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

To: Crimson Ghost who wrote (19282)	12/22/2004 1:52:50 AM
From: mishedlo	Read Replies (2) \| Respond to of 116555

the question remains how long this junk bond frenzy can last. Global crossing was due to run out of cash in three days. It got access to the bond market today at spreads way better than anyone could have thought. Why would anyone throw money at this bankrupt (nearly a second time) POS company? Amazing that they got any money at all, let alone decent spreads over treasuries. Mish

To: Crimson Ghost who wrote (19282)	12/22/2004 9:10:30 AM
From: mishedlo	Respond to of 116555

Forex - Pound on backfoot after BoE rate-setting minutes Wednesday, December 22, 2004 1:31:48 PM afxpress.com LONDON (AFX) - The pound remained on the backfoot after this morning's publication of the minutes to the last rate-setting meeting at the Bank of England The minutes to the Monetary Policy Committee meeting in the early part of December proved to be more dovish than expected, with particular surprise generated by the fact that the rate-setting body, which voted unanimously to keep interest rates on hold, actually discussed the case for a cut The MPC has raised the cost of borrowing a quarter point on five occasions since November 2004 as it sought to stem inflationary pressures arising from above-trend growth and rampant consumer demand "We continue to see risks of further tightening next year but expect the pound to fair badly regardless, with any further move on rates likely to be viewed in the market as the last hike and perhaps one too many," said Daniel Katzive, analyst at UBS The minutes helped heap further pressure on the pound after yesterday's closely watched UK housing survey from the Royal Institution of Chartered Surveyors found house prices falling at their fastest rate since the early 1990s Analysts said the direction of interest rates will depend largely on how an apparent slowdown in the housing market impacts upon consumer spending and if the central bank's observation that the historical link between the two has loosened, continues "Sterling has come under pressure across the board following the recent stream of weaker than expected UK data, especially from the housing market and the domestic side of the economy suggesting that a slowdown could well be developing," said Hans Redeker, global head of FX strategy at BNP Paribas Elsewhere, the dollar was faltering in thin pre-holiday trade as market players warned of renewed dollar weakness in the new year Before its technical rally last week, the US currency had been hammered hard on worries over the US's swelling current account and budget deficits On Dec 7, the euro rose to an all-time high of 1.3469 usd, while the dollar slipped to a five-year trough of 101.86 yen Those problems are not expected to disappear anytime soon, and analysts warned that the new year, if not before, may herald a renewed bout of dollar selling "While dollar weakness is likely to resume as risk positions are rebuilt in the new year, there remains no obvious catalyst for a break of key dollar support levels in the current thin trading environment," said UBS' Katzive Today's US GDP revisions are not expected to excite with most analysts predicting third quarter growth to be unrevised at 3.9 pct forexstreet.com

To: Crimson Ghost who wrote (19282)	12/22/2004 9:23:27 AM
From: mishedlo	Respond to of 116555

U.S. GDP revised a tick higher to 4.0% growth in Q3 Wednesday, December 22, 2004 1:56:12 PM afxpress.com WASHINGTON (AFX) -- Third quarter U.S. economic growth was revised slightly higher to a 4.0 percent annual rate from the 3.9 percent previously reported, the Commerce Department said Wednesday. This is a rebound from the slower 3.3 percent growth rate seen in gross domestic product during the second quarter. The nation's economy grew at a 4.5 percent rate in the first quarter The second revision to inflation-adjusted GDP in the July-through-September quarter was largely due to a decrease in estimated imports, which subtract from economic growth. This was partially offset by less government spending than previously thought Economists surveyed by CBS MarketWatch had been expecting third-quarter GDP to remain unrevised at a 3.9 percent rate. Final sales of domestic product increased 5.0 percent, up from 4.9 percent in the earlier estimate Also in the third quarter's GDP report, inflation measures were revised slightly higher. The core personal consumption expenditure price index increased at a 0.9 percent annual rate, up from the previous estimate of 0.7 percent. The broader gross domestic purchases price index increased 1.9 percent, up from 1.8 percent previously estimated In current dollars, nominal GDP increased 5.5 percent to $11.81 trillion on an annualized basis Corporate profits were revised sharply lower. Before-tax profits fell 4.8 percent at a quarterly rate to $1.12 trillion annualized. This is the biggest drop since the third quarter of 2001 Profits were hurt by the series of hurricanes that devastated parts of Florida and other southeastern states in the quarter. As in the earlier GDP estimate, consumer spending was the biggest source of growth in the third quarter -- up 5.1 percent, marking the biggest gain in three years Spending on durable goods rose sharply, up 17.2 percent, while spending on services increased 3.0 percent. Spending on nondurable goods rose 4.7 percent Business investment was revised up slightly, to a gain of 13.0 percent. Spending on equipment and software rose 17.5 percent

To: Crimson Ghost who wrote (19282)	12/22/2004 9:26:24 AM
From: mishedlo	Respond to of 116555

ECB´s Padoa-Schioppa says Europe´s slow growth not linked to monetary policy Wednesday, December 22, 2004 1:27:55 PM afxpress.com ECB's Padoa-Schioppa says Europe's slow growth not linked to monetary policy MILAN (AFX) - European Central Bank executive board member Tommaso Padoa-Schioppa said Europe's low level of economic growth is not linked to monetary policy and interest rates. In comments at a seminar here, Padoa-Schioppa said he "absolutely" does not share the belief that interest rate cuts could boost growth. "I believe it is absolutely unfounded the theory that Europe's low growth is dependent on monetary policy," he said "The rates of the ECB are at the lowest level of the last 60 years, are lower than inflation, and lower that than those set by the Bundesbank when Germany was in recession," he said. On possible EU stability pact changes, he said governments should resist the temptation to relax these rules

To: Crimson Ghost who wrote (19282)	12/22/2004 9:57:38 AM
From: mishedlo	Respond to of 116555

Gilt yields down sharply after MPC minutes By Päivi Munter in London Published: December 22 2004 Yields on short-dated UK gilts fell sharply in Wednesday’s early trading after the minutes from the Bank of England’s last monetary policy meeting raised the spectre of credit easing. The minutes showed that some of the members in the BoE’s monetary policy committee had considered the case for lowering UK interest rates, although the nine-member MPC voted unanimously to keep rates on hold at 4.75 per cent. The committee said the reasons for considering lower interest rates were a surprisingly weak economic performance in Japan and Europe, as well as a small rise in the pound. Two-year gilt yields slid 5.2 basis points to 4.377 per cent, leaving prices higher. Ten-year yields, which are less sensitive to central bank rates, were down 2.1bp at 4.470 per cent. In the interest rate futures market, the March short sterling contarct climbed 4 ticks to 95.100, implying no change in rates by the end of the first quarter. Eurozone government bonds, meanwhile, were all but unchanged in muted pre-holiday trade. Two-year German Schatz yields were at 2.455 per cent, while 10-year yields traded at 3.625 per cent.