Optimistic and Continuous Cautious

Central banks intervention finally came on Wednesday. Coordination among the G7 group as well as lowest unemployment rate in the past two years sent last week's Dow 7% gain last week, the best in the last 2 years. Banks will provide liquidity as needed. This is the first orchestrated effort to stop Euro zone problem from spreading to other areas. Risk of European country defaults had driven Euro/USD to new lows and the U.S. Treasurys notes to lows.

Similar moves occurred after the terrorist attacks of 9/11, 2001 and Russia's default in 1998. Both of these threatened to wreak havoc on the financial system. From these experiences, we learned that capital rebalanced from disaster zone to heaven markets. Then markets responded positively after intervention, albeit in different patterns. Also, intervention won't drive up markets indefinitely. Therefore, we should still be careful and keep cash when dips come. A record-proved way is buy dividend-paying kings.

In fact, risk is still rampant especially agreements still need time to become action. European plan needs significant effort to reach common ground. The G7 agreement doesn't guarantee a quick Euro crisis resolution. Back to homeland, analysts have already questioned that newly employed don't have enough quantitative mass to support economic growth. This is reflecting the common sense that the U.S. will not be a fast track to recovery, regardless of taking advantage on Europe's problem. Hence, caution is deemed to pay off at this volatile time.