VNQI

Commodities continued to rise last week, posting a second weekly gain.Last week also witnessed relatively strong gains in emerging markets stocks and foreign property shares.The deepest loss last week among the major asset classes: US junk bonds.

"Japanification" is the process of other countries' economies becoming like that of Japan: flatlined, with little to no growth or inflation and interest rates stuck at zero indefinitely. Because of the Monetary Death Spiral process that I've described elsewhere, many countries around the world are undergoing the process of Japanification. With interest rates now stuck at zero for the long haul and the Fed focused on employment above all else, the US has now completed the process. I go through nine economic metrics to show how the United States is walking down the path of Japan.

International Real Estate offers both geographic and currency diversification. Owning a claim on physical assets outside your home country is a good way to sleep better at night.VNQI offers exposure to over 600 REITs in over 50 countries at an expense ratio of 0.12%.As a bonus, VNQI is cheap: the P/B ratio is less than half that of comparable US funds.

On another choppy week, U.S. equity markets finished mostly lower despite a solid slate of economic data and assurances from the Federal Reserve that it would keep interest rates near-zero indefinitely.Declining for the third-straight week following a six-week winning streak, the S&P 500 dipped another 1.0% this week and is now roughly 7% below its recent all-time highs.An encouraging slate of dividend news and rent collection updates buoyed real estate equities this week, particularly the more beaten-down property sectors, including malls, hotels, student housing, and mortgage REITs.After the Equity REIT sector was slammed by a wave of 64 dividend cuts in March through June, since then, we've seen far more dividend increases than dividend cuts in the REIT sector, including five more boosts from equity REITs and three from mortgage REITs this week.Housing Heats-Up: Homebuilder Sentiment jumped to the strongest levels on record in September, driven by a surge in Home Buyer Traffic, which far exceeded previous record levels as inventory levels remain historically tight.

Ample economic research has shown that excessive debt, above a certain threshold of GDP, begins to drag down economic growth. US national debt is now well above that threshold. But ballooning debt, in itself, is not the fundamental issue. It is the result of the core problem. In the coming decades, the US economy will be asked to do the impossible: grow faster even while the government extracts more of its resources. There are no easy solutions. There are only painful trade-offs.

The "tech-wreck" dragged on as U.S. equity markets declined for the second-straight week after Congress failed to reach a compromise on a renewed stimulus package and after a potential vaccine setback.The seemingly unstoppable rally from the "stay-at-home winners" has come to a screeching halt over the last two weeks. The Nasdaq 100 dipped into "correction territory" with declines of nearly 5%.It was an especially choppy week in the real estate sector as the relatively mundane 2.2% decline from the broad-based Equity REIT ETF masked a sharp dip from retail REITs.It shaped up to be a very busy week of REIT-related news flow, headlined by a flurry of rent collection updates, several dividend increases, and some notable M&A news in the mall and self-storage REIT sectors.Homebuilders were a bright spot this week as housing data continues to impress. Mortgage applications to purchase a single-family home are now higher by a stunning 40% from last year.

The US trading week begins with a fresh dose of red ink hanging over the major asset classes from last week's sell-off.With the exception of foreign corporate bonds and investment-grade fixed-income in the US, all flavors of global markets lost ground last week (through September 4), based on a set of proxy ETFs.The deepest setback has been witnessed by US equities, with the Vanguard Total Stock Market ETF down 2.4%.

With the exception of investment-grade bonds in the US, risk-on sentiment lifted every corner of the major asset classes.Stocks in emerging markets and an equal-weighted measure of a broad set of commodities posted the second- and third-strongest gains, respectively, last week.Last week's biggest (and only) loser among the major asset classes: investment-grade bonds in the US.