The Next Shoe

I interviewed Mish Shedlock last night (will have the interview posted here tonight) and asked him if he agreed with Gerald Celente's assessment that commercial real estate was the next shoe to drop. Needless to say, Mish believes that commercial real estate is in trouble. He also believes that the pain in commercial real estate will quickly extend to the regional banks.

I have been asking the question "will the strong dollar hurt stocks" Mish favors a very strong dollar and makes a very compelling case for it. I am still maintaining that Friday's rally was nothing more than a bear market rally. One has to look at the reason for the rally. I couldn't find a good one on Friday other than it was a short covering rally preceding the government spending bill. Again, when we look to the government as a reason to be bullish---we are in trouble. Many in the mainstream media are FISHING for a reason to be bullish. They talk about and spin any piece of news that could possibly be construed as good news.

I will be looking for an opportunity to buy SRS (short commercial real estate). Now I have lost a good bit of money on this one lately as it is very volatile. I intend to use better position sizing to be able to hang in with this one until my thesis proves correct.


I will have a longer post after the interview with Mish is posted and we will continue exploring the inflation/deflation debate.