As we've expected for some time, another shoe dropped in Europe over the weekend. In the Netherlands, the Prime Minister and his cabinet resigned over the weekend because of disagreements between them and the Parliament concerning the country's financial situation. Once again, this is yet another example of how the financial crisis is spreading throughout the region, as more and more countries come to terms with this problem. Also in European news, manufacturing numbers out of Germany were way below expectations and show the dominoe affect and how the financial crisis has hampered European economic growth.
Because of all the news out of Europe, our markets are of course trading lower today about 1.2%. Specifically getting hurt are the financials, being down on average by about 2%. Despite todays selloff, I still have a hard time seeing how our financial companies are so very correlated to what's going on across the pond (the Atlantic ocean). There is also some concern coming out of the southern Asia as the North Korean government came out with a statement saying how they were ready and willing to reduce the South Korean government "to ashes"...a conflict over there would cause tension between the U.S. and China, as China supports the North and we support the South.
Despite all the mess I've mention above, I still believe the most prudent way to go about investing in the markets this year is by staying nimble and moving in and out of the markets, depending on how economic and geopolitical issues play out. High yielding divident stocks, such as Chimera, KKR Financial, Verizon, Intergy, and maybe some utility and pharmaceutical companies are good places to park money..and I of course like some of the special situation stocks that are great acquisition candidates this year (such as Etrade, Yahoo, and Sallie Mae).
That's about all I've got for now but I will definately continue to montior the geopolitical concerns and market action I've talked about above.
