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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Jon Koplik who wrote (7686)	3/14/2007 11:45:24 PM
From: John Pitera	Respond to of 33421

I'm not as bearish on commodities as you are Jon.

To: Jon Koplik who wrote (7686)	3/15/2007 1:12:54 AM
From: Hawkmoon	Read Replies (1) \| Respond to of 33421

Jim Rogers left out that commodities should collapse, too ... He can't do that.. He's been a supra-bull on commodities for years (and obviously done nicely). But oil prices are out of synch with actual oil storage quantities in the US, which have been at highs not seen since 1998 (when oil crashed to sub-$20/barrel). In fact, oil prices coming down to reasonable sub-$50/bbl levels is one of the things that I hope will mitigate some of the current market damage we're seeing. We've seen the DOW and Nasdaq rally strongly everytime oil prices have fallen.. I suspect it will happen again.. Let's see.. maintain artificially high commodity prices or permit the largest stock market in the world to crash? Hmmm... As for RE prices declining 40% in high rate areas, I would agree. But the question is how many of these people bought their homes several years ago (over which time many have gained 100% in value) and their ability to sustain. Obviously people who have purchase homes in the last two years are going to suffer. Personally, I think a lot of capital is going to migrate back to the US, which still has the most transparent markets around. So I think we're going to see one more attempt at a market high, despite all the chaos we're seeing. Recall the crash of 1929, in which the US markets (as I recall) only crashed AFTER many other global markets had crashed. I seem to recall from my history books that the US markets actually climbed in the midst of the misery around the rest of the world, until the time came that we were finally forced to pay the piper. Japan is currently in the process of closing its books at the end of this month. After that, I believe the carry-trade will regain its previous popularity.. Talked this Japan issue over with my Japanese girlfriend who was a securities broker in Japan. She agreed that the BOJ would not permit the yen to climb to the point that it endangered the country's economic recovery. I also explained my theory on the necessity for the carry-trade to subsidize Japan's monetary base and she also agreed with my analysis (which is based upon my own thoughts, and not plagiarized). Yes.. the carry trade will eventually unravel, but it will be as a result of the BOJ and Japanese government doing what is necessary to spur internal consumption and debt assumption to replace foreign borrowers. Finally, unemployment will need to drastically rise for use to see serious concern about mortage defaults in the prime markets. Unemployment is at near historic lows and has a long way to rise before it becomes a dramatic concern. Not saying it won't rise to those levels, but it isn't going to happen in the next 6 months. Hope I'm right.. ;0) Hawk