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Half-Time Report, July 2011 <ul><li>Global Economies and Financial Markets: </li></ul><ul><li>True Recovery </li></ul><ul>...
The 4 Big Stories As We Enter The 2 nd  Half of 2011: <ul><li>GREEK BAILOUT </li></ul><ul><li>GLOBAL DEBT </li></ul><ul><l...
A Review of Greek History 490 BC – Defeated Persians at Marathon 404 BC – Peloponnesian Wars, disunity 327 BC – Alexander ...
2010 May 2 – first bailout ($43B) May 18 – second bailout ($18.7B) September – IMF says Greek reform “ahead of schedule” 2...
First Half 2011 Market Review
Source: Morningstar 2011’s First Half: What A Difference A Week Makes! <ul><li>Other Observations: </li></ul><ul><li>Depen...
2011 FIRST HALF ASSET CLASS ADVANCERS INCLUDED:* Healthcare and Biotech stocks Energy stocks Silver (metal) Swiss Franc Re...
<ul><li>Bulls Say </li></ul><ul><li>(The optimists’ view of the stock market going forward) </li></ul><ul><li>Low bond yie...
<ul><li>Bears Say </li></ul><ul><li>(What could cause a large drop in the stock market by middle of 2012) </li></ul><ul><l...
 
 
The State of U.S. Housing and Real Estate
Homes Are More Affordable…
… But How Low Can They Go?
This is Not How You  Want to Increase Home Sales
Source: Richard Yamarone, Chief Economist, Bloomberg
Unemployment
One of These Things is  Not Like the Other One…
Under-Employment: A Big Issue…
… And Some Jobs May Not Come Back
Other Key  U.S. Economic Observations at Mid-Year
Confidence Rising from Lows…
… But Energy Inflation is A Concern
Inflation is Tame… If You Are Selective About What You Call “Inflation”
We’ll Conclude With Some  Much-Needed Perspective
 
 
50 Ways to  Invest Your Money
 
 
 
Thank You  for Listening! Michael L. Schwartz, RFC, CWS, CFS offers securities and advisory services though First Allied S...
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2011 Half Time Report With Speakers Notes

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2011 Half Time Report With Speakers Notes

  1. 1. Half-Time Report, July 2011 <ul><li>Global Economies and Financial Markets: </li></ul><ul><li>True Recovery </li></ul><ul><li>Or </li></ul><ul><li>“ Two” Big To Fail? </li></ul><ul><li>A love triangle between global governments, consumers, </li></ul><ul><li>and their debt… </li></ul><ul><li>Michael L. Schwartz, RFC, CWS, CFS offers securities and advisory services though </li></ul><ul><li>First Allied Securities, Member FINRA - SIPC </li></ul>$
  2. 2. The 4 Big Stories As We Enter The 2 nd Half of 2011: <ul><li>GREEK BAILOUT </li></ul><ul><li>GLOBAL DEBT </li></ul><ul><li>3. “TWO” BIG TO FAIL? </li></ul><ul><li>4. U.S. HOUSING, UNEMPLOYMENT, AND CONFIDENCE </li></ul>
  3. 3. A Review of Greek History 490 BC – Defeated Persians at Marathon 404 BC – Peloponnesian Wars, disunity 327 BC – Alexander the Great conquers Persia 900-1200 AD – Byzantine economic expansion 1453 – Fall of the Greek Byzantine Empire 1829 – Greek independence achieved 1940 – Fought off Italian invasion during WW2 1980-81 – Rejoined NATO and European Union 2001 – adopted Euro as its currency But wait, there’s more………………
  4. 4. 2010 May 2 – first bailout ($43B) May 18 – second bailout ($18.7B) September – IMF says Greek reform “ahead of schedule” 2011 January – rating agencies cut Greek debt to “junk” February – third bailout ($19.5B) April – Europe leaders urge Greece to control spending May – S&P cuts debt to B (just above Pakistan) as anti-austerity protests rise June 8 – fourth bailout ($8.5B) June 9 – GDP tumbles 5.5% June 13 – S&P downgrades to CCC July 2 – fifth bailout ($17B) approved, for disbursement July 15 A Review of Greek History
  5. 5. First Half 2011 Market Review
  6. 6. Source: Morningstar 2011’s First Half: What A Difference A Week Makes! <ul><li>Other Observations: </li></ul><ul><li>Depending on your time frame, the equity markets look very different. </li></ul><ul><li>The past 15 years resulted in what some might consider a mediocre return for the S&P 500 (6.50%). Many “experts” predict similar returns in the future. The “10% stock market return” concept is likely more myth than reality. </li></ul><ul><li>Stocks and bonds have been a close match over the past 15 years. Bonds will be hard pressed to replicate those returns going forward. </li></ul>Name 2011 Thru June 24 2011 Thru June 30 1 Year 2 Years 3 Years 5 Years 10 Years 15 Years S&P 500 TR 1.78 6.02 30.69 22.29 3.34 2.94 2.72 6.50 MSCI World Free USD -0.10 3.99 27.84 17.51 -1.72 0.17 2.10 3.63 BarCap US Agg Bond TR USD 4.00 2.72 3.90 6.66 6.46 6.52 5.74 6.32
  7. 7. 2011 FIRST HALF ASSET CLASS ADVANCERS INCLUDED:* Healthcare and Biotech stocks Energy stocks Silver (metal) Swiss Franc Retail stocks 2011 FIRST HALF ASSET CLASS DECLINERS INCLUDED:* Natural Gas stocks Alternative Energy stocks Gold and Silver Mining stocks India stocks Bank stocks * Source: Morningstar “ We Are All Winners” … Well, Not Really
  8. 8. <ul><li>Bulls Say </li></ul><ul><li>(The optimists’ view of the stock market going forward) </li></ul><ul><li>Low bond yields – Make stocks more attractive by comparison </li></ul><ul><li>Steep U.S. yield curve – A prelude to stronger growth </li></ul><ul><li>Strong corporate earnings – Many expect S&P 500 EPS at $100 this year </li></ul><ul><li>U.S. economic “cleansing” – Four years into it, banking system now recapitalized </li></ul><ul><li>5. Housing market is “cheap” – Most affordable in 60 years </li></ul><ul><li>6. Consumers living within their means – Past prosperity periods started like this </li></ul><ul><li>7. U.S. companies control the virtual economy: </li></ul><ul><li>* Ebay, PayPal, Apple, Facebook, Linkedin, Groupon, Fedex, UPS, </li></ul><ul><li>Amazon, etc. </li></ul><ul><li>U.S. role as a world leader: We feed the world, keep it secure, invent a large part of the best medical science </li></ul><ul><li>Source: Richard Bernstein, Smead Capital Management and others </li></ul>
  9. 9. <ul><li>Bears Say </li></ul><ul><li>(What could cause a large drop in the stock market by middle of 2012) </li></ul><ul><li>Recovery Is Uneven – Some regions of America are almost economically dead </li></ul><ul><li>Underwater mortgages – More than a quarter of US mortgages are underwater </li></ul><ul><li>Stocks are expensive – Stocks looked cheap in late 2007 until earnings collapsed </li></ul><ul><li>Inflation – Can’t afford higher food, clothing prices when incomes are not moving up </li></ul><ul><li>Companies hoarding cash – Dividend increases help shareholders, but no one else </li></ul><ul><li>Everyone's shedding their workforce – Companies not hiring + government layoffs </li></ul><ul><li>China's slowing economy – Many American firms need China sales </li></ul><ul><li>  </li></ul><ul><li>Greece is tanking – Will go under and take many other small EU nations with it </li></ul><ul><li>(A series of defaults among the nations may damage the bank and credit system more than the collapse of Lehman, decimate European banks) </li></ul><ul><li>Source: 24/7 Wall Street blog, by Douglass McIntyre </li></ul>
  10. 12. The State of U.S. Housing and Real Estate
  11. 13. Homes Are More Affordable…
  12. 14. … But How Low Can They Go?
  13. 15. This is Not How You Want to Increase Home Sales
  14. 16. Source: Richard Yamarone, Chief Economist, Bloomberg
  15. 17. Unemployment
  16. 18. One of These Things is Not Like the Other One…
  17. 19. Under-Employment: A Big Issue…
  18. 20. … And Some Jobs May Not Come Back
  19. 21. Other Key U.S. Economic Observations at Mid-Year
  20. 22. Confidence Rising from Lows…
  21. 23. … But Energy Inflation is A Concern
  22. 24. Inflation is Tame… If You Are Selective About What You Call “Inflation”
  23. 25. We’ll Conclude With Some Much-Needed Perspective
  24. 28. 50 Ways to Invest Your Money
  25. 32. Thank You for Listening! Michael L. Schwartz, RFC, CWS, CFS offers securities and advisory services though First Allied Securities, Member FINRA – SIPC The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

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