Tuesday, August 30, 2011 11:51 AM – Slight Profit-Taking, European Problems, Mixed Economic News

Bonds are up, gold is up 2%, stocks are down -0.3% Asia was higher and Europe was mixed.

Speaking of Europe, take a look at the highest rates I know of right now:

That chart represents yields on Greek sovereign 2 year bonds. They are yielding an unbelievable 45% to maturity. Think everything is under control in Europe?

I will go into much more detail in my monthly newsletter later this week but politically things are getting to the point where Germany may not be able to continue carrying the load of bailing out southern European countries. So, radical solutions are being privately discussed, according to the UK Sunday Times. Then there’s the little issue of Germany’s Supreme Court planning to rule by Sept. 15 on whether what has been done so far is even constitutional.

In the U.S. home prices went up again this month but are still 4% below 12 months ago. At least it’s progress, at least until bank foreclosures that have been on hold while the issue of improper processing gets sorted out and foreclosure sales come out in much greater numbers. Consumers’ outlook for the economy, aka “sentiment figures” took a huge drop in the latest U of Michigan survey.

There is just not much good news out there right now. On the other hand, stocks are pretty reasonably priced if things stay roughly the same. So, they can certainly go up but volatility is still high and will likely stay that way for another month or more.