Financial Times today has article analyzing the words and strategy shift stated in Norway's sovereign fund (well over 1 Trillion dollars)letter. Basically, Norway is making a sizable partial move AWAY from government bonds (all countries) and sliding over an equivalent percentage into commercial bonds & mortgage instruments. Norway's fund went on to make a comment essentially saying commercial bond risk is equivalent to government bond risk. Regarding the liquidity of government bonds versus the lower liquidity of commercial instruments, the fund also made the comment that with their great size they had sufficient liquidity to meet obligations. Again, the FT authors equated the liquidity comment as saying it is better to be safer in quality commercial instruments than to carry a higher percentage in government bonds despite the liquidity aspects.

. . . . it tolls for thee (to finish the John Donne quote). BTW, the quote we use is a misquote. Donne's original writing is: "Never to send to know for whom the bell tolls; it tolls for thee". Another Donne quote applicable to our larger world-wide interconnected financial situation: "No man is an island, entire of itself".

These are interesting times and Norway's investment strategy change is another indication the world-wide government debt market is signaling increasing risk.

Uwharrie