In an about-face to his previous outlook, Monty Guild- founder and CEO of Los Angeles- based Guild Investment Management- recommended selling U.S. and emerging market stocks.
Guild changed his bullish view after reading about a memo leaked to London’s Daily Telegraph that stated Germany proposes to create a German-controlled superstate to take over the beleaguered euro zone countries.
“That’s going to create a lot of uncertainty, and the markets don’t like uncertainty and that’s why it sold off today,” said Guild. “This will delay (Europe from) doing any quantitative easing and bailout of the banks.”
Although many news headlines blamed the sell-off on the supercommittee’s failure to come to an agreement over slashing the budget after three months of talks, Guild said he thinks it didn’t have anything to do with the sell-off. “No one expects the supercommittee to do anything anyway,” he said.
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