Emerging Market ETFs Soar Amidst Gloomy News

A record decline in the price of crude oil helped
to push the U.S. trade deficit down to the lowest level in nearly a year even
though the deficit with China shot up to an all-time high. The Commerce Department reported Thursday that the
trade deficit fell by 4.4% to $56.5 billion in September, the smallest
imbalance since October 2007.

Why? A 15.7% fall in petroleum imports as the
average price for imported crude oil dropped by a record $12.41 per barrel and
the volume of shipments fell to the lowest level in more than five years. This
helped lead to a reduction in overall imports by 5.6% to $211.9 billion.

Demand for imported goods fell by a record amount,
reflecting the sharp slowdown in the U.S. economy but imports from China shot
up in September, led by huge gains in shipments of televisions, toys and games
as retailers stocked up for the holidays. This plus plummeting U.S. exports to
China resulted in a record trade gap between the two nations of $27.8 billion –
almost half our overall trade gap. China is the new Japan problem! 

Jobless claims also shot up last week and Treasury reported that the budget deficit soared to $237 billion putting us on track for a $1 trillion deficit for the year.

 One of the hardest-hit sectors in
2008 has been the shipping industry. The most popular measure of this is
the Baltic Dry Index. This index, which
measures the cost of shipping raw materials around the world, hit 11793 in May,
and has lost 93%. Shares of shipping companies have been beaten down as a
result, with most major shippers down by more than 60% on the year.

Japan will lend the International
Monetary Fund up to $100bn in temporary funds to help emerging economies
weather the global financial crisis, Taro Aso, prime minister, will tell the
G20 summit in Washington this weekend.