Wednesday, November 9, 2011

Shipping down -- worse than 2008

That's the Reuter's headline this morning.  China is finding the going tough!  Finally, sales in Europe are starting to falter.  Reported elsewhere, Apple has reduce component orders by nearly 20% -- still very much a rumor, but it remains that a global recession seems to be on the cards.

Short term I see the USD rising in value, as investors seek the safety of the US debt and equity market (I could be wrong), at least until the 23rd of November -- when the supercommittee on the deficit reveals that they could not agree on a USD1.2 trillion cut in expenses (that over 10 years).

As I like to repeat Canada is a second derivative country, we should see some weakness in the price of some of our export goods.  Oil price (if there is a global recession) should drop, as should copper prices ("the" bell weather of global growth).  It goes without saying that everything else will be affected too.  Of course this is a worse care scenario, italy and Greece could wake up and decided that "some" real austerity (and tax collection) is a good idea... but don't count on it.  ECRI says that a recession is "baked in".  Interesting time

The big question after that is: Where do investors put their money after that?

Other interesting headlines:

Half of all mortgages in the US are underwater
Mortgage delinquency is rising again
Las Vegas saw a 9% drop in home price in 2011, and expects another 100,000 home to be foreclosed on.  Total so far 1/5 of the Vegas entire housing stock has been foreclosed.
FT:  Thinking the unthinkable -- Greece on the way out?
Gold nearing $1,800 price point
German confidence level dropping (as are exports)


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