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B4 The Belll Frieday October 22


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In the Press

 

Reuters

Weekly Leading Index Rises

10/22/2004

 

NEW YORK, Oct 22 (Reuters) - A leading index of the U.S. economy rose in the latest week due to a rise in mortgage applications and to a drop in initial jobless claims, but the weekly report on Friday was not entirely upbeat.

 

The Economic Cycle Research Institute, an independent forecasting group, said its weekly leading index (WLI) inched up to 131.6 in the week ended Oct. 15 compared with 131.0 in the previous week.

 

The week's gains were limited by a drop in stock prices, and the survey's overall trend shows slowing.

 

The index's annualized growth rate, which smooths out weekly fluctuations, remained unchanged at an 81-week low of -1.0 percent.

 

"The WLI index is us telling that a neither a strong rebound nor a severe downturn lays ahead for the economy," said, Lakshman Achuthan, Managing Director of ECRI.

 

"However, the slowing that the index has telegraphed for many months is likely to be more concentrated in the manufacturing sector," Achuthan added.

 

http://www.businesscycle.com/showstory.php?storyID=733

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The reason that consumers (in the aggregate) have been able to maintain their standard of living is the they have been pulling $3 billion A WEEK out of their revolving home equity lines, week in and week out.  See last weekends Fed Releases report for the gory details.

That too. New mortgage credit and government handouts/spending have provided more than 100% of the marginal growth in the US economy.

 

We have not only not increased productivity on a real basis, but producitivity may have actually been negative the last few years. The recent increase in energy prices means that the reduction in the standard of living will accelerate in the very near future.

 

Savings have been effectively stolen from foreign counties through their funding of the US$, which indirectly helps money flow to the mortgage markets and provides easy credit there.

 

 

BTW - Doc has done a great job in the Feed Report that is superior to most of the other Fed analysis you might find out there.

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DJ In Bush Ad, Wolves Suggest Terrorists' Threat Under Kerry

? WASHINGTON (AP)--President Bush's campaign, using powerful imagery of prowling wolves, suggests in a new TV ad that the country under John Kerry would be vulnerable to terrorists because "weakness attracts those who are waiting to do America harm."

 

This stuff is so laughable and pathetic...

 

They can only surmise at best that America would be vulnerable to a 9/11 - type attack under a Kerry Administration...

 

Meanwhile...

 

It has already been PROVEN that the country WAS vulnerable to a 9/11 - type attack under the Bush administration.

 

 

I have never seen or heard Kerry criticizing Bush for 9/11.

 

 

No questions about the massive intelligence failure.

 

No questions about why there was no timely military response to the hijackings.

 

No questions about the President who ran from one shore to the other leaving his VP in charge to handle the crisis.

 

No questions about why no government official has yet to be disciplined over this.

 

No questions on why the administration stonewalled any investigation into 9/11.

 

No questions on anthrax attacks and the administration's failure to capture the perpetrators.

 

No question on Patriot act or the gradual erosion of liberties.

 

 

In fact Kerry in the last debate actually praised Bush for his excellent leadership during 9/11!!

 

It seems to me that the rules of engagement have been handed down to the Kerry campaign by the puppet masters.

 

He cannot utter anything critical about 9/11.

He cannot attack the necessity of Iraq war but only the prosecution of it.

Also he should always maintain that he is going to continue the war on terror.

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I agree with your comments about Hannes Tulving. I have made 4 large orders with him in the last 18 months without a hitch. Spoke with him several times. He is very good and quite a gentleman. His spreads are the best I have seen and I have looked around a lot!! I am getting ready to make a large order to Tulving and take more physical off of the market.

 

Turk

 

As per a Stoolies recommendation, I too have placed 5 large gold orders with Hannes Tulving, all orders completing without a hitch.

 

Tulving can be contacted at: [email protected]

Hannes has photos of his offers on his site, and delivery is free One Day US Postal Service (which took two days to get to me on the desert - which was OK). If you pay by check, he will wait the customary 10 days to be sure your check clears before he ships your order.

 

On one order, the postal delivery person said "I don't know what it is, but it sure is heavy". I told her it was stamped metal parts. :D

 

I recommend Hannes Tulving.

 

B.S.

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LONDON, Oct 22 (Reuters) - U.S. and European banks are engaged in intense competition for lucrative business in the booming hedge fund industry which is pressuring margins and may be weakening credit controls, senior prime brokers say.

 

Lucrative for who though, certainly not those who invest in the hedge fund as the average return has only been 2.75% for the first nine months of 2004

 

So the article continues:

 

While banks are getting unexciting returns in other areas, hedge funds are estimated to have generated $7.5 billion in equity-related fees alone in 2004, with 40 percent of that going to prime brokers, according to a report from ratings agency Moody's.

 

And the feeding frenzy continues:

 

Prime brokers are constantly having to improve their services as they also face competition in the United States, the largest global centre of hedge fund management, from the funds themselves.

 

Larger hedge funds are increasingly taking on broker/dealer roles and so disintermediating the brokers.

 

Lambert said margins on prime broking lending to hedge funds, the most profitable part of their relationship, have shrunk to between 40 and 62.5 basis points over LIBOR compared with 75 basis points around three years ago.

 

The competitive pressure may be feeding through into the terms of credit provision by prime brokers. Some are taking a stress testing analytical approach which is quite conservative, while other are using value at risk (VAR) models which allow much higher levels of leverage, he added.

 

Moody's said on Thursday that hedge funds face the risk of multiple failures or a "domino effect" as an increasing number of largely unregulated investor groups take on the same market bets.

 

I guess the only logical question here is, how much money can be created before a collapse?? What is left to monetize?? Social security?? What happens when the next president decides to privatize that?? Won't those 'funds' provide enough moolah for a continued market run??

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You know I'm starting to get used to this board when I think about the marke in terms of song lyrics.......so here goes...

 

Dedicated to "The End"

 

 

 

You know the day destroys the night

Night divides the day

Tried to run

Tried to hide

Break on through to the other side

Break on through to the other side

Break on through to the other side, yeah

 

We chased our pleasures here

Dug our treasures there

But can you still recall

The time we cried

Break on through to the other side

Break on through to the other side

 

Yeah!

C?mon, yeah

 

Everybody loves my baby

Everybody loves my baby

She get

She get

She get

She get high

 

I found an island in your arms

Country in your eyes

Arms that chain us

Eyes that lie

Break on through to the other side

Break on through to the other side

Break on through, oww!

Oh, yeah!

 

Made the scene

Week to week

Day to day

Hour to hour

The gate is straight

Deep and wide

Break on through to the other side

Break on through to the other side

Break on through

Break on through

Break on through

Break on through

Yeah, yeah, yeah, yeah

Yeah, yeah, yeah, yeah, yeah

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Hannes sent my silver "bag" in a paint can. I told the doorman it was concrete.

 

Kerry knows. Remember - a few months ago a tv crew caught him backstage in a private conversation. he said 'liars and thieves - that's all they are'. I think the 911 commission knows too. but the credibility and reputation of the country are on the line, so they dance around the issues.

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two good energy trusts on that list are Pennegrowth and Peyto, FDG is a proven winner with lots to go on the upside as is Canadian Oil Sands Trust. ;)

These are both energy and income stories. Even if energy prices drop temporarily the residual income in the trusts allows you to stay invested and compound your money. If you are not a believer in the long-term resource story than the income will not suffice.

 

IMO, these are longer term investments as opposed to short term trades.

 

BTW, Brian, I recently sold my PGH for fundamental reasons. They are likely to need a large equity offering to bring the Canadian ownership up among other concerns I had. It was the first time I had sold a Canadian trust. I rotated into Macarthur coal in Australia.

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