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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: marginnayan who wrote (70615)	10/29/2007 1:36:07 PM
From: marginnayan	Read Replies (1) \| Respond to of 116555

Professional & Seasoned short seller Doug Kass: In support of my bearish view on US stock markets, I offer the following three observations. 1. The generally lower-trending yields in the bond market -- the yield on the 10-year U.S. note is under 4.30% -- seem to be foretelling an economic slowdown and, possibly, a sharp deceleration or contraction in corporate profits in 2008. And the continued ramp in the price of crude oil continues apace (up another dollar this morning) and will likely serve to dampen personal consumption expenditures and pressure corporate profit margins (as input costs increase) on the outset of a "winter of our discontent." 2. As a byproduct of the mortgage mess, the Financial Times and Challenger Gray & Christmas report that over 140,000 financial-services jobs have been lost in this down cycle. The protracted housing downturn will exacerbate the weakening job picture and points toward disappointing domestic economic growth in early 2008. 3. Even more important, my continued concerns regarding more subprime fallout are based on the substantive and hellacious price action of the ABX BBB- subprime and the AAA-rated mortgage indices -- the sector that much of the Merrill Lynch writedown encompassed -- which continued their schmeissing through Friday's close. Link: thestreet.com