Baby Steps.

I'm trying to take baby steps here. Right now, I'm seeing the gold miners get clobbered, while gold has retreated to $985. NG is down 15% and reports earnings later today. They're down 40% from their recent highs. I'm really tempted to put 5% in at $2.50.

Another development is the recent strength of the dollar against the Yen. This could become a new trend as the market realizes that Japan's economy is completely dependent on our consumer. With consumer confidence hitting a new low of 25, (yes, 25) this could have a long way to run. I could short the Yen here. The dollar strength is very good for my Treasuries, though, and I already have a 100% position here. The volatility in Treasuries is making me nervous, as well as the hidden supply that keeps coming from selloffs in foreign reserves such as Russia and S. Korea. On the other hand, all the money the Fed loans to banks goes right into Treasuries and back to the Fed.

According to this blog, Chinese commercial real estate is now imploding. In Shanghai, they built the entire island of Manhattan's worth of 20%+ empty skyscrapers. This is a fourteen year supply (at peak demand rate of 2007). And we know what real estate collapses do to bank balance sheets.