will the Economy Rise from the Grave?


Mutual fund managers’ quarterly letters, market commentaries, forecasts, and other reports are full of interesting tidbits and, if one looks carefully, investment ideas. Every quarter, mutual funds are required to publish reports, and many portfolio managers, research chiefs, and advisors take the time to express their opinions about the markets, individual stocks, or other items on their minds. Some fund shops publish more frequently–on a monthly or even weekly basis.

Featured Commentary
GMO | Jeremy Grantham | January 2009
Quarterly Letter: Obama and the Teflon Men, and Other Short Stories. Part 1.
…We are deep in the pickle jar, and it seems likely that, in terms of economic pain, 2009 will be the worst year in the lives of the majority of Americans, Brits, and others. Read more…

Tweedy, Browne | Jan. 15, 2009
Shareholder Letter
Unfortunately, there was nowhere to hide in public equity markets in 2008, nor for that matter in virtually any other asset class, as stock markets around the globe collapsed in the face of an unprecedented credit crisis. Needless to say, our funds were not immune to the carnage. Read more…

Recent Commentary
Morgan Stanley | January 15, 2009
Investment Perspectives
Discover Morgan Stanley’s macroeconomic insight and find out what they think of specific regions, industries, and stocks. Click here to read more.

PIMCO | Bill Gross | January 7, 2009
Andrew Mellon vs. Bailout Nation
2008 was the year when the United States led the charge of bailout nations, lending and literally guaranteeing trillions of dollars of private liabilities in an effort to avoid the advent of another Great Depression…Was it necessary and productive to mutate 21st century American-style capitalism into a thinly disguised knock-off of the New Deal? Read more…

PIMCO | Mohamed El-Erian | Jan. 7, 2009
No Immunity From Policy Action
Not long ago, the question of how the actions of national authorities – and the US Federal Reserve in particular – impacted on their investment decisions would get a range of replies from investors. Some observed that their decisions were unaffected; others cited the old mantra that “you should never fight the Fed”. Read more…

BlackRock | Jan. 6, 2009
Outlook & Opportunities in 2009: A Framework for Investing
The financial market turmoil that began in late 2007 has intensified as economic data continue to disappoint and the ongoing credit crisis shows few signs of abating anytime soon. In response, policymakers worldwide have employed aggressive policy reflation measures…Read more…

Royce Funds | Charlie Dreifus | Jan. 6, 2009
Charlie Dreifus Reacts to Being Named Morningstar Domestic-Stock Fund Manager of the Year
I’m very honored to have won. It’s particularly noteworthy that this accolade comes during such a difficult year, a year in which I wasn’t especially pleased with Royce Special Equity Fund’s (RYSEX) performance on an absolute basis. Read more…

Caldwell & Orkin | January 2009
Market Update
Like The Comrades Marathon, the U.S. economy enters 2009 tumbling downhill from a mountain of leverage that it spent 20 years ascending.  This descent has destroyed asset values (real estate, housing and stocks) while, as always, the debt that was used to secure these assets remains steadfastly in place, leaving consumers with tattered balance sheets, negative home equity and stock margin calls. Read more…

ING Clarion Real Estate Securities | January 2009
Market Commentary
Real estate stock investors endure a very tough year. Despite a sizeable rally in December, real estate stocks suffered their worst year ever as equity markets around the world plunged in 2008. Read more…

Legg Mason | January 2009
Month-End Commentary: December 2008
The S&P 500 Index rallied a little over +1% in December, thus allowing 2008 to go into the record books as the worst year since 1937, rather than the worst year since 1931. A small victory, one might argue, but it was a welcome relief to see some “green on the screen” for a change. Read more…

Oak Value Funds | January 2009
Fourth-Quarter Review
There is certainly no doubt that 2008 was a battleground for most investors. The events of the last year challenged numerous fundamental assumptions and theories on investing. Read more…

PIMCO | Paul McCulley | January 2009
Cyclical Outlook
When formulating our outlook, we typically fine tune our GDP and inflation forecasts as a means to anticipate changes in central bank policy. But for now, the standard fine tuning has been put on the shelf because the reality of a recession brings clarity to forecasting. Read more…

T. Rowe Price | January 2009
2009 Investment and Economic Outlook
We are pleased to share the presentations and highlights from some of the firm’s key investment managers regarding the U.S. and markets abroad. Find out Alan Levensons’ outlook for the U.S. economy, Mary Miller’s take on the fixed-income markets, and explore opportunity abroad with Raymond Mills. Click here to see all of the presentations.

WisdomTree Investments | Jeremy Siegel, Wharton professor and Senior Investment Strategy Advisor
Economic and Market Commentary
2009 doesn’t have to be a very good year to be better than 2008. The past year saw equities fall the most since the Great Depression as the global economy slid into recession. But I think that 2009 will surprise on the upside, with both the economy and the markets doing much better than expected. Read more…

Oakmark Investments | Bill Nygren | Dec. 31, 2008
Commentary on the Oakmark and Oakmark Select Funds
There is certainly a camp of investors who believe we are on the verge of a severe depression, and if they are right, zero might be a pretty good relative return. But with that view so widely broadcast, I think the contrary position looks very attractive. Read more…

Investment Outlook – PIMCO

Investment Outlook
Bill Gross | October 2007
What Do They Know?

Under a conservative assumption of 2½% inflation, PIMCO’s view is that the U.S. Fed will lower the Fed Funds rate to 3¾% or so over the next 6-12 months. (Actually that’s only two, 50 basis point reductions from where we are now).  Continue reading