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


To: Crimson Ghost who wrote (29317)5/4/2005 10:10:04 AM
From: Tommaso  Read Replies (2) | Respond to of 116555
 
>>>Issuing the long bond again, provides more evidence that that the Treasury expects long rates to move higher over time. This comes soon after they decided to stop making savings bond rates adjustable.<<<

I wish I didn't have to take such a cynical view, but the government is getting set up to screw the public out of its real savings for the next 20 years. The 30-year bond is much in demand, the initial interest rates will be unrealistically low, the government will get the money at bargain rates, inflation will kick in, and then the bonds will be worth up to 40% less than face value as interest rates go on up. Meantime, small savers will get less than the inflation rate on their savings bonds. It all happened before, in the 1960s and 1970s.

Actually it could be a lot worse than what I have just described. I just don't want to sound any crazier than I actually am.

Does anyone remember those 13% government bond rates? If you don't believe me, just look at the May 2014 government bond quote. What do you suppose treasuries with 5% coupons were selling for when that one was issued? Probably less than 60 cents on the dollar.



To: Crimson Ghost who wrote (29317)5/4/2005 10:16:52 AM
From: studdog  Read Replies (1) | Respond to of 116555
 
Fillmore, The EE yield came out yesterday. Any buyer will be stuck with 3.5% for the life (30 years) of the savings bond. Hardly a deal. The I bond rate is 4.8% and represents the biggest spread between the two savings bonds that I can remember. It points out how even the government's calculation of inflation is pretty high. I suspect they will do something soon to the I bonds to keep those rates lower.
I agree, the rumor of the 30 plus the EE bond change certainly looks like expectations at the Treasury are for rates to go higher. The last time they changed the EE bonds to variable (1981) was at the absolute peak of interest rates, pretty good timing.

Karl



To: Crimson Ghost who wrote (29317)5/4/2005 11:00:56 AM
From: mishedlo  Read Replies (1) | Respond to of 116555
 
"Near the end of a major expansion, few creditors expect default, which is why they lend freely to weak borrowers. Few borrowers expect their fortunes to change, which is why they borrow freely. Deflation involves a substantial amount of involuntary debt liquidation because almost no one expects deflation before it starts."

safehaven.com



To: Crimson Ghost who wrote (29317)5/4/2005 11:10:31 AM
From: mishedlo  Read Replies (1) | Respond to of 116555
 
A Little Hanky-Panky at the Federal Reserve Banky?
gillespieresearch.com

"GOVERNMENT ECONOMIC REPORTS: THINGS YOU'VE
SUSPECTED BUT WERE AFRAID TO ASK!"
gillespieresearch.com



To: Crimson Ghost who wrote (29317)5/4/2005 11:18:56 AM
From: mishedlo  Read Replies (1) | Respond to of 116555
 
Trichet says recent euro zone data show economic activity ´on the downside´
Wednesday, May 4, 2005 1:26:18 PM
afxpress.com

Trichet says recent euro zone data show economic activity 'on the downside' FRANKFURT (AFX) - European Central Bank president Jean-Claude Trichet said recent data show the short-term outlook for economic activity are on the downside with some of the downward risks partially materialising over the past few months

Speaking at the start of a news conference after the ECB Governing Council left its key interest rates unchanged, Trichet also said the bank sees no significant evidence of a build-up of underlying domestic inflationary pressures in the euro area

"Regarding the current situation and the short-term outlook for economic activity, recent data and survey indicators are, on balance, on the downside," he said

He said some of the downward risks to economic growth identified earlier, in particular those related to persistently high oil prices, appear to have partially materialised over the past few months, he added

"The exceptionally low level of interest rates across the entire maturity spectrum provides considerable support to economic activity in the euro area. At the same time, continued vigilance with regard to upside risks to price stability is warranted," he said

He said at the same time, when looking beyond the short term, conditions remain in place for stronger real growth

"Downside risks to economic growth continue to be related to oil price developments and global imbalances," he added. He said there continue to be upside risks to price stability, relating mainly to oil price developments and their potential to lead to second-round effects stemming from wage and price-setting behaviour



To: Crimson Ghost who wrote (29317)5/4/2005 11:32:47 AM
From: mishedlo  Respond to of 116555
 
Italy´s Baldassari says ECB should cut rates, not follow US in hiking
Wednesday, May 4, 2005 10:36:19 AM
afxpress.com

Italy's Baldassari says ECB should cut rates, not follow US in hiking PARIS (AFX) - Italian deputy economy minister Mario Baldassari said the European Central Bank should cut interest rates rather than following the US in raising them. "I would reduce the interest rate in Europe if I were the central bank," Baldassari said on the sidlines of an OECD ministerial meeting here.

"But at least I would not increase it when the Fed is doing so. I don't believe there is motivation to do the same in Europe," he said. Baldassari said the ECB should place more emphasis on boosting growth now that euro zone inflation is relatively under control.The ECB governing council is expected to keep rates on hold at its meeting today



To: Crimson Ghost who wrote (29317)5/4/2005 11:36:22 AM
From: mishedlo  Respond to of 116555
 
House has no timetable for Social Security
Wednesday, May 4, 2005 3:16:23 PM
afxpress.com

WASHINGTON (AFX) -- House Republican leaders aren't committed to a detailed schedule for crafting Social Security legislation, House Speaker Dennis Hastert told reporters Wednesday. "When we do it, we want to do it right," Hastert said. The House won't be tied "to any specific Social Security timetable," he said. House Ways and Means Committee Chairman Bill Thomas announced last week that his panel would begin hearings this month on legislation to overhaul Social Security with an aim toward crafting a bill by June



To: Crimson Ghost who wrote (29317)5/4/2005 11:51:31 AM
From: Jim McMannis  Respond to of 116555
 
Clever aren't they...



To: Crimson Ghost who wrote (29317)5/4/2005 12:49:20 PM
From: mishedlo  Respond to of 116555
 
Heart Clinic May End or Curtail Use of a Drug
nytimes.com

Heart doctors at the Cleveland Clinic, one of the nation's largest centers for cardiac care, have voted unanimously to severely curtail or even ban the clinic's use of the Johnson & Johnson drug Natrecor.

The final decision is in the hands of a clinic committee that is expected to review data at a meeting today. Natrecor, widely used as a treatment for heart failure, has been reported in two recent medical journal studies to increase kidney problems and death rates among patients. Last week, the company worked out a plan with federal drug regulators to cite such risks on its label.

Opposition to the drug's use among Cleveland Clinic heart physicians could be a blow to Johnson & Johnson. Last December, the clinic, a national leader in innovation and research, took the lead in banning the painkiller Bextra - several months before the Food and Drug Administration asked Pfizer to withdraw the medication from the market, because of its heart risks.

Mark Wolfe, a Johnson & Johnson spokesman, said yesterday that the company would not speculate on the outcome of the committee's review. "From our perspective, Natrecor is highly effective and has a positive risk-benefit ratio when used in patients with acutely decompensated heart failure, a life-threatening condition for which there are limited treatment options," he said.

The preliminary vote against Natrecor was unanimous among about 50 members of the department of cardiovascular medicine who attended a meeting last Thursday to review data on the drug, said Dr. Eric E. Topol, the chairman of cardiovascular medicine for the clinic. He said that today's meeting of the formulary committee - which determines which drugs are used at the clinic - was considered urgent and had been scheduled only after last Thursday's vote.

Natrecor became a Johnson & Johnson drug as a result of the company's purchase of Scios, a biotechnology company, in 2003 for $2.4 billion. The treatment is a cardiac hormone that dilates vessels so that less blood pools in the heart and lungs, reducing shortness of breath, which is often the most debilitating symptom of heart failure.

While the company does not release sales figures for Natrecor, some financial analysts had been predicting that its sales would exceed $600 million this year and could eventually reach blockbuster status. During an earnings conference last month, however, the chief of investor relations at Johnson & Johnson, Helen E. Short, said recent negative publicity about the drug had modestly diminished sales.

Natrecor is approved to treat severe cases of acute heart failure, which typically requires hospitalization. But it has also been widely used in outpatient clinics where patients arrive for regular infusions. As a result, as many as 600,000 patients have been treated with the drug since its approval in 2001.

Dr. Topol expressed concern about Natrecor yesterday, saying that he did not understand its widespread use, in light of questions about its safety and effectiveness, as well as its expense - about $500 per infusion.

"The point is, we have other medicines that cost pennies; there is a battery of drugs that are traditionally anchors in this field," he said, citing ones like nitroglycerin and furosemide, which is sold as Lasix and under other names.

"Natrecor was never shown to be superior for reducing death or reducing the need for repeat hospitalizations," Dr. Topol said. "How could this happen? All of a sudden we have 600,000 people using this drug."

He said the clinic had also suspended enrollment of patients in a Natrecor study sponsored by Johnson & Johnson. The study was designed to evaluate Natrecor's effectiveness in outpatient infusions. Nationally, a total of 276 patients had enrolled for the trial, but only 5 of them were at the Cleveland Clinic, said Dr. Randall C. Starling, a clinic cardiologist who is an investigator in the study, called Fusion II.

Dr. James B. Young, the chief of medicine at the Cleveland Clinic, was a leading researcher on Natrecor and has been a proponent of the drug. Dr. Young, who also directs the clinic's heart-failure treatment center, could not be reached for comment yesterday.

Last week, Johnson & Johnson announced that it had agreed with the Food and Drug Administration to revise labeling for Natrecor to include data showing a slightly increased risk of mortality within 30 days for Natrecor patients compared with patients taking placebo or alternative treatments.

The company said the increased death risk noted in the labeling - 5.3 percent in Natrecor patients versus 4.3 percent in others - was not statistically significant. It was based on data collected in seven studies.

The controversy over Natrecor, also known as nesiritide, has been spurred by separate studies published in two medical journals - Circulation and The Journal of the American Medical Association - raising questions about the safety of the drug. One analysis concluded that patients on Natrecor had a 40 percent to 50 percent greater chance of reduced kidney function. Another said that Natrecor patients in three studies faced a 7.2 percent risk of death in 30 days, compared with 4 percent for patients on other treatments.

Yesterday, in an e-mail message, the lead author on both of those studies, Dr. Jonathan Sackner-Bernstein of North Shore Medical Center in Manhasset, N.Y., criticized Johnson & Johnson for what he called its failure to conduct a definitive study of the drug's safety.

"Scios and J. & J. have seemed more interested in criticizing our concerns about nesiritide's safety than they have about investigating its safety," Dr. Sackner-Bernstein wrote. "We knew the data would alarm the medical community and this action by the cardiologists at Cleveland Clinic sends a strong message."

The Cleveland Clinic formulary committee will consider whether to adopt its cardiologists' recommendation that Natrecor's use be banned or severely limited. Dr. Topol said that if the formulary committee voted to severely limit the drug's use, it could then be used only on patients in the clinic's special heart-failure intensive care unit. "It would be really rare," he said. "It would be a last resort. It would be almost nil."



To: Crimson Ghost who wrote (29317)5/4/2005 12:53:23 PM
From: mishedlo  Read Replies (2) | Respond to of 116555
 
Rude Crude
marketwatch.com

The Energy Department said U.S. crude inventories rose 2.6 million barrels for the week ended April 29, which places supplies above the upper end of the average range for this time of year. They're also the highest since the end of March 2002.

Meanwhile, the American Petroleum Institute said crude supplies were up 10.2 million barrels last week.

"The API's crude-oil inventory number is coming out of field," Flynn said. "I don't know where you'd put 10 million barrels of oil."

So we have a 400% variance between crude inventory changes between the two major entities that watch and report on the supply situation. That's just great...