Like any investor, Bob Doll is growing tired of the prolonged uncertainty and contagion risk that continues to flow out of Europe. While the U.S. economy's ability to avoid getting sucked into a recession is heartening, the frustrating part for him is that the European crisis is solvable.
"It's not a matter of economics and how many Euros it will take to solve the problem, it's 'Is there the political will to do it?'" says Bob Doll, the chief equity strategist at BlackRock. He believes the longer leaders in Germany and the European Central Bank wait, the harder and more costly the ultimate fix will be. Along those lines, he thinks the ECB, and its new chief, need to do a lot of things and do them now.
"It's a bunch of things that need to be tried," Doll says in the attached video clip. "Back in late 2008, early 2009, Congress threw a bunch of things at the wall to see what would stick. I think that's what we are going to go through here."
Ultimately he'd like to see the ECB increase purchases of sovereign bonds, expand its balance sheet and lower interest rates further. And the pain of recession and market forces will force Europe's hand. Doll believes if markets and rates don't begin to normalize, a re-visitation of the hard fought 50% reduction in Greek debt (known as the 'haircut') might happen.
Interestingly, Doll was unmoved by recent headlines about China's warning on a global slowdown, saying it "wasn't anything we don't already know, they just verbalized it."
In the meantime, this strategist with over a trillion dollars under his purview, 60% of which is in domestic stocks, is in no mood to take a lot of risk. " You're better off in safe havens," says Doll.
Are you hiding out in safe havens? Let us know in the comment section below.
