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

To: Elroy Jetson who wrote (12822)	10/4/2004 9:48:29 PM
From: mishedlo	Respond to of 116555

Random Walk - On FNM prudentbear.com

To: Elroy Jetson who wrote (12822)	10/4/2004 10:06:45 PM
From: mishedlo	Respond to of 116555

Japan Aug coincident index seen below 50 pct for 1st time in 16 mths - report Tuesday, October 5, 2004 2:00:37 AM afxpress.com TOKYO (AFX) - The August index of coincident economic indicators, which shows the current state of the economy, is expected to fall to 50 pct or below, the Nihon Keizai Shimbun reported If it falls below the 50 pct boom-or-bust line, it would do so for the first time in 16 months, the leading business daily said On Thursday, the government will issue those data, as well as the reading for the forward-looking leading index. The diffusion index of leading economic indicators is expected to remain above 50 pct for the 12th straight month A reading above 50 pct indicates economic expansion, while a reading below that level points to a slowdown or contraction. Yet the Nikkei said the decline in the coincident index for August would likely be seen as a reaction to the strong showing in May rather than as a sign of a sharp economic slowdown The coincident index is the percentage of 10 indicators that improved from three months earlier. In August five of these, including industrial production, production goods shipments and department store sales, worsened from May. In addition, overtime working hours remained unchanged, the Nikkei noted

To: Elroy Jetson who wrote (12822)	10/4/2004 10:09:20 PM
From: mishedlo	Respond to of 116555

Poole Party Treasurys shift gears on Fed talk, end slightly higher - Monday, October 4, 2004 10:58:30 PM afxpress.com CHICAGO (AFX) - Treasury prices did an about-face late Monday, stemming loses to edge higher as a rally in stocks fizzled and a Federal Reserve official acknowledged economic rough spots like higher energy costs and a lackluster job market At the close in New York, the price of the benchmark 10-year note was up 2/32 at 100 18/32. Its yield, which moves inversely to the price, fell to 4.18 pct from 4.19 pct at Friday's finish William Poole, president of the St. Louis Fed, told reporters after a speech in Jefferson City that there is "slack" in the labor market and escalating oil prices likely took "a bite out of the recovery." "Poole counsels that the economy still has some slack that needs to be absorbed and that oil prices have taken a modest bite out of the recovery," said analysts at Action Economics. Still, there was little "to indicate that the moderate hawk would not go along with further rate hikes," the analysts said On Friday, the government releases its monthly jobs report for September, with forecasts calling for nonfarm payrolls growth of about 140,000, roughly the same as August Earlier on, Treasurys had erased a portion of their initial losses after the government reported an unexpected drop in factory orders for August, but they remained slightly lower most of the day On the heels of a sharp rally Friday, US stocks traded higher but off their best levels Monday afternoon. Gains for the semiconductor sector paced a broad-based rally in stocks. "Since September 27, the Dow Jones Industrial Average has moved up almost 275 points and the 10-year note has increased 22 basis points in yield," said Morgan Keegan & Co. analyst Kevin Giddis, adding that these movements were no coincidence Earlier, the Commerce Department said orders for US-made factory goods unexpectedly fell 0.1 pct in August after July's gains were revised higher. Economists had forecast a 0.1 percent rise for August. And, Fed officials were back on the road again, by and large voicing optimism about the US economy and playing down the potential negative impact of rising energy costs Federal Reserve Board Governor Ben Bernanke, for one, said high oil prices need not be an ongoing drag on the nation's economy. "The economy can accommodate prices at the current level," he told reporters in Washington after a panel discussion on banking issues Separately, Anthony Santomero, president of the Federal Reserve Bank of Philadelphia, said the economic recovery is on a self-sustaining track with few signs of undue inflationary pressure. And, quarterly forecast of US economists found them generally in agreement with the view of Fed officials that the economy is gaining ground. At the Chicago Board of Trade, short-term interest-rate futures contracts now reflect increased odds the central bank will raise US interest rates at each of its next few meetings, including on Nov 10 and at the Fed's final policymaking meeting of the year on Dec 14. Also Monday, the Treasury Department said it would hold three auctions in the days ahead, including Tuesday's sale of 15 bln usd in 4-week notes and the sale of 15 bln usd in 5-year notes on Wednesday. The government on Thursday will auction 19 bln usd in reopened 10-year Treasury Inflation Protected Securities, or TIPS, in action to cover the nation's record federal budget deficit. Against this backdrop, the 2-year note ended 1/32 lower at 99 23/32, with its yield rising to 2.66 pct from 2.63 pct at the previous session's close. The 5-year maturity climbed 1/32 to 99 25/32, its yield declining to 3.42 pct from 3.43 pct. The 30-year bond gained 6/32 to 106 16/32, its yield moving down to 4.94 pct from 4.95 pct on Friday

To: Elroy Jetson who wrote (12822)	10/4/2004 10:13:53 PM
From: mishedlo	Respond to of 116555

Democrats pressure Treasury´s Snow on debt limit Monday, October 4, 2004 9:31:08 PM afxpress.com Democrats pressure Treasury's Snow on debt limit WASHINGTON (AFX) -- With 29 days to go before the presidential election, a group of Democrats on Capitol Hill is pressing John Snow to do more to raise the federal government's mandatory debt ceiling, which is poised to be reached as soon as this week "The impending breach of the statutory debt ceiling is the latest in a series of warnings about the federal government's fiscal situation," three key Democrats wrote in a letter to the Treasury chief "Our debt has been growing markedly faster than our economy's ability to repay it, thanks in large measure to tax cuts proposed and enacted into law by the administration and congressional Republicans," said the letter, signed by Reps. Charles Rangel, D-N.Y., John Spratt, D-S.C., and Charles Stenholm, D-Tex Technically, on its current spending course, the government is expected to run out of money in "early October." But the administration can employ emergency accounting mechanisms to avoid hitting the $7.38 trillion mandatory limit until "mid-November," the Treasury estimates The distinction between early October and mid-November is, of course, critical, as the Republican-controlled Congress wants to avoid raising the debt limit for the third time in three years before Nov. 2 Treasury Department spokesman Rob Nichols told reporters Monday the administration would inform Congress a day or two before the debt ceiling is breached. fxstreet.com

To: Elroy Jetson who wrote (12822)	10/4/2004 10:50:54 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

Plunger on OIL We have yet to see when and how it plays out. Will it be like the late 30s hike that collapsed a nascent recovery? Will housing begin a descent it can't be rescued from as in Japan? Will the housing collapse cause a Fed about turn and a new Nasdaq bubble? Will gold indeed get to $3,500 or wherever? These are the questions to be answered. I'll venture though a solution to the oil riddle. Remember * the back futures and forward prices of oil rose over the summer without open interest changing much * Saudi seems unhappy with the current oil price because they are hedged at $30 * China is trying to build a strategic oil reserve to hedge against a falling USD but lacks immediate capacity. Can anyone else add 1+1+1? With a backwarded oil price it makes little sense for China to actually hold oil in expensive storage. Guess who's on the other side of Saudi's hedge contracts. Plunger.

To: Elroy Jetson who wrote (12822)	10/4/2004 10:52:26 PM
From: mishedlo	Respond to of 116555

Political historian Kevin Phillips warned us: "Most great nations, at the peak of their economic power, become arrogant and wage great world wars at great cost, wasting vast resources, taking on huge debt, and ultimately burning themselves out."