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

To: TH who wrote (6135)	5/11/2004 2:28:14 PM
From: mishedlo	Respond to of 116555

EPA orders clean-up of diesel engines Tuesday, May 11, 2004 5:08:24 PM WASHINGTON (AFX) -- The Environmental Protection Agency announced more stringent pollution-control rules for diesel engines Tuesday that it claims will cut diesel pollution by 90 percent. "We are going to make that burst of black smoke that erupts from diesels a thing of the past," EPA Administrator Mike Leavitt vowed Environmental and public health groups reacted with measured praise, and industry groups largely accepted the new regulations "The Bush administration's doing something positive for the environment is like a dog walking on its hind legs," said Frank O'Donnell, executive director of the nonprofit Clean Air Trust, paraphrasing English author Samuel Johnson. "It may not be great, but you're surprised it's happening at all." Allen Schaeffer, executive director of the Diesel Technology Forum, an industry trade group, said in a statement that meeting the new standards wouldn't be easy. However, "there is no question about industry's commitment to meet these aggressive standards," he said. The new "clean diesel" rules require oil refiners to reduce sulfur levels in diesel fuel by 99 percent over the next eight years. The EPA compared this requirement to past measures to reduce lead levels in gasoline. The agency will also require "nonroad" diesel vehicles, like farm and construction equipment, to significantly cut diesel-exhaust emissions by adopting emission-control technologies already used by trucks and buses. The new rules, the EPA said, will eventually reduce pollution from diesel equipment by more than 90 percent. Diesel exhaust causes cancer and is responsible for breathing problems like asthma, especially in urban areas. It has also been blamed for contributing to smog and reducing visibility in national parks. The EPA claimed that by 2030 the rules put in place Tuesday will have prevented 12,000 premature deaths, 8,900 hospitalizations and 1 million lost workdays "The nonroad diesel rule will move the nation toward cleaner air," said American Lung Association President John Kirkwood. "But only with a more aggressive commitment to clean up all sources of pollution will clean air be achieved." Variety of opinions But public interest groups were disappointed that trains and ships with diesel engines will not be required to adopt similar pollution-control measures until 2012. The EPA says it's still "inviting comment" on such plans "After oil industry lobbying, the Bush administration chose to put off until 2012 what should be done today to protect our health," said Emily Figdor, a spokeswoman with the U.S. Public Interest Research Group The American Petroleum Institute, a trade group for the oil industry, welcomed the new measures The regulations, the API said in a press release, "will deliver significant reductions for the public on a schedule that is feasible for the nation's fuel suppliers." Douglas Oberhelman, president of Peoria, Ill.-based Caterpillar , which makes diesel engines as well as construction and mining equipment, praised the EPA for including industry input Caterpillar has invested more than $500 million in clean diesel technology, the biggest research and development initiative in the company's history, according Carl Volz, who works in governmental affairs at Caterpillar "It literally has revolutionized the way the diesel engine works," Volz said of the new technology. "We have taken a diesel engine and made it extremely clean." Volz said the company has already seen increases in its market share because of the new technology fxstreet.com

To: TH who wrote (6135)	5/11/2004 2:31:53 PM
From: mishedlo	Respond to of 116555

Forex - Sterling under pressure on weak UK economic data, sets 2004 low vs usd Tuesday, May 11, 2004 4:19:35 PM LONDON (AFX) - Sterling remained under pressure, setting a 2004 low against the dollar after a dismal performance in the UK manufacturing sector dampened expectations of rapid UK interest rate increases The pound sank to as low as 1.7534 usd before recovering slightly. The sell off, which saw the pound drop more than 1 cent against the dollar came after beleaguered manufacturers saw output decline for the second straight month in March, raising concerns that higher borrowing costs are taking their toll on the sector Official data showed manufacturing output in March falling 0.3 pct from the previous month, against expectations of a 0.6 pct increase. On a year-on-year basis, manufacturing output was up 0.4 pct against expectations of a 1.0 pct rise Sterling has been the main mover today - after markets were taken by surprise by the data, especially in an otherwise quiet day, said Naeem Wahid at HBOS Signs are that the Bank of England will not be in a hurry to hike interest rates. The central bank has already raised rates three times in six months, the third came last Thursday, taking the benchmark repo rate to 4.25 pct Capital Economics' UK economist Paul Dales said today's numbers provide a "strong warning" to the MPC "not to forget about the rest of the economy in its attempts to cool down the housing market". Separately, French industrial output also came in weak, adding to worries over recovery in the euro zone, especially after equally dismal figures recently out of the area's largest economy, Germany. Seasonally-adjusted French industrial output for March was up 0.1 pct, well under expectations of a 0.4 pct rise Taken together, the French and UK data helped the dollar shrug off a weak start to climb higher. Still a "broadly consolidative" tone is likely for the dollar, given the lack of US economic data, Marc Chandler, chief currency strategist at HSBC Bank USA said The yen was also under pressure but steadied from 8 month lows against the dollar. The dollar rose past 114 yen briefly on Monday fxstreet.com

To: TH who wrote (6135)	5/11/2004 2:41:47 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

Australia Will Pull Out The main opposition Labor Party, which holds an election-winning lead in opinion polls over Prime Minister John Howard's governing coalition, has vowed to pull out Australia's 850 troops from Iraq if it wins the election expected between August and November. ================================================================ Excellent OZ needs to follow Spain's lead I hope every leader that supported Bush goes down in flames. fxstreet.com

To: TH who wrote (6135)	5/11/2004 2:44:35 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Germany's Eichel says growth too weak for fresh deficit cuts Tuesday, May 11, 2004 1:21:20 PM BRUSSELS (AFX) - German finance minister Hans Eichel said growth is too weak for Germany to make fresh cuts in its deficit "It's a danger to talk about supplementary measures for economies because the problem is that growth is still weak," Eichel said on the margins of a meeting of EU finance ministers He reaffirmed his weekend comment that Germany may in 2005 breach the EU stability and growth pact's deficit limit of 3 pct of GDP for the fourth year in a row He said however that Germany will do its best to get its deficit below the ceiling at the end of next year fxstreet.com

To: TH who wrote (6135)	5/11/2004 2:47:18 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Spanish premier Zapatero stresses EU a greater priority than US Tuesday, May 11, 2004 1:14:15 PM MADRID (AFX) - Prime Minister Jose Luis Rodriguez Zapatero said that the European Union is a greater priority for his government than the US because of the contribution of EU members to the development of modern, democratic Spain "First comes Europe, then our historic ties with Latin America and the Mediterranean, and after that come trans-Atlantic relations," he said in an interview with Radio Cope, articulating an opposite set of priorities to those of his conservative predecessor, Jose Maria Aznar Zapatero, leader of the Socialist Party, recalled that EU members, "in particular France and Germany, played a decisive role in helping our transition to democracy" after the death in 1975 of the military dictator Francisco Franco, who ruled Spain since the end of the civil war in 1939 The EU "played an essential part in our development, our progress and our well-being," Zapatero said. "In recent years, it has added one percent to our gross domestic product, enabling us to build roads, dams and schools and to train our workforce," he added "Irrespective of who is in power in Paris, Berlin or other European capitals, it is natural for us to have the best possible relations with those countries with which we have built economic and monetary union, share a single currency and are going to build a common defence system", Zapatero said However, he told the radio interviewer that his radical shift in policy is "perfectly compatible with having good relations with the United States." He noted that Spain is a member of the North Atlantic Treaty Organization and acknowledged the importance of its trans-Atlantic ties fxstreet.com

To: TH who wrote (6135)	5/11/2004 2:50:43 PM
From: mishedlo	Respond to of 116555

OECD's Cotis sees gentle slowdown in UK house prices, but not a crash Tuesday, May 11, 2004 12:20:43 PM PARIS (AFX) - OECD chief economist Jean-Philippe Cotis said he expects to see a gentle slowdown, rather than a crash, in the UK property market "We don't see a crash in house prices but rather a gentle slowdown of house prices," Cotis told a news conference The Bank of England will be able to contain UK house price growth, he said The Bank of England last week delivered its third quarter point hike in its benchmark lending rate since the start of November With UK inflation running at around half the rate at which the bank is mandated to maintain it -- two pct -- speculation is rife that the move was designed primarily to take some steam out of the UK's booming housing market But Corbis said: "I don't see yet a situation which should lead to scare stories. I think basically prices are high, but...monetary policy is well placed to take care of this," he said He said the Bank of England is "taking into account this source of overheating by running a kind of pre-emptive and gradual tightening." Cotis said sharp rises in house prices provided a cushion for the UK economy during the global economic downturn, and a cooling off in house prices would similarly be expected to have a dampening effect on economic growth at a time of stronger economic growth fxstreet.com

To: TH who wrote (6135)	5/11/2004 2:55:21 PM
From: mishedlo	Respond to of 116555

China inflation outlook 'not optimistic', Q2 loan growth high - central bank Tuesday, May 11, 2004 11:48:10 AM BEIJING (AFX-ASIA) - China's central bank warned that the economy is likely to continuing powering ahead in the second quarter, with the inflation outlook "not optimistic" and bank lending and fixed asset investment all set to show strong growth. However, a slowdown will become evident in the second half of the year as government policies to cool the economy feed through into the system, the People's Bank of China said in its quarterly monetary policy report. Strong increases in second quarter data have been expected, and do not show that monetary policy has been ineffective, the bank said The impact of the policies "will have a more evident effect in the second half of the year," the bank said, adding "there will be no a hard landing for China's economy". The bank reiterated that it will adopt prudent monetary policies in future for a "moderate tightening" if needed, but will not slam on the brakes In the short term, however, economic data and bank lending figures are not expected to show much of a slowdown. The outlook for inflation, which stood at 3.0 pct in March is "not optimistic", and the consumer prices index is likely to remain at a relatively high level in the second quarter, the PBoC said. GDP, which rose by a sizzling 9.7 pct in the first quarter, will also remain at a "relatively high level" in the second quarter, partly because of the low comparative base last year when the SARS epidemic cut second quarter growth to 6.7 pct. Fixed asset investment, which soared 43 pct in the first quarter "clearly showed an overheating phenomenon", the bank said. China will see a "relatively high" loan growth in the second quarter of this year, partly due to the low comparative figure in the same period last year, with a slowdown seen starting only in the third quarter as the raft of policies and administrative orders issued by the government to curb lending bear fruit. But the PBoC said it will meet the lower loan growth target for the whole year In January, the bank said it was aiming to cut new lending this year by 6.1 pct to 2.6 trln yuan, down from 2.77 trln in 2003 in an attempt to slow the rapid credit growth which is fuelling soaring fixed asset investment, which rose 43 pct in the first quarter. But at the same time, the central bank said it will give banks more flexibility to set their own lending rates as part of its gradual move to a market-oriented interest-rate system. However, it made no mention of any possibility of a rise in benchmark lending rates, a move which is being widely expected by investors and analysts. The PBoC also reiterated its existing stance on the currency, pledging to keep the yuan basically stable at a reasonable and balanced level, while also seeking to move gradually towards a more flexible exchange-rate system. fxstreet.com

To: TH who wrote (6135)	5/11/2004 2:58:05 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

OPEC warns over oil prices, could raise price band - president Tuesday, May 11, 2004 10:30:55 AM LONDON (AFX) - Indonesian energy minister Purnomo Yusgiantoro said there is little the world's largest oil exporters can do to rein in oil prices In an interview with the Financial Times, Yusgiantoro, who is the current OPEC president, said high crude oil prices could last through the summer. He blamed "very tight" gasoline stocks in the US due to new regulations there, the actions of speculators, and geopolitical issues including the unrest in Iraq "I don't like these kinds of prices. These kinds of prices will really hurt everybody," he said "But this price level is not because Opec is playing. There is not much OPEC can do." Yusgiantoro indicated that some OPEC members favour raising the oil cartel's preferred price band He said that rather than trying to bring prices down to the 22-28 usd target, the cartel is likely to "soon" move to raise that price band Oil futures prices in London yesterday dropped 49 cents to 36.51 usd and those in New York fell 53 cents to 39.40 after Saudi Arabia called for what he termed "an essential" 1.5 mln barrel a day increase in the cartel's output ceiling fxstreet.com

To: TH who wrote (6135)	5/11/2004 3:01:07 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

OECD cuts 2004 Germany, Italy growth forecasts; raises projection for France Tuesday, May 11, 2004 10:15:59 AM PARIS (AFX) - The OECD cut its 2004 GDP growth forecasts for Germany and Italy but raised its projection for French growth In its semiannual economic outlook, the OECD said it now expects the German economy to grow 1.1 pct this year, compared with a previous projection of 1.4 pct. It also cut its forecast for German 2005 growth, to 2.1 pct from 2.3 pct The previous forecasts date from the organisation's November economic outlook The OECD said Germany's economic recovery will be largely driven by exports, which are expected to accelerate as world trade growth expands more rapidly, but little improvement is expected in employment "No rapid turnaround is expected on the labour market, with employment starting to increase moderately only towards the end of the year," it said For Italy, the OECD cut its 2004 growth forecast to 0.9 pct from 1.6 pct and its 2005 forecast to 1.9 pct from 2.1 pct It said Italian economic activity is estimated to have remained "almost flat" in the first quarter and is expected to grow at a muted pace in the second. Italy releases first quarter GDP figures on Thursday Italy faces risks relating to the fallout from the Parmalat SpA scandal, the OECD said "Current uncertainties regarding corporate governance in Italy - if not tackled quickly - could widen the risk premia on corporate bonds or eventually lead to a credit crunch, halting the expected rise in investment," it said Meanwhile, the OECD raised its forecasts for French growth, to 2.0 pct from 1.7 pct for 2004 and to 2.6 pct from 2.4 pct for 2005 It said business confidence indicators suggest that growth should continue to pick up strength in the first half of this year, but data for the first quarter are somewhat contradictory. French first quarter GDP is due tomorrow For the euro zone as a whole, indicators suggest that growth picked up slightly in the first quarter, the OECD said On fiscal policy, the organisation said it expects Germany, France and Italy to breach the EU stability and growth pact's 3 pct of GDP public sector deficit ceiling both this year and next Portugal is also expected to exceed the deficit limit in both 2004 and 2005, while the Netherlands and Greece are seen breaching the limit this year but then trimming their deficits to 2.9 pct next year Germany's deficit is projected to reach 3.7 pct in 2004 and then decline to 3.1 pct in 2005, while the French deficit is seen at 3.8 pct this year and 3.6 pct next year Both countries have been above the deficit limit since 2002 and have already forecast that they will breach the limit again this year. But they have committed to get their deficits below the 3 pct threshold in 2005 The OECD said France will need to make substantial efforts beyond those announced so far if it wants to cut the deficit to less than 3 pct Italy's deficit is forecast to reach 3.1 pct this year and then surge to 3.9 pct in 2005 as one-off measures wear off "Further restrictive budgetary measures are thus needed," the OECD said fxstreet.com =================================================== If Germany, France, and Italy get within budget constraints there will be one H of a recession in Euroland IMO Mish