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

To: yard_man who wrote (2245)	3/16/2004 9:34:47 PM
From: mishedlo	Respond to of 116555

EU says yet to decide whether to take action on UK, Netherlands deficits Tuesday, March 16, 2004 12:12:08 PM BRUSSELS (AFX) - The European Commission said it has yet to decide whether to take any action over the deficits posted by UK and the Netherlands last year. The UK's deficit widened to 3.2 pct of GDP in 2003, while the Netherlands recorded a deficit of 3.0 pct, according to figures released by EU statistics agency this morning. When asked if the Commission will take disciplinary action, EU Commission spokesman Gerassimos Thomas replied: "Certainly, it is not acting today". Thomas noted that the Eurostat figures cover the calendar year, while the UK's official figures span the financial year. "All this is being analysed by the Commission to see what is the development of public finances in the UK," he said. He said the deficit for the Netherlands has been rounded up from 2.98 pct. "It is a position that is being analysed by the Commission and no specific decision has been taken," he said. The stability and growth pact sets a deficit limit of 3 pct of GDP. ========================================================= Take action? What does that mean? If that means cutbacks in govt spending that will accelerate the recession over there. Can someone in the know comment on this? Thanks

To: yard_man who wrote (2245)	3/16/2004 9:41:19 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

UK Feb CPI rises 1.3 pct yr-on-yr, below expectations UPDATE Tuesday, March 16, 2004 10:35:36 AM LONDON (AFX) - UK consumer price inflation rose by less than expected in February largely because clothing prices failed to rebound sharply from the turn of year sales, official figures showed. [This should lower pressure to hike - Mish] The country's National Statistics office said the annual rate of EU-harmonised CPI fell to 1.3 pct from 1.4 pct the previous month. Economists had predicted an unchanged annual rate. The latest figure compares with the Bank of England's statutory 2 pct target - a level which CPI has been stuck below since May 1998. On a month-on-month basis, CPI rose 0.3 pct, also just below expectations. NS said the main downward pressure on prices came from a 0.3 pct monthly decline in clothing and footwear prices, which left prices down 4.0 pct on the year. That compared with a 1.2 pct monthly increase the previous February - a month when retailers usually lift prices after discounting heavily in the new year sales. Meanwhile, NS said there was no discernible impact in the data to suggest sterling's recent rise has kept price gains in check. While the unexpectedly benign figures may help alleviate concerns over a possible further hike in UK interest rates next month, with the economy nonetheless growing at a healthy rate analysts doubt whether February's inflation numbers mark the beginning of a downward trend in inflation. "We expect CPI inflation to climb back towards its 2 pct target over the next few months on the back of higher utility and petrol prices," Royal Bank of Scotland economist Ross Walker said. With the Bank of England aiming to keep inflation at its target in two years time, analysts said it could still hike interest rates in coming months even with inflation well below its target. [Do analysts everywhere always expect hikes? - mish] Rate setters last raised the key repo rate by 0.25 points to 4.0 pct in February, the second hike in just three months, and they are widely expected to hike another quarter percent in May. The central bank justified its last two rate rises by pointing out that inflation was expected to rise above its target in two years time. RPIX inflation, which excludes mortgage interest payments, rose 0.3 pct for a 2.3 pct year-on-year gain -- again below expectations. The wider all-items RPI index rose 0.4 pct in February for a 2.5 pct year-on-year gain. fxstreet.com

To: yard_man who wrote (2245)	3/16/2004 9:46:25 PM
From: mishedlo	Respond to of 116555

ZEW German March expectations index down 12.3 to +57.6, consensus +67.5 Tuesday, March 16, 2004 10:25:42 AM FRANKFURT (AFX) - The ZEW research institute said its German economic expectations index for March fell 12.3 points from February to +57.6, the third consecutive monthly decline since hitting a 3-1/2 year peak of +73.4 in December. The fall was sharper than expected. The consensus forecast of economists polled by AFX News was for a drop in the index to +67.5. fxstreet.com ================================================================== I am not familiar with this number any explanation from someone from Europe? Whatever it is it sure does not look very good (except for Euribors perhaps) ggg Mish

To: yard_man who wrote (2245)	3/16/2004 9:49:19 PM
From: mishedlo	Respond to of 116555

RPT Australia Jan investment property lending down 15.5 pct after rate hikes Tuesday, March 16, 2004 10:13:38 AM SYDNEY (AFX-ASIA) - New loans for property investment in January fell 15.5 pct, the Australian Bureau of Statistics (ABS) said, with the decline larger than expected. The fall in lending follows the Reserve Bank of Australia's (RBA) decision to raise rates by a quarter point in November and December to 5.25 pct over concern about escalating household debt as low interest rates fuelled a rash of buying, driving prices to unprecedented levels. Analysts said the latest indicators make a rate hike in April or even May less likely. In January borrowing for property investment fell for a third consecutive month while home loans for owner-occupiers fell a seasonally adjusted 7.0 pct, the ABS said. A slowdown in building construction and a fall-off in the number of homes being sold at auction is also pointing to a slower housing sector, the ABS said. January is traditionally a soft month for home borrowing but the size of the fall exceeded economists' expectations. The ABS said borrowing for all purposes fell in the month, with personal finance down 1.2 pct, commercial finance falling 14.5 pct and lease finance dropping 12.3 pct. Australia's housing boom has defied expectations, lasting longer than many economists had predicted and while it is showing signs of weakening, few expect a bust. "Despite the sharper than expected decline in the data, we still believe the housing market will die of old age rather than of a heart attack," said Tracey McNaughton, senior economist at BT Financial Group. "Credit markets will take heart. The data closes the door on a rate hike in April and possibly May as well." The central bank next meets April 6 having left interest rates on hold at its two most recent meetings. Economists at UBS Warburg, Westepac, the ANZ and National Australia Bank all said lower employment figures and a slowing in domestic demand will make the RBA reluctant to hike interest rates next month. Analysts at UBS said the central bank may leave rates on hold all year. fxstreet.com

To: yard_man who wrote (2245)	3/16/2004 9:52:36 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

US consumer confidence at 10-month low-ABC/Money Tuesday March 16, 6:28 pm ET NEW YORK, March 16 (Reuters) - U.S. consumer confidence fell sharply to its lowest level in 10 months, a report said on Tuesday, in a sign Americans are growing impatient with the economy's seeming inability to create new jobs. ABC News/Money Magazine said its weekly Consumer Comfort index slid to -22 in the week to March 14 from -18 in the prior week, an unusually steep decline for this indicator. The gloom was pervasive, with the poll's individual readings on the current state of the economy, personal finances and buying climate slipping across-the-board. Worse yet, consumer expectations tracked in a separate ABC/Money survey also deteriorated. The number of respondents saying they were pessimistic about the economy's future has swelled 15 percent over the past two months. Only 23 percent of Americans now believe the economy is getting better. The grim consumer outlook was in line with the results of other sentiment surveys, which have been hit hard as Americans become frustrated with a jobless economic recovery. While analysts caution that consumers have often kept spending money even as they complain to confidence surveys, they worry that a persistent jobs rut will eventually catch up with consumers, forcing them to tighten their purse strings. The ABC/Money survey was based on 1,000 interviews conducted in the month ending March 14, and has a margin of error of plus or minus three percentage points.

To: yard_man who wrote (2245)	3/16/2004 10:56:32 PM
From: mishedlo	Respond to of 116555

Couple of neat charts A cycle from Prechter: stockcharts.com Detailed here: Current Observations stockmarketcycles.com Brian

To: yard_man who wrote (2245)	3/16/2004 11:01:59 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

A slew of posts from Heinz Date: Tue Mar 16 2004 19:45 trotsky (J'Bear) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved we certainly agree in principle, and the point about the concentration of assets in the hands of fewer and fewer financial institutions is one i myself frequently make when discussing systemic risk - i think it's VERY important. and sure enough, we CAN learn from history, and assume the 'rhyming effect' to be very much in force. maybe we misunderstood each other a bit - i agree for instance that we have an eerie parallel here with the 1920's, insofar as once again, the general consensus is that we have 'mastered' financial and economic risk. my comment on the length of cycles was just an attempt to interpret what at this stage is merely empirical knowledge. for instance, it took stocks after '29 only 3 years to reach their nominal lows, whereas Japan's bear market reached fresh nominal lows a full 13 years after the top. the only explanation that makes sense to me is that the cycle has been lengthened due to more forceful intervention. otoh, i believe when you referred to the potential for a quick collapse, you were probably looking at what i'd call the 'endgame'. i.e. the point at which an actual, 'too-big-to-bail' crisis eventuates. that for which Argentina's collapse was the dress rehearsal, so to speak. the capital letter PANIC, Puplava's 10-sigma event. we may well be in for that unique experience at some point...probably more a question of when than one of if. Date: Tue Mar 16 2004 19:28 trotsky (frewils, 18:29) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved you have to admit though that when the price of silver was still in the doldrums, no-one here thought it supported the claim of a glut either. i think only uptick argued that the low price proved that there was no shortage. still, these assertions by the Perth mint can probably be taken as a bullish contrary indicator - since at tops, the word 'shortage' is far more prevalent than the word 'glut' ( recall the fabled 'DRAM shortage' of late '99/eary '00 as an example ) . in reality, i doubt that the Perth mint has any more accurate information on the readily available amount of silver than anyone else. the only reliable silver statistics we DO have are those of production and consumption ( in deficit for ages ) and the KNOWN inventories, which as TB points out don't seem all that big. however, there must have been large unknown inventories in the past, since that's the only reasonable explanation for the previously depressed price. Date: Tue Mar 16 2004 19:19 trotsky (RIP, 18:28) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved oh well, no doubt the present system is in fact deeply flawed. but we have to differentiate whether we talk about the most basic economic laws ( which in turn derive from rational human action ) or whether we are criticizing the current fiat money system. those are simply different topics. i would agree that a great deal of the credit creation we have witnessed since the last link to gold was severed has created never before seen imbalances and structural distortions - and especially the credit created over the past 5 years has probably ended up in the hands of mostly not credit-worthy borrowers ( i'm thinking specifically about the mortgage credit bubble, car loans and credit cards ) , which should ultimately contribute greatly to systemic destabilization. also, i agree with the assertion that the central bank fiat system such as it is now constituted is inherently evil on account of an uneven distribution of purchasing power ( earlier recipients of the fiat money created are cheating those further down the chain ) and the 'invisible tax' effect. also, it is susceptible to depleting the pool of real funding, as numerous activities inimical to true wealth creation are furthered. lastly, in the final analysis it vastly enhances the power of the state, to the detriment of the individual. anyhow, i expect these things to be part of the set of shared convictions on a gold site. Date: Tue Mar 16 2004 19:02 trotsky (Alberich) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved regarding the mobility of capital via other means than outright loans like e.g. the stock market, or similar co-ownership arrangements, we do obviously have those, and they make sense. however, there is a qualitative difference between the LENDING of one's savings and the INVESTMENT of one's savings, in terms of risk and return potential. anyhow, economic calculation is best undertaken by using the time value of money, or the discounting mechanism of interest rates. an entrepreneur estimating the potential future return of capital invested needs a yardstick, a method to compare this return with a quasi 'riskless' return such as that of e.g. a US t-bill. that way it is possible to properly assess the relationship between the risks undertaken and the potential return from same. this should actually be obvious. Date: Tue Mar 16 2004 18:28 trotsky (kapex) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved it is true that the money for the huge debt balloon overhanging the global economy has come from thin air - and that's exactly where it will disappear to in the coming bust. once the non-wealth-generating false economic activities spurred on by the credit binge are liquidated, the credit that gave rise to them will be liquidated as well - mostly in the form of default. guess what the bond market is smelling here? click here ... tfc-charts.w2d.com hint: it's NOT inflation. Date: Tue Mar 16 2004 18:21 trotsky (mozel) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved money is a good like any other good. the only difference is its 'moneyness', i.e. the characteristics which make a certain good more useful as money than another. gold has these characteristics ( i.e., scarcity, a pre-existing demand, and fungibility/transportability ) . a present good is always worth more than a future good. from this derives the time value principle, which holds true for money just as it holds true for any other good. the time value of money is called the 'interest rate'. well, what's the big deal...your usury rant sounds positively medieval. to recap: time value is inherent in ALL goods. in the case of money , it does not really matter in this context if the money is a paper money or not. the difference in arriving at the time value is only one of degree, not one of principle. PS: no religious dogma can erase this basic truth - a present good is worth more than a future one. no anti-usury rant will change that simple fact.

To: yard_man who wrote (2245)	3/16/2004 11:26:22 PM
From: mishedlo	Respond to of 116555

Wage Data Interesting post from Russ Winter It would seem that wages MIGHT be falling off the cliff here Note: he does not see this as deflationary but many of us would. Here goes: Message 19924321 I did not quite understand what he was talking about so I asked This was an excellent reply explaining things siliconinvestor.com Here is what he tracks fms.treas.gov Here is the current report fms.treas.gov Here is the line we are dealing with: Withheld Income and Employment Taxes $12,882 $73,719