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

To: regli who wrote (46362)	2/13/2006 9:35:19 AM
From: shades	Respond to of 116555

And that's exactly what's happened over the past 25 years. China's success is not entirely a home-grown affair: it reflects a huge surge in foreign direct investment as companies in the G7 and elsewhere have tried to take advantage of China's low labour costs. Right, in the 80's US megacorp pushed for investment there, differen laws here - all in the name of profit - and Real Mulan says they still the major benefactors while the poor in both places going down.

To: regli who wrote (46362)	2/13/2006 1:14:27 PM
From: mishedlo	Respond to of 116555

Japan's Bonds Have Biggest Gain in Two Months on Nikkei Slump Feb. 13 (Bloomberg) -- Japanese bonds rose, with benchmark 10-year debt having the biggest rally in two months, as stocks erased this year's gains. Investors bought 10-year bonds after yields earlier today rose to near the highest for the fiscal year ending March 31, as the Nikkei 225 Stock Average dropped 2.3 percent. Yields on 10- year bonds fell more than those with shorter maturities on speculation any rate increase from the Bank of Japan may slow economic growth and stop inflation from taking hold. ``Bonds are benefiting from the drop in stocks. Investors feel comfortable buying 10-year debt,'' said Tsutomu Kawasaki in Tokyo, a fund manager who helps oversee the equivalent of about $9.3 billion in Japanese bonds at Pension Fund Association. Fixed- income securities with longer maturities also benefited ``as inflation looks benign.'' The yield on the benchmark 1.6 percent bond due in December 2015 dropped 4.5 basis points, the most for 10-year bonds since Dec. 14, to 1.55 percent as of 5:51 p.m. in Tokyo at Japan Bond Trading Co. The yield earlier rose to 1.6 percent, within 3 basis points of this fiscal year's high of 1.63 percent on Nov. 7. The difference in yields between five- and 10-year debt narrowed to a 2 1/2-year low of about 54 basis points, flattening the so-called yield curve, a chart of rates for various tenors. The gap is the tightest in about two and half years. `Relatively' Low Rates The central bank ``should help the economy move to a good direction with relatively low interest rates'' after it starts to modify the so-called quantitative easing of pumping cash into the banking system and holding down rates near zero, BOJ Governor Toshihiko Fukui said today. He spoke at Japan's lower house budgetary committee in Tokyo. Finance Minister Sadakazu Tanigaki on Feb. 10 said Japan can't yet declare victory over the streak of deflation that has sapped the world's second-largest economy for more than seven years. He spoke to reporters in Moscow before a meeting of Group of Eight finance ministers. Speculation about a change in monetary policy have pushed up yields on five-year notes faster than those on 10-year debt this year, causing the yield curve to flatten. ``I bought some debt'' because yields look good, said Koji Mori, who oversees the equivalent of about $410 million in mutual funds in Tokyo at Daiwa SB Investments Ltd., a subsidiary of Japan's second-largest broker. ``The yield curve continues to flatten because there's strong demand for longer-dated bonds.'' Ten-year bond futures for March delivery gained 0.39 to 136.21 as of the 3 p.m. close at the Tokyo Stock Exchange. Bond Sale Yields on five-year notes earlier rose to the highest in more than five years on concern the government's 2 trillion yen ($17 billion) sale of the securities tomorrow will meet tepid demand. Five-year notes completed a three-week drop on Feb. 10 amid speculation the economy is growing fast enough for the central bank to reduce cash in the financial system. A government report on Feb. 10 showed factory orders posted their longest run of gains in more than two years. ``Investors are not keen on buying five-year notes before the auction, especially when a policy shift is becoming a reality,'' said Tokyo-based Yoshimasa Kato, a deputy general manager at the investment division of Shinkin Trust Bank Ltd., which holds the equivalent of about $8.5 billion in assets. ``Yields on shorter debt are set to rise more.'' The yield on the 0.8 percent note due December 2010 dropped 1.5 basis points to 1.015 percent after climbing to 1.045 percent, the highest since December 2000, according to Japan Bond Trading. Kato said he will wait to buy five-year notes until yields rise to about 1.3 percent, a level not seen since the central bank raised interest rates by a quarter percentage point from almost zero in August 2000. `Prolonged' Low Rates The central bank shouldn't increase expectations of ``prolonged'' low interest rates, BOJ policy board member Atsushi Mizuno said, according to Jiji Press. At its two-day meeting ended Feb. 9, the bank's board kept the target for reserves made available to lenders at between 30 trillion yen and 35 trillion yen, six times more than in March 2001. Core consumer prices rose for a second month in December, a gain the bank says must be sustained if it is to end its deflation-fighting policy. The bank has said it won't change its policy until three conditions are met: core consumer prices stop falling for at least a few months; policy makers are sure they won't resume sliding; and the bank is confident about the overall strength of the economy.

To: regli who wrote (46362)	2/13/2006 2:12:25 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Iraq beatings caught on video Sunday, February 12, 2006 Amateur video released Sunday by a London-based newspaper shows eight British soldiers dragging what appear to be three Iraqi youths behind a wall, where they apparently kick and hit them with batons and fists. The News of the World said the soldiers' attack, which followed a scene showing youths throwing stones at the soldiers, was videotaped in southern Iraq in early 2004. The newspaper said the scenes, which lasted about two minutes, were videotaped by a corporal "for fun," apparently from a nearby rooftop. On the tape, the youths' pleas for mercy are ignored. The beatings include what appears to be a British soldier kicking one of the youths, shown pinned to the ground by other soldiers, in the genitals. In another case, a soldier puts a boy in a headlock, then releases him only to butt his head against the boy's, then strike his fist on the boy's head. The youth's cries can be heard on the tape. The tape includes what sounds like a running commentary of approval from the cameraman. "Oh yes! Oh yes! You're gonna get it. Yes, naughty little boys!" the narrator can be heard saying as the blows land. "Die! Ha, ha!" ...The paper quoted an informant as saying, "These Iraqis were just kids. Most haven't even got shoes on. edition.cnn.com

To: regli who wrote (46362)	2/13/2006 2:26:48 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

Home Prices Do Fall A Look At The Collapse Of The 1980's Real Estate Bubble Through The Eyes Of The New York Times youdovoodoo.com

To: regli who wrote (46362)	2/13/2006 3:19:32 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Bush Picks Ameriquest Owner as Ambassador Firm's Lending Tactics Investigated washingtonpost.com By Kirstin Downey Washington Post Staff Writer Friday, July 29, 2005; Page D01 On the same day that the White House announced that President Bush is nominating California billionaire Roland E. Arnall to be ambassador to the Netherlands, the company he controls said it would set aside $325 million for a possible settlement of allegations of predatory lending tactics. Arnall's company, Ameriquest Mortgage Co., is being investigated by regulators in 30 states. A $325 million settlement would be one of the largest ever in a predatory lending case.......

To: regli who wrote (46362)	2/13/2006 3:55:50 PM
From: mishedlo	Respond to of 116555

The Big Dipper By: Dan Norcini news.goldseek.com A snip from professional trader Dan Noricini: "The reason for this, in my opinion, is that we seem to have entered an era in which extremes in both price action and volatility can be attributed directly to the plethora of computerized trading platforms and system traders which are increasingly coming to dominate the markets. Try to imagine if you can thousands of computers running technical analysis software which are tied directly to online trading platforms. These electronic trading systems are designed for speed and objectivity. In other words, they are designed to eliminate any guesswork and/or human factors when it comes to the actual execution of trades. The way these things work is pretty straightforward. A hedge fund for example will purchase a system, whether for intraday use or longer time frames, which is programmed with a set of parameters that it tracks in order to generate buy or sell signals. These signals are all based on price movement of some sort. Some of the systems will trigger a buy signal for instance, if the price exceeds the high of the last 5 days or a sell signal if the price drops below the low of the previous 5 days. Others are keyed to moving average crossover patterns. Still others are yet keyed to oscillator crossovers. The point is that such systems can easily and quickly be set up to automatically scan price action in any given market that is desired to trade in for such signals. Now comes the interesting part. These trading systems have the capability of interfacing with the trader’s electronic trading platform so that they can AUTOMATICALLY send the buy or sell signal directly to the exchange without the trader even having to manually enter the trade himself. The computer automates the entire process. The goal in employing such technology is to gain an advantage over the next guy by beating him to the punch and getting your order to the exchange first and as quickly as possible. The name of the game is speed and if you have to wait around for some carbon-based human life form to actually key in the order and send it, you have forfeited another 10 seconds or more – valuable time in which thousands if not tens of thousands of dollars can be lost due to execution lags as price begins to move leaving you a much poorer entry point. Realistically speaking, this technology allows the hedge fund manager to be out on the golf course having a drink at the club house while his computer is sending orders to the exchange on behalf of his clients! Not that they are doing that (although the terrifying thought is that there probably are some that do!) but the potential is there. After all, once the system is set up properly, the entire system is fully automated. At exchanges where the contracts are traded upon a fully electronic platform where orders can flow directly into the exchange’s order system, the result is a near instantaneous execution of an order that had a buy or sell signal generated only mere seconds earlier! You want to talk about lightning fast! Think about this for a minute and you will begin to understand the repercussions of this development and how it can result in unprecedented barrages of orders flowing into the exchange at any given moment in time. In time past, orders had to be phoned in to a broker’s desk who then phoned it down to the floor which then sent the order into the pit via a runner to the floor broker who then executed it. The process had by today’s standard, a huge time lag. Not any more. The process is frighteningly efficient. Now, I submit that it is this very process which lies behind the unbelievable wild swings and huge intraday price movements that mark so many of today’s markets, especially the futures markets. At any moment in time, thousands of these computers are tracking the very same price data in a given market. Any move that therefore triggers a sell signal on one will soon trigger a sell signal on another. That will trigger yet another sell signal on a third and so on and so on and so on. In reality the sell signals are being triggered on more computers than one at a time but you can understand my point here. With all these fully automated trading systems sending their orders to the exchange within seconds of one another, all price movements become incredibly exaggerated as sell order upon sell order is piled upon the next. The net result is that existing bids can be swamped in a matter of mere seconds producing a snowball effect that quickly becomes an avalanche. This is precisely what we witnessed in gold on Tuesday, February 8, 2006, this week. It is also the exact same thing which we have seen for better than a year in the copper market as well. The interesting thing about this is that while the intraday sell offs can quickly cascade out of control, the price reactions seem to be finishing up much swifter than they have done in the past with the result that the primary trend is reasserting itself much sooner than was the case formerly. In other words, though the price reactions tend to be more brutal on an intraday basis, they also are completed in a shorter time frame before the market resumes the direction of the previous trend. What I am advancing here is the notion that since so much of human judgment has been taken out of the picture due to this automation, there is little need for decisions by trading funds managers the following day or even the days after the price reaction. The computers take care of the whole kit’ n’ caboodle. Whereas formerly it took fund managers some time to evaluate a market and decide whether to sit tight or lighten up, that is no longer the case. The entire process has been taken out of their hands and given to a computerized platform to perform. It is done- caput, finished - objectively, swiftly and efficiently. So much so that I would venture to say that in many cases, hedge fund managers have been reduced to being mere spectators whose primary role is to pick the markets they want to trade in while leaving the actual buy and sell orders to the programmed trading system they are employing. We then as a result get the swift, sharp downward corrections that we now have come to know only to witness the market within a matter of days go right back to trending as if nothing whatsoever had transpired. All the selling is taken care of at one time without any attention paid to subtlety or finesse. It simply gets done as the computer is not programmed to get its job done with skill – it is incapable of that – it only knows to sell and so that is what it does and it does that automatically by continuing to send its orders to the exchange until it has exhausted them. Unless that same system then somehow gets flipped to generating a new signal to go short, the selling is exhausted within a matter of days and there is no one left to further sell the market. At that point, fundamentally oriented traders looking to buy jump back in and the market then reverses itself and heads back up with the result that the same hedge fund computerized trading systems are now sending buy orders to the very market that they just finished selling a few sessions ago. Traders attempting to short these markets are literally blown out of them and forced to cover much to their stunned amazement. It is quite a strange sight to me personally to have observed this phenomenon which I first thought was a bit of an anomaly but am now coming around to believing is becoming the new norm for many of today’s markets.

To: regli who wrote (46362)	2/13/2006 4:20:38 PM
From: mishedlo	Respond to of 116555

Tracker funds fuel the rise in gold price By Kevin Morrison in London Published: February 13 2006 02:00 \| Last updated: February 13 2006 02:00 Investors in gold-backed tracker funds now own about $18bn (€15bn) worth of bullion - more than the Bank of England and many other central banks. The gold tracker funds have tripled their holdings of the precious metal to 429 tonnes of gold since the start of November and have become one of the top dozen holders of gold in the world. They have become one of the most popular ways to buy gold, helping to push the metal to a 25-year high recently. The spurt of purchases in the last three months means the funds now hold more than a third more than the Bank of England, which had been one of the largest gold owners until Gordon Brown, the UK finance minister, decided to sell down the bank's gold assets in 1999. The funds still lag well behind the world's six biggest gold holders - the US, Germany, the International Monetary Fund, France, Italy and Switzerland - each of which holds between 1,300 and 8,200 tonnes. The surge in gold prices to $574.60 a troy ounce, the highest level since 1981, has been partly fuelled by investors buying into the gold-backed funds. They are a relatively new type of investment, first launched in 2003, that has made it easier for more investors to buy gold. Gold prices fell $5 to about $551 on Friday. The funds are listed on key stock exchanges in the UK, US, Europe, South Africa and Australia, and have become an alternative to buying gold futures or physically owning the metal. Also known as Exchange Traded Funds, the gold-backed tracker funds follow the underlying gold price, and charge low fees because they do not require active fund management. Ross Norman, director of TheBullionDesk.com, a precious metals research group, said the renewed popularity of ETFs had been accompanied by a rush of long-term investors' funds such as pension and mutual funds, which have started to allocate more money to commodities in the past three months. Gold ETFs are an initiative of the World Gold Council, the industry body for gold miners, to boost demand for gold - which is heavily dependent on jewellery. news.ft.com