These blog posts originally appeared on RealMoney Silver on Aug. 14.
7:21 a.m. EDT
The newest paradigm of a global economic decoupling is turning into another fairytale, as the economies of France and Germany
in the second quarter. Meanwhile, GDP growth in India is decelerating, and there remain serious questions regarding China's growth rate in the 2009 to 2010 period (post-Olympics).
And the tailwind of an ever lower U.S. dollar, which provided export growth to domestic companies and served to offset weakening retail sales and the depression in housing, is now becoming a headwind to future profit growth.
Over the last two weeks, I have expanded my short book of companies and ETFs -- such as the
Consumer Staples Select Sector SPDR
-- that depend upon export growth, which has buoyed sales and profits over the last several years.
A variant view.
8:48 a.m. EDT
Another one of my
appears to be occurring -- a surprise that few were contemplating and that could have major investment, economic and geopolitical ramifications.
Surprise No. 16 (below) raised the possibility that cyber attacks could become the tactical nuke of the digital age:
The Internet becomes the tactical nuke of the digital age. The Web is invaded on many levels as governments, consumers and investors freak out. First, an act of cyber terrorism occurs that compromises the security of a major government (similar to the attacks this year emanating from the Chinese military aimed at the German Chancellery) or uses DDoS against media and e-commerce sites. Second, a major data center will fail and will be far worse than the 1988 Cornell student incident that infected about five percent of the Unix boxes on the Internet. Third, cyber crime explodes exponentially in 2008. Financial markets will be exposed to hackers using elaborate fraud schemes (like liquidating and sweeping online brokerage accounts and shorting stocks, then employing a denial-of-service attack against the company). Fourth, Storm Trojan reappears.
Based on the information incorporated in a
New York Times
this week, a series of multiple distributed denial-of-service, or DDoS, attacks on the Georgian Internet infrastructure have recently been launched, serving to shutdown that country's servers for a period of time.
New York Times
article suggests that these attacks might be a precursor to an all-out cyber war between Russia and Georgia.
Consumer Is Cooked
9:02 a.m. EDT
Today's economic releases underscore that the consumer is cooked, and the process of restoring his/her health will be lengthy and painful.
My single largest short exposure continues to lie in the consumer sector -- far and wide.
Watch What They Do, Not What They Say
9:44 a.m. EDT
I am referring here to the insider sales at
, the chairman of which recently appeared on
Shorting EL for a Trade
9:50 a.m. EDT
The strength in
European division, which was the catalyst to this morning's earnings beat, could be short-lived, with those markets currently weakening posthaste.
I have shorted some stock above $48 for a trade.
Doug Kass writes daily for
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At the time of publication, Kass and/or his funds were short the Consumer Staples Select Sector SPDR, Fastenal, Henry Schein and Estee Lauder, although holdings can change at any time.
Doug Kass is founder and president of Seabreeze Partners Management, Inc., and the general partner and investment manager of Seabreeze Partners Short LP and Seabreeze Partners Short Offshore Fund, Ltd.