"If there is either a financial crisis or recession in Europe, one would trigger the other (the U.S.). And given that the U.S. is not in the greatest shape to start with, possibly with deficit reduction of our own that might be excessive, we could easily be knocked into recession by that. So between our own political questions, and political questions in Europe, and severe private sector balance sheet problems in both continents, it is not a pretty nice picture.
"Number 1, protect capital. Treasurys are I think a spectacular way right now to do that. And unlike a lot of people, I think Treasury yields are going to go down. The yield may not be attractive, but the capital gains bonds will bring over the next year or two, if you can ride out a little bit of daily noise, I think is very attractive."