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


To: orkrious who wrote (47427)2/27/2006 10:42:22 PM
From: loantech  Respond to of 116555
 
Well so far I have really missed. You know the ones. <NG> I had a bunch of TK. Sold on news now bought back in. Greed rules!

Hitting on most cylinders lately. I need GGC to ramp back up.Boyz back from Europe on March 6. I guess we get some news to fan the fire then. Hope so.

If TK hits and report soon I hope real soon. Put the $$ into GYD another lottery ticket.



To: orkrious who wrote (47427)2/27/2006 11:34:55 PM
From: mishedlo  Respond to of 116555
 
Global credit ocean dries up

The cash machine that sustained a world boom is about to close, and it's going to get ugly, says Ambrose Evans-Pritchard

One by one, the eurozone, the Swedes, the Swiss and now even the Japanese, are turning off the tap of ultra-cheap credit that has flushed the global system for the past year, keeping the ageing asset boom alive.
The "carry trade" - as it is known - is a near limitless cash machine for banks and hedge funds. They can borrow at near zero interest rates in Japan, or 1pc in Switzerland, to re-lend anywhere in the world that offers higher yields, whether Argentine notes or US mortgage securities.
Arguably, it has prolonged asset bubbles everywhere, blunting the efforts of the US and other central banks to restrain over-heating in their own countries.
The Bank of International Settlements last year estimated the turnover in exchange and interest rates derivatives markets at $2,400bn a day.
"The carry trade has pervaded every single instrument imaginable, credit spreads, bond spreads: everything is poisoned," said David Bloom, currency analyst at HSBC.
"It's going to come to an end later this year and it's going to be ugly, even if we haven't reached the shake-out just yet," he said.
"People have a Panglossian belief in the march of global capitalism but that will change as soon as attention switches back to US financial imbalances," he said.
There were early signs of panic this week when the Icelandic krone crashed 8pc in two days, setting off dominoes in high-yielding currencies of New Zealand, Australia, South Africa, Hungary and Brazil.
The debacle was triggered when the rating agency Fitch downgraded Iceland's sovereign debt, a move that would not normally rattle markets.
The new skittishness comes against a backdrop of ever more hawkish moves by Japan and Europe.
"There are several hundred billion dollars of positions in the carry trade that will be unwound as soon as they become unprofitable," said Stephen Lewis, an economist at Monument Securities. "When the Bank of Japan starts tightening we may see some spectacular effects. The world has never been through this before, so there is a high risk of mistakes."
Toshihiko Fukui, the Japanese central bank governor, gave a fresh warning yesterday that this day is near, saying the country was pulling out of seven years of deflation. The economy grew at a 5.5pc rate in the fourth quarter of 2005.
In his strongest words yet, he said the bank would act "immediately" to curtail its extra injections of liquidity, preparing the way for rate rises above zero in coming months.
"The moment of truth is approaching,'' said Kenichiro Ikezawa of Daiwa SB. In Europe, Sweden raised rates to 2pc this week in the face of an overheated Stockholm property market, while Germany's IFO business climate index soared yesterday to its highest level in 14 years.
The European Central Bank will almost certainly raise eurozone rates to 2.5pc in March, with likely moves to 3pc by the end of the year.
Most of the world is now tightening, with no sign of a fresh credit window opening to keep the game going. This is new. Japan has had the tap on continuously as the trade exploded over the past five years, while America itself became the source of funds after it slashed rates to 1pc at the end of the dotcom bubble, and held them there until June 2004.
The US Federal Reserve has since raised rates 14 times to 4.5pc in a belated effort to restore monetary discipline, with at least two more rises priced into the markets.
It is an open question whether the yen, euro, Swiss franc and Swedish krona carry trades have occurred on such a scale that they have led to over-investment in Latin America and beyond, and compressed US yields, fuelling the American housing boom in 2005 despite Fed tightening.
There are other big forces at work: huge purchases of US Treasuries by Asian central banks, and petrodollar surpluses coming back to the US credit markets. Stephen Roach, chief economist at Morgan Stanley, warns that the carry trade is itself, in all its forms, a major cause of dangerous speculative excess. "The lure of the carry trade is so compelling, it creates artificial demand for 'carryable' assets that has the potential to turn normal asset price appreciation into bubble-like proportions," he said.
"History tells us that carry trades end when central bank tightening cycles begin," he said. Ominously, almost every bank other than the Bank of England is now tightening in unison.

telegraph.co.uk

This is curious if for no other reason that every eye in the world is on this and expects this.

Perhaps the YEN has not yet bottomed, nor (as unbelievable as it might seem, long term interest rates in Japan).

Mish

telegraph.co.uk

This is curious if for no other reason that every eye in the world is on this and expects this.

Perhaps the YEN has not yet bottommed, nor (as unbelievable as it might seem, long term interest rates in Japan).

Mish



To: orkrious who wrote (47427)2/27/2006 11:42:32 PM
From: mishedlo  Respond to of 116555
 
Global: Open Macro, Closed Politics
Stephen Roach (New York)

China: Time to Change
Andy Xie (from Shanghai)

morganstanley.com



To: orkrious who wrote (47427)2/28/2006 12:41:54 AM
From: mishedlo  Respond to of 116555
 
The Standard Procedure is Wrong
capitolhillblue.com
Not winning any friends

The United States is spending millions on public diplomacy to make ourselves look likable and agreeable in the eyes of the world, but we keep botching it in ways that even the ministrations of Karen Hughes, President Bush's designated international image-maker, cannot repair.

Goverdhan Mehta is a distinguished Indian scientist; president of the Paris-based International Council for Science, an association of national academies; director of the Indian Institute of Science, and a science adviser to the prime minister of India, with whom Bush is to meet next week.

Mehta has been a frequent and welcome visitor to the United States and a one-time distinguished visiting professor at the University of Florida, where he had been invited to return to address an international conference.

U.S. consular officials in India have denied him a visa.

According to The Washington Post, the rejection and the manner in which it was done have "triggered heated protests in that country and set off a major diplomatic flap on the eve of President Bush's first visit to India."

Mehta's version, which he seems to have freely shared with the Indian press, is that he and his wife had to travel 200 miles to one of the handful of visa-issuing consulates in that vast country, wait three hours and then have their passports stamped "visa refused," which is tantamount to blacklisting, because consular officials thought his specialty, chemistry, might be a threat. He was told to fill out a more detailed questionnaire and to try again. Mehta described the whole process as humiliating and degrading.

The U.S. Embassy in New Delhi issued a statement of regret, according to the Post, and invited Mehta to reapply. Mehta said he's not so sure he wants to risk being insulted again and, in any case, he's not filling out more questionnaires.

This kind of nitpicking really damages us abroad. A State Department official defended the consulate's action as "standard procedure." Well, then, the standard procedure is wrong.



To: orkrious who wrote (47427)2/28/2006 1:28:27 AM
From: mishedlo  Read Replies (2) | Respond to of 116555
 
The breakaway Republicans
The closest thing to a working political antenna at the White House these days may be the one on Dan Bartlett's car radio. Congressional anger over President George W. Bush's decision to allow a Dubai-owned company to operate terminals at major U.S. ports had been at a low boil for days before the White House got its first inkling of the furor: Bartlett, the presidential counselor, happened to tune in to conservative talk-show host Michael Savage on the way home from work. By the time the President moved to quash it several days later with assurances that he wouldn't have allowed the deal "if there was any chance that this transaction would jeopardize the security of the United States," it was far too late to quell the Republican rebellion. "This freight train had already left the station," says a Bush aide. And the President's threat to use his first-ever veto was no obstacle to its momentum.

If there is any message that Bush should take forward after the blistering he got last week from virtually the entire Republican Party, it is that "Trust me" is no longer a viable political strategy. That's because nervous Republicans don't -- at least not when their futures are at stake. With Bush's bungling of the ports controversy, they are starting to say privately that they cannot afford to risk their fate on the agenda and instincts of an unpopular President who never has to face the voters again. What began months ago as a routine government-approval process for a business deal -- in this case, one made politically radioactive by the fact that it would allow an Arab-government-owned company to manage terminals at major U.S. ports -- has exploded into the sharpest and most bitter confrontation that Bush has had with his party. And it has hastened the declaration of independence toward which Republicans have been edging for months. "This is the tipping point," said a House leadership strategist. "No longer will Republicans sit idle when they have a difference with the President." A senior Senate aide spoke even more bluntly: "It's every man for himself."

But let's pause for a moment, if only to note that although security experts say there are plenty of reasons to be worried about the vulnerability of the nation's ports, the nationality of the companies that operate the terminals is not one of them. Only about 5% of the millions of containers that flow through the nation's ports are inspected, and there still are no standards for container locks and seals or for port-worker identification cards. The country has spent $18 billion on making airports more secure since Sept. 11, but it has invested only $630 million to safeguard the nation's ports, even though a study last year by the Department of Homeland Security and the Coast Guard found that almost 70 of the 361 U.S. ports are vulnerable to terrorism.

While none of that is particularly comforting, it does make the outrage directed at Dubai Ports World, which has operated 23 facilities on five continents without a mote of protest, seem a bit unfair. And it raises the question of how the Administration is supposed to win hearts and minds in the Muslim world if it presumes that all businesses there are natural enemies. The President went so far as to ask, "those who are questioning [the deal] to step up and explain why all of a sudden a Middle Eastern company is held to a different standard."

There is also a legitimate strategic concern about alienating the United Arab Emirates (Dubai is one of the seven emirates), given that it has been a recent but important convert to the Administration's campaign against terrorism. "Totally in bed" is how a senior intelligence official characterized the UAE's relationship with the U.S.; Senator John Warner, chairman of the Armed Services Committee, says, "The UAE is a vital, I repeat, a vital ally."

Whatever the merits of the President's decision to allow the port deal to go through, what rattled Republicans most was that Bush and his entire team seemed oblivious to the political problems it created. How could Bush have failed to foresee the potential public relations consequences of an agreement to hand over terminals to a company owned by a country that had been home to two of the 9/11 hijackers, both of whom laundered their money in its banks? A distraught Republican summed up the party's problem: the episode was "caviar for Democrats." And it was a role reversal that must have been most satisfying for them too, since it put Bush in the position of arguing nuances of international diplomacy that got lost in the alarmist din over security.

There was visible relief at the White House when, after Bush's top strategist, Karl Rove, dropped some hints to Fox Radio's Tony Snow that Bush might look favorably on a slowdown of the deal, Dubai Ports World announced it would delay taking over the port operations. That announcement gave the Administration, should it need one, a face-saving way to send the deal back to an interagency group for a 45-day review, buying more time to sell it to Congress. Said White House press secretary Scott McClellan: "We believe that once Congress has a better understanding of the facts and the safeguards that are in place, they will be more comfortable with the transaction's moving forward."

Perhaps, but it wasn't just the unthinkable possibility of appearing weak on national security next to Hillary Clinton and Edward Kennedy that drove Hill Republicans to take on the President. It was a feeling that he was treating them with contempt. Even as McClellan spoke about appeasement, there was grumbling that the White House still hadn't contacted Speaker of the House Dennis Hastert directly to talk matters through, and a House leadership aide noted that "with the veto threat and then the accusation that members were being xenophobic, [the President] alienated them even more."

Beyond feelings of personal insult, a look at the electoral map offers another compelling reason some members might seize an opportunity to put distance between themselves and Bush. Nine of the 10 most endangered House incumbents this fall are Republicans, noted nonpartisan political analyst Stuart Rothenberg in a recent column for the Capitol Hill newspaper Roll Call. Bush remains a big draw for the hard-core Republican faithful, but it was hard not to notice the absence of Ohio Senator Mike DeWine when the President arrived at Cincinnati/Northern Kentucky International Airport last week to raise $1.1 million for DeWine at a private event in the tony Cincinnati suburb of Indian Hill. (DeWine's probable Senate opponent observed that "DeWine doesn't want to be seen with President Bush in public.") One of the first to denounce the ports deal was Pennsylvania's Rick Santorum, a Senator whose re-election battle--already the toughest in the country -- will be even harder to win without improved support in Philadelphia, one of the affected ports. Close behind Santorum was Senate majority leader Bill Frist, who is struggling to establish his identity for a possible 2008 presidential run.

The Republican Congress has been tiptoeing toward this moment for months, becoming less reluctant to challenge Bush as his approval rating stays mired in the low 40s. GOP lawmakers are getting more vocal in challenging Bush's spending priorities, and his modest budget cuts on programs from farm aid to housing to student loans are running into election-year resistance, even as the legislators complain about the costs of his Medicare prescription-drug program. On Friday the coalition of House conservatives known as the Republican Study Committee sent a letter to the White House demanding more justification for Bush's spending requests, specifically the $92.2 billion in emergency money that he wants for the war on terrorism and Gulf Coast rebuilding, "so that we can intelligently exercise our constitutional right to appropriate funds."

And things could get a lot worse, even on the national-security issues that have been Bush's greatest political strength. Already DeWine, a member of the Senate Intelligence Committee, is planning legislation to give Congress more say over the National Security Agency's domestic-spying program, despite Bush's assertions that any hearings or legislation would help terrorists. And the President was forced to accept congressionally mandated restrictions on the tactics that interrogators may use with terrorist suspects. Republicans, their faith shaken in his ability to protect them politically, may even feel emboldened enough to press for a sharper drawdown of troops from Iraq before the November elections. On the domestic front, conservatives are likely to stiffen their resistance to the guest-worker provisions in Bush's immigration plan and, with their constituents feeling the effects of a record trade deficit, could have less patience for Bush's nonconfrontational stance toward China.

White House officials, recognizing the likelihood that Republicans on Capitol Hill will go their own way, say they have designed an agenda that relies on Congress for very little in this election year. Instead, they say, the President will deploy his bully pulpit for such issues as overhauling the entitlement programs--Social Security, Medicare and Medicaid--that eat up half the budget and could balloon as baby boomers retire. By judiciously asserting his influence, Bush believes he can set "an agenda that our party and, one would hope, the country can unite behind," White House communications director Nicolle Wallace said. But the flap over port security, coming after the controversy over Vice President Dick Cheney's handling of his accidental shooting of a hunting companion, shows that the White House will have to sharpen its game to regain even that much ground. An Administration official said Bush's aides realize that they'll be taking more Republican shots "every year that we're closer to being done." But in the end, the wounds that hurt the most may be the ones that are self-inflicted.
cnn.com



To: orkrious who wrote (47427)2/28/2006 1:35:22 AM
From: mishedlo  Read Replies (1) | Respond to of 116555
 
Coast Guard Warned White House on Ports Deal
Document Reveals Concerns About Intelligence Gaps

WASHINGTON (Feb. 27) - Citing broad gaps in U.S. intelligence, the Coast Guard cautioned the Bush administration that it was unable to determine whether a United Arab Emirates-owned company might support terrorist operations, a Senate panel said Monday. The surprise disclosure came during a hearing on Dubai-owned DP World's plans to take over significant operations at six leading U.S. ports. The port operations are now handled by London-based Peninsular & Oriental Steam Navigation Company.

"There are many intelligence gaps, concerning the potential for DPW or P&O assets to support terrorist operations, that precludes an overall threat assessment of the potential" merger," an undated Coast Guard intelligence assessment says. "The breadth of the intelligence gaps also infer potential unknown threats against a large number of potential vulnerabilities," the document says. ...

The document raised questions about the security of the companies' operations, the backgrounds of all personnel working for the companies, and whether other foreign countries influenced operations that affect security. "This report suggests there were significant and troubling intelligence gaps," said Collins, R-Maine. "That language is very troubling to me."
articles.news.aol.com



To: orkrious who wrote (47427)2/28/2006 1:57:54 AM
From: mishedlo  Respond to of 116555
 
Japan Jan orders received by 50 largest contractors down 21.5 pct year-on-year
Tuesday, February 28, 2006 5:31:47 AM
afxpress.com

TOKYO (AFX) -The value of construction orders received in January by the 50 largest contractors in Japan fell 21.5 pct year-on-year to 718.6 bln yen yen, he Ministry of Land, Infrastructure and Transport said

It was the first drop in two months, Domestic private-sector orders fell 13.8 pct to 561.4 bln yen, the first decline in two months, while public-sector orders dropped 36.4 pct to 99.5 bln yen, also recording the first fall in two months. Orders from overseas plunged 69.3 pct to 21.5 bln yen, the first decline in five months and other miscellaneous orders were down 5.4 pct at 36.2 bln yen, the ministry said.