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

To: ThirdEye who wrote (10197)	8/5/2004 12:07:43 PM
From: redfish	Read Replies (1) \| Respond to of 116555

In a few months we will probably see a glut of used Hummers hit the market.

To: ThirdEye who wrote (10197)	8/5/2004 12:59:20 PM
From: mishedlo	Respond to of 116555

UPDATE 4-Oil soars to new highs on YUKOS saga Thursday, August 5, 2004 4:43:26 PM reuters.com By Sujata Rao LONDON, Aug 5 (Reuters) - World oil prices soared to new record highs on Thursday after the a decision by the Russian government to revoke oil major YUKOS' permit to use its bank accounts to finance operations put the company's crude exports under fresh threat. U.S. crude <CLc1> jumped to an all-time high of $44.40 a barrel, standing $1.37 higher by 1630 GMT to $44.20. London Brent futures rose $1.52 to $41.22 a barrel -- also another record high. Markets have now shrugged off bearish news that pushed prices about a dollar lower in the previous session as the YUKOS news underscored the precariousness of global energy supplies. Russia's Justice Ministry said on Thursday that permission granted by one bailiff, sent to YUKOS <YUKO.RTS> only on Wednesday and made public by the oil firm, was illegal and therefore withdrawn. The company has been battling bankruptcy, with tax debts of $3.4 billion. "All financial means entering the company's accounts now and in future, will be seized by the bailiffs' service and transferred to the budget to pay the tax debt," the ministry said in a statement. YUKOS had announced on Wednesday that bailiffs had allowed it access to its cash reserves to ensure short-term exports, thus helping knock prices off highs in the previous session. "The main news of course is YUKOS against a backdrop of general market worries," said independent energy analyst Geoff Pyne. "The market thinks it is going to lose YUKOS production and at the same time there is no sign that demand growth is slowing down in the second quarter as expected." "There is enough news around to make people believe that OPEC will not be able to raise production immediately," he added. SUPPLY FEARS Prices have risen about a third this year but saw the relentless bull run disrupted on Wednesday when the OPEC producers' cartel reassured the market that it had one million to 1.5 million barrels of spare daily production to add to supplies if needed. It said it was able to tap these supplies immediately. Fears have grown that a major glitch could arise in the supply chain, just at a time when energy demand is growing at the fastest pace in more than two decades and Asian economies continue to consume more and more oil. OPEC production is already running near the highest level since 1979. Security concerns in Saudi Arabia and Iraq, as well as uncertainty in Venezuela and Nigeria have sparked fears of inadequate supply. This has attracted speculative fund investors, who are partly seen as responsible for oil's relentless rise this year. "It will take a lot of time for this extra oil to be delivered by OPEC," said Christopher Bellew of Prudential Bache brokerage in London. "The fears people had about supply interruptions still remain, because of the instability in Saudi Arabia and Iraq." But former Saudi oil minister Sheikh Ahmed Zaki Yamani -- the face of OPEC during the 1970s oil price shock -- predicted that the current price scare would not last. "Prices are already too high. There is additional supply available from OPEC -- you will definitely see it," Yamani told Reuters in an interview. "Before the end of the summer we will see a lower price. Saudi Arabia has the key to do this." Pyne said there were a few signals that stocks were starting to build in the United States. One of the triggers for Wednesday's fall was a report showing rises in gasoline inventories in the United States, unexpected as the country is still in the midst of the summer driving season. This has sparked speculation that high fuel prices and sluggish economic growth has started to cool oil demand in the world's largest energy consumer. fxstreet.com

To: ThirdEye who wrote (10197)	8/5/2004 1:22:51 PM
From: mishedlo	Respond to of 116555

European govt bonds up on weak German data; dovish BoE comments boost gilts Thursday, August 5, 2004 3:48:10 PM LONDON (AFX) - European government bonds were higher as disappointing German manufacturing orders data indicated that there is no urgency for the European Central Bank to raise interest rates Gilts were particularly strong meanwhile in the wake of a surprisingly dovish statement accompanying the Bank of England's interest rate decision today The European Central Bank's widely expected decision to leave rates on hold today had only a limited effect on bond markets The rate decision was "a bit of a non-event", said Audrey Childe-Freeman, analyst at CIBC World Markets, adding that since the ECB did not hold a press conference there was nothing for the market to look at Much weaker-than-expected German manufacturing orders figures gave a boost to European bonds, however, with orders falling a seasonally-adjusted 3.5 pct in June from May. Economists had forecast on average a fall of 0.2 pct month-on-month "The figures were very disappointing and suggest that there is no rush for the ECB to hike interest rates," Childe-Freeman said She added that, on the international front, bonds were also tracking a rise in US treasuries which firmed on hopes that key US July jobs data due for release tomorrow will come in below expectations "There was some position-squaring ahead of the non-farm payrolls data," she said In the UK, gilts were sharply higher, particularly at the long end, despite the Bank of England's decision to hike its key repo rate by a quarter of a point to 4.75 pct earlier today The rate hike had been widely expected by investors and market talk had moved on to the issue of whether the BoE might implement a 50 basis point hike, or whether it would consider back-to-back quarter-point hikes in August and September in the wake of Monday's very strong manufacturing PMI data The accompanying statement by the BoE's rate-setting Monetary Policy Committee was much less hawkish than many had anticipated, however, on the key issues of the outlook for inflation and house prices The statement said there are signs that the housing market is "starting to ease", and that although underlying cost pressures have risen it said the consumer price index, the central bank's target measure, is likely to fall back in the near term "The statement is not hinting at a September rate hike," Chile-Freeman said fxstreet.com

To: ThirdEye who wrote (10197)	8/5/2004 2:30:28 PM
From: mishedlo	Respond to of 116555

Delta is priced for bankruptcy They want $2 for a strike $5 jan 2005 put They want $2.95 for a $5 jan 2006 put AMR puts from a month ago would sure be golden. John Succo on Minyanville wirtes that based on bond prices AMR twice as likley to go BK as DAL. Mish

To: ThirdEye who wrote (10197)	8/5/2004 2:53:23 PM
From: mishedlo	Respond to of 116555

Payroll Playbook With some paraphrased comments from Brian Reynolds. BTW He was bang on back in March as to what would happen but back then the expectations for jobs was low and the numbers were a blowout upside surprise. Bloomberg expectation is 240K Whisper numbers 275K Brian estimates 285+ is what it will take to spook the bond market Most negative for stocks and bonds and might cause a selloff in bonds perhaps to 4.6 yield on ten yr Perhaps a gap and crap on stocks 240-275 in-line minimal treasury reaction and his possible possible best case scenario for stocks. [I will add my guess in here and state that it will cause a mild selloff in treasuries and eurodollars with profit taking after the latest rally, The higher the number the worse for bond holders] 210 or below Brian thinks we might see 10 year rally to 4.25 yield. [mish comment, not sure that 210 will do that but below 200 probably would - I am going to guess a near miss gets us perhaps to 4.30 area] Huge miss 180 or below Brian did not say but I will take a stab at 4.25 and add the additional comment of no hike by greenspan in August. That will cause a huge eurodollar/euribor and treasury rally for sure. Perhaps that causes a big stock selloff followed by a buy the news next week when Greensopan fails to hike. Mish

To: ThirdEye who wrote (10197)	8/5/2004 2:57:05 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

More from Heinz Date: Thu Aug 05 2004 12:33 trotsky (pm stocks and the Dow) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved more often than not, pm stocks correlate POSITIVELY with the broader stock market, especially in short term time frames. but there have been several noteworthy historical exceptions to the rule in medium and longer term time frames. e.g. the 1930's for one. but more recently, two significant periods of non-correlation occurred in the '97 to '00 bear market for pm stocks that coincided with the stock market bubble blow-off, and the pm stock rally off the late '00 low that coincided with the demise of the bubble. the circumstance in which another medium term decoupling could occur is a weakening of the US economy. that would remove the interest rate related bid from the US dollar, and lead to a steepening of the yield curve, both positive for pm stocks. however, it's a good bet that the broader market would suffer from heightened recession fears. there are numerous signs that a consumer-led recession ( as opposed to the business-led one of '01/'02 ) is in the offing. it would be worse in terms of macro-economic data than the business recession, since it would take down the housing finance bubble. like i said before, although the market has ( via the FF futures ) built in a 'normal' Fed tightening cycle, i don't think such a normal cycle will occur. whatever they manage to push through rate hike-wise before the economic downturn becomes obvious will very likely be retraced very quickly in its entirety. Date: Thu Aug 05 2004 12:17 trotsky (humble) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved i was referring only to the gold sector - not the broader stock market. i'm aware that the mutual fund cash to assets ratio is close to an all time low, and what's more, bullish sentiment is quite rampant. still, if you look at the three peaks the SnP and Dow have made this year, it seems possible to me that they will also build the 'domed house' before the slide begins in earnest. doesn't have to happen, but it's a possibility worth considering. Date: Thu Aug 05 2004 12:11 trotsky (bookmark) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved the short version is, i'm watching the tape for signs of whether big traders are accumulating or distributing. this is not in any way related to price movements on a given day, which is why it's different from traditional formulaic approaches. for instance, a 20,000 share bid that gets filled via lots of odd lot selling counts as positive for me, but would be registered as negative using the standard formulas. Date: Thu Aug 05 2004 11:40 trotsky (the conservative case against Bush) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved it's ironclad - whatever he is, he's NOT a conservative. well worth the read ( regardless of whether you do or do not support him ) . note to the gang of densies: it's NOT an endorsement of Kerry. this is simply an anlysis of the CiC's conservative credentials, or rather, the lack of same. nypress.com Date: Thu Aug 05 2004 11:33 trotsky (pm stocks) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved in spite of the non-commital trading range of recent months, the likelihood of a bullish resolution is rising. assets in the Rydex pm fund for instance have declined by more than two thirds...there are no 'weak hands' left. at the same time, gold and silver futures CoTs have vastly improved. also noteworthy, of the past three weeks+ worth of trading, i have jotted down 15 of 17 trading days as having experienced net bullish money money flows ( as i measure them ) . all of this doesn't guarantee anything - but it's an indication that the downside risk has become quite small compared to the upside potential.