THE POMBOY

Barrons with a decent issue this weekend - highlight - the Stephanie Pomboy interview- these are the parts that I thought were particularly insightful:

Any other important longer-term trends you expect?

We are going to see a secular rotation from paper assets to hard assets like gold. The whole global competitive currency devaluation, including that of the dollar, plays right into that.

Do you see any asset classes besides junk bonds benefiting from a short-term rally?

There is a chance that equities participate in that rally as well, although I think investment-grade corporate credits look much more attractive than stocks. But when you think about pension funds that are trying to make 8% annual returns, they are not doing it by getting 1% on two-year Treasury notes. They can't use the secret sauce of leverage anymore.

If I was going to hold my nose and buy anything, I probably would buy higher-quality corporate credits. If you want to get long socialism, one of the next segments of the market that will be given a guarantee will be municipal bonds. That's because state and local governments are a huge share of total [gross domestic product] and employment, and we can't afford to have them down for the count.

So if foreign investors stop buying Treasuries, or even significantly pare their buying, that means higher rates in the U.S.?

That's correct. But then [Bernanke] will start buying Treasuries to arrest the rise in interest rates. I've always had a very simplistic view about this:

Either we are going to pay for our policy sins via higher interest rates or a weaker dollar. And for an economy that is as levered as the one in the U.S. is, the former choice is not an option. We can't pay through higher interest rates; we barely got to 4.5%, 5% before the whole subprime crisis erupted. So a weaker dollar is the natural valve. But right now, we are enjoying some real competition in the ugly contest from the currencies of the European Union and the United Kingdom, and that will probably persist for a while because they are in pretty bad shape, and they are a little bit behind the curve relative to us.

BESPOKE with some interesting work on the recent rally;

The not so ROSIE outlook;

Dr. Brett on munis and on Trading Screens;