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

To: KyrosL who wrote (9071)	7/11/2004 8:26:58 PM
From: mishedlo	Respond to of 116555

Inventories Post from Pituophis on the FOOL ======================================================= This was reported a few days ago. I guess we never talk much about inventory fluctuations because not many of us (or anyone else, it seems) really knows what to make of it, but the rise in inventories in May was huge. I guess it means that wholesalers simply didn't sell as much of their inventory as they expected - I suppose the spin is that, in a time of rising inflation, wholesalers are better off holding larger inventories. It is interesting that this was the largest rise in durable goods inventories since November of 1999 - I think everyone may remember what THAT inventory rise portended: =============== Wholesale inventories top expectations May stockpiles rise 1.2% while growth in sales down slightly from April. July 9, 2004: 11:05 AM EDT money.cnn.com WASHINGTON (Reuters) - Inventories at U.S. wholesalers jumped ahead of Wall Street expectations in May, boosted by growth in durable goods stocks, while sales at the wholesale level increased at a milder pace than in April, a government report on Friday showed. The Commerce Department said wholesale inventories rose 1.2 percent in May after an upwardly revised 0.2 percent gain in April. Analysts had expected a 0.5 percent rise in May wholesale inventories, according to a Reuters survey. Sales grew at a slightly weaker pace, rising 0.5 percent in May compared to 0.9 percent in April. April inventories were originally reported as a 0.1 percent decline, while April wholesale sales had been initially reported showing a 0.8 percent gain. The gain in inventories and slower sales propped up the inventory-to-sales ratio - which measures how long it would take to draw down stocks at the current sales pace - to 1.13 months' supply from 1.12 in April. Inventories of durable goods - items meant to least three years or more - rose 1.5 percent in May, reflecting large rises in metals, hardware and lumber stocks. The durable goods increase was the highest since a matching 1.5 percent rise in November 1999.

To: KyrosL who wrote (9071)	7/11/2004 8:30:59 PM
From: mishedlo	Respond to of 116555

That High-Tech Balloon Is Going Ssssssssss But the biggest trouble spots on Mr. Hickey's horizon are the ballooning inventories on tech companies' balance sheets. Already rising in the first quarter, these inventories will probably show a surge for the second quarter, he said, because few tech companies appear to have cut production in recent months. IN the first quarter of 2004, inventories jumped 21 percent to 61 percent, year over year, at such tech stalwarts as Dell, Cisco Systems, Intel and Texas Instruments. And that was when the economy was cooking. So Mr. Hickey expects inventories to show a surge for the second quarter. When inventories rocket, profit margins are hurt. Hefty write-downs are another common result. nytimes.com

To: KyrosL who wrote (9071)	7/11/2004 8:52:39 PM
From: mishedlo	Respond to of 116555

Reverse Mortgages from Julie on the FOOL... I met up with someone who is in the reverse Mortgage business. He claimed that business was up 60% last year and expect it to double for the year 2004. I was hoping someone had some information/experience with this type of mortgage business. I think real estate is going to remain an important part of the economy for many more years ahead ~j theage.com.au About $400 billion in untapped home-equity could be the answer to the ageing population's expected shortfall in retirement income, industry analysis group Datamonitor says in a review. Reverse mortgages, which let people borrow on the basis of their equity and not to make repayments during the loan term, are expected to become increasingly popular, the report concludes. For this type of mortgage to become widely accepted, banks and other lenders will need to improve its image through marketing, improving safeguards and better regulation, possibly through a code of conduct, the report says. Reverse mortgages came under fire over allegations that excessively high compound interest rates rapidly consumed house values, resulting in negative equity and borrowers owing money to the lender. Financial services analyst Alex Boorman says most excesses, such as the possibility of negative equity, have been removed, while better marketing would remedy confusion. In 2003, about 5000 reverse mortgages, totalling an estimated $250 million, were advanced, a fraction of the potential market, the report says. Commonwealth Bank and St George are providing most of these mortgages. "Despite the poor performance of reverse mortgages in the 1990s, there is now renewed interest," Mr Boorman says. "This is not merely a result of wider availability, although this is an important factor. Rather, it is because changing social circumstances are conspiring to create a conducive environment." He recommends that Australian lenders follow the British model and set up an industry body to liaise with retirement organisations and create barriers to entry for those unwilling or unable to meet industry criteria. The report identifies the key dynamics driving the market as an ageing community, insufficient retirement savings, the growth in home equity and increasing competition among lenders.

To: KyrosL who wrote (9071)	7/11/2004 10:01:02 PM
From: mishedlo	Respond to of 116555

Hussman on superballs hussmanfunds.com

To: KyrosL who wrote (9071)	7/12/2004 1:53:19 AM
From: Haim R. Branisteanu	Read Replies (10) \| Respond to of 116555

Europe to Lag Global Growth on Aging Population, Labor Costs July 12 (Bloomberg) -- Henkel KGaA Chief Executive Ulrich Lehner said in February the fastest global growth in four years would boost the European economy and increase sales of his company's Persil detergent and Schwarzkopf shampoos. On July 6, the 128-year-old company cut in half its forecast for sales growth as ``ongoing sluggish demand'' in its home market spreads across Europe. Two days later Carrefour SA, Europe's largest retailer, said first-half sales at its French hypermarkets fell and on Friday L'Oreal SA, the world's largest cosmetics maker, said revenue in Germany, France and Italy has stagnated. Five years after the euro currency's introduction, the region's economy is lagging the U.S. for the 11th year in 12 and the pace of growth is dwindling for a fourth decade. Companies, including tiremaker Continental AG, are moving jobs abroad, government efforts to boost growth have been hobbled by slumping popularity and a shrinking workforce is boosting welfare costs, further depressing economic expansion. ``Europe will lag the rest of the world for the next 15 years,'' said Philipp Vorndran, chief strategist at Credit Suisse Asset Management in Zurich, which has $241 billion in assets under management in Europe, in a telephone interview. ``Growth of 1.5 percent to 2 percent is what we have to expect over the coming years -- and the trend is pointing down.'' The Paris-based Organization for Economic Development and Cooperation estimates the region's potential growth -- the rate at which the economy can grow without fueling inflation -- at 2 percent, compared with 2.7 percent in the 1980s and 3.2 percent in the U.S. Vorndran said the euro region's potential rate may fall to between 1 percent and 1.5 percent over the next two decades.