Thursday March 8, 2012
We noted Tuesday March 6 the clear long term down trends in XME, SLX, Ford and the financial XLF.
Please read the article in today's WSJ on page A8 Emerging Market Engines Falter
There is statistic after statistic showing that Brazil India China are slowing down. At the same time speculation in real estate in those countries has priced that housing out of reach of near everyone.
Here is an important sentence which explains the XME and SLX graphs we showed you Tuesday.
A slowdown in China, the biggest trade partner for Brazil, South Africa, and other commodity exporters, will be felt across th globe. China buys iron ore and soy from Brazil, more from South Africa, ash and copper from India
Like the parlor game of musical chairs, someone is without a seat when the music stops.
China's leaders are making clear the years of 10% growth are coming to an end.
Hmm what about a few consecutive years of a 5% decline?
Let me be clear, the long term charts displayed tuesday show a huge decrease in enthusiasm for basic metals. It then follows that financials, the loans on those deals, are without collateral. Excess speculation on real estate in emerging markets will eventually bring those markets down.
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