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Containing the euro crisis

Friday, June 15, 2012 - 02:10

June 15 - Looking for a safe place to hide from what could be a turbulent spillover from the Greek election and the European debt crisis? A financial planner offers some tips as a global strategist explores ways the Federal Reserve could limit the damage to U.S. investors. Jill Bennett reports.

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PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL Looking for a safe place to hide from what could be a turbulent spillover from the Greek election and the European debt crisis? A financial planner offers some tips as a global strategist explores ways the Federal Reserve could limit the damage to U.S. investors. U.S. investors may want to brace themselves for the coming week. A weekend election in Greece could crack the euro zone and bring more turmoil to markets worldwide. But there are some steps investors can take to protect themselves. Jonathan Satovsky, Satovsky Asset Management: SOUNDBITE: JONATHAN SATOVSKY, CERTIFIED FINANCIAL PLANNER, SATOVSKY ASSET MANAGEMENT (ENGLISH) SAYING: "Short term municipal bonds, short term corporate bonds, T-bills, even Treasury inflation adjusted bonds; people can have some things that would protect them and give them a return of principal so they don't have to worry about getting their money back." Satovsky says investors with a 7-year plus time horizon might want to look to global stocks. He says Total in France, Pfizer, and Microsoft offer good margins and dividends at cheap prices. Investors may want to buy now - Europe's spillover effect may be fast moving. Andrew Goldberg, Global Market Strategist, J.P. Morgan Funds: SOUNDBITE: ANDREW GOLDBERG, GLOBAL MARKET STRATEGIST, J.P. MORGAN FUNDS (ENGLISH) SAYING: "There's a sentiment impact. Just seeing this in the headlines drives a tremendous amount of uncertainty, and that's one and the other one of course is how tightly connected to our banking system is the European banking systems - and that's the one area of contagion that we are watching the most closely." G20 officials, who meet in coming days, say numerous central banks are preparing to step in to stabilize the financial markets - if needed. The UK is already opening the spigots, with plans to provide cheap long term funding to banks for business and consumer loans. Now it's time to brainstorm what the Federal Reserve can do to instill confidence in U.S. markets. SOUNDBITE: ANDREW GOLDBERG, GLOBAL MARKET STRATEGIST, J.P. MORGAN FUNDS (ENGLISH) SAYING: "There are a few things the Fed can do to instill confidence the first one is just verbally to reiterate that they will backstop U.S. banks, the second thing that they can do and it's become known as Operation Twist, it's basically a maturity extension program where they are trying to keep long term interest rates low by buying those longer maturity bonds they can do that and the third thing is I call it a wild card, the Federal Reserve has proven time and again that when the going gets tough they can get creative." Investors already seem to be banking on a Fed that will step in and save the day. Jill Bennett, Reuters

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Containing the euro crisis

Friday, June 15, 2012 - 02:10