B4 The Bell Moonday September 20

[Hiding Bear]

Welcome to another week of trading, humor, insights, served with some political barbs and what-not at B4 the Bell! B4 has as its central theme short-term trading, lead by the astute technician Brain4. But it is also about any technical and economic issues that members think affects that - in a cordial atmosphere of a 24/7 international family lounge.

 

THROUGHOUT the first half of this year, investors in commodities fretted about China. They worried that its economy was in for a hard landing, as construction, property values and equities all seemed to be overheating.

 

Such a landing could be disastrous for commodities companies, which have profited from some of the strongest global demand for resources in decades. Much of that demand has been driven by China, which now accounts for 30 percent of world coal consumption and 40 percent of steel consumption.

 

So far, however, the fears have generally not been borne out. Loan growth in China slowed by 7 percent from August 2003 to August 2004, and while inflation has remained strong, it has been below forecasts. China's consumer price index rose by an annualized rate of slightly more than 5 percent in August. Many anal cysts now say that China's economy will grow 9 percent this year.

 

As a result, said Phil Flynn, senior market anal cyst at Alaron Trading, a futures and options brokerage in Chicago, commodities and shares of mining companies around the world, which have posted sizable gains over the last two years, are still a solid long-term bet. "We're in an era of tremendous opportunity for commodities, and it's going to be one of the biggest sectors not for one year, but for 5, 10 years," Mr. Flynn said.

 

Commodities Are Riding on China's Coattails

 

 

Rules: Doc says - "... discussion of politics and world affairs on this thread is permitted, but 911 conspiracy discussions are off limits."

 

Good trading!

[The brown one]

Unilever gave out a profit warning this am in Amsterdam.Poor sales of ice-cream due to lousy summer!! Getting hit for 6%.

 

Similar story to Coca-Cola methinks--consumers less prepared to pay the premium brand price.

[twignberries]

Dan Rather of CBS news was seated next to little Tommy on the plane when Rather turned to the boy and said, "Let's talk, I've heard that flights go quicker if you strike up a conversation with your fellow passengers.

 

Little Tommy, who had just opened his book, closed it slowly, and said to Rather, "What would you like to discuss?"

 

"Oh, I don't know" said Rather, "How about politics? Should we keep Bush as president or elect Kerry?"

 

"OK" said Little Tommy, "That could be an interesting topic but let me ask you a question first. A horse, a cow and a deer all eat grass. The same stuff. Yet a deer excretes little pellets, while a cow turns out flat pattys, and a horse excretes clumps of dried grass. Why do you think that is?"

 

"Jeez" said Rather, "I have no idea."

 

"Well then" said Little Tommy, How is it you feel qualified to discuss who should run this country when you don't know shit?"

 

[machinehead]

Here is a direct analogy between the failed Bretton Woods international currency system, and where we are today:

 

Brian Reading, of Lombard Street Research ... says the global economy is held together by a Bretton Woods-style fixed exchange rate regime that is doomed to collapse. Half the world, he says, is yoked together in a new dollar area, which has the US and Asia marching in step. Including the US, these countries make up half the world's dollar GDP.

 

Reading's point is that Bretton Woods 2 is less stable than Bretton Woods 1. It is a marriage of convenience, rather than a formal arrangement; it was created by the countries on the periphery so the US has no obligation to resist a devaluation of the dollar, it is not a gold exchange system, and it has developed when US imbalances - a 5% current account deficit and a 5% budget deficit - are extreme. "It is more like late Bretton Woods than early, but worse", he notes.

 

"The new dollar area, like Bretton Woods, must end in tears. The synchronised boom it has created cannot continue. There can be no soft landing for the US or China. Quite simply, Americans save too little and must save more, meaning demand and incomes must shrink. The Chinese invest too much and must invest less, meaning demand and incomes will contract. This is the recipe for synchronised sinking."

 

No soft landing

 

Note carefully that Reading's forecasts of slumping demand and incomes are in real terms. In nominal terms, the situation could be inflationary or deflationary.

 

Funny-mentally speaking, the teetering "Bretton Woods II" international currency exchange system is the most important macroeconomic story of this decade.

[DrStool]

No change in long term outlook. To subscribe, click the link below.

[Jimi]

Here is a direct analogy between the failed Bretton Woods international currency system, and where we are today:

 

Brian Reading, of Lombard Street Research ... says the global economy is held together by a Bretton Woods-style fixed exchange rate regime that is doomed to collapse. Half the world, he says, is yoked together in a new dollar area, which has the US and Asia marching in step. Including the US, these countries make up half the world's dollar GDP.

 

Reading's point is that Bretton Woods 2 is less stable than Bretton Woods 1. It is a marriage of convenience, rather than a formal arrangement; it was created by the countries on the periphery so the US has no obligation to resist a devaluation of the dollar, it is not a gold exchange system, and it has developed when US imbalances - a 5% current account deficit and a 5% budget deficit - are extreme. "It is more like late Bretton Woods than early, but worse", he notes.

 

"The new dollar area, like Bretton Woods, must end in tears. The synchronised boom it has created cannot continue. There can be no soft landing for the US or China. Quite simply, Americans save too little and must save more, meaning demand and incomes must shrink. The Chinese invest too much and must invest less, meaning demand and incomes will contract. This is the recipe for synchronised sinking."

 

No soft landing

 

Note carefully that Reading's forecasts of slumping demand and incomes are in real terms. In nominal terms, the situation could be inflationary or deflationary.

 

Funny-mentally speaking, the teetering "Bretton Woods II" international currency exchange system is the most important macroeconomic story of this decade.

Word.

[Bearman]

dan blather and the 59 minutes

 

bunch of lefty's doing impersonation or gobbels

 

dan report the news dont make it

 

he got caught last election at demo fund raiser

 

left's dont even know where they stand

[depends]

dan blather and the 59 minutes

Wasn't he standing in the grassy knoll

when the bullets were flying past him?

Never did believe a word he said.

[twignberries]

I feel for Dan Rather, but he clearly let his personal views get in the way of good journalism in this case. Whether or not the documents were planted by republicans (and they very well could have been), is irrelevant. CBS and Rather had an obligation to do their own due diligence - and they didn't. Unfortunately, the Democrats are sharing the consequences this time.

[DrStool]

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[Hiding Bear]

Here is a direct analogy between the failed Bretton Woods international currency system, and where we are today:

 

Brian Reading, of Lombard Street Research ... says the global economy is held together by a Bretton Woods-style fixed exchange rate regime that is doomed to collapse. Half the world, he says, is yoked together in a new dollar area, which has the US and Asia marching in step. Including the US, these countries make up half the world's dollar GDP.

 

Reading's point is that Bretton Woods 2 is less stable than Bretton Woods 1. It is a marriage of convenience, rather than a formal arrangement; it was created by the countries on the periphery so the US has no obligation to resist a devaluation of the dollar, it is not a gold exchange system, and it has developed when US imbalances - a 5% current account deficit and a 5% budget deficit - are extreme. "It is more like late Bretton Woods than early, but worse", he notes.

 

"The new dollar area, like Bretton Woods, must end in tears. The synchronised boom it has created cannot continue. There can be no soft landing for the US or China. Quite simply, Americans save too little and must save more, meaning demand and incomes must shrink. The Chinese invest too much and must invest less, meaning demand and incomes will contract. This is the recipe for synchronised sinking."

 

No soft landing

 

Note carefully that Reading's forecasts of slumping demand and incomes are in real terms. In nominal terms, the situation could be inflationary or deflationary.

 

Funny-mentally speaking, the teetering "Bretton Woods II" international currency exchange system is the most important macroeconomic story of this decade.

I mentioned almost a year ago that the Fed and/or Treasury would eventually resort to devaluing the dollar. But as we have seen above, the dollar has taken a more central role in a new informal currency scheme.

 

The coming devlauation then will not necessarily be against the other major currencies, although that still is more than likely. But it will be devalued against a basket of 'real' goods - oil, gold, etc.. Some commodities and especially RE may decline in nominal terms, but overall dollars will buy less as time goes on.

[NWD]

Suspense Builds

 

Time Runs Short for Breakout

 

Your Golden Stool, including short and long term updated charts and price targets, is loaded. Even if you are not a goldbug, you should check out the Golden Stool. It's in your Anals daily. Take a subscribatory and download the Golden Stool RIGHT NOW!

 

30 Day Intro Subscribatory. Just $16.99! Get In RIGHT NOW!

I see that, yesterday, Bearvest made an interesting analysis (here at B4theBell) calling for a DXYO melt-up and a sharp slump for PMs and miners.

[machinehead]

The coming devlauation then will not necessarily be against the other major currencies, although that still is more than likely.  But it will be devalued against a basket of 'real' goods - oil, gold, etc..  Some commodities and especially RE may decline in nominal terms, but overall dollars will buy less as time goes on.

I also wonder about the potential for differential outcomes after the output slumps in Asia and the U.S. -- with Asia becoming deflationary (as Japan already has done), while the U.S. drifts toward hyperinflation.

[Guest]

I feel for Dan Rather, but he clearly let his personal views get in the way of good journalism in this case. Whether or not the documents were planted by republicans (and they very well could have been), is irrelevant. CBS and Rather had an obligation to do their own due diligence - and they didn't. Unfortunately, the Democrats are sharing the consequences this time.

If you send government related documents directly to the White House for their review, and their top communications spokesperson does not question their legitimacy, is it not implied that the White House deems the documents to be accurate and authentic? Would you seek confirmation of their authenticity beyond the confirmation of the spokesperson who is speaking on behalf of the target of the documents? By implying their confirmation that the documents were authentic, the White House itself becomes part of the scheme. Right? What higher authority would you have sought out for confirmation if you had been the editor of the piece? A direct interview with the President's spokesperson is about as good as it gets.

[Stool in a Pool]

dan blather and the 59 minutes

 

bunch of lefty's doing impersonation or gobbels

 

dan report the news dont make it

 

he got caught last election at demo fund raiser

 

left's dont even know where they stand

Got WMDs?