Don Coxe 10.21.11 Conference Call

· Need to speak about EURO issue which is now a page 1 story. Greek riots are on everyone’s screens. We have the situation then that Greece will be defaulting in one way or another. Real situation is that real sacrifices have not occurred. Private sector has been hurt while not one public sector worker to date in Greece have been fired. Greece is simply the society in which the privileged class, those working for the government, see that once these things do get implemented, they will be impacted with their pensions, etc. so they won’t implement them. But when you look at the other countries, many of them are not much better than what Greece was when the riots began. Every one of them has a net negative imbalance except for the Germans. France is now backing away from the deal they thought would get done where each country would back their own banks because France now realizes they can’t do it as it will take so much money that France would be downgraded. Sarkowsky realizes he can’t have this going into an election. Amounts of money involved to refinance the Euro banks are enormous. Initially we hoped that the resolution would be for each country to back its own banks but looks like this will not occur. Series of meetings will occur over the weekend but thinks they will come up with something that will make people feel good for a while but obvious will not find real resolution as banks in Europe are in such bad shape.

· Only thing that is working as planned is Operation Twist. Bernanke carrying on the Greenspan efforts. We are seeing a pretty nice rally in stocks. But this doesn’t turn Don into a bull because once this Bernanke put stops, we will have to go back to economic reality.

· It’s hard to be a bull in stock markets anywhere given what’s happening in the Eurozone. Fact remains that they do not have a formula for recapitalizing banks across Europe and will then limp from crisis to crisis.

· Gold has sold off along with other commodities. 1600 range seems to be sort of a trading range. Gold would benefit if there are no Euro agreements. But oddly enough if there ends up being a massive bailout this too would be bullish for gold as it would revive the old fears of money printing.

· Bernanke has not been engaging lately in massive money printing.

· What should you be doing with your portfolio’s in the face of these gigantic macrotrends? Commodities and commodity stocks sold off along with general stock markets. Commodities have not come back. Copper has been taken back by 25%. (China claims to have enough copper in stock for one year production.) However, the grain prices are holding up which is a bad news story for so many countries. This is the kind of thing that causes riots.

· Have not changed his view that we should have strong exposure to commodity stocks as there is not that huge a supply out there. There will be printing of more money for more dubious debt. This will be positive for gold.

· But Gaddafi is gone with more oil flowing so shouldn’t this be positive? No it isn’t happening….because no one thinks there will be instant piece in Libya. There is no government structure to fall back on like there was in Egypt. It is not clear how they will be forming a government that people will believe in and where oil companies will be willing to invest significant amounts of capital. Suspect oil companies will be slow to invest here.

· Clearest cut story definitely remains in the agricultural sector and in the oil sector, at least in the near term as no new suppliers will be coming along.

• Outlook for S&P is that as long as QE 2 was going on, the stock market was behaving beautifully. US stocks look to be more attractive now than they have in a long time. US political situation looks really good compared to that of Europe. Feels that outlook for Obama has improved especially with the Republican debates going so badly so thinks Obama will be reelected