Yesterday the theme in our minds was “divergence” –

1. Bank of Ireland (Ticker: IRE) debt not being downgraded and the stock moving higher vs. Allied Irish Bank (AIB) debt being downgraded and the stock moving lower.  As an investor in the Bank of Ireland, that was a divergence that we had been looking for.

2. Amazon.com (AMZN) moving to 52 week highs, while Wal-Mart (WMT) a bit weak and going nowhere.

Today the theme in our minds is – “cooperation and coordination” –

1. China – Headlines this early morning reported that China had stepped up to help with the European sovereign debt problem by buying bonds.

2. North Korea had chosen not to respond militarily to South Korea’s military exercises.  There was with certainty a lot of diplomacy taking place to achieve this outcome.

This cooperation and coordination theme also is very evident in today’s announcement by the U.S. Federal Reserve that they are extending the “temporary” dollar liquidity swap arrangements with the European Central Bank, and the central banks from Japan, Canada, Switzerland, and the U.K.

Decades-long trade imbalances, overspending by governments, asset bubbles… have all taken a tremendous toll and placed our world economy in a precarious state.   It will take lots of coordinated efforts – such as those mentioned above – combined with hard decisions, to establish a “new normal”.

During this time of heightened global coordination and increased U.S. Federal Reserve activities – designed to strengthen and improve global growth – we are on the hunt for excellent stock ideas.

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Please remember – at the Stock Market Companion we do not and cannot give individual investment advice. According to the State of Washington RCW21.20.005 the Stock Market Companion is not a Registered Financial Advisor and we do not render any advice on the basis of the specific investment situation of a particular individual. This information is for a wide readership and is not intended for any particular individual,  and under no circumstances should our Market Update or Watchlist be considered an investment recommendation or plan for any specific individual.  By accessing this material, you agree that the Stock Market Companion will not be held liable for any actions taken by a subscriber or other parties.  Please seek the counsel of a broker or other licensed investment professional for accurate pricing and concerning the suitability of all investments that you may be considering. Disclosure : You understand that the Stock Market Companion holds positions in the above mentioned securities.  Based on market related or personal events these positions may change without notice.

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