In recent weeks, the stock market seems to have lost it moorings and found itself thrashing about in heavy seas. US stocks appear to be caught in gale-force fears of all sorts of impending disasters from runaway inflation to a double dip in the economy.

I am a soccer fan, therefore I am aglow with pride over the USA's victory over Algeria to win their group phase in the World Cup in South Africa.

My love for "football" came because both of my sons gave up playing my sports (baseball and basketball) when they were very young to concentrate on soccer. Since I love both of my sons, perhaps it was only natural that I would come to love the game they loved, even though for many years I did not understand the difference between a "corner kick" and a "free kick."

Dividends are alive and well and getting back to normal. At least that is what the data for the first six months of the year would indicate. The following is a brief update on the dividend actions or inaction's of the 500 companies in the Standard and Poors Index for calendar year 2010.

This information is based on announced dividend actions as reported by Bloomberg and is taken from Bloomberg Professional Data.

Anyway you look at it, the jobs report released Friday was flat ugly. Almost all the new jobs created were government census workers. Even though the unemployment rate ticked lower to 9.8%, the lack of new jobs in the private sector was an unpleasant surprise to economists and stock traders. Stocks fell sharply and bond prices rallied.

At our Investment Policy Committee meeting today our discussion focused mainly on three topics.
1) Is the risk discount built into current stock prices excessive?
2) How tightly is the US economy tied to Europe? and
3) How tied are the companies we invest in to either the US or European economies?

I've had a lot of people telling me lately that cash is king. I don't want to pop anyone's illusions, but for my money cash is certainly not king. Indeed, cash is dust because the rate of return for cash these days is almost zero.

So in a world where everything seems like it is coming apart, where can you go with confidence? I think there are many safe places where one can achieve a reasonably good long-term rate of return. The key words here are safe and long-term.

"Americans can always be counted on to do the right thing...after they have
exhausted all other possibilities." -- Winston Churchill

Our regular readers, will remember that the Barnyard Forecast is our short-hand version of determining the prospects for US stocks over the next 6-12 months. The Forecast receives its name from the acronym we use to "score" the prospects for stocks: Economy+Inflation+Earnings+Interest Rates=Opportunity (EIEI=O).

A friend called today and asked the question that is on every one's mind: "How in the world can the financial troubles of a tiny nation like Greece cause the world's financial markets to screech to a halt?

As I listened to him I saw the stock market fall off a cliff: down 60 points on the Dow Jones, down 100 points, down 200 points, down 300, 400, 500, 600 points. I did not see the print of down 900 points because I turned away from my screen for a moment.

An article in Friday's "Wall Street Journal" bemoaned the fact that taxes on dividends could rise dramatically by the end of the year. Here is a quote from the article: