LongRun Capital Management

Interest rates on US Treasury notes hit a record low yield of 1.44% at the beginning of June before moving back up into a range between 1.56% and 1.68% for the rest of the month. Ask yourself why you would voluntarily loan money to our government for ten years at these interest rates. Crazy right?

Heres my list of three things that would make me comfortable having a lot of equity exposure. Its safe if US corporate profits remain at record levels as a percentage of GDP. Take note that part of the reason profits are so high is that wages/salaries as a % of GDP are as low as theyve ever been. These trends could go on for a while but profits tend to run in cycles and any downward move would hurt equity valuations.

A euro is a euro, right? Worth the same in Ireland, Portugal, Germany, France and Greece? Well, maybe not. There is a lot of political and economic dancing going on in Europe these days and the name of that tune appears to be Love Can Keep Us Together. And it sounds just as vapid and schmaltzy as the original by the Carpenters. But I have become convinced that something else is going on namely a monumental effort to restructure the EU by removing the weakest links in as orderly a fashion as possible. Greece is the first to be loaded into the cannon so lets use them as the guinea PIIG.