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

To: orkrious who wrote (11166)	8/30/2004 4:16:21 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

I really do not think he said much. The US$ can correct a lot here given that it was in a freefall for about 2 years. Now the "recovery" is suspect in Europe and the UK appears to be done or nearly so in hiking, the US$ has plenty of room to rise for a while. I think a trading range is more likely. Once the US recovery is seen for the sham that it is, the US$ could plunge. All it will take to get it started is Greenspan skipping one hike or US housing to fall on its face. Grand reflation part II will be interesting. I predict US interest rates will be lower at the end of 2005 than the end of 2004. Even with that I expect housing and auto to falter. The question is: what will the US$ fall against? Is Europe much if any better? Japan? Other than gold or silver what should the US$ fall against? Mish

To: orkrious who wrote (11166)	8/30/2004 4:35:44 PM
From: mishedlo	Respond to of 116555

U.S. July incomes grow at slowest pace in 2 years [how long before they are negative - mish] Monday, August 30, 2004 6:42:14 PM WASHINGTON (AFX) - Personal incomes of U.S. residents grew 0.1 percent in July, the slowest growth in two years, the Commerce Department estimated Monday Consumer spending increased 0.8 percent in July after a revised 0.2 percent decline in June. With spending rising faster than incomes, the personal savings rate fell from 1.3 percent to 0.6 percent, the lowest since December 2002. Disposable incomes (after taxes) increased 0.1 percent in July after no change in June Income growth was a disappointment, but the spending numbers came in strong as expected. Economists surveyed by CBS MarketWatch were expecting incomes to rise 0.4 percent in July. "Consumption is bouncing back in the third quarter from its feeble 1.6 percent annualized advance in the second quarter," said Sherry Cooper, chief economist for BMO Nesbitt Burns. Inflation moderated in July. The personal consumption expenditure price index was unchanged. The core PCE index - which excludes food and energy prices - was also unchanged. In July, the core PCE price index had risen 1.5 percent year-over-year for the fifth straight month. The core PCE price index is the Federal Reserve's preferred consumer inflation gauge. Fed officials have implicitly adopted a target of about 2 percent in the core PCE The tame inflation numbers will give the Federal Reserve more room to maneuver if growth slows in coming months. At present, Fed officials continue to believe the economy has suffered only a temporary setback and are on track for another interest rate hike at the Sept. 21 meeting. With inflation flat, real spending also increased 0.8 percent, the biggest increase since November Real disposable income grew 0.1 percent in July. Real disposable incomes increased just 0.9 percent in the first seven months of the year after growing 3.9 percent in all of 2003 The slow down in incomes in July was primarily due to declines in transfer income, proprietors' income and rental income. The 0.8 percent decline in transfer payments reflected the sunsetting of a provision of the Jobs and Growth tax cut Wage and salary income increased 0.4 percent, a healthy gain considering nonfarm payrolls rose an anemic 32,000 in July. "What we need are more job gains," said Robert Brusca, chief economist for FAO Economics. "Putting more to work will boost aggregate income and then spending." The bulk of the increase in spending was for durable goods, which increased 4.5 percent after falling 3.1 percent in June. Automakers reported a large snapback in sales in July after they brought back sales incentives Real spending on nondurable goods increased 0.6 while real spending on services increased 0.2 percent. June's decline in spending was revised higher, from a 0.7 percent drop to a 0.2 percent decline

To: orkrious who wrote (11166)	8/30/2004 4:39:04 PM
From: mishedlo	Respond to of 116555

Steve on the FOOl ponders autos I've been wondering how a protectionist imported auto tarrif would be gerrymandered to protect the big 3 and hurt the imports. If a Honda, made in Ohio, is an import because Honda is foreign owned, then a Dodge made in Michigan would be an import because Chrysler is foreign owned. If my Ford Escort, which was built in Mexico, is domestic because it's a Ford, then Jaguars and Range Rovers made in England are domestics because those companies are owned by Ford. How about going by North American content? Both my Civic (built in Ontario) and my Escort (built in Mexico) are 80% North American content. The Chevy Equinox is final assembled in the US, but only has 55% North American content. So what constitutes an import? Steve...spends too much time reading car mags

To: orkrious who wrote (11166)	8/30/2004 4:42:01 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

UPDATE 5-Oil extends losses, OPEC seeks to boost capacity Monday, August 30, 2004 7:07:20 PM reuters.com (Updates prices) NEW YORK, Aug 30 (Reuters) - U.S. oil prices hit their lowest in more than a month on Monday on continued profit-taking as producer group OPEC sought to increase its tight spare capacity and the U.S. summer driving season approached its end. U.S. light crude <CLc1> settled down 90 cents to $42.28 a barrel after falling to $41.30 a barrel midday, the lowest level since July 26. Oil has dropped more than $7 from the record highs near $50 a barrel earlier in the month as hedge funds, responsible for part of the recent price surge, take profits. Brent crude trade on Londons International Petroleum Exchange was shut for a public holiday. Despite last weeks slide, oil prices remain about a third higher than at the end of 2003 as producers pump close to full tilt to match soaring demand. The head of the OPEC producers cartel said on Monday that the group, which controls more than half of world exports, aimed to increase spare output capacity by about one million bpd in the next few months in an effort to bring down sky-high prices. The Organization of Petroleum Exporting Countries is estimated to be pumping close to 30 million bpd, its highest level since 1979, in an effort to dampen this years price rally. "In response to expected demand growth in the near future, member countries have plans in place to further increase production capacity by around one million bpd towards the end of this year and into 2005," OPEC president Purnomo Yusgiantoro said in a written statement handed to reporters in Jakarta. "In addition, plans for additional capacity expansions are available and could be enacted soon. However, this capacity would, typically, become available around 18 months after commencement of this process." Only OPECs Saudi Arabia has any significant spare capacity within the 11-member producers cartel, which is due to meet on Sept. 15 in Vienna to review output policy. Also pressuring prices is the looming end to vacation season, which typically means a decline in motorist demand for gasoline. The summer driving season traditionally ends on the Labor Day weekend. Keeping a floor under the oil price dive, Iraqi oil exports ran at a reduced 1.4 million barrels per day (bpd) on Monday, compared with two million bpd a week ago. An Iraqi oil official said work to repair sabotaged pipelines would take five days. Fire fighters on Sunday battled to put out a blaze in the South Rumaila oilfield after spilt oil and gas from damaged pipelines ignited. Turmoil in Iraq and frequent attacks on oil infrastructure have been a major factor in underpinning the sharp rally in crude prices this year.