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

To: ild who wrote (41916)	11/29/2005 11:20:12 AM
From: Knighty Tin	Respond to of 116555

ild, Thanks. That was great. Kids get all the good poop. <G>

To: ild who wrote (41916)	11/29/2005 12:12:09 PM
From: mishedlo	Respond to of 116555

BLACK SWAN CAPITAL on the yield curve Curr€nc¥Current$ blackswantrading.com “[T]hose betting against the curve should be aware of the odds — eight inversions in the last 40 years, and all eight were related to either recession or, at a minimum, material equity bear markets. The fact that the Fed has dismissed the curve this time around only increases the chances, in my view, that the curve will again be spot on, as the Fed tightens into a recession,” says Morgan Stanley economist Neil McLeish. “Bottom Line: The supports under consumer spending are giving way and it is only a matter of time before households tighten their belts. We do not expect a major retrenchment, but a slowing in real consumer spending growth to the 2-3% range will set the scene for an end to Fed rate hikes,” according to the Bank Credit Analyst. Many have prematurely forecasted an end to the Fed’s tightening campaign. Many believe the move in metals is all about inflation, and the Fed is woefully behind the curve. But others believe the Fed’s hikes are already draining liquidity and the move in commodities is MORE about liquidity than inflation. The chart below shows the movement of global commodities prices vs. a measure of global liquidity: Because declining global liquidity is bullish for the dollar AND this trend in declining global liquidity will likely intensify, we think any dollar correction predicated on “Fed blink” is only a temporary affair—quite possibly a multi-week event (though this morning it’s looking more likely a one-day wonder). Jack Crooks Black Swan Capital