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European Economies: German Unemployment Rises, Output Slides

Is this a good sign for PIMCO and its foreign bonds in Germany? Serious question since my knowledge of the bond market is rather limited to say the least. This may then help to determine what exactly they are up to.

What worries me the most is the performance of so called "safe" stocks. They don't seem to have any more bottom than do the others. CL, GM and JNJ have weaknesses but should be attracting som interest. Well, they are not.

I have been and remain on the sideline watching. The muni's and CD's are low but seem the only game and they are not safe from some senarios. There are other corporate frauds awaiting, Chaney's problems with Judicial Watch will hurt and another major terrorist strike here will generate vastly inflated losses.

Thank you for the post!

'Very few analysts, anchors...even recognize the problem.'

Not a problem: A shake-out. I posted the following on another thread, but it is relevant here.

Please, Freepers, take a look at AAA corporate bond rates for the last, get this, 100 years. The pattern tells the tale. Then, please plot the S&P500, DJIA or any other major equity index since 1970. The retreat from the major market top starting in 1999 is abundantly clear. The phenomenon currently transpiring is largely driven by the massive secular retreat of interest rates since 1981. We have a classic 'head-and-shoulders' pattern of those rates extending over four decades. The two decades of declining rates had two primary effects:

1. Declining coupons on interest bearing instruments caused investors to migrate to equities looking for returns. The 401(k) effect and interest driven migration represented an influx of capital which generated great equity growth.

2. Declining interest rates also lowered the cost of borrowed capital. Again, companies could grow.

Now, the rates are bottoming. All of the 'energy' derived from declining rates is dissipating and the broad equity indices are responding appropriately. I am advising clients not to expect a return to the 1990's bull market...that really was the perfect (positive) equity storm. It is over.

Blessings to Freepers Everywhere.