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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (1512)	3/8/2004 2:15:38 PM
From: mishedlo	Respond to of 116555

Inflation- Alive and Well house.gov <snip> “The Federal Reserve always promises that it's working to bring down inflation, but as Murray N. Rothbard shows in The Case Against the Fed, it never does. Since the Fed came into being, the dollar's value has plummeted to less than a penny, and even at a 3% inflation rate, prices will tend to double every 25 years… The Fed wants to cover its crimes by appearing more successful at 'battling inflation.' What the Fed doesn't want to talk about is the real cause of inflation: not greedy consumers, avaricious workers, or price-gouging corporations, but the central bank itself, and its power and practice of creating money out of thin air.” The Treasury department parrots the Fed line that consumer prices, as measured by the consumer price index (CPI), are under control. But even some Keynesian economists admit that CPI grossly understates true inflation. The most glaring problem is that CPI excludes housing prices, instead tracking rents. The Fed's easy credit policies have created an artificial mortgage boom, enabling many Americans who would not have met credit standards 30 years ago to buy houses. So demand for rentals has diminished, causing rental housing prices to drop and distorting the CPI downward. However, everyone knows the cost of purchasing a home has increased dramatically in the last ten years. Home prices in many regions have more than doubled in just five years. So price inflation certainly is alive and well when to comes to the largest purchase most Americans make. ============================================================ If Ron Paul was president we would not be in this mess. At least not this big. Mish

To: Crimson Ghost who wrote (1512)	3/8/2004 2:18:20 PM
From: mishedlo	Respond to of 116555

I would be very cautious on Junk here. Perhaps junk is leading the market down. Please give us your JBR report tonight. Thanks Mish

To: Crimson Ghost who wrote (1512)	3/8/2004 2:31:59 PM
From: mishedlo	Respond to of 116555

Global Recovery Strong and Lasting-G10 The world economic recovery is strong and risks that it could be derailed are fading, top central bankers said on Monday. Central bankers from the Group of 10 leading industrial nations and their counterparts from top emerging economies were optimistic the downturn which followed a prolonged stock market slump was over, despite a weak U.S. jobs report last week. "The sense of the meeting today was that the sustainability of the recovery at the global level was certainly not to be put in question," said European Central Bank President Jean-Claude Trichet, who is spokesman for the G10 central bankers. [WTF? - Mish] "We have a strong recovery," he told a news conference in comments that reinforced upbeat messages from other international agencies. His remarks at the central bankers' meeting in the Swiss city of Basel helped to allay fears the weak U.S. labor market was a sign that America's recovery is more fragile than thought. [Is this guy a dimwit? - Mish] Last week the International Monetary Fund (news - web sites) said there were potential "upside surprises" in the global economy. The Organization for Economic Cooperation and Development was also optimistic. [Good god - they are all in the act - Where's BB's leading econimic indicators? I think the BS reading is headed off the scale here] Asian central bankers were likewise upbeat. Arriving for the meeting, Bank of Japan Governor Toshihiko Fukui said his country's economy was improving moderately, despite the continued risk of deflation. China expects its economy to grow in the seven to eight percent range this year, said Li Ruogu, the deputy governor of China's central bank. RISKY Trichet warned, however, that global investors are taking on a lot of risk and that the central bank leaders would be watching developments closely. "We consider that it is true that the risk appetite of global investors is at a level that is significant in historical terms," he said. "We have to observe this evolution and to be vigilant, but we are not alarmed." Trichet's comments echo those on Sunday by the Bank for International Settlements (BIS), a forum for the world's central banks and host of the G10 meeting. It warned that investors were extending themselves in a search for high returns more than economic fundamentals might merit and this had driven a global equity rally in 2004. [One snip of reality - mish] Share prices have outpaced company earnings improvements for about a year, pushing some valuations beyond historical averages, said the BIS, whose views are seen as reflecting a consensus among monetary authorities. Policymakers are pondering what role central banks should play as markets rise, either through bursting bubbles, deflating them gently, or standing by. International fund managers have begun to voice concern that cheap money in Japan, Europe and the United States has fueled a rush into riskier assets that could unwind dangerously when interest rates in the top industrial countries start rising. NO ALARM Trichet said the governors viewed commodity prices without alarm or fear that they signaled inflationary pressure. "It is certainly a reflection of the quite robust episode that we are experiencing at the level of the global economy," he said. "We think that the overall picture calls for not being overall very alarmed but being very vigilant (about commodity prices)." Oil prices held near post-Iraq (news - web sites) war highs on Monday as low U.S. gasoline stocks and unrest in OPEC (news - web sites) member Venezuela heightened fears over supplies for the summer, when Americans push up demand by taking to their cars for long journeys. In London Brent crude traded at around $33.30 a barrel, within 30 cents of Friday's new 12-month peak, which was the highest level since just before last year's U.S.-led invasion of Iraq. Currency movements -- one of the hottest friction points among central bank governors -- were not discussed at the meeting, said Trichet. He had used the last G10 forum in January to warn against excessive volatility and "brutal" moves in comments that helped to strengthen the dollar. The dollar was trading at $1.2354 to the euro at 1405 GMT. ========================================================= You know what? I just figured Trichet out. He is desperately trying to talk UP the US$. Mish story.news.yahoo.com

To: Crimson Ghost who wrote (1512)	3/8/2004 2:40:35 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Thoughts from Todo It's hard to fight a war without your generals and that's exactly what the Nazz is attempting to do. Intel (INTC:NASD), Microsoft (MSFT:NASD), Dell (DELL:NASD) and Oracle (ORCL:NASD) are all trading below their 200-day moving average. It's been a mighty long time since we've said that, my friends, so respect it. Aside from the obvious leadership issues, the fearsome foursome accounts for almost 20% of the entire NDX. With the archers injured and the front lines fleeting, the remaining troops are desperately trying to hold the fort (NDX 1450).