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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: bart13 who wrote (87177)	10/2/2007 11:22:19 AM
From: stan_hughes	Read Replies (1) \| Respond to of 110194

I made this screen cap of some US economic data posted at the Conde Nast site after turning all the java sets onto as long a time frame as it would let me -- Sometimes things appear more obvious when you can see them all on one page. Despite all the hoopla and spin in the financial press about a world wide boom, the longer term trends for the US are undeniable, as anyone can plainly see for themselves -- slowing industrial production, slowing consumer spending and retail sales, the unemployment rate ticking up, all of which translates into anemic GDP growth -- even the slight trade balance improvement confirms the analysis, as shown below: Import values have flattened, meaning that they've actually dropped (due to nominally increased prices due to the falling USD) -- dataweb.usitc.gov Yet exports are falling in value too, even though you'd expect those values to be benefitting from that same falling USD -- dataweb.usitc.gov So while we have exports falling (not good), imports have been falling at an even faster rate (also not good if you are 70% dependent on consumers for your GDP like the US), resulting in a net reduction in the monthly trade deficit. In some quarters they immediately see the lower figure hit the news wires and think this is a good thing, but IMO it's anything but good. I can understand how the transnational Dow stocks can avoid a lot of these issues and possibly even benefit from some of them, but how domestic stock indexes as broad as the Wilshire or the Russell can keep going up in the face of economic reality can only be explained by the Zimbabwe Effect, i.e. the higher nominal US index figures are being achieved by market asset allocation activities designed to maintain a US weighting, i.e. it is solely via the debasement of the dollar. So here's the 3-year Wilshire priced in gold as proof that US stocks aren't actually going anywhere here -- in fact, they're actually falling in relative value. I rest my case -- stockcharts.com