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"THE WILLIS REPORT" IS ON THE
CASE.
AND NAZDAQ
ALSO IN NEGATIVE TORII HUNTERY,S
RE-- IN NEGATIVE TERRITORY.
RESIDENTS OF CYPRUS RUSHING TO
PULL MONEY OUT OF THE BANKS AND
ATMS AT AS NATION'S GOVERNMENTS
WEIGHS A NEW BANK ACCOUNT TAX.
THERE WOULD BE A 3% TAX FOR
DEPOSITS UNDER $100 THOUSAND
EUROS, AND A 10% TAX AND 15% TAX
FOR AMOUNTS LARGER THAN 500,000
EUROS, COUNTRY CENTRAL BANK
DECLARING A HOLIDAY UNTIL
THURSDAY, WHEN THEY VOTE ON THE
PLAN, THIS IS SPARKING INVESTOR
FEARS AT HOME, JOINING ME NOW
LANCE ROBERTS, HOST OF STREET
TALK LIVE, AND XENA.
PARTNER AND CFA, WELCOME ALL,
GREAT TO HAVE YOU HERE, LANCE,
I'LL START WITH YOU, I HAVE TO
ASSUME SOME WEALTHY INDIVIDUALS
ARE HAVING QUESTIONS ABOUT
SAFETY OF THEIR MONEY, HAVE YOU
GOTTEN ANY CALLS, ARE YOU
EXPECTING ANY?
>> I'M NOT EXPECTING ANY BUT I
WOULD NOT BE SURPRISED TO SEE
PEOPLE TALK MORE ABOUT THIS IN
NEXT FEW DAYS IT IS VERY LATE
TONIGHT ANYWAY IT LOOKS LIKE
THEY WILL PRESERVE THE UNDER
$100 THOUSAND MARK AND GO AFTER
LARGER DEPOSITS, BUT THE
QUESTION, HERE IN U.S., COULD IT
HAPPEN HERE?
PROBABLY NOT.
BUT THE QUESTION IS HASN'T IT
ALREADY HAPPEN WITH STANDPOINT
FEDS SUPPRESSING INTEREST RATES,
THAT IS THE RATE LESS THAN
INFLATION, NEGATIVE INTEREST
RATE IT HAS ALREADY HAPPENED
HERE.
GERRI: LET'S GO TO XENA FOR A
SECOND, A LOT OF PEOPLE OUT
THERE THINK THIS WOULD NEVER
HAPPEN ON OUR SHORES,S, I I OVEN
THOUGHT ONE OF THE NATION'S
BIGGEST BANKS WOULD GO BELLY UP,
AND WASHINGTO MUTUAL FUND --
MUTUAL DID.
CONTINENTAL ILLINOIS IN 1984,
7TH BIGGEST BANK IN THE COUNTRY
BELLY UP, IT IS HAPPEN HERE,
WHAT DO YOU TELL YOUR CLIENTS?
>> WE HAVE NOT GOT THAN MANY
QUESTIONS EITHER, SIVE RUSS IS
AN IN-- CYPRUS IS AN INTERESTING
SITUATION, IF ANYBODY TRIED THAT
HERE THERE WOULD BE A MESS OF
LAWYERS RIGHT AWAY, AND CYPRUS,
WHAT IS GOING ON IS THE E.U.
GOVERNMENT IS FED UP WITH
BAILING OUT SOME OF T
COUNTRIES, CYPRUS IS KNOWN AS A
TAX SHELTER FOR A LOT OF
NON-EU COUNTRIES AS WELL.
GERRI: FACE IT A LOT OF RUSSIAN
CRIMINALS PUT THEIR MONEYS IN
THOSE BANKS THAT IS WHY
REGULATORS WERE HAPPY TO IMPOSE
AT FIRST A 30% TAX, THEY THOUGHT
NONE OF THE RUSSIAN OLIGARCHS
WOULD BE ABLE TO COMPLAIN ABOUT
IT STEVE, IF PEOPLE HAVE
QUESTIONS OUT THERE, ONE
QUESTION IS, WHERE ELSE CAN I
PUT MY MONEY?
BIGGEST BANKS IN THE COUNTRY.
MAY OR MAY NOT BE AT RISK, THERE
MAY OR MAY NOT BE QUESTIONS, BUT
WHAT OTHER OPTIONS DO I HAVE,
SOMEONE WITH SERIOUS MONEY AND
SAVING FOR A LIFETIME.
>> THE BANKS OF PAYING LEAST
AMOUNT OF INTEREST.
THERE IS NO QUESTION THAT THE
BANKS THE RETURNN ON YOUR
INVESTMENT IN BANKS IS VERY LOW,
BUT, I DO WANT TO STATE THAT THE
RETURN OF YOUR INVESTMENT IN
U.S. BANKSKS IS STILL HIGHEST
ALMOST THAT IT HAS BEEN, U.S.
BARGES A ARE SAFE AS THEY HAVE
BEEN IN 50 YEARS, I DON'T THINK
THERE IS A QUESTION THERE THE
PLACE TO BE RIGHT NOW IS IN
STOCKS.
NOT JUST BECAUSE STOCK MARKET IS
RISING BUT BECAUSE EARNINGS
YIELD, THE AIM YOU GET A
DOLLAR'S WORTH OF EARNINGS FOR A
DOLLAR INVESTMENT IS VERY HIGH.
RELATIVE TO WHAT YOU ARE GETTING
IN SAVINGS ACCOUNTS, THAT IS
WHERE YOUR MONEY SHOULD GO.
STOCKS ARE THE PLACE TO BE.
GERRI: ALL RIGHT, LANCE, DO YOU
AGREE WITH THAT?
YOU KNOW YOU SAID MAJOR BANKS
ARE STILL A FINANCIAL TRAIN
WRECK, WHAT DO I DO ABOUT THAT?
>> GO TO -- REGIONAL BARGES AND
SMALLER REGIONAL BANKS ARE
BETTER FINANCIAL SHAPE THAN A
LOT OF MAJOR 5, MAJOR BANKS ARE
STILL LIVING ON 80 BILLION A
MONTH IN SUBSIDIES, BACK TO
ISSUE OF EARNINGS YIELD, YOU DO
NOT RECEIVE A EARNINGS YIELD ON
SHOCKS, IF STOCKS DECLINE BY
30%, YOU LOSE 30% OF YOUR MONEY
THAT IS NOT A PLACE SAFE FOR
SAVINGS.
>> WHERE WOULD YOU PUT YOUR
MONEY, LET'S SAY YOUOU ARE THE
PERSON WHO IS CONCERNED ABOUT
BANKING SYSTEM, AND GLOBAL
BANKING SYSTEM, WHAT WOULD YOU
DO?
>> WELL YOU HAVE BE REALLY SMART
ABOUT IT WHAT STEVE SAID IS
TRUE, YOU NEED RETURN OF
PRINCIPLE YOU NEED TO FIND
CORPORATE BONDS WITH A TRACK
STRONG BALANCE SHEET, U.S.
TREASURY STILL PAY BETTER THAN
MONEY MARKET BANKS AND STILL
SAFEST BET ON THE PLANET RIGHT
NOW IN TERMS OF THAT THERE IS NO
FLIGHT FROM BONDS TO STOCKS ANY
TIME SOON, WE LIVE IN AN
INFLATIONARY ENVIRONMENT, BONDS
RETURN YOUR PRINCIPAL.
GERRI: ALL RIGHT, THANK YOU, YOU
KNOW WHAT IS INTERESTING, I
THINK TINY COUNTRY, ABOUT A
MILLION PEOPLE LIVE THERE.
CYPRUS, CAUSING THESE RIPPLES
THESEE CONCERNS, TINY GDP .
AND YET ONE BANK OBSERVER SAID
THIS, IF SPANISH AND ITALIAN
BANK DEPOSIT IRWAKE UP TOMORROW,
AND SAY THEY COULD TAX MY
DEPOSITS TOO THE POTENTIAL FOR
AN INTERNATIONAL RUN ON THE
BANKS IS A HIGH-RISK.
WHEN PEOPLE SAY THINGS LIKE
THAT, THIS IS SOMEONE WHO IS AN
EXPERT AT BANKING.
WHO ACTUALLY DOES SPEND A FAIR
BIT OF TIME STUDYING THESE
INSTITUTIONS, WHAT SHOULD PEOPLE
BE THINKING ABOUT?
MAYBE ANOTHER OPTION FOR
INVESTING ?
>> BEHIDES SAVINGS, HERE IN U.S.
WHERE YOU ARE NOT GETTING
ANYTHING, WE'RE -- LIKE WE GET
THE QUESTION ALL OF THE TIME, IT
JUST, A GOOD PORTFOLIO HAS A
DIVERSE SET OF ASSETS WHETHER IT
IS COMMODITIES, REAL ESTATE REAL
,
STOCK, INTERNATIONAL, AND
EMERGING OR BONDS IT IS PROPERLY
ALLOCATED AND RISK MANAGING OF
THAT PORTFOLIO, THE BUY AND HOLE
IS NOT NECESSARILY GREAT FOR
INVESTORS WHEN INVESTOR SEE
MARKET SWINGS SOMETIMES THEIR
BEHAVIOR IS SUBOPTIMAL, THEY
MIGHT BUY TOO HIGH OR SELL TOO
LOW.
GERRI: WHAT ONE PRODUCT DO I BUY
NOW?
>> I WOULD GO TO AFTERNOON
ADD
-- WOULD GO TO AN ADVISOR AND
QUESTION HIM.
GERRI: THE MORE DIVERSIFIED THE
BETTER.
THANK YOU SO MUCH, I APPRECIATE
YOUR PUTTING UP WITH ME, THANK
YOU FOR THE TIME, WE HAVE TO
THINK ABOUT THOSE ISSUES, MAYBE
YOU THINK THEY CAN'T HAPPEN BUT
WE SURE HAVE SEEN SOME THINGS IN
LAST FEW YEARS THAT HAVE SHOCKED