Stocks Yield Higher Than Bonds and Other Stuff

According to Jeff Erdmann of Merrill Lynch, the average yield of Pepsi, Intel, Johnson & Johnson, Procter & Gamble, and McDonald's is 3.29%, 1.2% greater than the average yield on these companies' 10-year bonds at 2.09%.  After taking into account the favorable tax treatment of qualified dividends, the stocks yield 2.79% compared to 1.36% on the bonds which are taxed as ordinary income.  (Source:  Barron's, 7/23/2012, p. 28).

From the Pension Fund world:  According to Michael Aneiro, "Top Pension Fund Sends a Warning", Barron's, 7/23/2012. p. M9, CALPERS, the country's largest public pension fund at $233 billion, achieved a return of 1% for the 12-month period ended June 30, 2012.  Interestingly, 55% in SPY (S&P 500), 15% in VEU (global less U.S.), and 30% in AGG (U.S. investment grade bond market) would have returned 2.6% before fees.  That's an extra cool $3.7 billion--not to mention that big-time managers scraped off a hefty amount in fees and the huge staff maintained at the Fund.

Finally Europe:  Bloomberg Businessweek (7/23/2012, p.9) reports that the European Court of Justice ruled that workers in the European Union "are entitled" to another vacation if they get sick on vacation. Is this an incentive to, in fact, "drink the water"?