A significant development...

reported by Bloomberg. It seems that foreigners unloaded US securities in August to the tune of a record $69 billion.

The Treasury's reporting on long-term securities captures international purchases of U.S. government notes and bonds, stocks, corporate
debt and securities issued by U.S. agencies such as Fannie Mae and Freddie Mac, which buy mortgages.
Including short-term securities such as Treasury bills, foreigners sold a net $163 billion, compared with a gain in the previous month.

Could this be a preview of more to come? As foreign currencies suffer rapid inflation, they will step up their hoarding of hard assets. This has already created a vicious cycle.

In other news, homebuilders are still suffering terribly. Satyajit Das was precient when he stated a few weeks ago that the markets first overreact, and then underreact to bad news. The credit crunch is back, housing market news gets worse when it appears that it's as bad as it can possibly be, and corporate earnings are hit and miss. Because of the ABCP logjam, I see another rate cut at the end of this week. The dollar will slip further. Gold will go to $800 by the end of the month.