Looking for Growth? Look Over There
This column was originally published on RealMoney on Feb. 23 at 8:57 a.m. EST. It's being republished as a bonus for TheStreet.com readers.
German business confidence is rising. Japan says the deflationary spiral is now a thing of the past. Middle Eastern countries are trying to buy up anything that moves in our country because they have exhausted investment options in theirs. No way to slow down China or India. France has become the new U.S., accepting 1980s style capitalism with abundance.
We so often think about
our
housing starts and
our
retail sales and
our
balance of trade that we forget what's going on overseas. There's a veritable explosion of activity, truly a remarkable amount of growth.
We don't have it. Our economy is being sadly managed by the guns-and-butter crowd, as if it were Lyndon Johnson in charge. Our lack of fiscal discipline and our unbelievable deficit spending makes many of our stocks simply un-ownable in the eyes of foreigners. But that's OK, some of our companies have done so much to go overseas that they practically seem Swiss in nature. Good thing, too, because if they seemed American, I sense that would hurt them too, except in Australia.
I don't want to get too down on the U.S., lest the Republicans lose Congress and we get gridlock, which we all know is better for the stock market than this. In some ways, I want to attribute any strength we get to that possibility, because if we get gridlock, there is no reason for the
Fed
to tighten; in that case, the era of spending that can't be justified and tax decreases that don't even make sense anymore could finally be at hand. Oh, and save it, Republicans, I am just saying what any worldwide investor would say. It is also the reason every
Action Alerts PLUS pick I have made lately is a foreign company.
We have to start understanding that a bad number from
Toll
(TOL) - Get Report
isn't as important as a good number from Brazil. We have to recognize that we can freak out about problems with lines of home equity, but it would be better to focus on the Chinese central bank's ability to steer things right. Those who look only domestically are so right to be bearish; there is so little that is good in reality, vis a vis, housing, retail sales, autos and the Fed, that you would be right to fight this tape tooth and nail.
Alas, though, it could cost you a fortune, because this is not the only tape there is. And the better ones will, in the end, infect us in one way or another. We simply aren't that big, and they aren't that small any longer.
Random musings:
Someone asked me down here on vacation what they should be reading. They wanted me to give some
Financial Times/Investor's Business Daily
litany. I told them to just go read Breakout Stocks, where the action is. It's easy -- just
click here to take a free trial.
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