US Economy

[brisand]

A question for the wise.

What would you choose to invest in, if you knew the American economy was going to have a severe setback.
I have been reading a few reports on the American economy that paint a dismal future for the American economy, and knowing how we catch a cold when America sneezes I am interested in other peolples thoughts on this subject.
What investments ???????????

[Mick100]

quote:Originally posted by brisand

A question for the wise.

What would you choose to invest in, if you knew the American economy was going to have a severe setback.



Oil and precious metals
Short the USD
.

[peat]

this is a no-brainer?
If I knew that I would seriously short the US index(es) and leverage to the max. Problem is one never knows.

[wns]

hi brisand,

Have a look for a book called "Conquer the Crash" by Robert Prechter. The whole book is about what to do / not do in that scenario.

[Mick100]

I don't think the US is going to have a severe set back but a reccession starting early next yr is on the cards IMO. Robert Prechter has been crying wolf for ten yrs now - he's going to be right one day - dunno when though

.

[kittydashwood]

don't be too hasty to short you could lose a packet. The hard landing will come but only after new highs are tested. You might be right but get in too quick could see you sucking 20% paper losses before the housing collapse. Remeber the plunge protection team, America is not a free market, also the use of options acts as a rubberband mitigating any big collapse.

With a falling oil price, maybe an announcement of victory in the war on terror (just in time for the midterms)and continuing record corporate profits.

A more likely scenario is gradual deflation after this period of high volitility. Could you wait ten years for your short to make good profit?

Right now I am in the mid west, growth rates are high , 121 municipal wifi projects on the go, jobs everywhere, some sectors and some states are very strong. Media and healthcare sectors flexing unused muscles, saucer bottom on Goodyear tires is a good indicator. Failure of oil and gas sector could see market leadership rotated to the new risers.

California seems closer to the bust the the east coast or midwest.

Better to short by the sector or maybe play the VIX (volitility)into October. Don't make judgements on the light summer trading the instos are back after labor weekend so watch september carefully.

I am long 60% right now but will be cash again before the elections start in earnst.

[Mick100]

Bob Bronson on the US economy

http://www.financialsense.com/editorials/bronson/2006/0907.html
.

[kittydashwood]

You look out in the traffic in America and you see personnel debt not net worth.

Loved watching the flat screen tv containers arrive at Long Beach and seeing the US assembled Toyota Prius being exported back to Asia and the Pacific. FTX should start making Electric Ford Mustangs