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: Elroy Jetson who wrote (20329)	1/4/2005 10:09:19 AM
From: mishedlo	Respond to of 116555

U.S. weekly retail chain store sales up 0.2% Tuesday, January 4, 2005 1:00:18 PM afxpress.com WASHINGTON (AFX) -- Sales at U.S. retail chain stores rose 0.2 percent last week, according to the weekly index published Tuesday by the International Council of Shopping Centers and UBS. Same-store sales growth was 4.6 percent year-over-year, the best since June. "Consumers continued to spend during the post-Christmas period and the performance over the last two weeks was a pleasant surprise to an uncertain and uneven season," said Michael Niemira, ICSC's chief economist "Sales seem to be on track for the 3.0 to 3.5 percent year-over-year gain that we expect for December," Niemira said

To: Elroy Jetson who wrote (20329)	1/4/2005 10:29:13 AM
From: mishedlo	Respond to of 116555

Treasurys stung by rise in U.S. factory orders ($TNX) By Rachel Koning CHICAGO (CBS.MW) -- A stronger-than-expected gain in November factory orders coupled with an upward revision in October took Treasurys lower. The benchmark 10-year note started U.S. trading modestly higher but had turned negative just ahead of the release of the factory report. Losses accelerated modestly on news that orders rose 1.2 percent in November, the biggest increase since July and topping average forecasts for a 1 percent gain. New orders rose a revised 0.9 percent in October after an initial estimate of a 0.5 percent increase. At last check, the 10-year note was down 5/32 at 100 4/32. Its yield ($TNX) rose to 4.23 percent vs. 4.21 percent at Monday's close.

To: Elroy Jetson who wrote (20329)	1/4/2005 10:32:37 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

U.S. Nov. factory orders up 1.2%; Oct. revised higher Tuesday, January 4, 2005 3:15:18 PM afxpress.com WASHINGTON (AFX) -- New orders for U.S.-made manufactured goods rose a faster-than-expected 1.2 percent in November after October's gains were revised higher, the Commerce Department said Tuesday. The November rise was the fastest increase since July. New orders rose a revised 0.9 percent in October after an initial estimate of a 0.5 percent increase. Shipments rose 0.4 percent in November to a record $379 billion. Economists polled by CBS MarketWatch expected a 1 percent gain in November orders

To: Elroy Jetson who wrote (20329)	1/4/2005 11:34:14 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Housing Collapse Chain Of Events Heinz chimes in to the end of this discussion The entire post repeated for ease of reading Mish LIG: Unfortunately lacking from these so called experts commentary is how big of an impact rising home prices have had in terms of keeping the economy afloat. Of course if employment stays high so will home prices, I don't think anybody is in disagreement. But if home prices stop rising, will employment stay high? That's the $64k question. Mish: There are many things the experts have missed. I will name the two I think are most important. BTW I do not think it is so much the issue of "home prices rising" as it is "home building expansion" that is fueling the economy. 1) impact of homebuilding on jobs 2) impact of all the new stores going up around all of the new homes Number 1 is obvious but the mainstream seems to think homebuilding can go on unabated forever. The trade jobs associated with home building are enormous, as is the appliance manufacturing, trucking etc etc etc etc. Thus, home prices do not necessarily have to drop to see an enormous drop in jobs and economic activity. IMO It is the drop in economic activity that will accelerate home prices to drop IMO, not the other way around. All it takes is for demand for new homes to drop. How much pent up demand at 70% ownership rate is there? How much pent up demand can there be with real wages declining? How much pent up demand can there be after 3 years of unbridled and reckless credit expansion? How much pent up demand is there in the face of rising oil prices, rising property taxes, and 5 rate hikes? Virtually NO ONE even talks about number 2. Look at all the hiring, merchandise, trucking ordering etc, that it takes to stock those new stores. Not only are stores battling one another for market share, they are canibalizing their own nearby stores IMO. Quite frankly we have overbuilt. Are there that many more customers than 3 years ago that we need that many more Walmarts, grocery stores, McDonalds, Home Depots, etc? This expansion will stop as homebuilding expansion stops. No one talks about it. Has anyone even thought of it? Bottom line: Jobs will fall off the cliff once this expansion stops and it does not take a decline in home prices to do it either. All it takes is for homebuilding itself to slow significantly. The ripple affect will be enormous. I have not heard a single person outside myself mention #2. I am not even sure if Heinz has commented on it but I am 100% certain he would agree. Heinz: you're right, i do agree. i've written about it in more general terms - namely that the credit boom has produced a lot of unproductive debt in this instance, and malinvestment in its wake. once the boom ends - for whatever reason (it could be by means of a tightening of credit, but mere exhaustion would suffice as well), the malinvestments will soon be revealed for what they are. not only that, in every bubble the 'embezzlement factor ' plays a role. iow, a lot of fraud in mortgage land will become obvious once the boom ends (every boom produces an increasing amount of fraudulent activities the longer it lasts. Enron and Wcom being the prime examples of the equity boom's fraud - the true enormity of which we haven't really been made privy to imo).