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

To: ild who wrote (11090)	8/27/2004 1:53:43 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 116555

Whoa, that is draconian. And after Opels started outperforming Mercedes in reliability.

To: ild who wrote (11090)	8/28/2004 1:02:42 AM
From: mishedlo	Respond to of 116555

Well, they are taking the spin to the next level now. You see sentiment really fell in the beginning of the month, but it's up since then, so the headline is SENTIMENT UP FROM EARLY AUGUST. U.S. consumer sentiment surpassed expectations in late August after declining earlier in the month as oil prices eased from record highs and security fears abated, according to sources who saw a survey on Friday. The University of Michigan's index of consumer sentiment rose to 95.9 in late August from 94.0 earlier in the month, but it was down slightly from 96.7 at the end of July, according to market sources who saw the subscription-only report. Economists polled by Reuters had expected a reading of 94.0, unchanged from the initial August result. Consumers showed renewed optimism over the present state of the economy and expectations were slightly less downbeat than they had been at the start of August.

To: ild who wrote (11090)	8/28/2004 11:47:14 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Bubble at the Fringe prudentbear.com I recall reading articles highlighting noteworthy examples of spending extravagance that preceded by only months the respective crises in Mexico, Thailand, Russia, Brazil, and Argentina. But, then again, lavish purchases and ballooning trade deficits are a hallmark of Monetary Disorder. And while profligate spending is not a fresh development here in the U.S., I couldn't help but to think that almost 400,000 empty cargo containers leaving the Los Angeles and Long Beach ports during July is a signal along the same lines of booming Mercedes sales in Russia during 1998's first half. And I cannot also help but believe that “strong vs. weak U.S. economy” debates have basically become moot. What should be clear at this point is that even huge fiscal stimulus and unprecedented financial excess are incapable of fostering a sound and self-sustaining economic expansion. The paramount issue, today and going forward, is the deeply maladjusted U.S. economy and its increasing unresponsiveness to even enormous yet misdirected financial stimulus. Both the Financial Sphere and Economic Sphere are severely maladjusted. Two years of Fed-orchestrated “reflation” have only added to the U.S. economy's inflated cost structure and further weighed on global competitiveness. Meanwhile, the Global Credit Bubble (and China and Asian booms, in particular) has worked to strengthen the capabilities (financial and economic) of our determined competitors. But we should have expected nothing less. Today's Boom at the Fringe is but a further manifestation of historic Credit Bubble excesses that has inflated asset prices, bolstered consumption and imports, and inflated the general economy's cost structure, while having limited impact on sound business investment. And I will stick with the analysis that today's predicament of Monetary Disorder and Deep Structural Economic Imbalances is on course to precipitate some type of financial crisis. But, appreciating the extraordinary nature of current global financial systems and markets, it is anyone's guess as to how long market “ebb and flow” can hold tumult at bay. We do know that the U.S. economy and markets require $2 to $3 Trillion of total annual Credit growth. Succinctly, there remain two overarching issues: First, how long can this amount of Credit creation be maintained? Second, what will be the nature of Inflationary Manifestations while the Credit Bubble is sustained?