Frank A. Barbera Jr., co-portfolio manager of the Sierra Core Retirement Fund, tracks a staggering number of jobs reports and other economic indicators.
Mr. Barbera's Sierra Core Retirement Fund
(SIRAX), which has $750 million in assets, has been reducing its exposure to equities and shifting to cash.
October has been a good month for the S&P 500
, but Mr. Barbera
suggested that equity markets can be misleading.
"Equity markets are quick to jump; they react to hope and fear," he
"If you want a good story, look at the credit markets.
They have not improved at all in the last six weeks," Mr. Barbera
is concerned about the U.S. economy and eurozone banks, and said that we haven't seen the worst of either one yet.
"Our contention is that there was no recovery.
We had a leveling off, but not a recovery," Mr. Barbera
And now indicators are heading down again, suggesting another recession, and not a mild one, either, he
As for Europe, the debt crisis that used to be "peripheral" is threatening the entire European Union, Mr. Barbera
"It used to be Greece, and now it is Italy and Spain," he
"They are too big to fail and too big to bail," Mr. Barbera
thinks that the credit problems will affect French banks and eventually perhaps drive Germany to abandon the euro and go back to the Deutsche mark as its currency.
The crisis in Europe "is in the second or third inning," Mr. Barbera