Auto Sales and Housing Numbers

These two numbers that came out earlier today were again terrible numbers reminding us of how bad the real underlying economy is. Cash for clunkers and new homebuyers tax refund have done a little bit to hide how bad the real economy was. Well, not really, but part of it. A lot of the housing data is also filled with foreclosures and people flipping these foreclosed homes, so there is still a bit of double counting. You can imagine the real number is much worse, which only makes sense considering how real estate is so much more affordable and both relatively and nominally cheap elsewhere in the world. When you look at a place like New York City you easily realize longer term there is only one place to go for a lot of overvalued US based real estate: DOWN. That in turn will take down the US stock market bubble along with its international counterparts. Some obviously will go down less than others, so it makes to make pairs trades. For the longer term that trade is long international and emerging markets as well as Africa and shorting the US markets along with its Japanese counterparts.