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

To: patron_anejo_por_favor who wrote (1834)	3/11/2004 9:34:39 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Patron - look at this - thoughts anyone? financialsense.com The greatest stock mania in the history of the world is now in its fifth year of correction and will continue to set new records for length and depth in the years ahead. The greatest debt mania is still in full force and awaiting a major interest rate increase to signal its end. The real estate bubble appears to still be in full sway in the U.S. and other foreign countries. What will finally bring it to an abrupt end is not visible as we write, but it too will end. The huge issuance of corporate and tax free bonds by industry and governments have been transformed into insured, highly-rated income securities being sold to individual investors in huge amounts. If these guaranteed income promises are not kept, the value of these securities will plummet. The idea of having an insurance company guarantee the interest payments on a bond has never been tested in a major economic slump or depression, but it surely will be tested in coming years and especially in tax-free bonds with many city and state governments in dire financial straights. The most amazing thing to this writer is that the bullish hype from Washington and Wall Street, spread daily by our public press and TV, has kept the general public from seeing the enormous bubbles in which they have become totally entrapped. When they finally awake to the magnitude of their debt burden, news of our next great depression will be in the headlines of our daily newspapers.

To: patron_anejo_por_favor who wrote (1834)	3/12/2004 10:03:31 AM
From: zonder	Respond to of 116555

I hear you, patron :-) Have you ever lived in an inflationary environment? Well, you just might, pretty soon. Oh it's such fun to readjust prices in your head every time you go out shopping!

To: patron_anejo_por_favor who wrote (1834)	3/12/2004 11:49:18 AM
From: yard_man	Respond to of 116555

what courage?? courage that the Japanese had when their stock market went from 40k to ... I think that is etched pretty deeply -- anyway, they already did the tightening thing and burst the bubble. That bad part thingie -- that's over. Get with the program.

To: patron_anejo_por_favor who wrote (1834)	3/12/2004 12:12:21 PM
From: mishedlo	Respond to of 116555

More from Heinz Date: Fri Mar 12 2004 11:58 trotsky (frustrated@oil) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved well, it's already 2 bucks off the very recent high..and today's move DOES look pretty scary and determined on a 10 minute chart. i remain very bullish on crude LT btw., but this could become a significant correction, after all it seemingly double-topped. and that in turn would be good for the gold miners. Date: Fri Mar 12 2004 11:38 trotsky (frustrated) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved like i said, just a handful...GFI, MDG... don't forget, GFI has the third largest reserves, and fourth or fifth largest production of the majors. iow, it's a very significant stock. in any case, the point remains that this behavior ( i.e. a few stocks making new lows or highs in advance of the sector indices ) is characterizing bull/bear phases respectively. Date: Fri Mar 12 2004 11:31 trotsky (crude oil plunges) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved on strategic reserve news - that should lend a little support to the gold stocks ( energy is their second highest input cost after labor ) . Date: Fri Mar 12 2004 11:06 trotsky (Elliott@US growth projections) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved there are few areas of economic confusion more pronounced than the 'comparisons' between US and Euro-zone 'growth'. both the financial and non-financial media tend to compare the economic data as if they were comparing apples to apples - that is however not the case. in order to make US data comparable to any other set of economic data, a series of complex mathematical operations is necessary. in fact, the math behind it is so complex as to make it a very difficult endeavor, and as far as i'm aware, there's not a single economist actually willing to do the work - instead they just treat the data in the same way as the press. the first step is simple: divide US GDP growth by 4 - they publish an annualized figure. NO-ONE is doing that however, with exception i believe of the Economist magazine ( in its statistics section ) . then you have to remove software expenses, which have been reclassified as 'investments' for purposes of the GDP a few years ago. then remove the effect of hedonic indexing ( as soon as you do that, US 'growth' disappears altogether ) and chainweighting...in the context of chainweighting, compare the so-called 'deflators' of GDP - the deflator ITSELF is already based on another statistical lie, which likewise stems from hedonic indexing, and thus has to be recalculated. in fact, by the time a 'final' figure of 'real' US GDP growth is arrived at, the data has been massaged to death, and thus become utterly meaningless. this is also why there are no jobs created in the face of a 'recovery' , and why interest rates continue to plunge ( according to the government, it's actually a 'vigorous' recovery ) - simply put, there isn't much of a recovery. it's largely a statistical mirage. no doubt euro-zone statistics are also not entirely trustworthy - but they contain far fewer distortions and biases. most importantly, they CAN NOT BE COMPARED with the US data 'as is'. Date: Fri Mar 12 2004 10:43 trotsky (frustrated@XAU) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved what the XAU doesn't tell you however is that a handful of mid tiers and majors are already at new lows for the move - which is exactly the opposite of what one sees during the bull phases, where a handful of stocks usually makes new highs in advance of the indices. anyway, i think a shake-out is a good thing, but only if it manages to damage the bullish complacency. no evidence of that so far unfortunately. Date: Fri Mar 12 2004 10:35 trotsky (Todd@why do pm stocks lead the metals?) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved i think that can be easily explained - the same hedge funds that play the COMEX gold contracts also play the pm stocks, and buy and sell pm stocks before they buy and sell positions at the COMEX. then there are OTHER market participants closer to the action than we are, who also know about this, and when they see certain interests buying or selling pm stocks, they follow their lead and do the same. this is imo why the pm stocks always lead the metals. Date: Fri Mar 12 2004 10:27 trotsky (PoG) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved a fall towards say the low 380's would actually be a good thing...it might shatter the complacency here a bit, plus it would serve to wash out the weak hand speculator long positions at the COMEX...as an aside, the pm stocks are already discounting such a fall imo.