Seeking Alpha by Adding Beta

Last week was a downbeat week for stock markets when major world stock indices fell by more than 3% in one week. At same time, treasury market was going up with yield on 10 year US treasuries touching 3.08 at one point. There are multiple factors in play on why investors are willing to buy treasuries when everyone knows that US deficits are unsustainable and if not for US $ as "reserve currency", US case is worse than Greece. So why treasuries keep going up (and yield going down) ? Here are some factors: Flight to safety - investors have to park their money. With Euro and Yen in trouble and no other alternative (except Gold), governments as well as big investors have to park their money and at this moment there is only one alternative which is US treasury US $ status us world reserve currency AAA rating of US government - US has never defaulted in recent history When stocks are going down, 3% assured return is not bad Despite stocks going down in recent weeks, investors are s...

I returned to USA last week and coming back to my normal life. Tomorrow is official start of Summer and good time to make forward looking predictions for market direction. Last 2-3 weeks, markets have been consolidating between 10K and 10.5 K and almost looking confused about its direction. But now that Euro crisis seems to be understood (but not solved), markets can find some footing and start looking forward to Q2 results. Now that we are past dreadful May month, there is upward bias in markets and my prediction is that DOW would cross 11000 before summer ends on Sept 21. Here are the reasons for my prediction: Debt crisis of Europe in general and PIIGS in particular seems to be coming under control and doubts of viability of Euro have subsided. This is visible from Euro almost touching $1.24 after touching 4 year lows of $1.18 Growth story of emerging countries - in particular of China and India is very much intact. I have personally seen all the excitement in Indian economy during...