If I Had A Trillion Dollars: European Banks and American Debt

Every month I am lucky enough to be invited to participate with a group of economists, financial analysts and traders from all over the world, in a sort of roundtable. We discuss markets and the global economy. The call to work for time zones in US, Asia and Europe, I get the short end of the stick and have to do it at 5:00am West Coast time.  That means I’m usually a bit groggy but I’ll try to summarize yesterday's interesting conversation.

1. The European government budget problems are much bigger than everyone thinks and is highly linked to banks and dangerous. 

2. US Bank stocks are a buy and making enough money now to dig themselves out of the losses they had over the past three years

3. GOLD IS IN A BUBBLE! Bubbles always go on way longer once you realize it’s a bubble. It’s not time to short but ok to sell.

4. Real Estate Investment Trusts are way overvalued.  Check out the attached chart of the Dow Jones REIT ETF (RWR)

5. The U.S. stock market is fairly valued

6. The U.S. debt showdown is not as scary as the politicians are spinning it to be. Everyone will still go to work, the gas station will have gas, your kids will still love you etc. 

7. European Banks are in trouble. It’s worth repeating. 

A trillion here, a trillion there – what does a trillion dollars look like. I love this graphic from the blog DailyCognition.

RWR Chart: