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

To: S. maltophilia who wrote (13898)	10/22/2004 9:22:45 PM
From: mishedlo	Respond to of 116555

22.7 mio shares float 36.9 mio finally traded today! Is there anyone not in that wants in? Mish

To: S. maltophilia who wrote (13898)	10/22/2004 11:25:56 PM
From: mishedlo	Respond to of 116555

From the Daily Reckoning * What, me worry?... the eternal sunshine of Greenspan's mind... * An unstable foundation for homeowners... economy sinking into slow slump... *** Lying for the "greater good"... we've got friends in low places... and more! --------------------- The "maestro" is as serene as a dead man. It seems nothing can hurt the Fed chairman now. Not the falling dollar, slipping stocks, the rising price of oil, consumer debt or the housing bubble. On every point, he has reassured the nation: Nothing to worry about, he says. All these problems are no more trouble than flies on a corpse: They may be an unsightly nuisance, but they will do the man no harm. Oil closed over $54 yesterday. As a result, a report in yesterday's press tells us that the average Michigan household will pay between $106 and $253 in extra heating costs this winter. Nationwide, heating is expected to rise 29% from last winter. Where will they get the money? We don't know. From the same place they get the money to pay higher transportation costs, we guess. Readers will recall also that Dallas Fed president Robert McTeer urged consumers to buy big SUVs. Now, the poor lumpen drive around in gas hogs as the price per gallon rises toward $2. Nothing to worry about, says Mr. Greenspan, the best-known public servant since Pontius Pilate. While the cost of heat and locomotion has risen, so has the cost of the roof over your head. Across the country, the average hovel has gone up some 40% since Greenspan began cutting interest rates to ultra-low levels. In many places, notably the two coasts, prices are up 60-70%. The Fed chief sees nothing to worry about there... nor in the huge run-up in consumer debt that went along with it. He sees the chicken, but takes no notice of the egg that produced it. Mortgage debt... and consumer debt generally... may be at the highest levels ever recorded, but don't worry, says Mr. Greenspan, it is all supported by higher house prices! "It would take a large, and historically most unusual, fall in home prices to wipe out a significant part of home equity," says the world's leading central banker. And we love this: "Improvements in lending practices driven by information technology have enabled lenders to reach out to households with previously unrecognized borrowing capacities." Translation: Subprime borrowers can now get all the credit they want. Alan Greenspan still has a pulse. He still can make the needle move on a brain scan. But we have to wonder what really goes on in that noggin of his. Houses did not suddenly become more valuable in the last four years, giving householders a new well of money from which to draw whenever their thirst for gadgets needed quenching. Instead, house prices rose - thanks to the credit boom set in motion by the selfsame insouciant Fed chairman. "Short of a significant fall in overall household income or in home prices," he continued, "debt servicing is unlikely to become destabilizing." But that is, of course, the question. Or part of it. A drop in house prices would bring an immediate recession. A rise in interest rates would have the same effect. And even if house prices were to stabilize, there would be trouble. What would homeowners take out if they couldn't take out equity? Pizza?

To: S. maltophilia who wrote (13898)	10/22/2004 11:30:53 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Bill Bonner, back in London: * The price of gold rose to $425 yesterday. Oil rose to a new record high. And the dollar fell to an eight-month low against the euro, at $1.26. You would think that these are signs of "inflation." But apparently not. Or if so, the bond vigilantes don't see it. Bonds rose again yesterday. How could this be? Our guess remains: The economy is weakening, not strengthening. Deflationary pressures - from China, from aging populations, from debt - are overwhelming the attempts to reflate the economy. The United States sinks into a long, slow, softish slump... * Americans in Europe - along with the Europeans themselves - are overwhelmingly opposed to George Bush. We ran into one of them on the train from London: "These neocons are bad, bad news," said our friend, who had seen the BBC documentary on Wednesday night. "They don't seem to mind lying in order to get their way. They think they are the guardians of Western civilization... and that the nation needs to be rallied behind some great cause... so they think lying is just fine if it is for such a good cause. And they think they can invent a great cause to get behind. "I was surprised how Rumsfeld and his gang lied about Soviet weapons back in the '70s. The neocons had set up a special commission to prove that the Soviet Union was a much bigger threat than the CIA, and the Pentagon believed. And they came up with a report that seemed to prove it. But the CIA told them that every one of the major points was a lie. I liked that part... the CIA knew they were lies, because they had made them up themselves. The Soviets weren't planning at attack on the United States at all. The Soviet Union was falling apart. The CIA and Kissinger were right: All we had to do was to sit tight. "But Rumsfeld and Wolfowitz either believed the lies or found them useful... and then, even after they knew they were lies, they used them to mislead Reagan and the entire nation. And even now, nobody seems to care that we spent billions on weapons we didn't need... and that this whole 'evil empire' stuff was based on lies. Not that the Soviets weren't evil. But they weren't the only evil in the world. The United States makes mistakes too. And it has evil people in high places from time to time... " Bad news: This year -- and for many, many more to come -- your ballot may as well be a piece of toilet paper! It doesn't matter who eventually buys this election... the country is destined to go bust no matter who sits in the Oval Office.