With the anniversary of 2007 S&P high:
What have we learned:
1. Central banks have aggressively acted to reduce the negative effects of deleveraging.
2. Deleveraging takes about 7-10 years and we’re near the end of the cycle.
3. Govt. has dangerously expanded debt and created a major obstacle.
What do we need for growth:
1. Corporate tax reform that lowers the rate.
2. Corporate tax reform that eliminates taxing profits overseas.
3. Efficient regulation to reduce drag on small, fast growing businesses.
What do I sell/buy?
1. Lighten up on high yield.
2. Look to add leveraged loans.
Merkel & Greece
1. It’s critical as a leader to show up and face the crowds.
2. It’s important to reassure and remind Greece that Germany is a good friend.
3. It’s necessary to tell them they need to do more in person.
