Friday Outlook: Commodities, Emerging Markets

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As the last chart indicates, virtually all equity market sectors around the world are oversold. Economic conditions and the outlook for earnings are poor. The notion that the bank bailout bill will cure all that ails markets is being disrespected, as are the politicians responsible for foisting this upon us.

The electorate is pissed. Who can blame them? With elections coming, and despite your political leanings, you should send a message of real change. That means whoever is in should be voted out. So if you’re a Democrat voting for your Democratic congressperson, vote the other way and if a you're a Republican, do likewise. I don’t care if you vote Green, Socialist or Libertarian. Do the same for President. But in order to get term limits you’ll have to do it at the ballot box - because they’ll never do it.

As for Russell Crowe? Who cares?

Instead of posting today, Greg Newton and I will be podcasting. If you wish to listen, you may do so Friday evening or Saturday morning from our homepage with no charge or registration requirement.

Have a pleasant weekend.

Disclaimer: Among other issues the ETF Digest maintains long or short positions in: SDS, QID, SMN, SIJ, SDP, XLU, IEF, TLT, GLD, EFA, EFU, EEM, EEV, and FXI.

Comments

[Stockgobblin:]

Wow, you are good at drawing lines!

2008 Oct 03 07:19 AM

[Brian in Mo...:]

It's getting chilly up here. Great charts, Scarey too. Even Gold and Oil got hammered, not good, especially if your Canadian or Australian.

2008 Oct 03 07:48 AM

[okl:]

good stuff... i hope you post this every week!

2008 Oct 03 08:03 AM

[jackh:]

"not good, especially if your Canadian or Australian."

If you think that's bad ...... chart the USA and compare.......

2008 Oct 03 08:42 AM

[whidbey:]

But what matters is that this post is the mirror of a recession of major proportions. Commodities are volatile, but usually not this much beta on a falling equities market. It seems to say that worldwide the consensus is for a major economic retrenchment. No matter how happy we might be with the Treasury plan, we have yet to see how it can be executed. The devil is, as usual, in the details.

Thanks, great data.

2008 Oct 03 10:36 AM

[User 141585:]

"...shotguns, food and booze." I love it...

2008 Oct 03 12:03 PM

[old fogey:]

Mr. Fry, It is getting to be a case of looking forward to your annotated charts. Thank You

2008 Oct 03 12:15 PM

[old fogey:]

Mr. Fry, It is getting to be a case of looking forward to your annotated charts. Thank You

2008 Oct 03 12:15 PM

[Yankee Runn...:]

I have read another reason for the strong dollar. This comes from Chuck Butler from Everbank who writes a daily blog called "The Daily Pfennig"

"One of the things we've learned this week is that the European banks are not getting to go Ollie, Ollie Oxen Free, on the holding of toxic waste debt... And since they are U.S. issued mortgage bonds, the trader that called tells me that they need to have capital reserved in U.S. dollars. Well, usually, these banks use LIBOR for this funding... But with the credit crunch going on all over, LIBOR rates have gone through the roof. So... Looking for alternative means of raising capital, the European banks have turned to the euro / dollar swap market... Selling their euro reserves and buying dollars"

The libor rate does not seem to be coming down any time soon, so Uncle Bucky could be strong for a while. Not good for all the foreign currency ETFs I hold.

2008 Oct 03 08:29 PM

[David Fry:]

Good points YR Dog. Thanks everyone.

2008 Oct 04 08:08 AM

[nevket240:]

Everyone forgets the HUGE amount of panic deleveraging taking place. margin calls must be keeping the Telcos profitable.
What is going to happen in 6-12 months?? Collapsing employment means Govt spending on Infrastructure. HUGE amounts are required. The commodities are not going to be down for long!!
The BULL RAGES ......
regards

2008 Oct 04 09:46 PM

[Bhakta:]

I sent my absentee ballot in already and voted for Green or Libertarian and for only my Democrat Congressman Mr. Earl Blumenaurer who has consistently voted against the wars, against the bail outs, etc. My own gut sense is we are in for a very long and deep depression situation, and there is no government or combination of governments that can prevent this from happening. The lows we see now, will look high in another six months as more businesses fail, jobs become scarce worldwide, and trade slows.

2008 Oct 04 11:16 PM

[nevket240:]

China has, as we know, enormous finacial reserves to put into play to keep their restless minions employed. They will continue to suck in whatever commodities they can afford. Either keep the minions happy or have their throats cut. literally. Other Asian nations are in the same boat.
The US will inflate by Infrastucture spending. the US minions are too far under to borrow so printing is useless.
Sth America, now nearly as Socialist as the US, will do the same as China. They will go the economic war path against the US and store commodities for their own use forcing a bankrupt US to raise the bid.
Now, go read your own tea-leaves.
regards

2008 Oct 04 11:32 PM