SI
SI
discoversearch

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 (27218)4/10/2005 10:08:49 AM
From: Chispas  Read Replies (1) | Respond to of 116555
 
Very, very interesting - thanks for posting, Fillmore ! .. .. .. .

It's a fine line that must be followed before a worker can be

classified as an independent contractor vs. an employee. See :

irs.gov

However, it seems to be increasingly common for workers to

be classified as "independent contractors" in order to avoid

paying them benefit packages and legally required benefits

such as workers compensation.

What is strange to me is how government agencies tend to

turn a "blind eye" to the situation. Sometimes when the

independent contractor gets laid off and screams how they

were mis-classified seems to be the only way this situation

gets attention.

Do you have any opinion on why this is so ?



To: Crimson Ghost who wrote (27218)4/10/2005 11:46:07 AM
From: mishedlo  Respond to of 116555
 
Venezuela Could Post 2005 Fiscal Surplus

CARACAS, Venezuela (Reuters) - Venezuela could post a fiscal surplus this year rather than the deficit forecast by the government if oil prices continue at current levels, Finance Minister Nelson Merentes said on Saturday.

"We planned for a fiscal deficit of 1.8 percent, but if the current conditions continue we are probably going to have a surplus," Merentes told a news conference.

Venezuela, the world's No. 5 oil exporter and OPEC member, had budgeted for an average price of $23 a barrel for its basket of crude and product exports in its 2005 fiscal plan.

But Venezuela's oil basket prices have held well over that level this year as crude futures soar.

Venezuela's oil-reliant economy is recovering from two years of political conflict over the rule of President Hugo Chavez, who won a recall referendum in August of 2004.

The South American nation registered economic growth of 17.3 percent in 2004 as the political situation calmed down after the recall poll and high oil prices helped spur government spending.

Merentes said the government's plan to crack down on tax evasion had also surpassed expectations, with collections 39 percent higher than planned during the first quarter.

"The projections show that we have an important surplus and we are going to continue investing to move the economy," he said.

story.news.yahoo.com



To: Crimson Ghost who wrote (27218)4/10/2005 11:56:30 AM
From: mishedlo  Read Replies (5) | Respond to of 116555
 
Here's a nice "starter Home"
sgv.prucalonline.com



To: Crimson Ghost who wrote (27218)4/10/2005 12:55:07 PM
From: mishedlo  Read Replies (2) | Respond to of 116555
 
HON. RON PAUL OF TEXAS
BEFORE THE US HOUSE OF REPRESENTATIVES

April 6, 2005

Who’s Better Off?

Whenever the administration is challenged regarding the success of the Iraq war, or regarding the false information used to justify the war, the retort is: “Aren’t the people of Iraq better off?” The insinuation is that anyone who expresses any reservations about supporting the war is an apologist for Saddam Hussein and every ruthless act he ever committed. The short answer to the question of whether the Iraqis are better off is that it’s too early to declare, “Mission Accomplished.” But more importantly, we should be asking if the mission was ever justified or legitimate. Is it legitimate to justify an action that some claim yielded good results, if the means used to achieve them are illegitimate? Do the ends justify the means?

The information Congress was given prior to the war was false. There were no weapons of mass destruction; the Iraqis did not participate in the 9/11 attacks; Osama bin Laden and Saddam Hussein were enemies and did not conspire against the United States; our security was not threatened; we were not welcomed by cheering Iraqi crowds as we were told; and Iraqi oil has not paid any of the bills. Congress failed to declare war, but instead passed a wishy-washy resolution citing UN resolutions as justification for our invasion. After the fact we’re now told the real reason for the Iraq invasion was to spread democracy, and that the Iraqis are better off. Anyone who questions the war risks being accused of supporting Saddam Hussein, disapproving of democracy, or “supporting terrorists.” It’s implied that lack of enthusiasm for the war means one is not patriotic and doesn’t support the troops. In other words, one must march lock-step with the consensus or be ostracized.

However, conceding that the world is better off without Saddam Hussein is a far cry from endorsing the foreign policy of our own government that led to the regime change. In time it will become clear to everyone that support for the policies of pre-emptive war and interventionist nation-building will have much greater significance than the removal of Saddam Hussein itself. The interventionist policy should be scrutinized more carefully than the purported benefits of Saddam Hussein’s removal from power. The real question ought to be: “Are we better off with a foreign policy that promotes regime change while justifying war with false information?” Shifting the stated goals as events unravel should not satisfy those who believe war must be a last resort used only when our national security is threatened.

How much better off are the Iraqi people? Hundreds of thousands of former inhabitants of Fallajah are not better off with their city flattened and their homes destroyed. Hundreds of thousands are not better off living with foreign soldiers patrolling their street, curfews, and the loss of basic utilities. One hundred thousand dead Iraqis, as estimated by the Lancet Medical Journal, certainly are not better off. Better to be alive under Saddam Hussein than lying in some cold grave.

Praise for the recent election in Iraq has silenced many critics of the war. Yet the election was held under martial law implemented by a foreign power, mirroring conditions we rightfully condemned as a farce when carried out in the old Soviet system and more recently in Lebanon. Why is it that what is good for the goose isn’t always good for the gander?

Our government fails to recognize that legitimate elections are the consequence of freedom, and that an artificial election does not create freedom. In our own history we note that freedom was achieved first and elections followed-- not the other way around.

One news report claimed that the Shiites actually received 56% of the vote, but such an outcome couldn’t be allowed for it would preclude a coalition of the Kurds and Shiites from controlling the Sunnis and preventing a theocracy from forming. This reminds us of the statement made months ago by Secretary Rumsfeld when asked about a Shiite theocracy emerging from a majority democratic vote, and he assured us that would not happen. Democracy, we know, is messy and needs tidying up a bit when we don’t like the results.

Some have described Baghdad and especially the green zone, as being surrounded by unmanageable territory. The highways in and out of Baghdad are not yet secured. Many anticipate a civil war will break out sometime soon in Iraq; some claim it’s already underway.

We have seen none of the promised oil production that was supposed to provide grateful Iraqis with the means to repay us for the hundreds of billions that American taxpayers have spent on the war. Some have justified our continuous presence in the Persian Gulf since 1990 because of a need to protect “our” oil. Yet now that Saddam Hussein is gone, and the occupation supposedly is a great success, gasoline at the pumps is reaching record highs approaching $3 per gallon.

Though the Iraqi election has come and gone, there still is no government in place and the next election-- supposedly the real one-- is not likely to take place on time. Do the American people have any idea who really won the dubious election at all?

The oil-for-food scandal under Saddam Hussein has been replaced by corruption in the distribution of U.S. funds to rebuild Iraq. Already there is an admitted $9 billion discrepancy in the accounting of these funds. The over-billing by Halliburton is no secret, but the process has not changed.

The whole process is corrupt. It just doesn’t make sense to most Americans to see their tax dollars used to fight an unnecessary and unjustified war. First they see American bombs destroying a country, and then American taxpayers are required to rebuild it. Today it’s easier to get funding to rebuild infrastructure in Iraq than to build a bridge in the United States. Indeed, we cut the Army Corps of Engineers’ budget and operate on the cheap with our veterans as the expenditures in Iraq skyrocket.

One question the war promoters don’t want to hear asked, because they don’t want to face up to the answer, is this: “Are Christian Iraqis better off today since we decided to build a new Iraq through force of arms?” The answer is plainly no.

Sure, there are only 800,000 Christians living in Iraq, but under Saddam Hussein they were free to practice their religion. Tariq Aziz, a Christian, served in Saddam Hussein’s cabinet as Foreign Minister-- something that would never happen in Saudi Arabia, Israel, or any other Middle Eastern country. Today, the Christian churches in Iraq are under attack and Christians are no longer safe. Many Christians have been forced to flee Iraq and migrate to Syria. It’s strange that the human rights advocates in the U.S. Congress have expressed no concern for the persecution now going on against Christians in Iraq. Both the Sunni and the Shiite Muslims support the attacks on Christians. In fact, persecuting Christians is one of the few areas in which they agree-- the other being the removal of all foreign forces from Iraqi soil.

Considering the death, destruction, and continual chaos in Iraq, it’s difficult to accept the blanket statement that the Iraqis all feel much better off with the U.S. in control rather than Saddam Hussein. Security in the streets and criminal violence are not anywhere near being under control.

But there’s another question that is equally important: “Are the American people better off because of the Iraq war?”

One thing for sure, the 1,500 plus dead American soldiers aren’t better off. The nearly 20,000 severely injured or sickened American troops are not better off. The families, the wives, the husbands, children, parents, and friends of those who lost so much are not better off.

The families and the 40,000 troops who were forced to re-enlist against their will-- a de facto draft-- are not feeling better off. They believe they have been deceived by their enlistment agreements.

The American taxpayers are not better off having spent over 200 billion dollars to pursue this war, with billions yet to be spent. The victims of the inflation that always accompanies a guns-and-butter policy are already getting a dose of what will become much worse.

Are our relationships with the rest of the world better off? I’d say no. Because of the war, our alliances with the Europeans are weaker than ever. The anti-American hatred among a growing number of Muslims around the world is greater than ever. This makes terrorist attacks more likely than they were before the invasion. Al Qaeda recruiting has accelerated. Iraq is being used as a training ground for al Qaeda terrorists, which it never was under Hussein’s rule. So as our military recruitment efforts suffer, Osama bin Laden benefits by attracting more terrorist volunteers.

Oil was approximately $27 a barrel before the war, now it’s more than twice that. I wonder who benefits from this?

Because of the war, fewer dollars are available for real national security and defense of this country. Military spending is up, but the way the money is spent distracts from true national defense and further undermines our credibility around the world.

The ongoing war’s lack of success has played a key role in diminishing morale in our military services. Recruitment is sharply down, and most branches face shortages of troops. Many young Americans rightly fear a coming draft-- which will be required if we do not reassess and change the unrealistic goals of our foreign policy.

The appropriations for the war are essentially off-budget and obscured, but contribute nonetheless to the runaway deficit and increase in the national debt. If these trends persist, inflation with economic stagnation will be the inevitable consequences of a misdirected policy.

One of the most significant consequences in times of war that we ought to be concerned about is the inevitable loss of personal liberty. Too often in the patriotic nationalism that accompanies armed conflict, regardless of the cause, there is a willingness to sacrifice personal freedoms in pursuit of victory. The real irony is that we are told we go hither and yon to fight for freedom and our Constitution, while carelessly sacrificing the very freedoms here at home we’re supposed to be fighting for. It makes no sense.

This willingness to give up hard-fought personal liberties has been especially noticeable in the atmosphere of the post-September 11th war on terrorism. Security has replaced liberty as our main political goal, damaging the American spirit. Sadly, the whole process is done in the name of patriotism and in a spirit of growing militant nationalism.

These attitudes and fears surrounding the 9-11 tragedy, and our eagerness to go to war in the Middle East against countries not responsible for the attacks, have allowed a callousness to develop in our national psyche that justifies torture and rejects due process of law for those who are suspects and not convicted criminals.

We have come to accept pre-emptive war as necessary, constitutional, and morally justifiable. Starting a war without a proper declaration is now of no concern to most Americans or the U.S. Congress. Let’s hope and pray the rumors of an attack on Iran in June by U.S. Armed Forces are wrong.

A large segment of the Christian community and its leadership think nothing of rationalizing war in the name of a religion that prides itself on the teachings of the Prince of Peace, who instructed us that blessed are the peacemakers-- not the warmongers.

We casually accept our role as world policeman, and believe we have a moral obligation to practice nation building in our image regardless of the number of people who die in the process.

We have lost our way by rejecting the beliefs that made our country great. We no longer trust in trade, friendship, peace, the Constitution, and the principle of neutrality while avoiding entangling alliances with the rest of the world. Spreading the message of hope and freedom by setting an example for the world has been replaced by a belief that use of armed might is the only practical tool to influence the world-- and we have accepted, as the only superpower, the principle of initiating war against others.

In the process, Congress and the people have endorsed a usurpation of their own authority, generously delivered to the executive and judicial branches-- not to mention international government bodies. The concept of national sovereignty is now seen as an issue that concerns only the fringe in our society.

Protection of life and liberty must once again become the issue that drives political thought in this country. If this goal is replaced by an effort to promote world government, use force to plan the economy, regulate the people, and police the world, against the voluntary desires of the people, it can be done only with the establishment of a totalitarian state. There’s no need for that. It’s up to Congress and the American people to decide our fate, and there is still time to correct our mistakes.

house.gov



To: Crimson Ghost who wrote (27218)4/10/2005 10:21:30 PM
From: mishedlo  Read Replies (2) | Respond to of 116555
 
Surprise--America Owes Too Little
Kenneth L. Fisher, 04.18.05, 12:00 AM ET

Foreign capital, imported at the rate of $600 million per year, helps the U.S. economy. The money goes to build productive assets here.
Here's another reason to be bullish: everyone is worried sick that America is overindebted, but it's not. This country could profitably take on more loans from abroad and invest the money in productive assets. We're underindebted.

The debt worriers have been with us for a long time, and they've always been wrong. Their economic prescriptions are born of a moral philosophy that says debt is bad and more debt is worse. They don't like to see the U.S. importing capital from abroad at the rate of $600 billion a year. What the worriers fail to contemplate is the uses to which that capital is put.

What is the right debt level for society to carry? The answer is: that level where our marginal borrowing costs approach our marginal return on assets. This is, in fact, the same formula that a corporation would use. If you can borrow at 6% to build a factory that will yield a return of 12%, you should borrow.

The U.S. is nowhere near there. As a result, we need more debt to get more income, so people can become wealthier.

The Federal Reserve counts $97 trillion of assets in the economy, offset by $44 trillion of debt, leaving (with rounding) $52 trillion of net worth. The asset figure, to be sure, involves some double-counting (General Motors' factory, an asset, is financed by bonds, counted again as an asset in your individual retirement account), but no matter: The key figure is the $52 trillion at the bottom of the U.S. balance sheet. And we're getting a great return on that $52 trillion. Our national income is $12 trillion.

Yes, most of the income is labor income, not a return on capital as conventionally calculated. Yet think for a moment: Why are labor rates higher here than in Madagascar? It's precisely because we have so much invested in the form of roads, factories and job skills. I compare the $12 trillion income to the $52 trillion of net capital and conclude that capital is extremely productive in this country. I'm not worried about importing a little more of it and putting it to use.

Folks fret about our $2 trillion of consumer debt and $4 trillion of federal government debt. But these are small numbers in relation to our income, to our total debt (mortgage and business debts are far larger) and to our net worth. Stop worrying. Instead, buy stocks.

Technology-oriented militaries depend on Israeli defense firm Elbit Systems (24, ESLT) for some of their most advanced command, communication and intelligence systems. Among Elbit's products are unmanned airborne drones for surveillance and reconnaissance. America is the largest customer and our need for high-end intelligence keeps growing, while Elbit trades at a modest one times its $900 million of revenue and 16 times 2005 earnings.

Instead of worrying about trade deficits, think about the unrelenting growth in both imports and exports. CP Ships (15, TEU) is a British intermodal container shipper with 80% of its activity focused on North America. Its 80 ships make it the leading carrier in most of the routes it plies. CP Ships is cheap at 35% of its $3.7 billion of revenue and 13 times 2005 earnings. True, while ocean freight is a cyclical business, do not forget that this is also a growth business.

Archipelago Holdings (18, AX) operates the Archipelago Exchange, America's first and largest open, all-electronic stock exchange. Its ArcaEx product searches across the big exchanges for the best prices for a customer order, giving public access to execution speed and trade pricing once reserved for floor traders. It is gaining market share while maintaining inherently lower clearing costs than most of its competitors. At 1.6 times its $500 million of revenue and 16 times 2005 earnings, it is cheap for a leading-edge electronic financial services firm.

Lyondell Chemical (35, LYO) is a midsize specialty organic chemical company whose $4.5 billion of revenue is split evenly inside America and beyond. Its products are intermediates and basic building blocks in consumer products of almost all types. Hence Lyondell is sensitive to global economic growth. With economies improving, the stock should benefit. One cloud I see as an opportunity is its production of a controversial gasoline additive, MTBE (methyl tertiary-butyl ether), which was introduced in the 1970s to reduce gas emissions but has since been seen itself as a pollutant and is banned in California, Connecticut and New York. MTBE constitutes 25% of Lyondell's sales. More states may ban the substance, though the controversy is widely known and priced into the stock. It lets you buy Lyondell at 11 times 2005 earnings.

Kenneth L. Fisher is a Woodside, Calif.-based money manager. Visit his homepage at www.forbes.com/fisher.

forbes.com



To: Crimson Ghost who wrote (27218)4/11/2005 2:04:54 AM
From: mishedlo  Read Replies (2) | Respond to of 116555
 
My reply to Nouriel Roubini's blog on Massive Capital Losses
globaleconomicanalysis.blogspot.com

Mish



To: Crimson Ghost who wrote (27218)4/11/2005 2:17:52 AM
From: mishedlo  Respond to of 116555
 
The Whole-House Machine
This is why people think robotics are the future

In a sunny laboratory at the University of Southern California, a robotically controlled nozzle squeezes a ribbon of concrete onto a wooden plank. Every two minutes and 14 seconds, the nozzle completes a circuit, topping the previous ribbon with a fresh one. Thus a five-foot-long wall rises—a wall built without human intervention.

The wall is humble but portentous. “If you can build a wall, you can build a house,” says Behrokh Khoshnevis, an engineering professor, as he watches the gray mixture squirt out in neat courses from what he calls a contour crafter, a machine about eight feet tall and six feet wide. If all goes as planned, Khoshnevis will use a larger, more advanced version of the device later this year to erect the first robotically constructed house in just one day

more here:
discover.com



To: Crimson Ghost who wrote (27218)4/11/2005 2:51:13 AM
From: mishedlo  Read Replies (1) | Respond to of 116555
 
German govt moots minimum wage for vulnerable sectors - report
Monday, April 11, 2005 6:31:23 AM
afxpress.com

BERLIN (AFX) - The German government will this week consider setting a minimum wage for the most vulnerable sectors of the economy as part of a series of measures to fight a downward spiral in salaries, the Financial Times reported
[Does anyone think this can possibly work? I think it will cause unemployment to rocket up. Mish]

The newspaper quoted the economics ministry as saying the move could form part of proposals due to be presented to the cabinet by a taskforce on Wednesday

The taskforce, comprising officials of the finance and economics ministries, would look to extend a law that already applies to the construction sector, under which the latest wage agreement becomes the legal minimum wage for the entire sector

Germany has no legal minimum wage. Chancellor Gerhard Schroeder has repeatedly opposed introducing one, despite demands from his own party's left wing



To: Crimson Ghost who wrote (27218)4/11/2005 10:17:47 AM
From: mishedlo  Respond to of 116555
 
Luxembourg´s Mersch says ECB does not ´as yet´ see reasons to raise rates
Monday, April 11, 2005 11:12:41 AM
afxpress.com

Luxembourg's Mersch says ECB does not 'as yet' see reasons to raise rates LUXEMBOURG (AFX) - Luxembourg Central Bank governor Yves Mersch said the European Central Bank does not "as yet" see any reasons to raise interest rates

"We considered that we did not see as yet any reasons for moving the interest rate," Mersch, who is a member of the ECB's rate-setting governing council, said, when asked if it discussed an increase on Thursday at its last meeting

He said however that the ECB is "looking into every incoming information" on the euro zone economy, adding that "there are a lot of mixed signals that we have been receiving of late"

Reiterating ECB president Jean-Claude Trichet's comment on Thursday, Mersch said: "What has been ruled out is the cutting of rates." Asked further about Thursday's meeting, he said: "We discuss the general situation and then we draw conclusions. The conclusions were that rates should stay put on the basis of the information that we had at that time."



To: Crimson Ghost who wrote (27218)4/11/2005 10:21:28 AM
From: mishedlo  Read Replies (1) | Respond to of 116555
 
French Feb industrial output down 0.5 pct from Jan; consensus up 0.2 pct
Monday, April 11, 2005 7:00:37 AM
afxpress.com

PARIS (AFX) - Seasonally-adjusted French industrial output for February was down 0.5 pct following a flat performance in January, according to data from the Insee statistics office

The consensus estimate of economists polled by AFX News was established at a 0.2 pct month-on-month rise

Insee said the January figure was revised from a provisional 0.2 pct rise

Manufacturing output, which excludes food and energy, was down 1.0 pct in February compared with a 0.3 pct rise the month before

Economists had forecast that this component would be unchanged on the month

Food output was down 1.6 pct on the month after being flat in January, while for consumer goods it decreased 0.4 pct compared with a 0.8 pct rise the previous month

Automobile output declined 1.0 pct versus a 1.5 pct fall in the previous month, and capital goods production was down 0.3 pct against a 0.4 pct loss last time

Intermediate goods fell 1.7 pct compared with a 0.9 pct rise, while energy output was up 2.6 pct following a 1.6 pct decline the month before



To: Crimson Ghost who wrote (27218)4/11/2005 10:46:24 AM
From: mishedlo  Respond to of 116555
 
Bang a Gong - Hussman

They don't ring a bell, but as of last week, the Market Climate for stocks has shifted to a clearly negative condition, characterized by unusually unfavorable valuations and now clearly unfavorable market action (I generally report these changes with a lag if there is anything material to execute, but the present shift should be no surprise).

Importantly, this shift should not be taken as a negative “point forecast” for upcoming returns, but as a change in the likely probability distribution of stock returns (see the March 14th comment for more on this distinction). It does not imply that stocks must or even should decline in this particular instance, but it does indicate that the present set of market conditions has historically been associated with poor average total returns.

Keep in mind that our strategy isn't to forecast future market conditions, but to align our investment position with prevailing ones. I have absolutely no attachment to a favorable or unfavorable market outlook, and the current change in conditions should not be confused with a "call" on future market direction. It's not out of the question that the quality of market action could improve enough to signal a fresh willingness of investors to accept risk, and of course we would respond by establishing a greater exposure to market fluctuations on that evidence.

.......
hussmanfunds.com