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

To: TH who wrote (105626)	10/8/2009 3:48:56 PM
From: LTK007	1 Recommendation Respond to of 110194

TH,i highly recommend this excerpt from today's TSR(The Spear Report).Max ********************************************************* <<Meanwhile, HSBC is predicting that traditional global capital flow dynamics will turn inside out from what we have known since World War II. Uh oh. For the last two decades, cash rich emerging economies exported their capital to the U.S., which was used to fund growth and speculation, especially in the mortgage market. According to HSBC's CEO Stephen Green, that era is over. HSBC believes that a moribund securitization market (where investors purchase mortgages using cheap capital) will prevent a grassroots recovery in the Western banking sector. Instead, securitization and other long-term debt instruments denominated in local currencies will flourish in the Eastern markets, drawing global capital like a magnet. We see this as a secular process, lasting through the 21st century. According to the chief economist for Natixis, one of the 20 largest fund managers in the world, the geopolitical shift in growth, trade and capital flows poses a "terrible threat" for the U.S. and Europe. No kidding. We saw the writing on the wall about 18 months ago and have been pointing it out repeatedly since then. This turning inside-out of global capital flows is the underlying reason we think the Dow is headed significantly lower over the next few decades**, as the Western indices experience a post-bubble secular bear. Remember, strengthening local currencies will further weaken the dollar, boosting the prices of dollar-denominated commodities and gold. For the long run, consider holding foreign stocks, resource stocks and gold- related plays. Despite the dour long-term prognosis for the S&P 500 and the Dow, the current rally from the March lows could last through the end of the year and into early 2010, before this American Airlines flight starts its final descent.>> TSR excerpt 10/8/2009