Montreal, Canada

There's another big rally ahead for Treasury bonds this year as markets dislocate once again amid growing debt fears in Europe and how this will impact U.S. bank balance sheets. I think before this deflation scare is truly over, we'll see benchmark Treasury yields surpass the lows achieved in December 2008.

Montreal, Canada

Large-cap oil drilling stocks have now plunged almost 30% since May 1st and continue to lose technical support this morning following Obama’s flip-flop on oil drilling in the Gulf of Mexico. OIH, or the Oil Services HLDRs, has declined 18.4% in 2010 and is down 13.5% over the last 12 months.

Montreal, Canada

Visions are creeping in about the dark days of 2008 and early 2009 when the global financial system seemed to be at the brink of total collapse. The usual suspects worked profitably again last month in the worst May for the S&P 500 Index since 1962 and 1960 for the Dow.

May was virtually an identical replay of the carnage that unfolded in late 2008 with Treasury bonds, the Japanese yen, German bunds, gold and short-selling scoring the biggest gains. The U.S. Dollar Index also rallied.

Montreal, Canada

Montreal, Canada

Germany failed to auction a 5-year bund or bond yesterday marking the first time Europe’s largest economy has scrapped an auction since several issues failed to go to market back in October 2008 at the height of the credit crisis. Spain, Italy, Greece and Portugal are also struggling to sell paper this month with the former requiring European Central Bank (ECB) purchase assistance over the last ten days to raise short-term financing.

Montreal, Canada

Over the past 12 months, I’ve bought and sold a reverse index on long-term Treasury bonds twice anticipating a major pullback in prices or a significant rise in yields. On both occasions, I sold this position at a loss because lingering economic weakness and renewed credit fears continue to spur purchases of Treasury securities, driving bond yields sharply lower.

Montreal, Canada

Government bailouts of the financial system in 2008-2009 have resulted in a sovereign debt crisis this year as investors attack those nations with the biggest deficits.

First it was Dubai in late November 2009 and now it’s Greece. Spain or Portugal might be next. Maybe the United Kingdom. And what started out as a local crisis has now spread across the euro-zone while infecting not only the European continent but spreading contagion across world markets.

Montreal, Canada

Sovereign Society’s first Wealth Symposium in Montreal was a success. Over 400 delegates, mostly from the United States and Canada, attended our conference last week and everyone enjoyed the event.

Montreal, Canada

What are the odds that the single European currency will still exist in 24 months? What if the Germans do a flip-flop and decide they don’t want any more bailouts? More bailouts imply the single European currency is being driven to devaluation as traders and speculators continue to eat away at its core – meaning a full-fledged attack one day on German bond markets – widely considered to be a safe-haven in Europe.