Monday, October 27, 2008
World Falls Apart
Weird day in the market. It seems like something is about to blow. Either a large push down or this is still part of the base building to start the multi month rally that I am still expecting. The interesting thing about today is that commodities did not follow the market down (usually the commodities have been leading the market down) and the Yen hung in there against the dollar fairly well. The crises has definitely moved overseas. The new epi center may very well be Europe as the emerging world blows up and European banks have all the credit exposure. United States is not following the world plung lower but that does not mean that it won't or in the longer term have a much deeper impact than what current economist are forecasting. Remember the world was supposed to bail out America. Now, not only does America have to bail out America but the world needs dramatic help also. The IMF has already bailed out Iceland, Hungary, and Ukraine. Essentially these countries failed and I am sure there will be more to follow. I still think we are going to see a reprieve but like August 2007 started the first wave of the problems in the U.S., I think we are seeing the first waves of a truly world crises. Maybe it is the second and third wave but the epicenter is definitely shifting. Japan set a 24 year low (I think that is the right number) yesterday. So much for owning stocks for the long haul. China is off like 35% in a week. Currencies are crashing everywhere. All of this also will have profound impacts on the U.S. economy, politics, and global ties.