Australia Angers God

From The Wall Street Journal.

Analysts said Russia even may cease or curtail shipments abroad. Meanwhile, other countries included in the group of the top-five wheat exporters also are facing problems. Canada's crop has struggled due to excessive rains, and Australia is battling a plague of locusts. [emphasis added]

What next, Australians turning into piles of salt?

Comments

[dacian]

Hi T.

I posted the comment below on your previous post, so just in case you don't read back (and you please to answer). thanks!

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Thanks T., I'm reading you on China and I understand your point (I think). Regarding your article from 21st June on China, I want to say that this is what "smart money" are doing: understanding fundamentals.

As for

"Those who see this and have the wherewithal to exploit it make fortunes."

the question is: how an investor should position for this change?

From your article, I understand: higher interest rates hence short treasuries; lower demand for dollars, hence a weaker dollar but I'm not interested here as I'm not on FOREX (I don't see how cheaper dollars benefit US consumers; I understand it offers some relief from the easing of the deleverage); short companies offshoring (don't like it); but what else? what companies you would buy?
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[Toro]

Dacian

Don't overestimate "smart money." It is either not that smart or there is not that much of it.

I have not figured out how to exploit the coming trend, other than to know that earnings growth will not be as strong for companies that rely on outsourcing as a strategy. The incremental profit growth for corporate America is likely to be slower. Those selling to the burgeoning Chinese consumer will benefit, which is very well known.

I think that what is going to happen is that wages are going to rise faster than people expect, at least for the lower and middle classes. That will offset declines in the dollar relative to the yuan. Remember, for the past decade, consumers have experienced unrelenting price pressure for most consumer goods, yet wages have been stagnant, if not down for most people. Most of the gains have accrued to the wealthiest in the country. I think this is going to reverse over the next 10 years.

T.

[alan smithee (kerry)]

dunno, still think there is a huge gap between us wages and foreign wages.

the smart money is moreso herdlike consensus investing. right now people are investing in india and china and outsourcing there

[dacian]

"Don't overestimate smart money. It is either not that smart or there is not that much of it."

Ok, what I want to say is you have people trying to think about big picture and the trends supporting those in the middle to long term; those people are not afraid to buy classes of assets that will benefit because of those trends; now anything is possible, but when I see today full of blogs and financial advise web sites (maybe it's just me but I see an explosion of these blogs out there) all trying to be contrarians: if we double dip, it's that we won't; if there is a natural disaste in the gulf, is that it must be wrong: there is no problem hence I buy BP because I'm smart and all suckers are selling; every single blog out there is looking at AAII and CPCE data and try to play the opposite (they are contrarians, right?); other draw Fibbonnaci's and trend lines and elliot waves; it's like the market moves because of a trend line or a Fibonnaci has been reached. The problem with these blogs is that there thinking stops there: at the Fibonnaci lever. What I read here is much more and it's not because a line has been breached that I will sell everything.

Ok, I'm not saying that the big picture is always correct, anything can happen, but it supports one's positions with much more solid arguments than a Fibonnaci level.

[psychodave]

@dacian
Rock, Scissors, Paper

... the conundrum has been with all of us for more than a few days.

Perhaps it is to Toro's credit that, unlike all the sources you mention, all he'll say is:
"I have not figured out how to exploit the coming trend"

... naw, couldn't be(grin).

[dacian]

Hey Dave

"I have not figured out how to exploit the coming trend"

I'm not happy with that one :). Well, you get a nice analysis here with strong arguments for what might come in the LT. Few are noticing these developments (at least this is my perception). Now if one could figure out how to position for that! You might have a few ideas one day... shoot'em...