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

To: ild who wrote (14857)	11/4/2004 2:55:07 PM
From: TH	Respond to of 116555

ild, Yes, I have heard from two very good sources that Ford is going to be increasing rebates soon. They have to move those cars sitting in the lots. It will be a good time to be in the market for a car, provided you can find one that you actually like. Good Trading TH

To: ild who wrote (14857)	11/4/2004 4:04:25 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

Ford and GM are ramping up their loan portfolios. Real Ponzi scheme. Look at $1,000-$1,500 extra rebates for choosing their financing. Ford started doing this in 2003, GM in 2004. Why not choose their financing then immediately pay it off? Mish

To: ild who wrote (14857)	11/4/2004 4:45:47 PM
From: mishedlo	Respond to of 116555

The Era of Fictitious Capitalism The Daily Reckoning London, England Thursday, November 4, 2004 America's consumers outdid themselves last quarter. With the saucy confidence of a fat girl in love, they spent a record $342 billion (annualized) more than they received in disposable income. Our oldest baby boomers have lived through this before, Paul Kasriel points out, but under entirely different circumstances. World War II was a real war. America did not launch a peremptory strike against Japan; they waited for Japan to do something wrong. Then, with the gods of war on its side, America kicked Japan's butt. The war years were lean for consumers. Output was redirected towards supplying tanks and planes, not automobiles and refrigerators. Consumers had no choice; they saved their money. Then, when the war was won, our parents married... and began families. We were just tots in 1950 - the last year in which consumers overspent as much as they do now. In the 3rd quarter of 1950, consumers spent $1.05 for every dollar of after-tax income. Then, incomes rose... and for the next 50 years... never again did consumers spend significantly more than they earned. But Alan Greenspan's EZ credit-terms turned a good thing into something that was too wonderful. The Fed's key lending rate was set well below the inflation rate. Even after two rate hikes, the Fed still lends money at 1.75% - about a full percentage point below the rate of consumer price inflation. The Fed has been giving money away; can you blame consumers for taking it? In the 3rd quarter of 2004, the baby boomers - half a century older, but none the wiser - almost matched the record set 54 years ago. For every dollar in after tax income, they spent $1.04. But instead of satisfying the demands pent up in the war years... and instead of spending savings built up when the going wasn't so good... today's consumers spend money they haven't got on things they don't really need. Who needs a new SUV? Who needs a new mortgage? Who needs a new TV for the new family room in the new house in the new development? Who needs a TV at all? "Television is very educational," said Groucho Marx. "Whenever it is on, I go in another room and read a book." Spending savings is one thing. Spending debt is something altogether different. Savings represent real demand. Real demand can bring about a real and sustainable boom. In the early '50s... America began a boom that lasted for most of the baby boomers' lives. Now, the oldest of the boomers are in their mid- to late-50s. The real boom has turned into a phony one. The great fortune the boomers have enjoyed seems to be turning over in a great, rolling top... The cheap oil of the '50s is all used up. The factories and machinery that gave us such an edge after the war is not worn out; but manufacturing buildings are converted into loft apartments and shopping malls. Our parents used to sweat. Now, the sweating is done on the other side of the planet - where the new factories are built. A man from China or India will work all day for $10. We want 10 times as much for our labor. After World War II, we could get it. Because we had the most savings, most modern machinery, the most efficient roads, the best trains, the most energy... and most highly skilled workforce in the world. Now, those things have spread all over the world, and there is no stopping them. The cheap credit must soon be coming to an end, too. After the war, we had the world's only solid economy... and the only solid money, backed by real gold. Now, the whole world stands knee-deep in dollars and dollar credits. And we boomers stand up to our necks in dollar debts. Our parents had few debts and much savings. We are so much smarter; we have few savings and much debt. Time marches on. The world turns. We boomers were just learning to walk 54 years ago. Now, we are getting soft and weak. Our boom is phony. Our dollar is a phony. Our war is phony. Our consumer demand is phony. Our president is a phony. Our wealth (in housing prices) is largely phony. Not that we are complaining. We've enjoyed 50 very good years. Would it be so bad if the Baby Boomers finally had to face some real trouble near the end of their careers? Would it be so startling, or so unkind, or so unjust, if the going were not so good... and the world not quite so wonderful?

To: ild who wrote (14857)	11/4/2004 4:54:44 PM
From: mishedlo	Respond to of 116555

Bill Bonner - Daily Reckoning "America bled Russia for 10 years, until it went bankrupt and was forced to withdraw in defeat," says Osama bin Laden. "So we are continuing this policy in bleeding America to the point of bankruptcy." Nice of him to tell us. Nice of the Fed, the Bush administration and consumers to cooperate so fully. Note: bin Laden thinks he's bleeding America to bankruptcy, but truth is, he couldn't stop it if he tried. We're calling Bush's second term Act II: The Depression. ================================================================ Mish