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To: russwinter who wrote (5208)	1/16/2004 9:52:39 AM
From: mishedlo	Respond to of 110194

Industrial Production federalreserve.gov Industrial production rose 0.1 percent in December after an upwardly revised increase of 1.0 percent in November; for the fourth quarter as a whole, production advanced at an annual rate of 6.2 percent. At 113.2 percent of its 1997 average, output was 2.3 percent above its December 2002 level. Manufacturing output rose 0.3 percent in December. Mining output was unchanged, and output at utilities fell 1.4 percent. The rate of capacity utilization for total industry was unchanged in December at 75.8 percent. Market Groups The output of consumer goods fell 0.2 percent in December. The production of consumer durables rose 0.2 percent despite declines in home electronics and in appliances, furniture, and carpeting. The output indexes for automotive products and for miscellaneous goods each rose 0.4 percent. The production of consumer nondurables fell 0.3 percent. The decline in the nondurables index was driven by a drop of 1.6 percent in the index for clothing; the indexes for energy products and for foods and tobacco fell by smaller amounts. The output of chemical products rose 0.5 percent. Business equipment production edged down 0.1 percent in December. The output of information processing equipment dropped 0.8 percent but showed a gain at an annual rate of 14.7 percent in the fourth quarter; it ended the year up 7.7 percent from its December 2002 level. Output in transit equipment and in the industrial and other category posted small gains in December. The output of defense and space equipment edged up 0.1 percent in December to a level 3.9 percent higher than that of a year earlier. The index for construction supplies in December was unchanged, and business supplies showed a drop of 0.3 percent. The production of industrial materials rose 0.4 percent in December. The output of durable materials advanced 1.1 percent, and that of nondurable materials edged up 0.2 percent. The output of energy materials dropped 0.4 percent. Industry Groups Manufacturing output rose 0.3 percent in December; the factory operating rate edged up 0.1 percentage point to 74.5 percent. At year end, manufacturing utilization remained 5.7 percentage points below its 1972-2002 average. Production increased at an annual rate of 6.6 percent in the fourth quarter, and December's output ended up 2.9 percent above its level in December 2002. The production of durable goods rose 0.6 percent in December. The largest gain among its subsectors was for primary metals, in which output increased 2.0 percent. The index for computer and electronic products rose at an annual rate of 24.8 percent for the fourth quarter as a whole and increased 0.5 percent in December 2003. Among the high-technology industries, computers and office equipment moved up 2.6 percent, and semiconductors and related electronic components rose 3.6 percent, while communications equipment fell 2.2 percent. Production of electrical equipment, appliances, and components rose 0.8 percent in December. Production of motor vehicles and parts rose 0.6 percent, and the index for aerospace and miscellaneous transportation equipment moved up 0.9 percent. The production of wood products, nonmetallic mineral products, fabricated metal products, and machinery also posted gains. The index for furniture and related products edged down 0.1 percent. The output of nondurable goods was unchanged. The output of petroleum and coal products and chemicals posted gains, while output indexes for textile and product mills and for apparel and leather each moved down 1.3 percent; other categories showed smaller drops. Production at mines was unchanged in December; the utilization rate remained constant at 85.9 percent, 1 percentage point below its 1972-2002 average. The output at utilities fell 1.4 percent in December; the operating rate fell 1.4 percentage points, to 82.6 percent, a rate that is 4.4 percentage points below its 1972-2002 average. By stage of processing, capacity utilization for industries in the crude stage rose 0.1 percentage point, to 84.6 percent. Utilization for industries in the primary and semifinished stage was flat at 77.9 percent, while utilization for industries in the finished stage edged down 0.1 percentage point, to 71.8 percent. Revision of Industrial Production and Capacity Utilization On November 10, the Federal Reserve Board issued a revision to the index of industrial production (IP), the related measures of capacity and capacity utilization, and the data on industrial use of electric power. The updated measures reflect the incorporation of newly available, more comprehensive source data typical of annual revisions. The updating of source data for IP in the 2003 annual revision included annual data from the Census Bureau's 2000 and 2001 Annual Survey of Manufactures and from selected editions of its 2001 and 2002 Current Industrial Reports. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2001 and 2002 were also introduced. The updating included revisions to the monthly indicator for each industry (either physical product data, production-worker hours, or electric power usage) and revisions to seasonal factors. Capacity and capacity utilization were revised to incorporate preliminary data from the Census Bureau's 2002 Survey of Plant Capacity, which covers manufacturing, along with other new data on capacity from the U.S. Geological Survey, the Department of Energy, and other organizations. The statistics on the industrial use of electric power incorporate additional information received from utilities for the past few years and include some data from the 2001 Annual Survey of Manufactures. The revision release and revised data are available on the Board's web site, at www.federalreserve.gov/releases/G17. The revised data are also available through the web site of the U.S. Department of Commerce. Further information on these revisions is available from the Board's Industrial Output Section (telephone 202-452-3197).

To: russwinter who wrote (5208)	1/16/2004 9:55:00 AM
From: mishedlo	Read Replies (1) \| Respond to of 110194

Russ do not be correct on 15 items and dismiss the one big item. Here it is. money.cnn.com mish

To: russwinter who wrote (5208)	1/16/2004 10:32:25 AM
From: mishedlo	Respond to of 110194

Global Healing - Morgan Stanley - Roach (Russ - look at the last question in bold) ggg morganstanley.com there's something critically important that's still missing from the macro equation — the job- and income-generating dynamic that normally converts public sector stimulus into private sector dynamism. Courtesy of the “global labor arbitrage,” I continue to fear that recoveries in the high-wage developed world will be seriously impeded by leakages of jobs and income growth into the low-wage developing world (see my January 12 essay, False Recovery). If I'm right, that means the impacts of policy traction could be fleeting, as recoveries quickly fade once the stimulus is spent. That stems from another important difference between today's climate and that of five years ago: IT-enabled “offshoring” was not a force to be reckoned with back then. And that, I'm afraid, brings us full circle to the imbalances of a post-bubble world. Aggressive policy stimulus is certainly appropriate in order to avoid the treacherous Japanese-like endgame of deflation. But for saving-short and wealth-dependent economies such as the United States, that raises the risk of ever-mounting structural imbalances that will weigh increasingly on the nation's growth potential. Indeed, lacking in internally generated gains in wage income, America's growth dynamic should continue to be biased toward ever-rising indebtedness, mounting fiscal deficits, and deepening current-account deficits. Short-lived policy traction for deflation-prone economies creates a “macro addiction” to more stimulus as soon the medicine starts to wear off. That, unfortunately, is a breeding ground for the seemingly unending string of asset bubbles that has followed the bursting of America's equity bubble in early 2000 — bubbles in property, refis, bonds, credit instruments, and now tech stocks (again). Meanwhile, the Authorities seem unwilling or unable to stop this trend, creating the ultimate moral hazard dilemma. The global healing of 1999 was the right call at the right time. This is not that time. Constrained by serious imbalances, post-bubble aftershocks, and lingering deflationary perils, the case for a synchronized and sustained revival in the global economy is much more of a stretch today than it was five years ago. Forget about global healing — there's a far more important question: Is this any way to run the world economy? ===================================================================== Mish

To: russwinter who wrote (5208)	1/16/2004 10:37:12 AM
From: mishedlo	Respond to of 110194

mises.org Canceling federal agency-held bonds, then, reduces the federal debt by 40 percent. I would advocate going on to repudiate the entire debt outright, and let the chips fall where they may. The glorious result would be an immediate drop of $200 billion in federal expenditures, with at least the fighting chance of an equivalent cut in taxes. But if this scheme is considered too Draconian, why not treat the federal government as any private bankrupt is treated (forgetting about Chapter 11)? The government is an organization, so why not liquidate the assets of that organization and pay the creditors (the government bondholders) a pro-rata share of those assets? This solution would cost the taxpayer nothing, and, once again, relieve him of $200 billion in annual interest payments. The United States government should be forced to disgorge its assets, sell them at auction, and then pay off the creditors accordingly. What government assets? There are a great deal of assets, from TVA to the national lands to various structures such as the Post Office. The massive CIA headquarters at Langley, Virginia, should raise a pretty penny for enough condominium housing for the entire work force inside the Beltway. Perhaps we could eject the United Nations from the United States, reclaim the land and buildings, and sell them for luxury housing for the East Side gliterati. Another serendipity out of this process would be a massive privatization of the socialized land of the Western United States and of the rest of America as well. This combination of repudiation and privatization would go a long way to reducing the tax burden, establishing fiscal soundness, and desocializing the United States. In order to go this route, however, we first have to rid ourselves of the fallacious mindset that conflates public and private, and that treats government debt as if it were a productive contract between two legitimate property owners.