Recovery Today:A Trust Company Assessment

The unemployment rate went down slightly in April,but it doesn't include part-timers and the frustrated who have dropped out of the jobs search,points out Komal Sri-Kumar,Chief Global Strategist at TCW.The male participation rate was the lowest since 1948.The pain should be measured by the participation rate.Regardless of whether the job market is normally a lagging indicator,in this recovery it has become a leading indicator.The stock market cannot recover without jobs. The question is,do you want to right the market for a short period of time,or do you want to support it for 3-5 years with jobs?That is at the top of my list.In the short term,I look for U.S. Treasury yields to go down if there is more trouble in Europe or the U.S.In the first half of 2013,you will see more meaningful measures on jobs after the election,Mr.Sri-Kumar projected. TCW,the Trust Company of the West,was founded in Los Angeles in 1971.It serves institutional and high net worth individuals with a broad array of U.S. equity,U.S. fixed income,alternative and international strategies in accordance with its core values of fundamental research,remaining true to its investment styles and superior customer service.

Assessing A Possible Greek Default

The consequences of a Greek default are being gauged by thought leaders in world financial capitals.Komal Sri-Kumar,Chief Global Strategist at TCW,says that,if Europe crashes,you're looking at the banking system being under very severe strain.As long as that is unknown,I think you're looking at a bit of trouble here.
Moody's,the ratings agency,downgraded the creditworthiness of two of France's three largest banks,Societe Generale and Credit Agricole,because of their exposure to Greek debt.The third bank,BNP Paribas,escaped the demotion.
You cannot just have Greece defaulting and everybody else doing fine.Greece defaulting will cause a series of defaults.If that happens,the impact on the U.S. economy and market will come from the financial system.It's gonna be even more difficult to get a mortgage in the U.S. because the Federal Housing Finance Agency is suing the big banks.
Dr.Kumar has said he believes we are already in a recession.He's staying with high grade fixed income for the next 2-3 months;after that,it's defensive stocks.
TCW,the Trust Company of the West,offers institutions and individuals a broad range of investment strategies.Since 1971,it has been committed to serving its clients through fundamental research and superior customer service.

Analysing The Current Financial Problem

Komal Sri-Kumar,Chief Global Strategist at TCW,thinks the fundamental problem is you have an excess of debt in the world.The Federal Reserve left open the possibility of QE3,or more quantitative easing.It's something to be worried about this late in a recovery.
If we don't do any structural reforms,I can't see any improvement.We need to have free trade agreements;a more flexible labor market.I think we are in a recession now and into Q4.
We are looking into defensive areas.We like energy;information technology.Stay away from European equities and fixed income.The corporations have something like two trillion of cash.The money is kept mostly outside the U.S.,away from higher taxes.
I considered QE2 alchemy.You need incentives,getting workers to work and increase productivity.You cannot get anything else out of monetary policy.Many companies are firing domestic workers as they hire them abroad,because it is more efficient,Mr.Sri-Kumar noted.
TCW,the Trust Company of the West,offers institutional and individual investors a wide array of U.S. Equity,U.S. Fixed Income,Alternative and International strategies.It is committed to fundamental research and superior customer service.Based in Los Angeles,TCW was founded in 1971.