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

To: russwinter who wrote (25605)	3/14/2005 2:18:14 PM
From: mishedlo	Respond to of 116555

How Japan refinanced global reflation By Richard Duncan 10 March 2005 Dollar Crisis author, Richard Duncan explains how Japan bailed out the US by printing money equating to 1% of global GDP. In 2003 and the first quarter of 2004, Japan carried out a remarkable experiment in monetary policy - remarkable in the impact it had on the global economy and equally remarkable in that it went almost entirely unnoticed in the financial press. Over those 15 months, monetary authorities in Japan created Y35 trillion. To put that into perspective, ¥35 trillion is approximately 1% of the world's annual economic output. It is roughly the size of Japan's annual tax revenue base or nearly as large as the loan book of UFJ, one of Japan's four largest banks. ¥35 trillion amounts to the equivalent of $2,500 for every person in Japan and, in fact, would amount to $50 per person if distributed equally among the entire population of the planet. In short, it was money creation on a scale never before attempted during peacetime. Why did this occur? There is no shortage of yen in Japan. The yield on two year JGBs is 10 basis points. Overnight money is free. Japanese banks have far more deposits than there is demand for loans, which forces them to invest up to a quarter of their deposits in low yielding government bonds. So, what motivated the Bank of Japan to print so much more money when the country is already flooded with excess liquidity? Lots more here: financeasia.com Plenty of charts and graphs This is a very interesting article

To: russwinter who wrote (25605)	3/15/2005 10:09:18 AM
From: TobagoJack	Read Replies (1) \| Respond to of 116555

hello russ, a non-question: which came first, chicken or the egg? It may be the case that China export cannot be wrecked by China Train Wreck scenario of any sort, because most of what China ships are necessary, as opposed to 'can do without'; and also, the middlemen between China and end markets (i.e. Walmart etc) have far more margin% to be squished out then the typical China-based manufacturer, many of whom are foreign-owned and integral to offshore-based global corporations, and so will be squished when the need arises. China's export will suffer the sort of train wreck when and if America no longer requires socks and bras, and if / when that happens, we got nothing to worry about any more. China's cost increases, of the commodity kind, will of course be absorbed by all along the chain, all the way to the end-buyer, as that cost increase is global in nature. China's wage push inflation is effectively non-existent, and if/when becomes a problem, the RMB will devalue,as it should and must in any case. Nothing new here. Bottom line, everything is fcuked any way, and so we might as well enjoy the process of collapse, slowly, of one schema or another construct. Chugs, Jay

To: russwinter who wrote (25605)	3/15/2005 12:33:46 PM
From: mishedlo	Respond to of 116555

Check this out. You might like it for your tools section phillygasprices.com

To: russwinter who wrote (25605)	3/15/2005 12:59:17 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Mish: "Is the daily watching of repos and coupon passes a meaningless activity or not?" Heinz: in brief, watching it daily probably doesn't make a lot of sense. but one should check the activity out every once ina while. in essence, the information conveyed is the following: it tells you whether the Fed Funds 'target rate' is below or above the level a comparable rate would be in a free market. in short, if it takes a lot of injections to keep the trarget rate at its level, it's likely that the rate would be higher in a free market. otoh, if liquidity is 'drained' regularly to keep the rate at its desired level, it follows that in a free market, the rate would be lower. basically it documents the degree of market manipulation the Fed is engaging in.

To: russwinter who wrote (25605)	3/15/2005 1:59:46 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

U.S. March homebuilders index flat at 69 Tuesday, March 15, 2005 6:15:31 PM afxpress.com WASHINGTON (AFX) -- U.S. homebuilders said busiess prospects remained healthy in early March. The National Association of Home Builders and Wells Fargo said their housing market index was unchanged in March at 69. "Robust buyer demand continues to sustain the new-home market, with no signs of letting up in the near future," said David Wilson, president of the NAHB and a builder in Ketchum, Idaho. The index has been between 66 and 71 for the past 20 months

To: russwinter who wrote (25605)	3/24/2005 3:31:26 AM
From: croesus1111	Read Replies (1) \| Respond to of 116555

<actual outcome of a Train Wreck based China slowdown, is a fracturing of China's money losing export based economy. When these enterprises fail, it will disrupt the global supply chain.> I don't know, you have to remember that China is to some extent still a command and control economy, and the leadership fears discontent among the workers above all else. The leadership will not easily allow the state-owned businesses, and other marginal enterprises to just shut down. To the extent that they are able to, they will subsidize to prevent these enterprises from going under. They will use some or all of their forex resources to do it. What you are talking about would require a catastrophic recession. What evidence do you have of that magnitude of a slowdown being imminent? After all, Japanese banks have been essentially insolvent for fifteen years or more, and their government has saved them all this time...