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

To: Chispas who wrote (49825)	4/18/2006 3:02:16 PM
From: shades	Respond to of 116555

Juan Carlos Sepulveda, another fruit grower leader, said the government must look after the country's 13,800 fresh fruit producers, who provide 420,000 direct jobs compared with 50,000 in mining and whose exports were worth $2 billion last year. You know - if the goal of our world is to specialize and divide labor - you have to give up being self sufficient and focus on what you do best eh? Jack of all trades or master of some? Chileans say the government should spend some of the windfall on education or technological development Sounds like a great idea - they could send some of that money here and then Bush could finally FUND his no child left behind initiative eh? Most of it would be going to poor latinos in the USA anyways eh?

To: Chispas who wrote (49825)	4/18/2006 3:37:55 PM
From: mishedlo	Read Replies (3) \| Respond to of 116555

Global: Oil and Bonds Stephen Roach (New York) morganstanley.com In the macro realm, bad things usually come in pairs. The confluence of yet another surge in oil prices and a long-overdue back-up in bond yields has piqued my interest in that regard. Crude oil prices are back near $70 and bond yields are at important thresholds -- closing in on 2% in Japan, 4% in Europe, and slicing through 5% in the US. My concerns stem less from a partial analysis of each development and more from the potential interplay between them. The combined impacts of these two factors raise the odds that a tipping point for an unbalanced global economy could well be close at hand. I continue to believe that the American consumer is the weak link in the global daisy chain. The combination of rising long-term interest rates and higher oil prices puts an unmistakable squeeze on discretionary income -- the last thing overly-indebted, saving-short US consumers need. The higher gasoline prices arising from the recent back-up in crude oil markets unleashes a classic negative income effect on the consumer that, by Dick Berner’s reckoning, could knock about $60 billion, or 0.6%, off disposable personal income this summer (see his dispatch in today’s Forum, “Risks for the Consumer”). At the same time, higher US bond yields could unleash a negative wealth effect -- taking a toll on a housing market that is already moving lower and also acting to constrain mortgage refinancing activity and household sector equity extraction. For a US consumer who remains chronically short of labor income but who drew support from more than $600 billion of annualized equity extraction in late 2005, that could be an especially tough blow. ....