Don't Quit Your Day Job…

Well, S&P has finally done it – it cut the credit rating of nine European countries in response to the sovereign debt crisis in Europe. Two of those countries, France and Austria, formerly held AAA ratings, the highest grade which S&P assigns to sovereign debt (read: the lowest default risk). You know that DQYDJ thinks rating the debt of countries is silly because risk (default and debasement/inflation) is already priced in, but let’s humor S&P and take a look at how the world’s debt ratings now stack up. You can also see a similar map from the US debt ratings cut back in August.

Great attention in major media sources has been called to the recent dip in oil prices (CL1Q) which peaked at over $114 per 159 liters of light crude. It is hovering around $94 now, which is a decrease of over 16% from the peak. Traditional thinking claims that gas prices typically peak in the summer months due to more gas being used during holiday travel times such as the 4th of July and Memorial Day (and Earth Day: irony?). One of the recent developments is a claim by OPEC companies that the International Energy Association (IEA) released emergency oil stocks to alter the oil prices. In response, some observers believe that Saudi Arabia will not follow through on their promise to increase oil production by as much as originally claimed (some reading here and here). The confusion as to how each individual country will respond to this creates very different incentives for each of the countries in OPEC.

(Updated with information on Facebook’s potential IPO in April 2012). Remember back just a few short years ago when the ultimate goal of a start-up in Silicon Valley was to either get bought out (by a public company) or to go public? The first internet bubble saw companies like Amazon and eBay make their debuts, but it also relegated other companies to the history books: iWon.com, pets.com, and Startups.com. As a result of new regulations and laws (a major piece being the Sarbanes-Oxley Act of 2002), an Initial Public Offering may not be the glamorous exit strategy it once was. A perfect example most of us have experience with? Facebook.

Not all of us have surplus money stacked up under our mattresses. But it isn’t very hard to believe that after careful budgeting and hard work we can put away some money for the future. When we finally get to this point some of us see many opportunities and are unsure of what to do with our money. Personal investing can be a very opportunistic option and can pay off greatly if money is put in the right places. We strive to put away money for investing, and then have no idea of what investment opportunities are available and which are the most advantageous. It is important to research different roads we can take before we get to them.