Fisher Capital Management Investment Solutions: Bin Laden’s Death to Boost Pakistan Economy, Stocks:

The killing of Osama bin Laden is a positive event for Pakistan’s economy and stock market, despite doubts about whether the country’s military was complicit in hiding the Al Qaeda leader, according to a strategist.

Sajjad Hussain | Getty Images

Mark Matthews, equity strategist at Macquarie, said the positive comments from top U.S. officials including Secretary of State Hillary Clinton on Pakistan’s role against terrorism would eventually lead to the release of much-delayed financial aid for the country. That, in turn, would help the government lower its fiscal deficit and boost the economy.

“For about 5-6 months now, the American’s and coalition money have not been released into Pakistan. And Pakistan has a very wide fiscal deficit. It’s 6.1 percent of GDP and it is the major issue overhanging their stock market,” Matthews added.

The aid package worth $7.5 billion over 5 years has been promoted by Democrat Senator John Kerry and Republican Senator Dick Lugar. But it’s been in limbo because of U.S. concerns about corruption in Pakistan.

Once, that’s resolved, Matthews expects the stock market to benefit. “There are lots of gems in that country. There are probably more gems there, stock-wise, than any other country in Asia,” Matthews told CNBC’s Bernie Lo.

The Karachi stock index rallied late last year along with other emerging markets, but so far this year it has dropped 6 percent because of rising fuel prices and a growing budget deficit. According to Macquarie, Karachi’s stock index not only offers value, but also many well-run companies.

For investors looking for stocks with volume, Matthews suggests looking atPakistan Oilfields [PKOL.KA  326.80   -0.75  (-0.23%)   ]. He likes this company as it has a daily turnover of $5 million and trades on about 5x earnings, with a 9.5 percent dividend yield.

And for investors who can stomach the illiquidity in the small-cap space, he recommends Askari Bank [ASBK.KA  11.50   -0.25  (-2.13%)   ].

“If you annualize that (the bank’s first-quarter results), that is on 4x PE and their asset quality has held up remarkably well, NPLs are very low and its at a 40 percent discount to book,” noted Matthews.

But he also says investors need to be cautious, and he said he was recommending taking only small positions.

Fisher Capital Management Investment Solutions: U.S. Debt Finally Draws Serious Warning

The emperor has no clothes! The U.S. may have trouble repaying its debt!

Finally, someone had the audacity — and the power — to tell the truth. And the truth made a big difference in the global financial markets on Monday.

On April 18, Standard & Poors, the company that rates all kinds of bonds, downgraded its outlook for U.S. government debt from “stable” to “negative.” The unprecedented warning negatively impacts the market value of all outstanding government debt, and if S&P takes the next step and actually downgrades the U.S. debt rating, it would force the Treasury to pay higher interest rates to borrow money.

Interest on the national debt is the third-largest federal spending category. In the last 12 months, the Treasury has paid more than $400 billion in interest — and rates are currently at historically low levels. A ratings drop could cost the taxpayers billions in extra interest payments every year. Worse, the higher rates needed to entice borrowers also would negatively affect our economy.

The United States still maintains its “triple A” bond rating, but the downgrade warning signifies concern that Congress will not act prudently to rein in deficit spending.

In its statement, S&P emphasized “the importance of timely bipartisan cooperation and action on fiscal reform.”

Standard & Poor’s warning came the same day the Chinese central bank said it would take additional measure to fight inflation by increasing its banks’ reserve requirements, thus slowing lending in China’s economy. The combination of the news sent the U.S. stock market plunging at the opening, fearing a significant business slowdown.

The possibility of an austerity program in U.S. government spending, combined with the Chinese intention to fight inflation, raised the specter of a global economic slowdown. That put downward pressure on oil and it caused prices of industrial commodities such as copper to fall.

But the big move came in gold and silver. Gold hit new highs. And silver has more than doubled in price in recent months, closing at more than $50 per ounce in recent days.

These two metals represent a haven for those seeking protection against both inflation and financial uncertainty. Silver is more volatile, perhaps because of its lower price — and because it also has a large industrial usage.

Of course, there is some irony in the fact that S&P is the company that failed to recognize the dangers in the mortgage-backed bond market until that disaster overtook them. Still, its warnings are heeded both by market participants and — hopefully — by Congress.

The financial markets finally put a price on the antics in Washington. And a very expensive price it will be. That’s the Savage Truth.