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

To: Cogito Ergo Sum who wrote (11240)	9/1/2004 1:04:28 AM
From: S. maltophilia	Read Replies (1) \| Respond to of 116555

Outside of perhaps taking a few sales away from out-of-state mail order retailers, I can't see the benefit of sales tax holidays. If the state needs to collect $x, then it will raise the sales tax rate enough to make up any lost revenue. The retailers sell less the weeks before and after the tax holiday, but still incur all the usual expenses of keeping the stores open. Retailers of goods not included in the tax exemption do less business during the period, and again, incur the same expenses. And the poor customer gets a lousy shopping experience, dealing with the mobs of folks out for an ~8% discount and some semi-bogus sales. Christmas in August. Bah, humbug.

To: Cogito Ergo Sum who wrote (11240)	9/1/2004 9:27:42 AM
From: mishedlo	Respond to of 116555

Forex - Sterling steady at lower levels as string of weak UK data continues Wednesday, September 1, 2004 12:26:18 PM LONDON (AFX) - Sterling was steady at lower levels but still on the back foot as the string of weak UK economic data continued The dust had hardly settled on the dismal UK retail sector survey released by the Confederation of British Industry yesterday when sterling was dented further by a sharp slowdown in house prices and weaker than expected manufacturing sector activity. The pound slipped back under 1.80 usd while the euro edged closer to 0.68 stg "Sterling is suffering independent weakness today, weighed down by the softer than expected CIPS purchasing managers survey and the Nationwide report confirming a dramatic slowing in house prices," said Marc Chandler, chief currency strategist at HSBC This morning's closely-watched Nationwide survey reported further signs of a deceleration in the housing market, with annual house inflation falling to 18.9 pct in August from 20.3 pct in July. The data comes in the wake of a steep fall in the number of mortgage approvals for July. Official figures from the Bank of England showed yesterday that there were only 97,000 approvals, the lowest figure since November 2000 Additionally, a survey released this morning showed that manufacturing sector activity in the UK fell sharply, with the purchasing managers index at 53.1 in August against a revised 56.0 in July. The figure was well below expectations for a much smaller dip to around 56.0 If there was any doubt that UK interest rates will stay unchanged next week, the data settled it. Only one more rate hike this year is expected, indicating that UK rates are very close to their peak Chandler pointed out that going by the futures market, players are not expecting any more rate hikes next year. That aside, some nervousness ahead of the US equivalent of the CIPS report kept the dollar from moving much "After yesterday's soft Chicago PMI report, expectations for today’s national report have been downgraded," said Chandler Yesterday's sharp decline in the Chicago area purchasing managers index, came in the wake of similar falls in the equivalent Empire and Philly Fed surveys A sizeable drop from 64.7 in July to well below 60 is now likely But key focus this week comes on Friday when the US labour market report is released The data is expected to be the main influence on the US Federal Reserve's interest rate decision on Sept 21, and will confirm whether or not the US labour market has entered a weakening trend Elsewhere, the euro enjoyed rises against both the pound and dollar despite a disappointing reading in August's euro zone manufacturing sector purchasing managers' index, released this morning The index fell below expectations to a seasonally adjusted 53.9 in August, from 54.7 in July. The Swiss Franc continued to be supported by comments from Swiss National Bank president Jean-Pierre Roth that high oil prices not pose a serious risk to economic recovery in the country He said the Swiss economy is still expected to grow by around 2 pct this year while inflation remains stable "Many observers now recognize that a Sept 16 rate hike is likely being signaled," said Chandler at HSBC fxstreet.com