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As The World Slows

If you’re betting on the worldwide building boom to keep the global economy going, you might want to pull a few chips off the table.

There’s a growing list of infrastructure projects around the world that are being scrapped or at least put off . They range from a bullet train between Kuala Lumpur and Singapore to an aluminum smelter in Abu Dhabi.

In fact, “Morgan Stanley recently estimated that 8%, or $60 billion, of the $750 billion of infrastructure projects slated for 2008 are being delayed or canceled. That is four times historical cancellation rates of 2% a year,” according to the Wall Street Journal.

"It would be a mistake to think the infrastructure story will continue unabated without a cycle", says capital goods analyst Matt Collins of Edward Jones in St. Louis.

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"We would avoid most industrial stocks here," Morgan analysts echoed in their note. Their medium to higher risk names include Caterpillar , Emerson , Honeywell , and United Tech "Industrial companies may be quite surprised at how fast existing backlogs can erode," the analysts said.

I think reports of the slowdown are misguided, counters Zach Karabell on Fast Money. I think the bull story is still in tact.

There will always be pullbacks in every bull trend, says Joe Terranova in full agreement with Karabell.



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Trader disclosure: On Aug 29, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders;Karabell Owns (AAPL), (BHP), (CHL), (GLD), (GOOG), (JPM), (NOK), (SLB); Najarian Owns (LEH) Puts Spread; Najarian Owns (RIMM) Call Spread; Najarian Owns (WFC) Call Spread
Najarian Owns (MS) And Is Short (MS) Call; Najarian Owns (NOK) And Is Short (NOK) Call; Finerman Owns (GS); Finerman's Firm Owns (MSFT), (NOK), (SUN), (TSO), (VLO); Finerman's Firm And Finerman Own (C) Leaps; Finerman's Firm And Finerman Own (GLNG); Finerman's Firm Is Short (IYR), (IWM), (MDY), (SPY), (IJR), (BBT), (COF); Terranova Owns (NOV), (KOL), (X), (GS), (SA), (VLO), (RIMM), (AAPL), (EOG); Terranova Owns (POT); Terranova Owns (FCX)
Terranova Owns (AIG) Puts; Terranova Is Long Dec. 2008 Reformulated Gasoline Crack Futures

Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BRE), (CNTY), (CLB), (OFC), (DLR), (ESS), (EXR), (FL), (IAT), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (SKT), (BLV)

Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO; Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)