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

To: Knighty Tin who wrote (7696)	6/9/2004 9:44:10 AM
From: TobagoJack	Read Replies (1) \| Respond to of 116555

HSBC in HK is offering one year @ 1.15% rate to best customers on secured basis (deed to abode). Money is simply not money anymore. J

To: Knighty Tin who wrote (7696)	6/9/2004 10:30:40 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

In May, the BLS estimated that 195,000 new business jobs were created while total nonfarm payrolls came in at 248,000. In April and March, the government estimated that 270,000 and 153,000 new business jobs were created, respectively. Total nonfarm payrolls reportedly rose 346,000 in April and 353,000 in March. According to these numbers, 65% of the new jobs created in the last three months have come from the birth/death model estimations. ....... The household survey, which is a sample of about 60,000 homes, was hailed as the more accurate measure of employment earlier this year because it reflects the growth in new small businesses, without any guesses having to be made. Over the past three months, this survey has shown that 471,000 jobs have been created, far short of the 947,000 new jobs reported in the establishment survey. "We know discrepancies emerge from time to time," Hunt said. "Payrolls were lagging the household [survey prior to March] and some of it could be catch-up." Still, he said the discrepancy is extremely wide and suggests that payrolls might be inflated. "When you see that difference, you cannot help but wonder whether some of it is originating in the birth/death model," he said. In May, the household survey showed that employment rose by 196,000 but 137,000 workers were classified as self-employed. Hunt said many of those workers are self-employed because they can't find a payroll job and they won't have health or retirement benefits. Full-time employment actually fell during May while part-time employment increased, the household survey showed. Those working part-time because they couldn't find a full-time job rose by 134,000. Meanwhile, 39,000 more people were out of work in May compared to April, and both the average and median duration of unemployment increased last month. In a speech at the International Monetary Conference in London, Fed Chariman Alan Greenspan noted that "the proportion of increases in temporary workers relative to total employment gains has been unusually large, suggesting that business caution remains a feature of the economic landscape." [Lots more info in the article - mish] thestreet.com

To: Knighty Tin who wrote (7696)	6/9/2004 10:39:39 AM
From: mishedlo	Respond to of 116555

Gary Shilling You can make a bullish case for the economy, but it's hard to make one for the stock market. Though coming employment gains will sustain rapid economic growth, their effect on productivity will be harmful. You can't have big rises both in job rolls and in productivity. That's why earnings growth will not be adequate to support current lofty stock prices. Indeed, the rise from October 2003 to March 2004 may prove to be a temporary rally in a long bear market that is far from over. forbes.com

To: Knighty Tin who wrote (7696)	6/9/2004 10:48:15 AM
From: mishedlo	Respond to of 116555

Japan's Shinsei Bank follows Mizuho Corp Bank's lead in raising prime rate Wednesday, June 9, 2004 8:37:50 AM TOKYO (AFX-ASIA) - Shinsei Bank, Japan's fifth-largest lender by assets, said it will raise its long-term prime lending rate to 1.9 pct per annum, from 1.7 pct, effective tomorrow Earlier today Mizuho Corporate Bank, one of the two main lending arms of Japan's largest banking group, said it too was raising its long-term prime rate by 0.2 percentage point to 1.9 pct, the highest level since August 2002 Other banks are expected to follow suit, reflecting the sharp rise over recent weeks in bond yields, the most sensitive indicators of trends in both short- and long-term interest rates. The prime rate is the rate charged on loans to a bank's most creditworthy customers Japanese banks review their prime lending rates monthly, and adjust it in relation to movements in the coupon rate set on their monthly issues of five-year debentures, a major fund-raising source The long-term price rate is set 0.9 percentage point higher than the five-year coupon rate. Shinsei said it set a coupon rate of 1.0 pct on its June issue of five-year debentures, up from 0.8 pct the previous month Domestic interest rates have been rising in lockstep with yields on Japanese government bonds, which have shot up over the past two weeks as bond prices dropped as investors shifted funds to Japanese equities. The yield on the benchmark 10-year government bond today surged to a high of 1.780 pct, the highest level since Nov 15, 2000. It closed at 1.745 pct, up from 1.700 pct at Tuesday's finish The yield has surged 290 basis points over the past 10 trading days fxstreet.com

To: Knighty Tin who wrote (7696)	6/9/2004 11:00:57 AM
From: mishedlo	Read Replies (2) \| Respond to of 116555

Home Equity Loans As Alternative to Refinancing; Banks Aggressively Push Them Risks of Monthly Adjustment By RUTH SIMON Staff Reporter of THE WALL STREET JOURNAL June 9, 2004 At J.P. Morgan Chase & Co., home-equity volume climbed 51% in the first quarter of 2004 compared to the previous year Both Wells Fargo & Co. and National City Corp. say their home-equity business set records in March and April Lenders are expected to originate a record $370 billion in total home-equity loans and lines of credit this year David Lauster, a real-estate agent in Orlando, Fla., is using a $90,000 home-equity line to finance the purchase of an investment property. "I didn't have cash accessible for a down payment anywhere else," says Mr. Lauster, who figures the value of his home has climbed 30% since he bought it for $310,000 16 months ago But because rates typically adjust monthly, borrowers will see their payments rise soon after the Federal Reserve begins raising short-term rates. "The quicker the Fed moves, the more the line-of-credit borrower will feel it," says Greg McBride of Bankrate.com. In a recent report titled "Home Equity Loan Bubble?" Prudential Equity Group chief investment strategist Edward Yardeni wrote that "more and more Americans may use [home-equity loans] to finance a lifestyle they may be unable to support on their incomes alone." Last year, the Office of the Comptroller of the Currency assembled a special task force to look at the issue. It found that lenders had loosened their lending standards and "need to sharpen their risk-management practices," says Barbara Grunkemeyer, deputy comptroller for credit risk.

To: Knighty Tin who wrote (7696)	6/9/2004 11:38:50 AM
From: mishedlo	Read Replies (3) \| Respond to of 116555

KT - You follow coffee? db.riskwaters.com "But the participation of “ignorant” thematic traders with the attitude that 'commodities are good' has suspended normal market trends, Touradji says. “It creates opportunities to trade directionally and fundamentally, but that comes with the risk that market dislocations are being driven wider than they have at any time in recent history.” Such activity occurred in April and May, as fears that the Federal Reserve planned an imminent rise in interest rates resulted in participants fleeing from some metals and soft commodities. Zinc has dropped 10% since its high in April, while coffee has fallen 15%. Touradji says he sold on the way down for risk control, but is now going longer, believing the fundamentals are bullish. Momentum traders of coffee on the London International Financial Futures and Options Exhange have a short position of over a third of open interest, according to his estimates – a “quite alarming” fact, he says. “When the market turns, they will not only have to cover this position, but will likely go long.” He predicts the price of coffee will double in the next year, calling the situation the most exciting opportunity he has seen in five years. “The risk-reward is great, because everyone is short,” he adds."