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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (26865)	2/21/2005 3:52:43 PM
From: loantech	Read Replies (2) \| Respond to of 110194

mish as you know Bush and his cronies need everybody deep into debt as new bankruptcy laws are in the works making it more difficult to file and claim. Therefore right at the top of the debt orgy when all are busting at the seams with debt let's change the rules. Will create another level of debt slaves and get those donkies off to work. Tom

To: mishedlo who wrote (26865)	2/22/2005 11:26:07 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

Oakland's January port figures are out, and here's how the three major Calf ports shaped up; Imports were 615,181 vs 590,854 yoy, so up 4.0%, and you can probably add another 3-4% just for higher import prices. Outbound was 186,120 vs 195,311, rather nasty decline, indicating Asia is cutting back. Appears to be setting up an especially poor trade number with Asia for January when combined with higher energy prices.

To: mishedlo who wrote (26865)	2/23/2005 11:23:09 AM
From: russwinter	Respond to of 110194

The Liquidity Based Bear Case by Steve Northwood, Wednesday February 23 2005 wallstreetexaminer.com Equity valuations may be at a turning point. There are fundamental economic problems; the market is overvalued by most historical measures. However, economic fundamentals have not driven this market. Liquidity has, and that trough is running dry. Recent evidence suggests that liquidity is tight as a drum, resulting in almost a direct correlation between daily Federal Reserve and Treasury actions and market reactions. On drain days, the market sells off in proportion to the drain. Liquidity blasts are immediately met with short-lived rallies. Artificial stimuli from the government (both monetary and fiscal) are reversing. Specifically, Congress and the Administration have a stated policy to cut government spending. At a minimum, large wasteful spending increases should be over. Recently the public has seen encouraging signs on the deficit front because December and January deficits were smaller than year-ago numbers. January actually showed a surplus. The net swing for those two months was $25 billion. That process has reversed in February. Last year the February deficit (usually the largest of the year) was $96 billion. As of last Friday the current February deficit stood at about $110 billion, and is easily on track to hit $120 billion and possibly $130 billion for the month. Other potential sources of short term liquidity (other than the Fed) are foreign central bank purchases (another declining trend) and the Friday Tax blasts. The tax blasts are becoming ineffective since the Treasury now has to borrow this money dollar-for-dollar. More importantly, monetary policy is tightening. On Tuesday, Greenspan & Co. were attempting a preemptive strike to limit the damage from the Treasury's unanticipated borrowing increase, by adding a large repo. He and the Fed know they either have to fundamentally change the equation (i.e. reverse the course on Fed Funds and start pumping permanent money) which would scare the daylights out of everybody, or just ease the market on its way to where it wants to be right now- namely, down. Without changing the equation (which only the Fed or some unanticipated event can do) manipulation can only succeed within a limited short term range. We appear to be making the transition from a bull rally to the next leg of the bear market. Even market manipulators would admit that while they may be able to affect day-to-day or even week-to-week movements, they cannot change the broad course of a bull or bear market. The Fed’s blast of $11.5 Billion on Tuesday increases expirations on Wednesday to $14.5B, followed by $12B Thursday. If the market couldn’t rally on Tuesday on the heels of the huge Fed liquidity add, just consider what it faces as the short term blasts seeded over the last couple of days are withdrawn. The Fed may also be concerned about where any extra liquidity ends up. What moved in response to Tuesday's infusion? Commodities. The Fed doesn’t like that. Real Estate would be OK… Equities, maybe OK. But commodities, NEVER, because that leads straight to inflation, which would require even more stringent tightening. posted Wednesday February 23, 09 29 AM ET Copyright (c) 2005 The Wall Street Examiner. All rights reserved.