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

To: CalculatedRisk who wrote (30637)	5/24/2005 12:42:55 AM
From: NOW	Respond to of 116555

awe thats old news...keep your eyes on Iran...and what is the next slight of hand?

To: CalculatedRisk who wrote (30637)	5/24/2005 1:03:23 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Amazing that the US is subsidizing the price of gasoline for the citizens of Iraq to under $0.75 a gallon, while at the same time, our leaders are looking for ways to cut benefits to our war veterans, and looking for ways to reduce federal support to programs such as subsidized school lunches for the poor students in our American schools. Remember these words from our Bush Administration? "There is a lot of money to pay for this. It doesn't have to be U.S. taxpayer money," then-Deputy Defense Secretary Paul Wolfowitz told Congress days before the war, in televised testimony on the potential costs of invading Iraq. "We are talking about a country that can finance its own reconstruction and relatively soon." In the real world, however, this turned out to be utter nonsense. With approval of the latest spending bill, taxpayers will have been forced to cough up more than $300 billion for the war to date - above and beyond the annual $400 billion Pentagon budget - and tens of billions for a bungled reconstruction. Even if the United States can lower its troop commitment to 40,000 troops in Iraq by 2010, as some Pentagon strategists optimistically anticipate, the war could still end up costing U.S. taxpayers up to $646 billion by 2015, according to Rep. John Spratt of South Carolina, the ranking Democrat on the House Budget Committee. If insurgency, corruption and incompetence continue to plague the U.S. occupation as they have steadily for the last two years, however, the number could surge to a trillion dollars or more. <Small clip from a large article> bergen.com

To: CalculatedRisk who wrote (30637)	5/24/2005 1:09:11 AM
From: mishedlo	Respond to of 116555

Hienz on the EU and the dollar Date: Mon May 23 2005 10:51 trotsky (Frustrated) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved interestingly, a 'no' vote may well be better for Europe than a 'yes' vote. the proposed 'constitution' is a huge, cumbersome document that i note wasn't needed up to this point, and only serves to cement the EU bureaucracy. also, the less 'unity' there is politicically, the better it is for the euro ( i.e., it's the exact opposite of what everybody claims ) . the reason is the Maastricht treaty. the deficit spending caps that were agreed to in that treaty are primarily a measure of the distrust between Euro-area countries. basically, they're there to see to it that no single country can outdo the others in Keynesian deficit spending and thereby single-handedly undermine the common currency. the more distrust and competition between memeber states, the more likely the treaty's prescriptions will be adhered to. otoh, if they all agree to raise the deficit ceiling ( unfortunately this seems to be in the works, along with the planned replacement of the conservative Otmar Issing with a Keynesian as the ECB's 'chief economist' ) , the euro will weaken for sure. a failure of the constitution to be voted in will focus the minds of the eurocrats on fixing the 'damage' thus wrought, which will leave them with less time to tinker with Maastricht. iow., i'm not at all sure that France voting this abomination down is a bad thing. Date: Mon May 23 2005 10:25 trotsky (Chicken Man@10-year monthly chart) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved this chart is wrong, i.e. they forgot to adjust it. it shows a big down spike at the end of '99 that NEVER HAPPENED. instead, what changed was the cash note underlying the futures contract ( i.e. they replaced the existing one with a note bearing a lower coupon issued at a later time than the originallly underlying issue ) . i've noticed that about half of the chart services out there have never adjusted their charts, which naturally leads to a completely wrong impression when one looks at a monthly ( since the run to new highs is simply missing ) . Date: Mon May 23 2005 10:16 trotsky (@dollar) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved commercial hedgers now have one of the biggest net long positions in the Swiss Franc in the contract's history...also big net long positions in Yen, Euro and the loonie. net shorts in the Pound and the Oz peso reduced to their lowest levels in over a year. the Swiss Franc is especially remarkable - the big speculator GROSS long position is only 1900 contracts, and they're net short by over 28,000 ( total speculative net short position over 41,000 contracts ) . the Euro is also remarkable - the speculative net short position of roughly 19,000 contracts is one of the largest ever. in short, everybody has bought into the 'the dollar has bottomed' story. that does not per se mean that they're not right, since they're aligned at least with the short term trend. however, speculative net short positions in the Swiss Franc exceeding 40,000 contracts have resulted in rallies in the Swissie on every single occasion in the past i can recall. so even if the dollar rally is for real, this extreme position calls for a correction. also, considering how small the move in the dollar to date is, these positions seem excessive. it looks like bottom picking more than trend-following, which makes them all the more suspect.