Why the Euro Crisis Proves Stocks Are The New Bonds

By Rana Foroohar – So far, U.S. T-bills have benefited somewhat from the chaos overseas, but that relative advantage may not last.

One interesting upshot of all this is that blue chip stocks have become the new bonds. The smartest money has been selling government debt and buying up the stocks of large multinational franchise firms for some time now. After all, which would you rather own – exploding Eurobonds or sleepy T-bills that aren’t even keeping pace with inflation, or the stock of a large global franchise firm (think Coke or IBM) growing fast in hot emerging markets and paying out a safe and predictable 3 percent a year dividend in the mean time? more> http://is.gd/M28nl4

Related articles

• How to play Europe’s debt downgrades (business.financialpost.com)

Today in Euromess: Time for a eurobond?

By Brad Plumer – Take a peek at the debt-to-GDP ratios of various euro zone countries and you’ll notice a wide disparity. Greece’s debt is a whopping 144.9 percent of its economy. Italy’s is 118.4 percent. Seems unsustainable. But looking further down the list, a country like Finland’s debt sits at just 48.3 percent of GDP. In fact, if you look at the euro zone as a whole, the continent’s debt is a manageable 85 percent of GDP, less than that of the United States.

That’s partly why some economists have argued that if all of the euro zone countries simply banded together and issued one common euro bond, they could placate nervous investors. more> http://is.gd/iTJn7X

Related articles

• Debt crisis sweeps towards heart of Europe, Robin Emmott and Fiona Ortiz, Reuters
• Commission buys time on eurobond proposal, Jeremy Fleming, EurActiv
• Chinese central bank to replace IMF in Ukraine, EurActiv.com
• EU Commission sees eurobonds as way out of crisis (seattlepi.com)
• Eurobonds: The ‘solution’ that just won’t stick (money.cnn.com)
• Eurobonds Are Back! (businessinsider.com)