Download - S&P Downgrade Decision
![Page 1: S&P Downgrade Decision](https://reader035.vdocument.in/reader035/viewer/2022071815/55a9ccc31a28abf53c8b4675/html5/thumbnails/1.jpg)
War Room 08/09
S+P Downgrade Decision
![Page 2: S&P Downgrade Decision](https://reader035.vdocument.in/reader035/viewer/2022071815/55a9ccc31a28abf53c8b4675/html5/thumbnails/2.jpg)
The War Room
•Monthly macro discussion
•Using tools in context
•Feature for subscribers only
•Feedback - what should it to be?
![Page 3: S&P Downgrade Decision](https://reader035.vdocument.in/reader035/viewer/2022071815/55a9ccc31a28abf53c8b4675/html5/thumbnails/3.jpg)
Agenda
•Current Status
•Scenarios in play
•Discovering safe harbors
•What’s next?
![Page 4: S&P Downgrade Decision](https://reader035.vdocument.in/reader035/viewer/2022071815/55a9ccc31a28abf53c8b4675/html5/thumbnails/4.jpg)
Where are we right now?
Gold at all time highs at $1743/oz
Market bounces after 12 day sell-off
Fed pledges to keep rates low through mid 2013 – 3 dissenting voters
Dollar at record low vs Swiss Francs, post FOMC
Treasury Yields hitting record lows, after S+P decision, post FOMC
![Page 5: S&P Downgrade Decision](https://reader035.vdocument.in/reader035/viewer/2022071815/55a9ccc31a28abf53c8b4675/html5/thumbnails/5.jpg)
Scenarios in Play
•Debt Ceiling Downgrade
•Cascading downgrades from S+P
•Double Dip Recession
•QE 3 – not yet in play
![Page 6: S&P Downgrade Decision](https://reader035.vdocument.in/reader035/viewer/2022071815/55a9ccc31a28abf53c8b4675/html5/thumbnails/6.jpg)
Discovering safe harbors•Currencies – Yen + Swiss Francs
•Precious Metals
•Low + Negative Beta to S+P
Try theMacro Trend Screener
![Page 7: S&P Downgrade Decision](https://reader035.vdocument.in/reader035/viewer/2022071815/55a9ccc31a28abf53c8b4675/html5/thumbnails/7.jpg)
7/20/11
Not all gold plays are following gold up…
… some are following the market down.
![Page 8: S&P Downgrade Decision](https://reader035.vdocument.in/reader035/viewer/2022071815/55a9ccc31a28abf53c8b4675/html5/thumbnails/8.jpg)
What’s next?
•Cascading Downgrades Scenario still on table
•Double Dip Recession Scenario
•Volatility Increasing
![Page 9: S&P Downgrade Decision](https://reader035.vdocument.in/reader035/viewer/2022071815/55a9ccc31a28abf53c8b4675/html5/thumbnails/9.jpg)
On the chopping block Should be immune
• US Banks• European Countries• European Banks• 11k municipal bonds
• Pre-funded with escrowed Treasuries• Backed by federal leases• For areas with high DoD concentration• For areas that depend on fed spending• For agricultural entities
• Mortgage REITS• Fannie + Freddie• Israeli sovereign debt• Insurance Companies(italics: already downgraded)
• States or local governments bonds: • Fiscally insulated from federal
interventions• With a predictable institutional
framework• Financially flexible
• Emerging market debt
Debt downgrade: who is next?
![Page 10: S&P Downgrade Decision](https://reader035.vdocument.in/reader035/viewer/2022071815/55a9ccc31a28abf53c8b4675/html5/thumbnails/10.jpg)
![Page 11: S&P Downgrade Decision](https://reader035.vdocument.in/reader035/viewer/2022071815/55a9ccc31a28abf53c8b4675/html5/thumbnails/11.jpg)
Volatility of Autumn 2008 crisis
Will be mirrored in Autumn 2011. If you sell, sell into strength.
27July – 08Aug 2011
03-31 October 2008