A Trillion Dollar bailout for Europe! Really! The media today is finally starting to ask reasonable questions like "Where are they getting all the money?" and "You mean they are PRINTING a Trillion Dollars (worth of Euros) to buy a Trillion Dollars worth of bad bonds and loans?? Doesn't that feel like a ponzi scheme? I am ashamed to say they got is straight our of our (the Fed & Treasury) playbook.

I beleive the governments and central banks waited until the weekend to announce so the bailout would have a much bigger effect, a bigger punch. I also beleive these powers started buying to begin a frenzie and to force short covering.

They are trying to support the Euro, and it rallied this morning. However, it reversed and is now lower. Can this one day European stock rally continue on false financial data and monetizing the debt (jsut printing money).

They had no money last week, where did they come up with a Trillion. Even the mainstream media is starting to catch on. So what to do.

I would stay out of, or short, Europe. I would be short the Euro, I am. I would be in American equities right now as our economic date is coming out fairly strong even with "massaged" numbers and earnings are still accelerating. I would see if Asia is going to continue to tighten or whether they are going to be more accomodative.

I would also be looking to transition out of bonds over the next 3-6 months as interest rates are ending their 30+ yr downtrend and interest rates are going to rise. Remember, you were told that stocks always outperform bonds over any 10 yr period, right. Wrong, that is a bold face lie! Bonds have outperfomed stocks the last 20 yrs, BUT that is about to reverse and bonds are becoming much more risky. You must be very selective going forward, and be looking to prune weaker investments in your bond portfolio, or even make a fundamental shift. I am.

I hope this was some good food for thought and stimulated you into thinking about these things. Good luck, and pay attention. It is your money.

Dan Stewart CFA®