user bar first menu

Boeckh Investment Letter

Investment and economic commentary by J.Anthony Boeckh and Robert Boeckh

Asset Allocation December 2011

Severe macro risks persist on three fronts: the eurozone, stagnant developed nation economies, and China. It is difficult to say how any of these issues will play out, and so continued caution remains appropriate.
Regarding the eurozone, there are two broad requirements to contain the crisis. In the short run, there must be unlimited support by the ECB for sovereign bond markets and banks. In the long run, there must be a fiscal union with tough oversight to ensure falling government debt:GDP ratios, together with the prospect of a eurobond. At this point, neither outcome looks particularly likely. In recent comments, Mario Draghi has made it crystal clear that quantitative easing (QE) is a non-starter: “We must respect the spirit of the treaty.” This view implies that the eurozone can be sacrificed as long as the treaty isn’t violated!
The lack of a flexible exchange rate mechanism for seriously maimed eurozone economies means they are caught between the hammer of austerity and the anvil of the treaty and its rigid monetary and recently imposed fiscal discipline. The necessary adjustment can only occur through falling wages and other costs which will push unemployment to even more extraordinary heights and further stress the fragile social fabric. It will be long and painful. Growth will suffer, further threatening precarious state finances as well as the banking system. The risk of a eurozone breakup is growing fast, and the shrapnel would be cast far and wide.

Subscribe to view the full report

The Boeckh Investment Letter is a comprehensive service that provides analysis of factors affecting financial markets and broad investment recommendations* within an asset allocation context.  The service includes 12 to 18 issues per year (approximately every 3 to 4 weeks), depending on market conditions, i.e., changes in views, important new developments, etc.

Read free sample commentaries

Full Service

1 Year Subscription  - US $1995.00

3 Month Trial - US $525.00

The full service includes:

  • Special Reports concerning important topics relevant to investors
  • Comprehensive asset allocation strategy and analysis (quarterly)
  • Short, informal commentaries on particular ideas/thoughts
  • Moderate e-mail access to the editors, Tony and Robert Boeckh

Basic Service

1 Year Subscription  - US $395.00

3 Month Trial - US $99.00

The basic service includes:

  • Comprehensive asset allocation strategy and analysis (quarterly)
  • Short, informal commentaries on particular ideas/thoughts

 

For more subscription information, please see our Frequently Asked Questions


For multiple subscriber discounts, please contact us at info@bccl.ca.

*  Please see our 'Terms of Service'