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To: c.hinton who wrote (11414)	5/18/2004 12:40:14 AM
From: c.hinton	Read Replies (2) \| Respond to of 108590

Bond blues are building By Peter Brimelow, CBS.MarketWatch.com Last Update: 12:41 AM ET May 17, 2004 NEW YORK (CBS.MW) -- The bond timers' confidence has crashed to record lows. They'd better not be right. Quite quickly, the Hulbert Bond Sentiment Index [HBSI], measuring the average exposure of bond timers has moved to a record negative 56.84 percent. As recently as April 8, the HSBI was just negative 4.21 percent. Only one letter is currently bullish: National Trend Line - which doesn't have a particularly compelling record, according to data compiled by the Hulbert Financial Digest. Nevertheless, this is a classic extreme situation that contrarians just won't be able to resist. For example, the previous bearish extreme was negative 56.25 percent on March 8 2002. As it turned out, bonds were beginning a jagged rally that lasted until early 2003. Contrary opinion worked perfectly. But this contrarian stuff is tricky. For example, when I last wrote about bonds, I artfully attributed to Mark Hulbert the view that the rapid decline in sentiment in the face of the bond break -- no stubborn bullishness -- meant, from a contrarian point of view, that the worst might be over. It wasn't. Complaints should be addressed to Mark Hulbert, whose e-mail address is available elsewhere on this site. The other reason for hesitation is the extraordinarily dire nature of the bearish arguments that are now being made. Both technically and fundamentally, there is a definite sense that a juncture is being reached. Last week, the Australian gold service The Privateer.com wrote starkly: "US Treasury bonds have been in a bull market ever since the end of 1994. The bubble burst in June last year, but the uptrend still held...The major uptrend supporting the post 1994 bull market has not yet been breached, it will be if 10 year yields keep rising at all from present levels." Privateer also came at the issue in fundamental terms: "Remember, for most of the past three years, the US has sported a regime of negative REAL interest rates even by official measures. This has spawned a huge "carry trade" as investors borrow US Dollars at absurdly low rates in order to invest in foreign (and US) debt paper offering yields at high multiples of the cost of the borrowing... "With the growing apprehension, which has now become certainty, that the Fed is on the verge of raising official US rates, and with the resultant LEAP in rates on Treasury debt (especially Treasury debt of one year plus maturity), a huge hole has appeared in the value of US bond and stock portfolios. This has led to capital repatriation. But a far more potent aspect of the anticipation of higher US rates has been...this movement, this unwinding of the "carry trade", which is pushing the US Dollar up on the forex markets. The present Dollar advance is the VERY last echo of the US bubble markets, fuelled as it is by the accelerating unraveling of all the other ones. The flight of capital is getting closer and closer to "cash"... PRECISELY what happened to the dollar in the late 1970s." This Friday, Dow Theory Letters' Richard Russell updated the T-note chart, showing a clear breakout: "What you see here is the breakout that keeps Alan Greenspan awake at night. If yields continue to climb, they're going to drive a dagger into the debt-bubble, and if that happens the Greenspan bubble bursts and the "sh-- will hit the fan." Typical investment letter madness? The impeccably respectable Societe General has just put out a research bulletin headed "A confluence of ominous events..." The bank says: "A slowdown in US economic demand may be unavoidable...cooling Chinese demand, high energy prices, and a choke on US borrowing, are combining to threaten global economic demand...Underweight global manufacturing plays." Have a nice week!

To: c.hinton who wrote (11414)	5/18/2004 1:42:09 AM
From: elmatador	Read Replies (2) \| Respond to of 108590

35-hour week a disaster in Germany too! Siemens came to a facility and said: There are jobs for 40 hour week and no jobs for 35-hour week. The 220 employees accepted the 40-hour week. Had they not, the facility would've been cclosed and their jobs shipped to Hungary. Now they are back to work like they used to do 21 years ago when after a long strike companies agreed to shot the work week to 35 hours. Coutries like India, Brazil and many African states, have their governing elite living abroad. This is going to be more so as the condititons deteriorate.