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NEW YORK (TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.
Originally published on Thursday, March 14 at 10:57 a.m. EST.
- If you believe in a strong, self-sustaining global economic recovery, the lagging FXI is a good long.
Originally published on Friday, March 15 at 10:09 a.m. EST. Interestingly, bond yields are not rising in the face of a better industrial producction number for February. I am not surprised, though, as I have been writing that the recent strength in the domestic economy should not be extrapolated. February production rose by nearly twice the expected +0.4%, and January was revised to flat from -0.2%. As I have been emphasizing, fourth-quarter 2012 real GDP was understated due to inventory disaccumulation. This disaccumulation has reveresed in first quarter 2013, and we are seeing an inventory/production bounceback. Fourth-quarter 2012 real GDP was negative. First-quarter 2013 real GDP should be about +2.5% -- link the two together and we get punk growth of only about 1.25%. And since the inflation number input by the government is phony, real economic growth in the domestic economy is probably even lower -- perhaps under 1%. I continue to believe that the recovery in GDP will be short-lived (as inventory growth is normalized), and apparently, the bond market agrees with me. Thus, the foundation for corporate profit growth and stocks is weaker than most assume.