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

To: Wyätt Gwyön who wrote (1572)	3/9/2004 11:23:44 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

G-7 Communique Suggests G-7 Not Yet Concerned About Dollar's Decline But statement contains basis for cooperation if decline becomes disorderly Written by Tony Crescenzi , CEO BondTalk.com The G-7 statement appears to indicate that the G-7 does not object much to the recent behavior of the foreign exchange market, but that the G-7 has forged an agreement to cooperate, perhaps via coordinated intervention, in the event that the dollar's decline becomes rapid and disorderly. The G-7 statement also takes another swipe at the foreign exchange policies of both Japan and China, but there is no evidence apparent in either the statement or in the public remarks from these two countries that the G-7’s majority opinion will be acted upon. The chatter amongst the G-7 attendees appears to be at odds with the G-7 communique in that the chatter implies substantially more progress about combatting the recent dollar decline that the communique lets on. This seems to suggest that the G-7 attendees believe that the statement provides the language necessary to bind the G-7 nations to a coordinated intervention effort if the dollar's decline were to become rapid and disorderly. The emphasis here is on "if," as the G-7 statement gives no indication whatsoever of any objection to the recent behavior of the dollar. The subtle changes in the G-7’s latest statement are readily apparent when comparing the communiqué from the G-7’s last meeting in September in Dubai to the communiqué released this past weekend following a meeting in Florida. The September 2003 statement on foreign exchange: "We reaffirm that exchange rates should reflect economic fundamentals. We continue to monitor exchange markets closely and cooperate as appropriate. In this context, we emphasize that more flexibility in exchange rates is desirable for major countries or economic areas to promote smooth and widespread adjustments in the international financial system, based on market mechanisms" [What a crock - Based on fundamentals the US$ should be sinking like a rock.] Latest statement: “We reaffirm that exchange rates should reflect economic fundamentals. Excess volatility and disorderly movements in exchange rates are undesirable for economic growth. We continue to monitor exchange markets closely and cooperate as appropriate. In this context, we emphasize that more flexibility in exchange rates is desirable for major countries or economic areas that lack such flexibility to promote smooth and widespread adjustments in the international financial system, based on market mechanisms.” New in the latest statement was the inclusion of the statement regarding "excess volatility and disorderly movements" and on the desire to see more exchange rate flexibility in "economic areas that lack such flexibility." The former appears to reflect an agreement to act against a rapid and disorderly decline in the dollar, but it contains no evidence of an objection to recent movements in the dollar. The reference to “excess volatility and disorderly movements” appears to be the sentence that the G-7 attendees are referring to quite satisfactorily in their on- and off-the-record comments since the conclusion of the meeting. Many of the attendees have said that the latest statement improves upon the Dubai statement, ostensibly because they may have forged an agreement to act if necessary and that the statement now contains the language necessary to bind the G-7 nations to such an action should it become necessary. [If the assholes did not keep intervening there would be less volatility - Mish] Finger-Pointing At Japan and China With respect to Japan and China, the G-7’s latest swipe is only slightly more direct than the one dealt in September. Whereas the September statement emphasized that more flexibility was desirable among major countries, the latest statement is slightly more direct in that it emphasizes that the flexibility is desirable in countries that lack it (Japan and China). The new statement will do little to stop the intervention efforts of the Bank of Japan, which has already said as much. This means that Japan will continue to accumulate dollars, putting its intervention-related dollars into U.S. Treasuries. [Japan will do what Japan feels is best for Japan. Right wrong or indifferent. They are bitching about Japan stabilizing the US$ but threaten to intervene themselves on a plunge - WTF is that? Blatant hypocricy? - Mish] Given the lack of a strongly worded threat against current levels of speculation against the dollar, the dollar’s downward trend is likely to continue. A reversal of the trend is not likely unless there are policy changes at the world’s central banks. Policy changes that would impact the dollar might include: a rate hike from the Federal Reserve; a rate cut from the European Central Bank; or an easing up of the fixed-rate foreign exchange regime in China. [Agreed - everyone wants the US to support the $ when the US wants it lower - what a crock - Mish] The dollar’s decline is a double-edged sword but the impact has been positive thus far in that it has helped to boost profits of U.S. multinational companies and has boosted exports. But a rapid and disorderly decline could have more dire consequences given the size of the U.S. budget and trade deficits. The G-7 recognizes this and that is why the cast a safety net against such a decline by showing their objections to “excess volatility and disorderly movements.” [Japan intervening has prevented a rapidly falling US$ - Do they or do they not want Japan to intervene and do they or do they not want the US$ to trade on fundamentals? - another crock of horseshit - mish] bondtalk.com

To: Wyätt Gwyön who wrote (1572)	3/9/2004 12:30:46 PM
From: mishedlo	Respond to of 116555

Argentina was racing towards defaulting on a $3.1bn payment to the International Monetary Fund on Tuesday, although the government said last-minute efforts to broker an end to the crisis were continuing. "We are still negotiating," Cabinet Chief Alberto Fernandez told daily La Nacion's Tuesday edition. "The talks are tough." Defaulting on the loan, due on Tuesday at 2200 GMT (1700 New York time), would complete Argentina's financial isolation from the world, placing it in a small club whose members include Liberia, Sudan and Somalia.... news.ft.com

To: Wyätt Gwyön who wrote (1572)	3/9/2004 12:41:14 PM
From: mishedlo	Respond to of 116555

Mish post to Brian Reynolds on the Argentina situation ============================================================= Brian what would happen to the treasury and Eurodollar/euribor prices if Argentina would default? I would assume a negative reaction in financial equities and possibly the entire market. Can you do a post on all the ramifications looking ahead for this time and what happens if and when they default. Thanks Much Mike Shedlock

To: Wyätt Gwyön who wrote (1572)	3/9/2004 12:49:19 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Ro on the PPI too funny - Look CLOSELY ========================== No January PPI, no February PPI. Could it be the delay by Bureau of Labor Statistics is having a hayday/stretch/mind-boggle in changing its data from the Standard Industrial Classification metric to the new North American Industrial Classification system? The North American Industry Classification System replaced the U.S. Standard Industrial Classification in 1997. So we must be patient, this is only 2004. stthomas.edu Ro

To: Wyätt Gwyön who wrote (1572)	3/9/2004 12:51:38 PM
From: mishedlo	Respond to of 116555

The new head of the Royal Dutch/Shell Group and its current chief financial officer, as well as the chairman ousted last week, were advised of huge shortfalls in proven oil and natural gas reserves in 2002, two years before they were publicly disclosed.. This is material information that should have been disclosed immediately, under accounting rules. Shell may well be subject to an SEC inquiry, if not a criminal investigation. Yet another example of a European company not understanding U.S. financial reporting rules. A similar story (interesting read) is this: Spiegel's European Owner Gets A Hard Lesson in U.S. Business online.wsj.com

To: Wyätt Gwyön who wrote (1572)	3/9/2004 12:55:41 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Snow on FNM WASHINGTON, March 9 (Reuters) - U.S. Treasury Secretary John Snow on Tuesday took direct aim at mortgage finance giants Fannie Mae (FNM) and Freddie Mac (FRE), repeating previous warnings to investors that government-sponsored enterprises are not financially backed by the U.S. government. "We don't believe in a 'too big to fail' doctrine, but the reality is that the market treats the paper as if the government is backing it. We strongly resist that notion," he said in prepared remarks before a bankers group here. "You know there is that perception. And it's not a healthy perception and we need to disabuse people of that perception. Investments in Fannie and Freddie are uninsured investments," he said. Because the companies were originally chartered by Congress and have access to multibillion-dollar emergency lines of credit, some investors treat their securities as almost equivalent to riskless U.S. Treasury debt. Legislation pending in Congress would overhaul how the companies, as well as the Federal Home Loan Bank system, are regulated. Snow repeated the administration's stand that a "strong, credible and well-resourced" regulator is needed, with the power to set minimum and risk-based capital levels. "GSE reform is pending before the Congress right now ... it's a critical time, legislatively, for details," Snow said. ======================================================= Just how big a warning is this? Mish money.iwon.com

To: Wyätt Gwyön who wrote (1572)	3/9/2004 12:59:12 PM
From: mishedlo	Respond to of 116555

Heinz on treasuries and the markets Date: Tue Mar 09 2004 12:03 trotsky (bond market) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved short squeeze remains on...convexity buying by the GSEs probably begins here, and fund managers who collectively missed the boat are beginning to rush in. if pressure on the stock market persists, the buying will likely intensify by another notch. and in case of an emerging markets dislocation ( which is highly likely in view of the absolutely crazy exposure of banks and hedge funds in convergence trades ) the fun will really start. Date: Tue Mar 09 2004 10:40 trotsky (permabull Hugh Johnson) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved asserts that we're in the 'second year of the bull market' ( a sentiment which is incidentally typically found near the top of a bear market B wave ) , but concedes that economists and market strategists economic performance and profit forecasts may be a 'tad too optimistic'. you can say that again...they're not just a 'tad' too optimistic, they're probably as wildly off the mark as they could possibly be. i'm looking forward to Huge Johnson's excuses as to why it didn't work out a year from now. he urges people to sell their bonds, trash their cash, and shove it all into equities...a recipe for disaster imo...note that mutual fund cash-to-asset ratios are at an all time low, iow, unless the sheeple fork over more of their dough, they have little ramp ammunition left.

To: Wyätt Gwyön who wrote (1572)	3/9/2004 1:35:13 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

UPDATE - Strike in Trinidad halts Atlantic LNG exports Tuesday March 9, 11:57 am ET PORT OF SPAIN, Trinidad, March 9 (Reuters) - Exports from Trinidad's Atlantic LNG liquefied natural gas (LNG) project, the top supplier of LNG to the United States, have been shut down due to a labor strike by workers from two contracting companies, an Atlantic spokesperson said on Tuesday. "We are unable to supply gas, according to our contracts. This has tremendous implications for Atlantic's reputation and by extension, the reputation of Trinidad and Tobago as a reliable gas supplier," said Esther Le Gendre, Atlantic's manager of government and public affairs. Four LNG tankers remained out at sea on Tuesday as tug-boat operators on Monday joined construction workers in protest action demanding increased wages. With tankers unable to load, storage tanks have filled to capacity. "There are ships are out there, waiting for the end to this impasse. Our customers have...other customers in the U.S., in Europe, in Puerto Rico and we are unable to supply," Le Gendre said. The construction and tug-boat workers are not employees of Atlantic LNG, but were employed by two contractors hired by the LNG company, she said. Trinidad's government loses $2 million in tax revenues every day when Atlantic is unable to process natural gas.

To: Wyätt Gwyön who wrote (1572)	3/9/2004 1:50:43 PM
From: mishedlo	Respond to of 116555

Australia ANZ Feb newspaper job ads up 6.4 pct from Jan fxstreet.com

To: Wyätt Gwyön who wrote (1572)	3/9/2004 1:55:09 PM
From: mishedlo	Respond to of 116555

Japan estimated to have spent 3 trln yen since late Feb to weaken yen TOKYO (AFX-ASIA) - The Japanese government has spent an estimated 3 trln yen since late February on currency market intervention in a bid to weaken the yen against the dollar, the Nihon Keizai Shimbun reported, citing unidentified market sources. Last Friday the Ministry of Finance reported that Japan spent 3.34 trln yen buying dollars over the month to Feb 25, after spending 7.5 trln yen in January. That means Japan has spent 10.8 trln yen intervening in just the first two months of 2004, putting it on course to top the 20.06 trln yen spent intervening in 2003, which itself shattered the previous annual record of 7.64 trln yen set in 1999. "Many market analysts speculate that Japanese currency authorities are trying to weaken the yen to about 115 yen, the level it reached in September just before it began surging," the leading Japanese financial daily said. The 115-yen level is the average breakeven rate for export-oriented manufacturers, the Nikkei said. It also said some believe the interventions are aimed at stabilizing stock prices ahead of the March 31 end of the current financial year. Yet echoing a warning voiced last week by US Federal Reserve Chairman Alan Greenspan, the Nikkei said if Japan keeps aggressively intervening even as its economy recovers and domestic stock prices rise sharply, that action could become a destabilizing factor in the market. It noted that while other major currencies are strengthening against the dollar, "the yen alone has been markedly weaker". fxstreet.com =========================================================== Contrary to what everyone thinks... That this action can not continue..... Japan is probably pleased with these results. It has gained a competitive advantage over Europe and others for US markets. Mish

To: Wyätt Gwyön who wrote (1572)	3/9/2004 2:07:04 PM
From: mishedlo	Respond to of 116555

UK Jan global trade goods deficit record 5.6 bln bln stg on US exports slide tistician said sterling's surge against the dollar may have contributed to the sharp deterioration in the deficit. Sterling has appreciated to near 12-year highs against the dollar. Excluding oil and erratics, the trade deficit in January widened to 5.4 bln stg from 4.4 bln the previous month. Total exports fell by 6.4 pct on the month to 21.6 bln stg from 23.1 bln in December. Meanwhile, imports rose 0.2 pct to 26.3 bln stg from 26.2 bln in December. The official statistician blamed a slide in exports in intermediate and capital goods to the US for the decline in exports. As a result, the non-EU deficit for January was a record at 3.4 bln stg, compared with only a 1.4 bln shortfall the previous month. The UK recorded a trade deficit in goods with EU countries of 2.1 bln in January, compared with a record 2.6 bln shortfall the previous month. Including services, the UK also recorded its worst-ever trade deficit. It widenened to 4.6 bln stg from a 3.1 bln gap in December. pp/rf For more information and to contact AFX: www.afxnews.com and www.afxpress.com ====================================================== This should be good for my Short Sterling futures as it should decrease the chance for a UK hike. Indeed - I see thay are up a few ticks Mish fxstreet.com

To: Wyätt Gwyön who wrote (1572)	3/9/2004 2:15:45 PM
From: mishedlo	Respond to of 116555

DATAWATCH - UK rates less likely to rise next month after manufacturing data LONDON (AFX) - While official data show UK industry continued to struggle in January, the beleaguered sector's firms may at least draw a modicum of comfort from a growing belief that interest rates are likely to stay on hold next month. The markets have for some time pencilled in May as the most likely date for a further rate hike. But there had been some speculation that some of the bank's rate setters may have pushed to bring the move forward to next month given the resurgence of the overall economy, and the consumer sector in particular, and with house price growth starting to accelerate once again. However, Investec UK economist Philip Shaw said that as a result of today's figures the bank will be "more guarded" in pushing up interest rates by 0.25 points in April than it may otherwise have been. Shaw said a May hike is more likely, not least because the bank publishes its key quarterly inflation report later that month and rate setters will have access to its latest forecasts at that meeting. The central bank has already raised rates twice since November. Official data earlier showed manufacturers continuing to struggle in January, with output rising by only 0.2 pct from the previous month. Expectations were for a 0.5 pct increase after surveys from the likes of the Confederation of British Industry, the country's leading business lobby group, suggested a three-year downturn in manufacturing had finally ended. [It seems the easy bet is against expectations of hikes - mish] Manufacturing output was nonetheless 1.5 pct higher than in the same month a year earlier. Investec's Shaw noted the "discrepancy" between the "runaway boom" implied by surveys from the likes of the CBI and the slow pace of expansion revealed by the official figures. He reckons that the latter are more likely to pick-up rather than the survey data slow down. [Is there anyone anywhere that does not think things are "picking up" - Mish] "In the past, the surveys have been a good indicator of (future) activity and we hope to see more robust data soon," he said. Stewart Robertson, economist at Lombard Street Research, said the sector is clearly heading "the right way" with official numbers slowly coming more into line with the surveys. He pointed out that revised figures showed manufacturing output rose 0.1 pct in December compared with a previously reported drop. fxstreet.com

To: Wyätt Gwyön who wrote (1572)	3/9/2004 2:25:06 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

French budget deficit to fall below 3 pct of GDP in 2005 Finance Minister Francis Mer confirmed that France's public budget deficit will fall below 3 pct of GDP in 2005, in an interview to be published in Le Monde today. This morning, statistics office Insee reported that France's public budget deficit stood at 4.1 pct of GDP in 2003, above the government's own target of 4.0 pct. ======================================================= 2005 - how the Hell would he know that? M

To: Wyätt Gwyön who wrote (1572)	3/9/2004 2:29:27 PM
From: mishedlo	Respond to of 116555

Snow says Greenspan "extraordinarily disciplined" {LMAO - Mish] Forex - Dollar steady at lower levels vs euro after Snow remarks LONDON (AFX) - The dollar was steady at lower levels against the euro after US Treasury Secretary John Snow appeared to exert political pressure on the country's central bank to keep interest rates at their current low level. Snow said Federal Reserve chairman Alan Greenspan and his central bank colleagues have been "extraordinarily disciplined". He went on to praise the Fed for not overreacting to signs of increased economic growth by raising interest rates. The euro moved above 1.24 usd in the wake of the comments. HBOS currency strategist Steve Pearson said the remarks were seen as an attempt to apply pressure on the US Federal Reserve not to hike rates before the forthcoming Presidential election in November. But Snow's calls for markets to determine exchange rates appeared to have fallen on deaf ears, with the Bank of Japan rumoured to have been in the market buying dollars for yen once again. Major Japanese banks, which often serve as agents for the Bank of Japan, were said to have been among the most active buyers of dollars earlier in Tokyo. "The BoJ appears to have re-emerged to stabilise the dollar around 111 yen," said Pearson. The dollar surged to a high of 112.30 yen yesterday only to drift under 111.0 in Asia. Elsewhere, the pound retreated from one week highs above 1.85 usd, after data showed the UK chalked up a record deficit in January as exports to non-EU countries, particularly the United States, slumped. The UK's deficit on trade in goods widened to 5.6 bln stg, from a revised 4.0 bln the previous month. Sterling was further depressed by data which revealed manufacturing and industrial output rose by far less than expected in January. fxstreet.com

To: Wyätt Gwyön who wrote (1572)	3/9/2004 2:34:36 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

German Jan industrial output down adj 0.1 pct from Dec, worse than expected BERLIN (AFX) - Industrial output fell a seasonally adjusted 0.1 pct in January from December, and was up 1.1 pct year-on-year when adjusted for the number of working days, according to preliminary data from the Labour and Economy Ministry. Economists polled by AFX News had forecast on average a month-on-month rise of 0.2 pct, and a year-on-year increase of 1.7 pct. [LMAO - Mish] Output fell month-on-month in January due to a 7.4 pct decline in construction output owing to the wintery weather, and a 3.0 pct decline in energy output, the ministry said. [They like to blame the weather over there too! - Is bad weather a global phenemon? - LMAO - Mish] In December, output rose a revised 0.1 pct from November, the ministry said. fxstreet.com

To: Wyätt Gwyön who wrote (1572)	3/9/2004 2:39:55 PM
From: mishedlo	Respond to of 116555

Germany unlikely to meet 2005 deficit target Tuesday, March 9, 2004 11:57:02 AM BRUSSELS (AFX) - EU finance ministers confirmed that Germany is unlikely to meet its target of getting its deficit below 3 pct of GDP by 2005 and that it has abandonned the objective of balancing its budget in the medium term. In their draft assessment of Germany's updated stability programme, the ministers said that while its growth outlook for 2004 "appears realistic", its forecasts for 2005 and beyond are "optimistic". The ministers noted Germany's reaffirmation of its commitment to correct its excessive deficit by 2005, but warned that this would not be possible if 2005 growth is below its forecast of 1.8 pct or if it does not implement planned spending cuts. "Indeed, under less favourable macro-economic and budgetary assumptions, the adjustment path in the programme may be insufficient to correct the excessive deficit in 2005," the ministers said. Their assessment is a confirmation of the European Commission's verdict on the programme, issued on Feb 18. fxstreet.com ===================================================== Gold should be really good to go after the next ECB cut. Mish

To: Wyätt Gwyön who wrote (1572)	3/9/2004 2:47:14 PM
From: mishedlo	Respond to of 116555

Record UK trade deficit raises concern over sterling's impact Tuesday, March 9, 2004 2:07:03 PM LONDON (AFX) - The UK chalked up its biggest ever monthly trade deficit in January, raising concerns that sterling's rise to one-year highs on a trade-weighted basis has begun to crimp demand for British goods despite the world economic recovery. "It may be an early sign that sterling's strength is having an adverse effect on competitiveness," said Neil Mackinnon, chief economist at ECU Group. Official figures showed the UK's deficit on trade in goods with the rest of the world widened in January to 5.6 bln stg, from 4.0 bln the previous month, and compared with a previous record of 5.1 bln recorded in November 2002. The deficit widening was largely the result of a 6.4 pct drop in exports to 21.6 bln stg, with imports virtually flat at 26.3 bln stg. The fall in exports was in turn largely driven by a 29 pct plunge on the month in consignments to the US, the biggest single importer of UK goods. With the pound riding up close to 12-year highs against the US dollar after rallying by around 15 pct in the past year, those figures have prompted analysts to voice fresh concern for the UK's hard-pressed exporters, particularly with data out separately showing the country's troubled manufacturing sector is still struggling to reverse a three-year-long downturn. The UK recorded a 46.2 bln stg deficit on trade in goods last year, just shy of the 46.6 bln stg record set in 2002. Sterling has taken such figures in its stride to date, with foreign exchange markets seemingly unconcerned about the UK economy's ability to fund a deficit which now accounts for around 6 pct of total economic output. But the market reacted to the latest numbers by pushing the pound down across the board. Sterling fell below the 1.84 usd mark from earlier highs around 1.8580 usd, while the euro firmed to over 0.6740 stg from around 0.67 stg. "It's been a long time since the trade numbers have had a market impact and if this is the start of a trend, it has potentially adverse implications for sterling over the medium term," said Mackinnon. Eonomists expressed some concern that the UK notched up a record deficit with countries outside the EU just one month after recording a record EU deficit. But Lehman Brothers economist Alan Castle said while the latest figures suggest "some underlying weakness" in the UK's trade position in recent months, there was no need to get alarmed just yet, particularly with around half of the "surprise" deterioration due to weakness in the volatile oil and erratics components. [Is anyone EVER alarmed? - Mish] He added that the gathering pace of economic recovery, particularly in the US and Asia, should help to alleviate, at least in part, the effects of sterling's appreciation. =========================================================== Man the faith in this "recovery" is universal! Everyone has "faith in the recovery". And ALL of it is on the US consumer to keep spending. Staggering. Mish

To: Wyätt Gwyön who wrote (1572)	3/9/2004 2:55:10 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Cotton - lock limit down two days in a row. Unleaded gas down last two days. Copper down big today. By the time the PPI matters it might be headed south. Mish

To: Wyätt Gwyön who wrote (1572)	3/9/2004 3:23:56 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Dollar rises amid Japan intervention talk Tuesday, March 9, 2004 4:03:28 PM CHICAGO (AFX) -- The dollar improved modestly on its currency rivals Tuesday amid talk of ongoing moves by Japanese authorities to buy the greenback. Two fresh factors aiding the U.S. currency included disappointing economic data in Japan, which reported lower-than-expected machinery orders, and relatively weak reports on German industrial production and the United Kingdom's trade outlook, analysts said. See and . Last Friday's lukewarm U.S. jobs report jolted financial market and toppled the dollar from multimonth highs. See . "Market participants remain in consolidation mode following the sharp volatility of the past couple of weeks," Ruesch International analysts said in a new report. The jobs report was expected to bolster the chances for higher U.S. interest rates, which would likely boost demand for dollars to buy higher-yielding U.S. investments. [Then again - those on the wrong side of treasuries say jobs do not matter at all - mish] The dollar rose 0.2 percent against the yen, at 111.39 yen, in early U.S. trading. It had been as low as 111.11 yen per dollar earlier Tuesday. The dollar was down 0.3 percent against the euro, with the shared currency earning $1.2362. The euro traded as low as $1.2056 last week, its lowest level in three months, but had gained vs. the dollar since Friday's jobs report. The shared currency was as rich as $1.29 in February. The dollar rose 0.7 percent against its U.K. rival, with sterling changing hands at $1.8379. The greenback rose 0.3 percent against the Swiss franc at 1.2776 francs per dollar. Intervention weighed The dollar fell back from five-month yen highs of 112.34 in New York action late Monday and began Tuesday trading in Asia under slight pressure, when the market suspected that Japanese authorities stopped dollar-buying intervention following comments by U.S. Treasury Secretary John Snow. "No currency can be considered strong if it is propped up on life support with intervention," Snow told a group of state treasurers. [Yet another totally assinine comment by Snow cause the US$ would get crushed if it flosted againts the RMB and the YEN] Japan has spent record reserves buying dollars in order to depress the yen, keeping Japanese exports more competitive. There efforts have limited the yen's rise against the dollar when compared to the euro's climb, but had not been enough to keep the yen from scaling a 3 1/2-year high earlier this year. Despite Snow's comments, Japan's Finance Minister Sadakazu Tanigaki reiterated that Japan's intervention policy is aimed to offset speculative moves that have taken place since the Group of Seven meeting in Dubai in September. "I think that the process of correcting rapid moves which accompanied the misunderstanding in Dubai is continuing," Kyodo News quoted him as saying at a news conference. At that meeting, a joint communiquÃ© called for flexible exchange rates, which Japanese officials stress was aimed at China and which the market took as a signal that the dollar could fall unchecked by U.S. officials. [Japan wants China to be Flexible, Japan does not see what it does as intervention, but if Europe did what it did it would call that intervention. What a crock of shit all around - mish] Ryohei Muramatsu, senior currency trader at Commerzbank AG, expects that despite Snow's comments, Japan will soon resume its currency-market intervention. Analysts had long argued that a dollar correction was necessary and even desirable given the imbalance of a U.S. trade deficit that has to be financed by foreign capital flows into the United States. "Secretary Snow's comments show the U.S. is fuming at Japan's continued interventions despite Greenspan's warnings last week," said Muramatsu. [This from a man that wants a "strong dollar" LMAO - mish] Federal Reserve Chairman Alan Greenspan said that economic fundamentals would soon make Japanese intervention a risky policy. "The U.S. has begun to worry about the intervention's effects on its long-term interest rates. The Bush administration may also have to listen to its exporters' wish for a weak dollar to prop up the popularity ratings ahead of the presidential election." [Yes indeed. As stupid as it sounds..... what could force interest rates up is a strong dollar RALLY, not a decline - mish] fxstreet.com

To: Wyätt Gwyön who wrote (1572)	3/9/2004 4:00:20 PM
From: mishedlo	Respond to of 116555

Heinz on Bullism Date: Tue Mar 09 2004 14:56 trotsky (stock market) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved quote from Russell: "Mark Faber notes that according to a Yale School of Management poll, 95% of individuals and close to 92% of financial institutions believe US stocks will be higher 12 months from now. People are bullish about the stock market. The percentage of cash held by mutual funds has dropped to an historic low of 4.3%. Funds are extremely bullish regarding the stock market, at least with other people's money. Advisors have remained bullish for 44 consecutive weeks. Bullishness is now rampant with Investor's Business Daily's poll of investment advisors showing the bullish percentage now at 59.6% while the bearish percentage is at 18.8%. The bullish percentage of advisors has prevailed for months on end." it can be almost guaranteed that this consensus will be bitterly disappointed...