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

To: Chispas who wrote (17193)	11/30/2004 12:19:18 PM
From: Knighty Tin	Respond to of 116555

Chispas, I'd be willing to let the playactor have his boat if he'd stop killing people and balance the budget. <G>

To: Chispas who wrote (17193)	11/30/2004 1:08:14 PM
From: mishedlo	Respond to of 116555

Heinz on treasuries and IAMgold/GFI Date: Tue Nov 30 2004 10:43 trotsky (Aurum, 9:45) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved absolutely. the correction in bonds and notes may have further to go, but even the last correction was actually quite small compared to previous ones in the course of the secular bond bull since 1980. currently the market still remains close to its all time highs, but is infested with bears like no other. for instance, in the Rydex bond universe $84 million are invested long vs. nearly $2.9 billion invested short, for a stunning ratio of 34, which represents a bearish consensus of 99.97%. meanwhile the chart of the t-note since 2000 looks exactly like the JGB chart from 1989 onward - by itself not proof of anything, but clearly a heads-up that it could continue to look similar a few years hence. the major impetus that will drive yields lower still will be the demise of the housing bubble, which is clearly a work in progress by now ( inventories of unsold homes have soared in all the major bubble locations, transaction volumes have concurrently plunged, and even prices have begun to retreat, which they always do with a considerable lag in property ) . once the market wakes up to this fact government debt could be back in fashion big time. there are other reasons to expect a strong bond market in coming years...1. the US economy continues to operate way below capacity - i.e. there's a 'deflationary gap' that suppresses wage growth and keeps end user prices in check ( incidentally, a housing bubble denouement will widen this gap further ) . 2. credit spreads for everything from investment grade corporate debt to the worst junk paper have narrowed to near record lows from their July 2002 record highs - iow, institutions of all stripes ( from insurance companies to hedge funds ) have been chasing yield while apparently remaining completely oblivious to risk - and have thereby vastly increased the risk profile of their portfolios. this is precisely the situation that obtained shortly before LTCM's collapse - only the size of positions has grown far bigger. it's an accident waiting to happen, and when it does, spreads will widen again via a combination of frantic treasury paper buying and equally frantic selling of everything else. 3. because everybody and his auntie continue to be bearish on bonds, fund managers worldwide are underinvested - they have reduced exposure to USG debt for almost 3 years running now. so there's lots of pent-up demand. Date: Tue Nov 30 2004 10:21 trotsky (frustrated, 9:44@GFI) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "At the time of the IAMGold transaction, you know this is what I find somewhat surprising, you know we struggled to find anybody who didn't like the transaction, now all of a sudden people are saying -- No, it's a lousy deal." i thought i'd pick up on that. it is absolutely true, but shouldn't be too surprising. at the time the original GFI/IAG transaction was announced, GFI shareholders grudgingly accepted that while the transaction made little commercial sense ( commercially it rewards IAG shareholders while penalizing GFI's ) , it seemed at least to make some strategic sense and may well lead to the 'rerating' of GFI's stock which was management's major argument in promoting the deal. but HMY's offer also creates a rerating - in fact, it probably will be subject to a SECOND phase of rerating once the deal is consummated - without GFI's shareholders being forced to accept a way too low valuation being attached to GFI's international assets ( which were painstakingly acquired and nurtured over many years - it seems a pity to have to 'give them away' ) . as i've mentioned previously, the new GFI ( post HMY takeover ) might still look at a potential consolidation of assets ( IAG and GFI co-own two mines in Ghana ) , but on better commercial terms. IAG shareholders would get a little less out of it of course, but there's no law that says they should get more for IAG's assets than they're worth. also, the strategic rationale for the IAG transaction has been weakened considerably by a recent relaxation of SA's forex controls ( which are being reformed slowly but steadily ) . all in all Harmony clearly has the more convincing case ( and i don't doubt for a minute its claim that it can squeeze out a lot of costs from GFI's South African operations - HMY is legendary for its requisite abilities ) .

To: Chispas who wrote (17193)	11/30/2004 1:11:41 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Shopping Center Group Cuts Sales Forecast Tuesday November 30, 12:16 pm ET Leading Shopping Center Group Cuts Sales Forecast, Sign That Retailers Started Holiday Season Modestly NEW YORK (AP) -- The leading shopping center organization trimmed its sales forecast for November as it released figures Tuesday that confirmed that a strong shopping surge on Friday fizzled dramatically as the first weekend of the holiday shopping season wore on. The International Council of Shopping Centers said sales at stores open at least a year will be up anywhere from 2.5 percent to 3.0 percent for the month, versus the original forecast of 3 percent to 4 percent. Meanwhile, ShopperTrak, which tallies sales results from 30,000 outlets, reported Tuesday that sales rose a modest 2.9 percent for the three-day weekend, from a year ago. That was down from the robust 10.8 percent increase stores enjoyed on Friday. Message 20812738

To: Chispas who wrote (17193)	11/30/2004 1:16:11 PM
From: mishedlo	Respond to of 116555

Trichet says confident US will correct its economic ´weak points´ Tuesday, November 30, 2004 3:38:20 PM afxpress.com Trichet says confident US will correct its economic 'weak points' BRUSSELS (AFX) - European Central Bank president Jean-Claude Trichet said he is confident that the US will take steps to correct economic "weak points", such as its large current account and budget deficits Addressing the European Parliament economic and monetary affairs committee, Trichet said he has "every reason to believe" statements by US policymakers about reducing the US budget deficit He said he trusts Treasury Secretary John Snow to "deliver over time a substantial reduction in the fiscal deficit", and said the level of cooperation between the authorities on both sides of the Atlantic is good [Is he off his rocker? Mish] Trichet also called on some Asian countries to let their currencies appreciate gradually against the dollar He said the case of China, which has pegged the yuan to the dollar for the past ten years, is "very important". The euro would not have to bear such a large share of the burden of the dollar's downward adjustment if Asian currencies appreciated against the US currency Trichet reiterated his previous comment that the euro's recent sharp rise against the euro is "unwelcome" Trichet also said that he is not in favour of the idea of excluding some government spending from the calculation of countries' deficits under the stability and growth pact rules, which set a deficit limit of 3 pct of GDP The pact would lose credibility if spending on items such as research and development or education was excluded from the calculation, he said

To: Chispas who wrote (17193)	11/30/2004 1:19:49 PM
From: mishedlo	Respond to of 116555

Trichet sees 2005 euro zone growth around 2 pct [not likely JC not likely - Mish] Tuesday, November 30, 2004 3:48:45 PM afxpress.com BRUSSELS (AFX) - European Central Bank president Jean-Claude Trichet said the euro zone economy is likely to grow by around 2 pct in 2005 In its previous economic forecasts, published in September, the ECB projected growth of 2.3 pct, but the central bank is widely expected to lower the 2005 forecast when it releases new projections on Thursday The OECD this morning lowered its euro zone 2005 growth forecast to 1.9 pct from 2.4 pct

To: Chispas who wrote (17193)	11/30/2004 1:21:57 PM
From: mishedlo	Respond to of 116555

Trichet says no sign of any knock-on inflation effects from oil price rise Tuesday, November 30, 2004 4:22:44 PM afxpress.com BRUSSELS (AFX) - European Central Bank president Jean-Claude Trichet said there has until now been no sign of any "second round" inflation effects from the high oil price, such as upward pressure on wages But the risk of such knock-on inflation effects still exists, he said [IMO the real risk is an econonic slowdown due to higher oil prices not inflation caused by higher oil prices. - mish] "Till now we do not have that effect... (although) the risk exists," he told the European Parliament economic and monetary affairs committee

To: Chispas who wrote (17193)	11/30/2004 1:25:21 PM
From: mishedlo	Respond to of 116555

Citigroup to sell $500M 3.625% senior notes due 2009 (C) By Heather Wilson SAN FRANCISCO (CBS.MW) -- Citigroup Inc. (C) said Tuesday that it will sell $500 million in 3.625 percent senior notes due 2009. Citigroup Global Markets, Goldman, Sachs & Co., Lehman Bros., Loop Capital Markets, Merrill Lynch and UBS Securities served as underwriters for the deal.