Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Crimson Ghost who wrote (19571)	12/27/2004 8:51:17 AM
From: mishedlo	Respond to of 116555

Japan Nov supermarket sales down 4.8 pct year-on-year; 12th drop in 13 months Friday, December 24, 2004 5:28:57 AM afxpress.com TOKYO (AFX) - Supermarket sales in Japan fell 4.8 pct in November from a year earlier to 1.14 trln yen, the 12th decline in 13 months, the Japan Chain Stores Association said The figures are based on the combined sales of 97 supermarket chain operators running a total of 8,495 outlets. The percentage change has been adjusted to facilitate comparison on a same-store basis Nationwide department store sales data for November are to be released today at 2.30 pm (0530 GMT). Later the government will issue data for overall sales at the retail and wholesale levels last month Consumer spending, which underpins 60 pct of the economy, is being counted on to keep the economy growing if exports and corporate investment spending flatten out Earlier this month the government reported that the economy grew at a real, annualized rate of only 0.2 pct in the July-September quarter. It said the economy shrank the previous quarter The Japan Chain Stores Association said supermarket sales in November fell from the previous year in four of the five product categories. Sales of food -- the largest category accounting for 57.7 pct of overall supermarket sales last month -- fell 2.7 pct year-on-year, the association said Sales of household products -- the second-largest category accounting for 21.1 pct of overall revenue -- declined by 5.5 pct Sales of clothing -- the third-largest category at 13.6 pct of the total -- fell by 14.0 pct Sales of miscellaneous goods -- the fourth-largest category accounting for 6.8 pct of overall revenue -- dropped 0.7 pct Revenue from services -- the smallest category at 0.8 pct of total sales -- increased by 1.1 pct

To: Crimson Ghost who wrote (19571)	12/27/2004 8:55:20 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

UK house prices fall for sixth month running - Hometrack Monday, December 27, 2004 10:15:15 AM afxpress.com LONDON (AFX) - House prices fell for the sixth month running in December, according to Hometrack, the property website In its monthly survey of the housing market, Hometrack found that prices fell 0.8 pct in December, pushing the average property price down to 163,500 stg from a peak of 167,700 stg in June Over the year, Hometrack said house prices increased by just 1.30 pct, despite the 2.5 pct cumulative drop since July Hometrack reiterated its view that house prices will continue to fall in the first few months of 2005 by up to 3 pct, before recovering in the second half "As the market stabilises we should see a stronger performance in the last six months, meaning that house prices should finish the year in the same state as they started it," said John Wriglesworth, Hometrack's housing economist He said his confidence is based on four factors: Household incomes are increasing by 5 pct per annum, unemployment is continuing to fall, lenders are increasing the multiples of income on which they lend and interest rates are still historically low "There is no reason why any of these factors should dramatically change over the coming twelve months," said Wriglesworth Hometrack's findings echo those of other surveys Last week 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 The Bank of England's rate-setting Monetary Policy Committee 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, particularly in the housing market Concerns about the housing market have cemented expectations that the MPC will not raise its key repo rate from the current 4.75 pct any time soon

To: Crimson Ghost who wrote (19571)	12/27/2004 8:58:08 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Japan large firms´ Oct-Dec business conditions index falls - Monday, December 27, 2004 10:15:21 AM afxpress.com Japan large firms' Oct-Dec business conditions index falls - UPDATE (Adds details) TOKYO (XFN-ASIA) - Business conditions for Japan's large firms deteriorated in the October-December quarter from the previous quarter owing to the threat from surging prices of base materials, the appreciation of the yen and a slowdown in overseas demand, a joint quarterly survey by the Ministry of Finance (MoF) and the Cabinet Office indicated A series of natural disasters, including an earthquake which killed 40 people, emerged as a fresh threat to corporate activity, worsening business conditions, according to the survey The survey by the MoF and the Cabinet Office covers the views held by Japanese companies about business conditions and the economy as well as about their own sales, profits, capital spending, employment and other things According to the December survey, which covers 13,706 firms with capital of over 10 mln yen each, the large firms' business conditions index for the October-December quarter fell to 2.1 percentage points from 9.6 percentage points in the survey for the September quarter The index is the percentage of large Japanese companies reporting an improvement in business conditions in the period, minus the percentage of firms reporting a deterioration The deterioration in the business conditions index was evident in the manufacturing sector, which faces a slowdown of overseas demand for IT products, and the adverse impact of surging prices of crude oil and base materials According to the joint survey, the business conditions index among large manufacturers tumbled to minus 1.3 pts in the December quarter from plus 12.8 pts in the September quarter The business conditions index among large non-manufacturers eased to plus 4.1 pts in December from plus 7.6 pts in September However, small firms reported some improvement According to the joint survey, the business conditions index among small firms recovered to minus 14.5 pts in the December quarter from minus 17.8 pts in the September quarter Looking ahead, the indicator among large firms is expected to improve to plus 4.1 pts in the March survey, but to fall to 3.4 pts in the June quarter Among small firms, the index is expected to deteriorate to minus 16.3 pts in the March survey, but to improve to minus 8.6 pct in the June quarter The December survey also put combined current profit growth for all Japanese companies for the year to March 2005 at 10.1 pct, down from a 10.5 pct rise seen in the September survey "Natural disasters, including typhoons and the heavy earthquake, might have affected business plans," an MoF official said According to the joint survey, combined current profit growth for all Japanese manufacturers for the year to March 2005 is expected to rise 21.0 pct, up from a 19.2 pct rise seen in the September survey At non-manufacturers, combined current profit growth in the year to March 2005 is now forecast to rise 3.5 pct, down from a 5.5 pct rise seen in the September survey But private sector economists believe that the underlying strength of the corporate sector remains intact, and that this strength should continue to prevent the Japanese economy from falling back into recession "Thanks to the sweeping cost-cutting and restructuring efforts to date, Japan Inc is not likely to see a disastrous and industry-wide pull-back," said Akio Yoshino, head of the research department at Societe Generale Asset Management "And this strength should help the Japanese economy stay out recession," he added As evidence of the underlying strength of corporate activity, capital investment spending by all Japanese companies for this year is projected to increase by 5.8 pct from last year, according to the joint survey -- more than the 3.8 pct rise seen in the September survey The MoF began conducting this type of quarterly survey in June

To: Crimson Ghost who wrote (19571)	12/27/2004 9:02:54 AM
From: mishedlo	Respond to of 116555

Japan-made construction equipment shipments rise 20.7 pct in Nov yr-on-yr Monday, December 27, 2004 10:15:23 AM afxpress.com TOKYO (XFN-ASIA) - The value of shipments of Japanese-made construction equipment surged 20.7 pct in November from a year earlier to 141.3 bln yen -- the 26th straight monthly increase -- owing to strong exports, an industry body reported. The Construction Equipment Manufacturers' Association (CEMA) said exports jumped 43.7 pct from a year earlier to 76.1 bln yen, the 32nd consecutive monthly rise, while domestic shipments rose 1.7 pct year-on-year to 65.2 bln yen, the second consecutive monthly gain. The overall increase was due in particular to increased shipments of tractors, hydraulic excavators, mini-excavators and construction cranes, the CEMA said

To: Crimson Ghost who wrote (19571)	12/27/2004 9:07:12 AM
From: mishedlo	Respond to of 116555

China reiterates it will maintain basic stability of yuan - PBOC Monday, December 27, 2004 10:15:36 AM afxpress.com BEIJING (AFX) - The People's Bank of China, the country's central bank, reiterated its intent to maintain the basic stability of the yuan's exchange rate at "rational" and "balanced" levels. The monetary policy committee of the central bank, in its fourth quarter regular meeting, said it will further improve the exchange rate formation system and maintain the basic stability of the yuan. The central bank also said it plans to continue with a prudent monetary policy The committee said the central bank will use various monetary tools to adjust liquidity in the financial sector. It will also steadily and gradually promote market-oriented interest rate reform. The central bank said that its current tightening policy has achieved an initial impact. However, it considers the current rate of credit growth to be generally "appropriate."

To: Crimson Ghost who wrote (19571)	12/27/2004 9:29:28 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

New-home inventory is at a 25-year high investors.com ...report out Thursday from the Census Bureau showed November new-home sales dived 12% from October to a 1.125 million unit annualized pace. The Midwest saw the biggest sales drop in November, tumbling 39.4%. Sales fell 27.9% in the West and 7.1% in the Northeast. But sales in the South rose 13.6%. The median sales price was $206,300, down 8.2% from October and 0.4% from a year earlier. The supply of unsold homes grew to 4.5 months' worth at the current sales pace, the highest since February 2003. New-home inventory is at a 25-year high. This is the second surprisingly gloomy housing report. Last week the government said November housing starts tumbled 13.1%, the biggest drop in 11 years. Economists aren't sure if this is the start of a housing slowdown or just the result of quirky data. "It's a cautionary flag, but it's nothing to get worried about just yet," Naroff said, adding December's sales numbers will provide a fuller picture as to which way the sales trend is headed. But he notes mortgage rates haven't risen much despite five straight Federal Reserve hikes. "If we stay at these levels before mortgage rates pick up, then I get worried," he said. "It means that pent-up demand has largely been met." Durable goods Much of November's gain stemmed from a 64.2% rise in orders for civilian aircraft, which helped push transportation orders up 8.2%. Excluding transportation, durable goods orders fell 0.8% after October's 1.3% slide. Core capital goods, which don't include aircraft and defense orders, and serve as a proxy for future business investment, logged their fifth gain in six months, climbing 1.8%. [Business tax credits expire this month - mish]

To: Crimson Ghost who wrote (19571)	12/27/2004 9:37:33 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Risk Management is Generous John P. Hussman, Ph.D. All rights reserved and actively enforced. With the S&P 500 just over 1200, the price/peak earnings multiple on the index has returned to 21. Aside from the 2000 bubble peak, this multiple exceeds the valuation seen at any historical market peak including 1929, 1972 and 1987. Meanwhile, junk bond yields have been compressed to the point where the bond market is pricing in negligible probability of corporate defaults in the years ahead. Corporate BBB yields are just a half percent over AAA yields, while spreads on pure junk are only about 2% over comparable Treasuries. This will end badly. After several years of minuscule Treasury bill yields and with the S&P 500 still below its level of 6 years ago, investors are frantic for yield and return - a context which makes even unimportant performance differentials seem devastating. We've seen this appetite for risk before, at the 2000 peak, and at numerous market extremes of the past. Of course, there is no assurance the market is at the peak of this advance, or that valuations will normalize quickly ? certainly nothing that would prove useful as a short-term forecast. But risk management is generous - it is very tolerant of positions established somewhat early. Speculation, on the other hand, is extraordinarily unforgiving of positions taken off somewhat late. Once again, investors seem to have lost their sense of simple algebra. It helps to remember that corporate earnings, despite extreme cyclical variability, are actually very well-behaved over the long-term. Whether one looks at the past 10, 20, 50 or 100 years, S&P 500 earnings have remained well contained in a 6% growth channel connecting earnings peaks across market cycles. Yes, earnings growth can be very rapid from trough to peak, with growth rates often exceeding 20% and 30% annually. But peak-to-peak variation is quite small. The growth rate of S&P 500 earnings was 6% from peak-to-peak even in the roaring 90's, productivity boom, new economy and all. lots more here: hussmanfunds.com