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

To: Haim R. Branisteanu who wrote (12506)	9/29/2004 4:08:51 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

Analysts wary of bond guru Bill Gross´ position - Wednesday, September 29, 2004 7:22:16 PM afxpress.com Analysts wary of bond guru Bill Gross' position - UPDATE 1 CHICAGO (AFX) - "When Bill Gross speaks, people listen!" So writes Kevin Giddis, a fixed-income analyst at Morgan Keegan & Co., at least partially in jest. Giddis, for one, downplayed the impact of Gross' words, saying overbought conditions were the underlying factors behind the current market losses, as opposed to the advice to sell from Gross, who has, joked Giddis, "replaced E.F. Hutton as the spokesperson for speaking and listening." Gross, managing director at Pacific Investment Management Co., told investors if they purchased government bonds on a "benign outlook for inflation, they had better cash some of them in, especially at today's 4 percent yield for 10-year Treasurys." In an investment outlook released after the market closed Tuesday, Gross contended that real inflation is likely 1 percent higher than the government calculates, while economic growth is probably 1 percent below the official tabulations The comments came in the midst of losses that began Tuesday and spilled into Wednesday's trading, with the actual impact of his advice difficult to determine. Gross deserves recognition for having a good track record as well as the power to sway the market, analysts said. But they add his comments should be taken with a grain of salt, given his self-interest. "Why people don't understand he might be speaking his book befuddles me," said Kim Rupert, an analyst with Action Economics "He's not a disinterested analyst, he's a trader," said Maryann Hurley, an analyst at D.A. Davidson "He controls a lot of money, so he can push the market around if and when he feels like it," said Rupert "Gross has an impact on the market, but more importantly than what he says is what his funds do," offered Hurley. "I view him more as a contrary indicator... it really wouldn't behoove him to indicate what his positions are per say," Rupert said. "I suspect he already took his profits and could be looking to buy some back." "I'm just skeptical about anything he says, just because he talks position, whether it is correct or not," said Hurley

To: Haim R. Branisteanu who wrote (12506)	9/29/2004 4:12:00 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Canada: G-7 likely won´t press China on yuan Wednesday, September 29, 2004 4:06:10 PM afxpress.com Canada: G-7 likely won't press China on yuan WASHINGTON (AFX) - Finance ministers from the world's seven richest nations aren't likely to pressure China on foreign-exchange policy when they meet with Chinese finance officials for the first time as a group in Washington at the end of the week, a Canadian Finance official said Wednesday The official, who spoke on condition of anonymity, said the ministers are more interested in taking an assessment of the Chinese economy and learning what plans are in place for revamping the nation's banking system A day earlier, U.S. Treasury Secretary John Snow said precisely the opposite "We're going ... to press them on the currency," Snow said in a television interview with CNBC China has fixed its currency at roughly 8.3 yuan to the dollar since 1994 U.S. manufacturers complain the fixed exchange rate provides an unfair cost advantage to China's exporters, therefore costing thousands of U.S. jobs The U.S. manufacturing sector has shed millions of jobs over the past three years, and the issue has become politically sensitive during this presidential election year Asked if the Bush administration is raising the rhetoric on China for political reasons while remaining cool to the issue in private meetings, the Canadian official declined to give his opinion of U.S. politics He stressed that the topic hasn't been heavily discussed in preparatory meetings leading up to the G-7 finance ministers meeting, scheduled for Friday at the Treasury Department in Washington The official, who spoke with reporters at the Finance Ministry in Ottawa, and on the telephone from other locations, emphasized that he doesn't expect ministers to press the issue in their first formal meeting with Chinese officials He said G-7 leaders expect China's economy to come to a soft-landing Asked about the recent rise in oil prices, the official said he doesn't expect prices to remain in the range of $50 a barrel for a sustained period

To: Haim R. Branisteanu who wrote (12506)	9/29/2004 4:36:11 PM
From: benwood	Read Replies (3) \| Respond to of 116555

I'm surprised nobody has responded to the meat of your posts... How much free time should the gov't allow, say, for each age group? How effective is conscription and forced labor in, say, nursing, in "maturing" our youth compared to what's done now? What will be the effect of the mass socialization you aspire to, where the gov't hacks assign jobs to people. How does this effect those who previously chose that profession but are now unemployed because of the taxation-paid-for labor ran them out of a job? How does forcing me to pay for services via income tax improve the budget deficit? Is it because the gov't this time will improve on the free market, for the first time in history? Will the gov't-caused misallocation of labor and the resultant layoffs in previously higher-paying jobs for jobs in which no tax is paid but rather they are paid for in tax help the gov't coffers or hinder them? I think your massive socialization idea has been tried before, for example, USSR. Gov't intervention will only make this worse. Your preferred massive expansion of the federal gov't will make things much worse. Everybody has life lessons in which they mature -- just because your choice was forced on you doesn't mean the choices people made for themselves weren't as good or better. That kind of gov't paternalism is rampant, and I'll be oh so sorry to see it expanded in the nafarious way you describe. Volunteerism is good as you describe, and should be promoted on the family level, school level, and community level. My wife and I work on this with our own teenaged son (who has very little free time, in opposition to your stereotype) and I have no doubt that our own influence is more effective with our own son than is possible in any way shape or form if coming a political agenda-oriented civil servant. I will continue to fight attempts at parenting by Big Brother, no matter how good it makes those feel who simply cannot parent or cannot take responsibility for their own lives & personal growth.

To: Haim R. Branisteanu who wrote (12506)	9/29/2004 5:27:07 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

hold the presses... the headline got changed, i kid you not.... ----------------------- previous headline: Economy Grows at Weakest Rate in Over Year story.news.yahoo.com new headline: Economic Growth Better Than Thought WASHINGTON (Reuters) - The U.S. economy grew faster in the second quarter than previously thought as business inventories rose at the strongest rate in four years, the government said on Wednesday, a sign the soft patch was not as soft as feared. U.S. gross domestic product -- the measure of total output within the nation's borders -- expanded at a revised 3.3 percent annual rate in the April-June second quarter. That was up from a 2.8 percent rate the government estimated a month ago but still slower than the first quarter's 4.5 percent rate, and the most sluggish rate of GDP (news - web sites) advance since the first quarter of 2003.

To: Haim R. Branisteanu who wrote (12506)	9/29/2004 6:03:34 PM
From: mishedlo	Respond to of 116555

-- INTERVIEW-BoE close to UK rate peak-MPC's Barker -- By Sumeet Desai LONDON, Sept 29 (Reuters) - The Bank of England could be nearly done with raising interest rates for now as recent data, particularly on the housing market, have been weak, Monetary Policy Committee member Kate Barker said on Wednesday. In an interview with Reuters, Barker said that the property market and the state of the global economy were her two chief worries for the overall economic outlook and that she had not been surprised the yield curve flattened after the BoE's last Inflation Report in August. "I think it is certainly true that the message we are giving is not the same as it was when we were at a period when we were clearly indicating that tightening was continuing," she said. "But clearly we are close to, and this comes over in the minutes, closer to a point when that's not what you are signalling." Asked if she shared fellow MPC member Stephen Nickell's assertion a fortnight ago that if weak data persisted, the BoE may not have to raise rates much more, Barker said that view was not Nickell's alone and was implicit in the Inflation Report. "It (the Inflation Report) didn't imply the peak was an awful lot further up so it's kind of consistent with that. If the data's a bit weaker then the peak might well be even closer but it's always dependent on what happens," she said. The BoE has now raised interest rates five times and by a total of 125 basis points since last November. Most analysts expect a further quarter-point hike later this year but a few have taken the view that rates have already peaked. If rates have indeed peaked at 4.75 percent, that would be much lower than in previous interest rate cycles and many argue it would leave policy expansionary -- or below the so-called neutral interest rate level. But Barker said that it was not clear that the current level of interest rates was below neutral -- where policy is neither contractionary nor expansionary. "I wouldn't exclude today being the bottom of the plausible range," she said. "When we were at 3.5 percent we all thought we were below it but now some of us are not so sure." Still, she said she had been surprised by the bond market reaction -- it rose sharply -- after the minutes of the MPC's last meeting were published a week ago. WEAK DATA Barker said that recent housing market data has been "undeniably weaker". "It must be more likely that this is a turn in the market," she said. But she still thought a collapse in house prices unlikely though one would not want to rule it out. "However much pent-up demand you have got, if people think that prices are going to decline then they might decide to stay out of the market," she said. While consumer data had been more mixed, she noted that there were signs consumers were becoming more cautious and noted that the Confederation of British Industry's latest retail survey had been "pretty weak". "Nothing I have seen so far in September has led me to think that slightly softer picture for the real side of the data isn't still there," she said. But she said that against these downside risks to growth, persistent sterling weakness and sharp rises in commodity prices posed an upside risk to inflation. ((Reporting by Sumeet Desai; editing by Cheryl Juckes; Reuters messaging: sumeet.desai.reuters.com@reuters.net; +4420 7542 7708))