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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 (1945)	3/13/2004 4:14:11 PM
From: mishedlo	Respond to of 116555

March Madness dailyreckoning.com March is also a funny month for the stock market...sometimes wonderful, sometimes awful. Interestingly, mid-March has witnessed very important trend changes in each of the last four years. In mid-March 2000, the Nasdaq reached a record 5,132...before plummeting 65% to 1,794 by mid-March 2001. Then, the post 9/11 rally took the index to an important peak of 1,942 in mid-March 2002, representing the start of 2002's long decline. Most recently, mid-March 2003 provided an excellent entry point to a year-long rally. ... One year ago, the U.S. economy was muddling along, unemployment was rising, and corporate earnings growth was non-existent. Buying stocks back then seemed like a risky proposition. But the stock market soared anyway. Today, the economy is humming, investors are confident and the chairman of the Federal Reserve throws caution - and billions of newly minted dollar bills - to the wind. These are the good old days, revisited. Unfortunately, our national debt is now larger, our trade deficit is breaking records, the consumer is more "upside down" than ever before and the world's growing ranks of terrorist organizations continue to amuse themselves by blowing up people they've never met. And one more thing: the economy is adding jobs at an abysmally slow pace. In fact, U.S. payrolls have increased by only 122,000 jobs since March of 2003. No doubt, this week's sharp selloff will be seen as another great buying opportunity by the lumpeninvestoriat. Most likely, it isn't...If March 2004 continues the pattern of the previous Marches of this Millennium, the stock market is on the verge of a major trend change...

To: Wyätt Gwyön who wrote (1945)	3/13/2004 4:18:40 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

From Brian on the US$ and stocks Mish - If the US$ has not already bottomed, may only be a few percent from it. And if you think shorting US stock indexes is an opportunity here, think about shorting correlated markets in other currencies – it will likely do even better as the dollar rises. Canada is one of my favorites at the moment: stockcharts.com stockcharts.com Brian

To: Wyätt Gwyön who wrote (1945)	3/13/2004 4:27:38 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Affect on gold stocks of a severe decline in the general stockmarket 321gold.com

To: Wyätt Gwyön who wrote (1945)	3/13/2004 4:40:27 PM
From: mishedlo	Respond to of 116555

China's Effect of Food Prices enn.com snips: "Production of each of the three grains that dominate China's agriculture--wheat, rice, and corn--has dropped. But the output of wheat . . . has fallen the most. . . . Chinese wheat-buying delegations recently have visited several grain-exporting countries. Initial purchases of some 5 million tons . . . have already sent world wheat prices climbing." "The recent price rises may be only the early tremors before the quake, however. China's harvest shortfalls of recent years have been covered by drawing down its once massive stocks of grain. But these will soon be depleted . . . " "China's wheat harvest fell short of consumption last year by 19 million tons. When the country's wheat stocks are depleted within the next year or so, the entire shortfall will have to be covered from imports. In some ways, the rice deficit is even more serious. Trying to cover a rice shortfall of 20 million tons in a world where annual rice exports total only 26 million tons could create chaos in the world rice economy. And with a corn shortfall of 15 million tons and stocks already largely depleted, China may soon have to import corn as well." Wait, it gets worse: "The handwriting on the wall is clear. While grain production is dropping, demand is climbing, driven up by the addition of 11 million people per year and by fast-rising incomes. As people in China earn more, they are moving up the food chain, eating more grain-fed livestock products such as pork, poultry, eggs, and, to a lesser degree, beef and milk. . . . Urban expansion, industrial construction, and highway construction are all shrinking the land available for crops." The end result is that the surplus world grain production capacity and cheap food of the last half-century may soon be history. Higher food prices will result. Adjusting to these higher food prices will be a challenge in the years ahead.

To: Wyätt Gwyön who wrote (1945)	3/13/2004 5:27:11 PM
From: mishedlo	Respond to of 116555

War Rally Failing zealllc.com

To: Wyätt Gwyön who wrote (1945)	3/13/2004 7:40:06 PM
From: NOW	Respond to of 116555

could you postpone the next drop until after my trip to Europe?

To: Wyätt Gwyön who wrote (1945)	3/13/2004 8:08:13 PM
From: yard_man	Read Replies (1) \| Respond to of 116555

>>certainly the weak dollar over the past couple years has not hurt bond yields--in fact, lately the argument has been that a STRONG dollar would be bearish for USTs since BOJ would not buy so many of them to support USD/JPY. but on the other other hand, USD has kicked everbody's ass lately, much as i expected in an environment where all "investors" expected* a continued decline in USD (even as they all expected yields to rise and stocks to rise, ha ha), and despite the ass-whupping taken by nearly every currency of note, USTs have put in a fantastic stretch of late. << now wait a minute there -- I think you've got the order out of whack there -- plot carefully the USD and TNX. In the current dispensation a strong dollar IS bearish for bonds in the very short term, for the same reason you gave. It was a drop in the dollar that precipitated the bulk of the recent wave of buying, even if it was a decline within a rise ... that has been violated for a very short time recently in that the dollar continuing to rise a little has not produced the snap-back in rates (correction in the bond buying). I think this is a very bearish development for the economy and the stock market here.