If Other Countries Sneeze, Will The U.S. Catch A Cold?

Just as the U.S. economy is strengthening, other countries are threatening to drag it down.

Employers in the U.S. are creating jobs at the fastest pace since the late 1990s and the economy finally looks ready to expand at a healthy rate. But sluggish growth in France, Italy, Russia, Brazil and China suggests that the old truism, "When the U.S. sneezes, the rest of the world catches a cold," may need to be flipped.

Maybe the rest of the world will sneeze this time, and the U.S. will get sick.

That's the view of David Levy, who oversees the Levy Forecast, a newsletter analyzing the economy that his family started in 1949 and one with an enviable record. Nearly a decade ago, the now 59-year-old economist warned that U.S. housing was a bubble set to burst and that the damage would push the country into a recession so severe the Federal Reserve would have no choice but to slash short-term borrowing rates to their lowest levels ever to stimulate the economy. That's exactly what happened. Now, Levy says the United States is likely to fall into a recession next year triggered by downturns in other countries, the first time in modern history.

"The recession for the rest of the world ... will be worse than the last one," says Levy, whose grandfather called the 1929 stock crash and whose father won praise over decades for anticipating turns in the business cycle, often against conventional wisdom. Continue reading "If Other Countries Sneeze, Will The U.S. Catch A Cold?"

It hasn't sunk in yet, and maybe it never will.

It's not that often that we revisit previous posts but here is one that I wrote on October 23, 2008. It seems to me that seven months later not a lot has changed. I still think that we are  going to see some difficult times ahead. But not all is doom and gloom, there are always opportunities to make money in the market.

Anyway I thought you would find this post interesting and hopefully educational.

Continue reading "It hasn't sunk in yet, and maybe it never will."

Stock Inefficiency is best found During Times of Hardship

No matter what side of government intervention you're on, it's agreed that it has an affect on the market. Whether that effect is a shorter bear market or simply a prolonged slide is debatable. Today's guest blogger is Tony of KhronoStock.com. Tony is going to share what he thinks the similarities between the great depression and the current state of the economy means for the markets. Be sure to comment and let us know what you think.

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There are four most important factors that caused the Great Depression during the early part of the 20th century.

1.    Stock market crash that went from October of 1929 to summer of 1932. Stocks dropped over 80% during this period.

2.    Massive bank failures – regional and community banks failed by the thousands. The remaining banks were reluctant to write any new loans due to the collapsing financial system. Continue reading "Stock Inefficiency is best found During Times of Hardship"

Ladies are putting down the lipstick and picking up the necessities.

Ladies are putting down the lipstick and picking up the necessities.

US consumer have been used to spending hundreds on self-gratifying purchases; things that entertain us, make us look rich and make us attractive. However, the recession has emptied the movie theaters, the BMW dealerships and the cosmetic counters.

The things we once wanted are being put on the back burner to afford the things we really need. I learned how dire times really are when Elizabeth Arden (NASDAQ:RDEN) and Estee Lauder (NYSE:EL) came out with their sales and earnings forecast last Friday.

Watch my new video here:

Take a look at this video of Estee Lauder and see where we got short this stock using our "Trade Triangle" technology. What's nice about this technology is that it can use previous market action to help you get in and ride the trend (to profit from news and earnings). How valuable would that type of information be to you?

Every success in the markets,

Adam Hewison
President, INO.com
Co-creator, MarketClub