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

To: Knighty Tin who wrote (11763)	9/14/2004 10:23:28 AM
From: RealMuLan	Read Replies (2) \| Respond to of 116555

I heard on the radio that in 2 years, the cost of Medicare will account for 37% of the total of Social Security. Isn't that going to speed up the insolvency of SS?

To: Knighty Tin who wrote (11763)	9/14/2004 10:42:53 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

UPDATE 1-Citigroup regrets Aug euro govt bond sale-memo [WTF is C doing? - Mish] LONDON, Sept 14 (Reuters) - U.S. financial services giant Citigroup (C.N: Quote, Profile, Research) regrets its controversial sale of around 11 billion euros ($13.5 billion) worth of euro-denominated government debt on Aug. 2, according to an internal memo seen by Reuters. The memo, under the name of Tom Maheras, the firm's head of global capital markets, said that Citigroup did not fully consider the impact of this bond trade on the market. "Unfortunately, we failed to fully consider its impact on our clients, other market participants, and our regulators," the memo said. A spokeswoman for Citigroup declined to comment. The UK's market watchdog the Financial Services Authority launched an investigation into the transaction last month and other European regulators have been looking into the trade. The inquiry centres around Citigroup's sale of around 11 billion euros worth of euro-denominated government debt in the space of minutes on Aug. 2. Traders at rival banks said Citigroup sold the securities quickly, causing them to fall in value, and bought many back soon afterwards to make a profit, which they estimated at anywhere from 10 million to 30 million euros. The memo said that Citigroup had not met its own standards. "We did not meet our standards in this instance and, as a result, we regret having executed this transaction," it said. Separately, the Japanese Securities Exchange Surveillance Commission said on Tuesday that Citigroup had violated rules on the placement of securities and called for an administrative penalty on the bank. reuters.com

To: Knighty Tin who wrote (11763)	9/14/2004 10:45:17 AM
From: mishedlo	Respond to of 116555

U.S. Q2 current account deficit widens to $166 billion - Tuesday, September 14, 2004 1:16:22 PM WASHINGTON (AFX) -- The U.S. current account deficit widened to a record $166.2 billion in the second quarter from $147.2 billion in the first quarter, the Commerce Department estimated Tuesday The deficit increased to a record 5.7 percent of gross domestic product during the June quarter The current account deficit is the broadest measure of the nation's economic balance sheet with the rest of the world. It encompasses both trade and capital flows. Economists had been expecting the second quarter's deficit to widen to about $159.8 billion, according to a survey conducted by CBS MarketWatch. Most economists believe the current account deficit is unsustainably high and must be adjusted eventually, either through an abrupt change in currency values or changes in U.S. savings behavior. The deficit on trade of goods and services increased to a record $150.3 billion from $138.6 billion in the first quarter Net capital flows into the United States increased to $146.8 billion in the second quarter from $138.6 billion in the first quarter. Flows of capital in and out of the United States slowed. Foreign capital inflows slowed to $265.2 billion from $445.3 billion in the first quarter. However, U.S. acquisitions of foreign assets slowed even more, sinking to $118.5 billion from $306.7 billion Foreign purchases of U.S. equities fell to $2 billion from $4.2 billion. Purchases of U.S. Treasurys dropped to $35.6 billion from $65.4 billion, while purchases of corporate bonds increased to $51.5 billion from $51.2 billion. Purchases of agency bonds rose to $35.1 billion from $6.7 billion Foreign official assets -- that is, those assets held by central banks -- increased $73.9 billion compared with an increase to $127.9 billion in the first quarter The increase in foreign direct investment in the United States rose to $32.7 billion from $10.2 billion In a separate report, the Commerce Department estimated U.S. retail sales fell 0.3 percent in August as auto sales dropped 1.9 percent. Excluding autos, sales rose 0.2 percent. fxstreet.com

To: Knighty Tin who wrote (11763)	9/14/2004 10:48:20 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Oil - Brent futures surge on signs OPEC won´t hike output, Iraq pipeline fire Tuesday, September 14, 2004 10:55:58 AM Oil - Brent futures surge on signs OPEC won't hike output, Iraq pipeline fire LONDON (AFX) - Brent crude futures surged in early deals on rising signs that OPEC will decline calls to raise production quotas at tomorrow's meeting in Vienna and amid fresh sabotage against Iraq's export pipelines, dealers said Hurricane Ivan's approach towards the Gulf of Mexico, where both BP and Shell closed production facilities in several phases Sunday and yesterday, also pressured prices, they said At 11.05 am, benchmark Brent North Sea crude for October delivery was up 61 cents at 41.67 usd per barrel. New York's main October contract was up 53 cents at 44.45 usd in pre-market deals "Prices are stronger on the back of hurricane Ivan, and jittery ahead of the OPEC meeting," said GNI-Man Financial trader Lee Eliott. In reference to the Vienna meeting, where OPEC is also expected to review its oil price band, Sucden analysts said: "Signs are emerging that the group could resist calls to raise official output limits to legitimise actual production, which is running approximately 1.5 mln bpd above the existing (quota) ceiling." Ali al-Nuami, oil minister of OPEC kingpin Saudi Arabia, said overnight that his government is not in favour of raising either OPEC's official production rate or the 22-28 usd price band He also said Saudi is against a 40 usd price tag on oil, but that there is little the cartel can do to reduce prices if speculators are determined to drive the market higher GNI-Man Financial's Elliot said speculation over Wednesday's US inventory data are also exerting upward pressure on prices "For the last few weeks traders have been waiting for a big build in (US) crude (stocks), but we've just not seen it." "Inventories have already been affected by hurricanes Bonnie and Charley, and now we can only imagine what Ivan will do," he added. The Miami-based National Hurricane Centre said Ivan remains a category 5 hurricane, with wind speeds of up to 160 mph. "It is not surprising that Shell and BP have got people off oil rigs and shut down production," said Elliot Also boosting prices were reports of fresh sabotage on Iraq's northern pipeline A spokesman for the Iraqi military said the oil export artery was hit 60 km west of Kirkuk. There was no immediate confirmation of the attacks from the North Oil Co fxstreet.com

To: Knighty Tin who wrote (11763)	9/14/2004 10:51:21 AM
From: mishedlo	Respond to of 116555

BoE´s Nickell says ´significant probability´ of UK house prices falling UPDATE Tuesday, September 14, 2004 10:17:10 AM 2004-09-14 11:17:10 BoE's Nickell says 'significant probability' of UK house prices falling UPDATE (Updates with information on consumption) LONDON (AFX) - The outlook for UK house prices are uncertain although there is a "significant probability" that they may fall at some stage, Bank of England rate setter, Steve Nickell said. Nickell, a member of the nine strong Monetary Policy Committee, pointed out that it is also "quite possible that house prices will not fall at all" but added that they are "very likely" to dip below gains matching the annual earnings growth rate of 4.5 pct Indeed, observers are divided about the prospects for house prices If the two main surveys of UK house prices are to be believed, the property market has finally responded to the series of rate hikes delivered by the Bank of England, possibly marking an end to the boom years The latest monthly house price index from HBOS PLC unit, Halifax, found that house prices fell by 0.6 pct in August from the previous month for an annual rise of 21.3 pct. The data backs up Nationwide Building Society's equivalent house price index which rose just 0.1 pct from July - the smallest gain since November 2000 - for an annual increase of 18.9 pct. Both Halifax and Nationwide say they expect a soft landing for the property prices but no crashes Nickell said that it is worth speculating on the prospects for house price gains as they will affect household spending and the future path of inflation "So even though house prices are not included in the Consumer Price Index, monetary policy must pay them close attention," he said Currently, the level of house prices are close to six times that of average earnings and this ratio would have to fall by around 32 pct to reach its average level since 1982, he said But it may no longer be valid to compare the current situation with 1982 as house price gains set against increases in average earnings may well have risen since then Separately, Nickell argued that there has been no boom in consumption -- with the level of quarterly growth since 2000 almost exactly the same as in the previous 30 years "So there is no consumption boom," he said Since 1998, households have also been spending roughly the same proportion of their incomes after taxes, despite higher levels of debt they have taken on In addition, with the higher debt levels, households have also accumulated more financial assets. "Therefore, there is no strong relationship between aggregate consumption growth and aggregate debt accumulation," Nickell said fxstreet.com

To: Knighty Tin who wrote (11763)	9/14/2004 10:54:44 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Saudi says against 40 usd oil price level, but OPEC´s options limited -UPDATE [Gee, I know they are so so so sad they are making all this money - mish] Tuesday, September 14, 2004 7:36:42 AM 2004-09-14 08:36:42 Saudi says against 40 usd oil price level, but OPEC's options limited -UPDATE (updates with comments on oil market, Saudi spare capacity) VIENNA (AFX) - Saudi Arabia said OPEC is against a 40 usd price tag on oil, but admitted there is little the 11-member cartel can do to reduce it if speculators continue to drive the market higher "We do not support this price and OPEC does not want this price," Saudi Oil Minister Ali al-Nuaimi told a group of reporters a day ahead of a meeting of the cartel in Vienna at which the issue of production quotas is expected to be raised Oil is currently skirting at between 40-45 usd per barrel Al-Nuaimi said OPEC is doing what it can to take the heat out of oil prices after they rocketed in recent months on fears of political turmoil in the Middle East and soaring demand in China "OPEC is doing its part, but OPEC is not the only player in town and people want to make money," he added "They know there is no better way to make it than do what they are doing in the market. There is not much we can do. It is very legitimate, people want to make money." For its part, the world's largest producer will continue to pump 9.5 mln barrels of oil per day as long as there is demand, and has the capacity to produce an extra 1 mln, possibly more, if the need arises. Asked how long he believes Saudi Arabia will maintain its current high output, he said: "It depends on demand and it depends on customers." Yesterday, al-Nuaimi said Saudi Arabia is not in favour of raising OPEC's official production quota or its current 22-28 usd target band for prices fxstreet.com

To: Knighty Tin who wrote (11763)	9/14/2004 11:03:43 AM
From: mishedlo	Respond to of 116555

West European July car registrations down 5.5 pct yr-on-yr, Aug down 1.3 Tuesday, September 14, 2004 6:15:18 AM BRUSSELS (AFX) - Western European car registrations were down 5.5 pct in July, and fell 1.3 pct in August, industry association ACEA said. "The market figures for the summer months, traditionally one of the weakest periods, show a clear drop in July and an almost flat situation in August, reflecting current economic uncertainties in a number of countries," ACEA said

To: Knighty Tin who wrote (11763)	9/14/2004 11:05:31 AM
From: mishedlo	Respond to of 116555

Tokyo Aug dept store sales fall 2.7 pct year-on-year; 32nd drop in 33 mths Tuesday, September 14, 2004 6:09:10 AM TOKYO (AFX) - Department store sales in Tokyo fell 2.7 pct year-on-year in August, the 32nd drop in the past 33 months, the Japan Department Stores Association said The association attributed the decline to the exceptionally hot summer which affected sales of autumn clothes, and to typhoons and one fewer Saturday in the month than in August 2003 The report, covering 28 department stores operated by 13 companies, is released about a week earlier than nationwide sales for both department stores and supermarkets, and is thus viewed as a leading indicator of nationwide trends Consumer spending underpins about 60 pct of the economy, and economists say a sustained pickup in such spending is needed to ensure the resiliency of Japan's economic recovery, especially given signs of slowing demand in major export markets like China and the US. The association said sales actually rose in four of eight product categories such as personal belongings and home appliances, although overall total sales fell because of declines in the three biggest categories, clothing, food and sundries Clothing sales, accounting for about 31.0 pct of the total, fell 6.9 pct from a year earlier, and sales of food, accounting for 21.7 pct, declined 3.5 pct Sales of sundries like jewellery and cosmetics, the third-largest category at 17.9 pct of the total, fell 1.1 pct Meanwhile, sales of personal belongings such as handbags, shoes and accessories, the fourth-largest category accounting for 13.5 pct of total revenue, rose 2.0 pct Sales of household appliances, the fifth-largest category accounting for 9.1 pct of total sales, rose 1.9 pct, the association said And sales by restaurants and cafeterias, the smallest category at 3.4 pct of total sales, fell 4.8 pct. fxstreet.com