Looking at the stock market futures this morning it is obvious that the Fed “put” is in play. You can hear the chant out of the stock people — easy money, easy money, easy money!
We all know that that this easy money will end badly–we just don’t know when. The government deficits are totally out of the control at over a trillion dollars per year. Many years ago it was opined that we are the next “Greece” because of the never ending deficit spending. Now we hear little talk about this problem–it is OBVIOUS to me that no action will be taken on spending until there is a crisis
In the meantime we will try to take advantage of the positive effects of the “easy money” on preferred stocks. Yesterday we bought a full position in the new Band of America 5.375% preferred. At $24.98 it was a reasonable buy, although the likelihood that we hold this one long is low–we see it moving to $25.50 in 30 days.