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Does Cathay Pacific cutback prove Jim Rogers’ grim thesis? (CPCAY, BA, FDX)

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Cathay Pacific ( CPCAY , quote ) is reducing its plans for expansion due to declines in traffic, adding credibility to the prediction of uber investor Jim Rogers that there is a "100%" of another financial crisis, that will be more severe than in 2008.

For this reason, Jim Rogers is short both American and European stocks; and long commodties and currencies, such as the U.S. dollar and the euro.

Cathay Pacific operates from the world's largest cargo hub in Hong Kong. Like Fed EX ( FDX , quote ) and UPS ( UPS , quote ), a double digit decline in traffic since the summer has impacted operations for Cathay Pacific.

According to an article in The Wall Street Journal by Doug Cameron, Joanne Chu and Bob Sechler, "Cathay Scales Back Cargo Ambitions," the airlines is also deferring "the arrival of two new Boeing Co. aircraft, in the latest sign that the slowdown in air freight is more pronounced than many expected."

Fed Ex (FDX) is also delaying delivery of new 777s from Boeing ( BA , quote ), according to The Wall Street Journal piece.

The trajectory of the exchange-traded fund ( FAA , quote ) for the airlines industry certainly adds weight to Jim Rogers' predictions of grim economic times ahead, as detailed in articles on www.emergingmoney.com .

Now around $27.85, the Claymore/NYSE Arca Airline exchange traded fund (FAA) is well below its year high of $41.59. At around $8.30, Cathay Pacific (CPCAY) is much closer to its low for the year of $7.54 than its high of $14.95.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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