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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 (42269)	12/6/2005 3:41:47 PM
From: mishedlo	Respond to of 116555

Japan gives Iraq loans for oil work Japan has agreed to grant Iraq low-interest loans to rebuild its oil infrastructure, saying that restoring the energy industry was key to bringing stability to the war-torn country. The loans, the exact amount of which is yet to be specified, will cover projects such as liquefied petroleum gas and reconstructing crude oil export facilities and a refinery in the southern port city of Basra. The agreement was sealed during a visit to Tokyo by Iraqi Prime Minister Ibrahim al-Jaafari. .... english.aljazeera.net

To: Crimson Ghost who wrote (42269)	12/6/2005 3:43:10 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

The FED is merrily hiking away and seems oblivious to what is about to happen. Once housing turns it is all over and I do mean all over. The thing is I think housing has turned and few see it yet. Mish

To: Crimson Ghost who wrote (42269)	12/6/2005 3:47:45 PM
From: mishedlo	Respond to of 116555

paul krugman \| the new york times The joyless U.S. economy By Paul Krugman The New York Times Falling gasoline prices have led to some improvement in consumer confidence over the past few weeks. But the public remains deeply unhappy about the state of the economy. According to the latest Gallup poll, 63 percent of Americans rate the economy as only fair or poor, and 36 percent people say economic conditions are getting worse, not better. Yet by some measures, the economy is doing reasonably well. In particular, gross domestic product is rising at a pretty fast clip. So why aren't people pleased with the economy's performance? Like everything these days, this is a political as well as factual question. The Bush administration seems genuinely puzzled that it isn't getting more credit for what it thinks is a booming economy. So let me be helpful here and explain what's going on. I could point out that the economic numbers, especially the job numbers, aren't as good as the Bush people imagine. President Bush made an appearance in the Rose Garden to hail the latest jobs report, yet a gain of 215,000 jobs would have been considered nothing special - in fact, a bit subpar - during the Clinton years. And because the average workweek shrank a bit, the total number of hours worked actually fell last month. But the main explanation for economic discontent is that it's hard to convince people that the economy is booming when they themselves have yet to see any benefits from the supposed boom. Over the last few years, GDP growth has been reasonably good, and corporate profits have soared. But that growth has failed to trickle down to most Americans. Back in August, the Census bureau released family income data for 2004. The report, which was overshadowed by Hurricane Katrina, showed a remarkable disconnect between overall economic growth and the economic fortunes of most American families. It should have been a good year for American families: The economy grew 4.2 percent, its best performance since 1999. Yet most families actually lost economic ground. Real median household income - the income of households in the middle of the income distribution, adjusted for inflation - fell for the fifth year in a row. And one key source of economic insecurity got worse, as the number of Americans without health insurance continued to rise. We don't have comparable data for 2005 yet, but it's pretty clear that the results will be similar. GDP growth has remained solid, but most families are probably losing ground as their earnings fail to keep up with inflation. Behind the disconnect between economic growth and family incomes lies the extremely lopsided nature of the economic recovery that officially began in late 2001. The growth in corporate profits has been spectacular. Even after adjusting for inflation, profits have risen more than 50 percent since the last quarter of 2001. But real wage and salary income is up less than 7 percent. There are some wealthy Americans who derive a large share of their income from dividends and capital gains on stocks, and therefore benefit more or less directly from soaring profits. But these people constitute a small minority. For everyone else, the sluggish growth in wages is the real story. And much of the wage and salary growth that did take place happened at the high end, in the form of rising payments to executives and other elite employees. Average hourly earnings of nonsupervisory workers, adjusted for inflation, are lower now than when the recovery began. So there you have it. Americans don't feel good about the economy because it hasn't been good for them. Never mind the GDP numbers: Most people are falling behind. It's much harder to explain why. The disconnect between GDP growth and the economic fortunes of most American families can't be dismissed as a normal occurrence. Wages and median family income often lag behind profits in the early stages of an economic expansion, but not this far behind, and not for so long. Nor, I should say, is there any easy way to place more than a small fraction of the blame on Bush administration policies. At this point the joylessness of the economic expansion for most Americans is a mystery. What's clear, however, is that advisers who believe that Bush can repair his political standing by making speeches telling the public how well the economy is doing have misunderstood the situation. The problem isn't that people don't understand how good things are. It's that they know, from personal experience, that things really aren't that good. denverpost.com

To: Crimson Ghost who wrote (42269)	12/6/2005 4:05:11 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Credit Card Minimum Payments Set to Double Beginning January 1, 2006 Credit card companies will be increasing minimum payments right after the holiday as a result of new credit card lending guidelines set by the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and Office of Thrift Supervision. This new guideline, which should potentially double minimum credit card payments, could drastically affect many household budgets. "It's easy for people to sign their life away on credit cards but there's a price to pay at the end when the bill comes," said Don Marginson, President of City Mortgage. "For many that price is going up. In the past, most credit card companies required a minimum payment of 2.5 percent of the balance. The new regulation requires that amount to double. For example, if you have revolving credit card debt and the current monthly payments are approximately $300/$400 per month on a $15,000 debt you're soon to be looking at a payment of $600 to $800 per month. As a result, credit card and mortgage payment delinquencies are on the rise and going up daily. I am advising my clients, and indeed, all consumers, to act now to reduce their outstanding debt before this new regulation affects their credit standing." Bank of America and MBNA have already raised their minimum payments, and Capital One is currently sending out their notices. Most companies will follow suit beginning this January. "This is going to cause people to take a look for alterative ways to get out from under their credit card debt," said Marginson. "One solution is to think about refinancing their home loan or perhaps arranging a line of credit, and paying off their credit cards and getting back on track with their finances." send2press.com

To: Crimson Ghost who wrote (42269)	12/6/2005 6:46:54 PM
From: Tommaso	Read Replies (2) \| Respond to of 116555

I have not looked at the other 4 replies to your post, which says "I hate to admit it, but a severe real estate bear looks very improbable now. Too much debt in the system for this to be tolerated. " There comes a time when what has to be "tolerated" is beyond anyone's control, and multiple bankrupcies and foreclosures and forced sales cannot be very good for real estate prices, to put it mildly. Although I do not see how old-fashioned, pre-1940s, deflation is possible in the United States, I can certainly imagine many real estate properties being sold at prices that they commanded only 2-3 years earlier--and in some markets that means a 25% or larger markdown. Do you consider 25% not to be "severe"?