Guest yobob1 Posted July 16, 2004 Report Share Posted July 16, 2004 HB's report on M3 falling 60 Billion (a billion here, a billion there, and pretty soon we're talking real money) is confirming data. I would offer that instead of it indicating the economy is turning down, it is saying the economy turned down beginning in late May to Early June and is now starting to accelerate down the slope. I know Hyper has beat this to death (rightfully so) but just in case anyone missed it, it is not necessary for credit growth to stop or even decline. All that is necessary is for the rate of credit growth to slow sufficiently. IMO the early summer 2003 rate dive that spurred re-fis to hysteric highs set the accelerometer to a level that could not be sustained. Indeed that is what has happened. Oil is hoovering around $40 and yet gasoline prices have fallen a bit, about 14 cents to $1.90 here. What that's telling me is retail demand is slackening. Some might say well oil dipped a little last month and gas prices don't respond immediately. Oh contraire. Yes typically gasoline prices are slow to fall on a decline in oil price, however it has been my observation that when oil goes up, it is typically reflected at the pump within days. It is almost as if the gasoline distributors operate on a FIFO inventory system during declines and LIFO during price increases. I know I would if I thought I could get away with it, not that there's anything necessarily illegal about the way they operate, they are merely maximizing the value of their inventory. So the recent oil rise should have brought gasoline prices right back up to where they were, if the demand had held steady. Last weekend I drove about 180 miles North to one of my little spots for a couple of days of hiking at altitude (7,000'+), a little target practice and some fishing. Normally in mid july this area would be crawling with ATVs & RVs and overall would have moderate useage. It was decidely light in useage. However it seems that the close in recreation areas are experiencing heavier useage. People are staying closer to home. They'll take the Winnebago (only another 145 payments left ) 50 or 100 miles but balk at longer distances. What to expect in the next 6 months or so. Lay-offs will increase. Credit growth will stall out and probably go negative. Bankrupticies and defaults will begin accelerating again. Fed rate will not be increased. (Once again I expect the fed rate to decline by Q1 2005) Long rates could go either way depending on the global perception of the US. Shorter term I don't look for a significant increase (10 year stays under 5.0), but longer term (6 months to a year out) a weakening global economy might mean that furriners don't have the cash surpluses to re-invest in US treasuries and rates may climb due to the supply/demand imbalance. Cancel the election and rates would go through the roof. I would also expect the spreads to start opening up as a leading indicator. Those counting on some mystical powers of the Fed to employ extraordinary measures to prevent the coming debacle are going to be sorely disappointed. As always the mssing link is their inability to control the individual decisions of the 300 million residing in the US. They have been able to influence those decisions with low rates and happy talk, but soon enough you hit the borrowing ability limits coupled with a psycological shift, as I believe we have. Detroit is setting the pace. Their constant increasing of incentives is leading to the psychological set-up of why buy today, the price will be lower tommorrow. The decline in volumes of production is being masked by slightly higher prices. Wal-Mart same store sales were up only 2.2%. Factor in higher meat, dairy, gasoline, items with significant steel or wood content, and all in all it might show that Wal-Mart's unit volume was flat to down. When you begin to get falling volumes with falling prices things get out of hand very quickly. I continue to assert that the overal CRB is a bogey. Most of the CRB components will begin to retrench. Even oil and NG could experience significant short to intermediate declines if the economy does what I expect it to do. Gold could go either way, but a drop in price wouldn't necessarily surpirse me at this stage. Silver is the one item I see that will run out of supply before demand falls sufficiently. You need to realize where the silver comes from. Most new production is co-incidental, meaning that they mine copper or zinc, etc. and as a by-product silver is also produced. So if the demand falls on base metals, it affects silver supply. The number of pure silver mines in operation is tiny and those moth-balled operations will take years to begin producing and they won't begin to do that until the price of silver is well above the cost of production. I have noticed that global gold production seems to be falling, which would be an oddity in the face of rising prices. I believe what we are seeing is the result of gold producers high-grading when prices were in the $300 range in order to stay profitable and keep investors happy. But now they are running lowe on their high grades and are being forced to run lower grade ores meaning they get less gold per ton of rock processed and this lowers their production and raises their cost per ounce. So gold should go up but given the size of the market and the ability of the CBs to affect prices by leasing or outright sales it remains to be seen what will happen. IMO, there's no question you should have some physical in your portfolio right now, and a cash position equivalent to several months worth of living expenses, both stored at home away from the matrix. You need the cash to prevent you from being forced to liquidate the gold at an inopportune moment. OK, you can wake up. Nap time is over. Link to comment Share on other sites More sharing options...
Guest yobob1 Posted July 16, 2004 Report Share Posted July 16, 2004 Futures are drifitng lower as Europe waits for it's cue from New York Uncle Bucky a long view. Can Bucky break throught the 200 dma again? PMs in neutral. Smack down Fryday? Come on Tom Fridge raise us to orange alert on the news that someone in Peoria heard about a kid with two boxes of firecrackers running wild. I dare ya. Oil is licking the bottom of $41. Danger Will Robinson. NEW YORK -- The Bush administration has obtained from the Justice Department a legal opinion that says the Treasury Department has authority to limit future debt issuance by Fannie Mae (FNM) and Freddie Mac (FRE) a big step toward curbing the spectacular growth of the mortgage giants, Friday's Wall Street Journal reported... ...The legal opinion, requested by Treasury several months ago and delivered in the past few days, says the agency has broad authority over the companies' debt issuance. It says the agency can limit debt sales by Fannie and Freddie, not only to ensure their safety and soundness, but also to protect financial markets and the economy as a whole, according to an official familiar with it. It rejects several legal arguments the companies had used to question the Treasury's authority. Fannie, Freddie may get limits. These boys are sowing the seeds of their own destruction. Limiting the size of their growth is not going to send a good signal. Link to comment Share on other sites More sharing options...
DrStool Posted July 16, 2004 Report Share Posted July 16, 2004 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!? Link to comment Share on other sites More sharing options...
DrStool Posted July 16, 2004 Report Share Posted July 16, 2004 Yobob, actually, credit growth has already stalled. Some credit measures peaked on March 24, and one even as far back as February. I'd like to take this opportunity to remind non-subscribers, that subscribers were well aware that this was coming. 6-7 weeks ago when most were panicking that the Fed was supposedly ballooning the money supply I was pointing out that there is no connection between the Fed's actions and the growth of the money supply. And I also pointed out that the indicators we were watching were showing that money supply growth was about to come to a screeeching halt, and would begin declining within weeks. Very few others were giving your this heads up. The implications of this are huge. This is all covered in the weekly Fed Releases report, updated each weekend. I will publish an partial update this morning, but will not be able to review the Fed's Friday night bank credit data until Monday. So when you want to read history, read the mainstream financial media. If you want to know what's really going on, and what it means for the future, read the Anals. Take a subscribatory to get in to the Anals and the Fed releases report now! The price of a subscribatory will be increasing once the market averages cross below their 200 day moving averages. The price increase will not affect existing subscribers. Your renewal will be at your current rate. Click the link below to Get In RIGHT NOW! Link to comment Share on other sites More sharing options...
DrStool Posted July 16, 2004 Report Share Posted July 16, 2004 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!? Link to comment Share on other sites More sharing options...
Hiding Bear Posted July 16, 2004 Report Share Posted July 16, 2004 The alarming drop in money supply figures will probably be the most neglected and uncovered media story today. Why? I don't exactly know myself - perhaps all those inside the 'matrix' mistakenly believe that the economy will always function properly like a well tuned car. The very small pick up in MoGauge trends the last few weeks also does not bode well for money supply growth overthe next month. Surprisingly, the Fed is joining 'closing the credit barn door after the GSEs horses have been for years club'. Fed's Bies: Have To Move Toward Neutral Interest Rates Bies also said she was concerned about what she sees as a "lack of any market discipline around Fannie and Freddie," referring to government-sponsored enterprises Fannie Mae (FNM) and Freddie Mac (FRE). "If they would secure ties to the loans and sell them in the secondary market, I would be happy," Bies said. "Inflation will continue to grow as the economy expands," Bies also noted. She also repeated comments from her prepared remarks, saying she was surprised by how quickly prices have come up in the U.S., and adding that "To an extent, it's a one-time move on energy prices." http://online.wsj.com/article/0,,BT_CO_200...ticle%2Dbody%29 Also it appears that acceptance of inflation on the Fed is growing. Is inflation the solution to credit deflation? We shall soon find out. Good trading. Link to comment Share on other sites More sharing options...
DrStool Posted July 16, 2004 Report Share Posted July 16, 2004 Uncle Buck and the Long Bong Hit, including short and long term updated charts and price targets, is now loaded. Take a subscribatory and get the latest whiff of Uncle Buck and the Long Bong Hit. 30 Day Intro Subscribatory. Just $16.99! Get In RIGHT NOW! Link to comment Share on other sites More sharing options...
DrStool Posted July 16, 2004 Report Share Posted July 16, 2004 In case you are windering why the fuctures popped: TECHNOLOGY ALERT from The Wall Street Journal. July 16, 2004 Dell raised its second-quarter profit outlook, citing "robust" enterprise systems and services sales and market-share gains outside the U.S. For more information, see: http://online.wsj.com/article/0,,SB1089976...3565772,00.html Link to comment Share on other sites More sharing options...
orvack Posted July 16, 2004 Report Share Posted July 16, 2004 Housing bubble Globe & Mail, Friday, July 16, 2004 - Page B9 "The U.S. housing sector now meets all the classic requirements for a "bubble," according to David Rosenberg, chief North American economist at Merrill Lynch & Co. in New York. Housing was already an overowned asset class with an overextended valuation, he said in his morning market memo yesterday. Furthermore, homeowners' equity in their homes is at a record low." http://www.globeandmail.com/servlet/Articl...//?query=bubble Link to comment Share on other sites More sharing options...
orvack Posted July 16, 2004 Report Share Posted July 16, 2004 If credit growth has stalled, why is Copper on the verge on a breakout ? Link to comment Share on other sites More sharing options...
orvack Posted July 16, 2004 Report Share Posted July 16, 2004 Link to comment Share on other sites More sharing options...
Lock Limit Down Posted July 16, 2004 Report Share Posted July 16, 2004 As per the good Doctor..... "Hello my name is Joe. I have a house, and a dog, and a family. I have a 401K, a brokerage account, an SUV financed with a home equity loan. I work all day in the service economy. I learned that the important thing about having a diversified blue-chip stock portfolio is that it will never go down in the long run. The lesson I learned is that when the market does go down, just hold on and it will come up again"...more http://www.financialsense.com/Market/wrapup.htm HHH continues to be under close watch Link to comment Share on other sites More sharing options...
Lock Limit Down Posted July 16, 2004 Report Share Posted July 16, 2004 CPI Up .3% Core up .1% Futures endorsing Rinse lather repeat Link to comment Share on other sites More sharing options...
Lock Limit Down Posted July 16, 2004 Report Share Posted July 16, 2004 Again the possibility of further fed tightening 1 in 1 MILLION Link to comment Share on other sites More sharing options...
Guest yobob1 Posted July 16, 2004 Report Share Posted July 16, 2004 Yobob, actually, credit growth has already stalled. Some credit measures peaked on March 24, and one even as far back as February. I'd like to take this opportunity to remind non-subscribers, that subscribers were well aware that this was coming. 6-7 weeks ago when most were panicking that the Fed was supposedly ballooning the money supply I was pointing out that there is no connection between the Fed's actions and the growth of the money supply. And I also pointed out that the indicators we were watching were showing that money supply growth was about to come to a screeeching halt, and would begin declining within weeks. Very few others were giving your this heads up. The implications of this are huge. This is all covered in the weekly Fed Releases report, updated each weekend. I will publish an partial update this morning, but will not be able to review the Fed's Friday night bank credit data until Monday. So when you want to read history, read the mainstream financial media. If you want to know what's really going on, and what it means for the future, read the Anals. Take a subscribatory to get in to the Anals and the Fed releases report now! The price of a subscribatory will be increasing once the market averages cross below their 200 day moving averages. The price increase will not affect existing subscribers. Your renewal will be at your current rate. Click the link below to Get In RIGHT NOW! Sorry Doc, my second reference to credit was not well written. The word growth should have been omitted. My intention was that total credit will flatten and contract. In the Anals, do you anything have that shows a total credit figure (financial, corporate issuance, commercial, real estate both res and comm., revolving/non-revolving consumer loans and leases)? Link to comment Share on other sites More sharing options...
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