The Implications - Who is Right?
Jim Chanos, Marc Faber, Ben Benanke, George Soros, Jeremy Grantham, Cullen Roche --- all are looking ridiculously intelligent. Jim's been calling for a China crash, and China's economy is mostly based on pouring concrete, building buildings people can't afford to live in, and hiding liabilities in off-balance-sheet entities if you ask him. Marc Faber's been shooting bullseyes from the hip for a few years now and he sees a hit to the industrial sector being followed by more quantitative easing and high inflation. Ben Bernanke has advised that we aren't seeing high inflation because we are simply seeing cyclical speculation in commodity prices. George Soros and Billionaire Carlos Slim reportedly got out of Gold and Silver at the top. Jeremy Grantham's calling the squeeze on the poor due to China's economic policy Cullen Roche went short into the madness as opposed into the fall when things were getting crazy at the top. Well Played.
The Dow Jones Industrial Average:
Well, if the growth peaks for the Global Industrial Sector, how can you possibly be bullish on the Dow Jones Industrial Average? The components of the Dow that I am the most worried about are: Bank Of America (NYSE:BAC), Caterpillar (NYSE:CAT), Exxon (NYSE:XOM), Alcoa (NYSE:AA) United Technologies (NYSE:UTX).
Commodities to Short:
Copper, Aluminum, Nickel, Lead, Silver, Iron Ore --- all metals that I expect to see continued weakness in.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.