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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (22150)	8/19/2009 11:45:41 AM
From: Giordano Bruno	Read Replies (1) \| Respond to of 71456

WHILE YOU WERE SLEEPING Global equities are in the process of giving up yesterday’s rebound — the Nikkei closed down 80 points, or -0.8%, to 10,204, the Hang Seng down by 352 points, or -1.7%; and China down 4.3% as it is on the precipice of re-entering a bear phase (slicing below the 100-day moving average just days after breaking below the 50 day m.a.). Over 20% of the rally in China from the lows has now been reversed in this latest selloff and all we have to say on the matter is that if the S&P 500 were to do the same we will be at 945 before too long. It is clear that the deflation trend is going global as we saw today in Germany with its PPI sliding a record 7.8% YoY as of July — an even steeper downtrend than the -4.6% pace posted in June. Canada’s CPI also dropped a larger-than-expected 0.3% MoM in July, and that took the YoY trend to -0.9%, which is the most negative trend we have seen in 46 years! Even the core CPI in Canada was flat last month, so this is not “only” an energy price story. Below we highlight the appropriate strategies to deploy in an environment of falling prices. It’s all about income-orientation and capital preservation. HOUSING STARTS DOWN BUT NOT OUT The reason? The entire decline to 560k annualized units in July (-1.0% MoM; the consensus was looking for 599k) was in the volatile multi-family sector, which plunged 13.3% (tying the May low of 91k units) on top of the -26.0% print in June. Clearly the new supply of foreclosed homes coming on the market are being used as “rentals” and providing serious competition to existing apartment owners … and hence crimping new supply. -Rosenberg