March 12, 2009

Global Market Comments for March 12, 2009
Featured Trades: (TBT)

1) Forbes Magazine has published its annual list of the 400 wealthiest, and the carnage has been awesome. The net worth of the elite club has shrunk from $4.4 trillion to $2.4 trillion, with the average dropping from $3.9 billion to $3 billion. Bill Gates, worth $40 billion, jumps back up to the number one position, even though he lost $18 billion in 2008. The number of billionaires has plunged from over 1,100 to 793. Among the fallen are Citigroup's Sandy Weil, Facebook's Mark Zukerberg, and AIG's Hank Greenberg, and of course, Sir Alan Stanford.  China managed to add five new billionaires, including Wang Chuanfu, founder of battery maker BYD, who has attracted backing from Warren Buffet for his electric car efforts.

2) The global economic collapse has finally hit China with full force, knocking down exports by 25.7%, and shrinking imports by 24% in February. The ghastly figures show how rapidly international trade is shrinking. The Middle Kingdom's trade surplus is in free fall, and it is just a matter of time before the renminbi starts to fall against the dollar. Do you suppose that anyone in the US government understands that this will lead to fewer Chinese purchases of Treasuries, just when they need to sell the most? Better double up on the TBT, the 200% short long bond ETF.

TBT-2.png picture by sbronte

3) Looks like we are going to have to invent ourselves out of this mess. One third of US GDP is produced by companies that were created after 1980. Almost all new jobs are created in firms that are less than five years old. These figures show that innovation is the primary driver of new hiring.


' For decades, the money shufflers, the paper shufflers, have been the captains of the universe. That is now changing. The people who produce real things will be on top. You're going to see brokers driving taxis,' said legendary investors Jim Rogers, former partner of George Soros.