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

To: zonder who wrote (31702)	6/8/2005 10:44:52 AM
From: Knighty Tin	Read Replies (3) \| Respond to of 116555

8-track tapes are still the best sound system. But ask for an 8 track player on a new car and they look at you weird. They say they have some new-fangled player that gets music out of my bank savings. Now that's weird, a CD player.

To: zonder who wrote (31702)	6/8/2005 11:13:37 AM
From: mishedlo	Respond to of 116555

U.S. mortgage applications rise 6.5% By Thomas Middleton NEW YORK (MarketWatch) -- Mortgage applications at U.S. mortgage banks increased by 6.5% last week as interest rates dropped, the Mortgage Bankers Association reported Wednesday. Applications to refinance existing mortgages increased 10.3%, while applications for purchases increased 3.6%. Refinancings accounted for 42.9% of all applications, the highest percentage since March. The average interest rate on a 30-year fixed-rate mortgage fell to 5.55% from 5.61% the week before. More borrowers were choosing fixed-rate loans, with the percentage of adjustable rate loans falling to 31.7% from 33.3% the previous week. marketwatch.com

To: zonder who wrote (31702)	6/8/2005 11:17:36 AM
From: mishedlo	Respond to of 116555

U.S. April wholesale sales up 1.5%, best in 13 months - Wednesday, June 8, 2005 2:25:31 PM afxpress.com WASHINGTON (AFX) - Sales at U.S. wholesalers bounced back in April after tepid sales in the previous three months, the Commerce Department reported Wednesday Sales rose 1.5% in April, the biggest gain in 13 months. Meanwhile, inventories increased 0.8%. The inventory-to-sales ratio fell to 1.18 from 1.19. The record low was 1.14 in April 2004. Economists were expecting inventories to rise about 0.5% in April, according to a survey conducted by MarketWatch. Financial markets rarely react to the wholesale trade data. They are chiefly of interest to economists, who use the data to fill in gaps in their estimates of gross domestic product The report confirms that the wholesale sector also strengthened in April along with the factory and retail sectors after weakness in the first quarter Wholesalers are the middlemen between manufacturers and retailers, serving as a shock absorber for the business sector. Trends in the sector typically reflect conditions in the rest of the economy Sales of durable goods and nondurable goods each increased 1.5% in April. In April, wholesale sales were led by a 5.6% gain in machinery and a 4.1% increase in drugs. Sales of petroleum fell just 0.1%, despite a large drop in price. Auto sales fell 2.5% Wholesale inventories are up 11.8% from a year earlier, while sales are up 8.1%. The figures are adjusted for seasonal factors, but not for price changes Inventory gains were concentrated in nondurables, where inventories increased 1.4%. Petroleum inventories increased 1%, again despite falling prices. Drug inventories fell 0.4%, driving the inventory-to-sales ratio to a record low 1.04 The inventory-to-sales ratio for nondurable goods remained at 0.88 Inventories of durable goods increased 0.4%, including a 1.5% rise in auto inventories and a 1.4% gain in professional equipment inventories The inventory-to-sales ratio for durables dropped to 1.48 from 1.50

To: zonder who wrote (31702)	6/8/2005 11:21:14 AM
From: mishedlo	Respond to of 116555

UK May BRC shop price index up 0.37 pct vs April, up 0.65 pct yr-on-yr Wednesday, June 8, 2005 10:12:44 AM afxpress.com LONDON (AFX) - High street inflation picked up in May after falling in April, although it remains subdued, a leading retail lobby group said The British Retail Consortium said its shop price index for May rose 0.37 pct from April and was up 0.65 pct from a year ago The price of food items fell 0.60 pct from April, while non-food items increased 0.94 pct The decrease in food prices was mainly as a result of seasonal demand, especially in fruit and vegetables, while widespread discounting was also evident, with multi-buy offers on food and drink items, the BRC said Among non-food items, however, recent discounting on clothing and footwear was not as prolific as last month due to mid-season sales coming to an end Electrical goods also saw a slight increase in prices, as the heavy discounting in recent months started to come to an end, although promotions were still evident on kitchens, kitchen equipment, bathrooms and garden furniture "Overall retail price inflation remains low and with the current pressures on the high street, it is unlikely to increase but the question still remains whether consumer confidence will," said BRC director general Kevin Hawkins

To: zonder who wrote (31702)	6/8/2005 11:34:48 AM
From: mishedlo	Respond to of 116555

FOCUS Italy unlikely to return to lire, govt considering other measures Tuesday, June 7, 2005 2:31:03 PM afxpress.com MILAN (AFX) - Economists believe Italy is very unlikely to return to the lire, an idea which was mooted by Welfare Minister Roberto Maroni last Friday and is being promoted by the Northern League, a far-right member party of the ruling coalition -- and this would lead to higher interest rates But the government is considering other measures to improve competitiveness in the economy, economists said. Politicians from the Northern League are promoting a return to the lire in order to boost the country's stagnant economy "This is a very political declaration (by the Northern League). It is a provocation. There is no room for such a thing (return to lire). The risk for a return to the lire would be if the EU's economic and monetary union failed," said Unicredito Italiano SpA economist Marco Valli Banca Intesa SpA economist Gianluigi Mandruzzato said the call for the lire's return is "propagandist and a provocation for electoral reasons". The Northern League is trying to stimulate its voters ahead of next May's scheduled elections, he said, adding that none of the coalition parties has an interest in an early fall of the government Centrosim economist Paolo Mameli said the possibility of a return to the lire is "very remote", adding that the priority of Italian industry is to deal with structural problems, such as productivity, rather than devalue its currency If Italy dropped the euro and switched to the lire, this would lead to an immediate hike in the cost of issuing state bonds, which fund the country's public debt of more than 100 pct of GDP Valli said the premium spread on 10-year Italian government bonds would rise to 100 basis points against the German bund, from today's 23 points, while Mandruzzato said it could rise to 200 points Mameli said that in the mid-1990s, before the euro's introduction, the benchmark 10-year lire bond traded at a 6 pct premium to the bund The additional interest charges on government lire debt would add to Italy's already burgeoning public deficit, the economists said Short-term interest rates set by the Bank of Italy would also have to rise "For a bit of time the lire would give a boost to exports but this would be offset by inflation from imports. Italy needs energy imports," said Mandruzzato "More inflation would lead to a reaction in monetary policy from the Bank of Italy in terms of higher short-term rates," he said Economists said higher rates would have an even more negative impact on consumers than before the lire was replaced by the euro single currency, because in recent years families have taken on more mortgage and consumer debt Mandruzzato said that consumer loans already bear high rates of interest, while mortgage loans are on lower variable rates Mameli said one Northern League plan to link a new lire to the dollar would not even give scope for a devaluation of the currency, since the dollar is likely to appreciate against the euro A key reason for re-adopting the lire would be to give Italy scope to devalue and make its exports more competitive If the lire is not re-adopted, the government has little scope to find new resources to fund measures to boost industry competitiveness, given the already high public deficit Economists say industry needs funds to move out of sectors, such as textiles, where Asian competition is tough, and help it invest more in R&D and infrastructure in higher valued-added sectors. The government's main move for industry is expected to be a partial removal of the regional IRAP company tax, which would be equivalent to about 4 bln eur in 2006, they said However, economists are unclear on whether this will be funded by additional value added tax, by taxes on financial income, or not funded at all Unicredito's Valli said a reported government plan to hike VAT to 21 pct, from 20, is "not very probable", and that a 4 bln eur increase in taxes on financial income is "more probable" Intesa's Mandruzzato said further consumption taxes could affect consumer confidence and lead to Japanese-style stagnation, while financial taxes could damage electoral prospects Centrosim's Mameli said taxes on financial income could lead to capital leaving the country, though these taxes are likely to be aligned to EU levels by the next government after elections Economists said they expect the government to aim for a 2006 deficit of around 4.0 pct of GDP, above the EU's revised stability pact maximum of 3.5, and after a similar level in 2005 In 2006, Italy's GDP growth is seen recovering to 1.0-1.5 pct, from between negative 0.2 pct and positive 0.5 in 2005, they said The government is due to publish a medium-term budget and economic planning document later this month