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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (17666)	8/13/2004 8:41:22 AM
From: russwinter	Read Replies (3) \| Respond to of 110194

What a disaster, how can the markets ignore this one? This is especially ominous: "The department said exports fell 4.3 percent to $92.8 billion in June, the biggest decline since September 2001 and the weakest performance since February." Reuters The U.S. Trade Gap Widens to a New Record Friday August 13, 8:33 am ET WASHINGTON (Reuters) - The U.S. trade deficit widened much more than expected in June, hitting a record $55.8 billion dollars as the biggest drop in exports in nearly three years combined with record imports, the government said on Friday. Wall Street economists had expected the deficit to widen, but looked for a gap of just $47 billion. In its report, the Commerce Department also revised May's trade shortfall to $46.9 billion from the previously reported $46.0 billion. The department said exports fell 4.3 percent to $92.8 billion in June, the biggest decline since September 2001 and the weakest performance since February. At the same time, imports climbed 3.3 percent to an all-time high of $148.6 billion, partly reflecting a run-up in oil prices. Crude oil prices hit $33.76 a barrel, according to the department's measure, the highest price since March 1982. The quantity of crude imported also rose to a record level. While other recent data had led economists to expect an upward revision to the government's measure of second-quarter economic growth, the trade data was likely to lead them to lower their sights. In its first snapshot of the second quarter, the government said U.S. gross domestic product advanced at a 3 percent annual rate, a sharp slowdown from the swift 4.5 percent pace at the start of the year. The trade report showed the politically sensitive trade gap with China widened to a record $14.2 billion as exports eased and imports soared to an all-time high. U.S. manufacturers and labor groups complain that Beijing's policy of holding the value of its currency, the yuan, steady against the dollar has given it an unfair trade advantage. The Bush administration has claimed it is making progress getting China to move toward a more flexible currency regime, but Democrats want to ratchet up the pressure with a trade investigation. The report also showed the U.S. trade gap with Mexico reached a record. For the first half of the year, the trade gap came in at $287.7 billion, putting it well ahead of the same period last year and on track to break last year's record $496.5 billion.

To: orkrious who wrote (17666)	8/13/2004 9:55:11 AM
From: re3	Read Replies (1) \| Respond to of 110194

Date: Fri Aug 13 2004 09:33 trotsky (trade deficit) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved what can i say? it's getting out of control at an accelerating pace. if one looks back, as recently as 2001, a monthly deficit of below 30 billion was viewed with alarm by some people. the chart has gone parabolic, and ultimately, all parabolic charts suffer the same fate - they become the subject of an 'anti-bubble'. how does the market deal with out-of-control current account deficits? the process is well-known and has played out many times ( see the Asian crisis of '97-'98 ) . the currency of the debtor gets whacked, and a recession the depth of which is commensurate to the imbalance that needs correcting ensues. thus, the coming consumer recession will be a doozy...it needs to correct the biggest such deficit in mankind's history after all