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binve (< 20)

Rear View Looks Fine, But The Macro Forward Outlook Is Deteriorating

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July 14, 2010 – Comments (2)

New post by The Pragmatic Capitalist

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REAR VIEW LOOKS FINE, BUT THE MACRO FORWARD OUTLOOK IS DETERIORATING
14 July 2010 by TPC
http://pragcap.com/rear-view-looks-fine-but-the-macro-forward-outlook-is-deteriorating

[excerpt]

More bad economic news for those investors who prefer to rely on forward looking indicators as opposed to last quarter’s earnings results (and the obvious incapability of analysts to get estimates even remotely right).  Mortgage applications continue to foreshadow a rapidly deteriorating housing market while retail sales show that the consumer is coincidentally weakening. Mortgage applications hit a 14 year low as demand for housing has clearly fallen off a cliff following the end of the home buyers tax credit.  Econoday details the results:

    “In yet another negative indication for the post-stimulus housing market, the Mortgage Bankers Association’s purchase index fell 3.1 percent in the July 9 week signaling yet another decline for mortgage applications. The index is at a 14 year low. Applications for refinancing, which have been very high due to low interest rates, slipped back 2.9 percent. Refinancing made up 79 percent of all applications in the week. Thirty-year mortgages edged higher to 4.69 percent, still near a record low.”

On the retail side sales disappointed to the downside as well.  The number is being brushed off by many economists, but the second straight month of negative results and a clearly reversing trend is not a good sign for the US consumer going forward.

2 Comments – Post Your Own

#1) On July 14, 2010 at 12:28 PM, russiangambit (29.41) wrote:

> On the retail side sales disappointed to the downside as well.  The number is being brushed off by many economists, but the second straight month of negative results and a clearly reversing trend is not a good sign for the US consumer going forward.

Retailers know. They started offering deals last month again after holding full-price and no inventory for over a year,

People need to realize that what this "jobless receovery"r eally means is recovery in the rest of the worl but not in the US, thus in the US it is "jobless". Housing market is about to tank again because of that. People need jobs to buy stuff and they are starting to see that jobs are not coming back regardless of what they hear on TV about the recovery. Recovery is in Aisa, Australia etc. Not here.

That is my strategy for now - buying dividend paying multinationals and foreign companies, commodities, avoiding US companies like a plague.

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#2) On July 14, 2010 at 12:32 PM, binve (< 20) wrote:

russiangambit ,

>>Retailers know. They started offering deals last month again after holding full-price and no inventory for over a year,

Exactly.

>>Housing market is about to tank again because of that.

Completely agreed. Just look for Meredith Whitney videos the past month and she articulates this case very clearly.

>>That is my strategy for now - buying dividend paying multinationals and foreign companies, commodities, avoiding US companies like a plague.

That sounds like a good plan :) Thanks!..

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