groty

Steel, Coal and Agriculture Plays Turning Over

Inlfation is out of control in many fast growing countries. Most of the world's central banks (except the FED) are responding by tightening. IN some cases, pretty aggressively. For example Brazil's central bank recently raised overnight lending rates to 12.25%. China has been raisig interest rates, increasing reserve requirements and allowing its currency to strengthen for several months to try to get a handle on inflation and still haven't been successful.

The point is, with central banks tightening, I think investors are starting to discount a synchronized global slowdown. All the high fliers mentioned are economically senstive, so they are getting wacked. If a sharp global slowdown does materialize, those stocks will be toxic even though they look "cheap" on '09 earnings estimates.