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B4 The Bell Thursday September 30


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#1 Hiding Bear

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Posted 30 September 2004 - 07:08 AM

:D Welcome to B4 The Bell! :D

Still don't think the US$ will be devalued? The IMF does:

I.M.F. Asks China to Free Its Currency From Dollar
By ELIZABETH BECKER
Published: September 30, 2004

WASHINGTON, Sept. 29 - The International Monetary Fund added its voice on Wednesday to the growing calls for China to float its currency immediately, a move that supporters say would help reduce the United States trade deficit and strengthen the global economy.

On the eve of annual meetings here with the World Bank, Rodrigo de Rato, the managing director of the I.M.F., said that it would be to China's advantage to uncouple the yuan from the dollar.

The tight link to the United States currency has been blamed for making foreign goods too costly in China and Chinese exports unfairly inexpensive.

"There should be more flexible currencies, not only for China but the whole of Asia," Mr. de Rato said to a group of 10 journalists at his headquarters..


http://www.nytimes.c...html?oref=login

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Good trading! ;)

Natural Gas, which is said to be rising only for 'technical' reasons:

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#2 DrStool

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Posted 30 September 2004 - 07:43 AM

Thinning Ice

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#3 Lock Limit Down

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Posted 30 September 2004 - 07:53 AM

Metals screaming today
Is this the day?
Blastoff imminent
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"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." --- Thomas Jefferson

#4 jstrack

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Posted 30 September 2004 - 07:53 AM

Seems to be a rash of job cuts again....Nortel to cut 3,250 jobs, for instance...

#5 Guest_yobob1_*

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Posted 30 September 2004 - 08:02 AM

Those of you who missed Easy Al's link yesterday to Dr. Hunt's contrarian view of the bond market should possibly read it. ( Lacy Hunt: Bond Bull ) At the core of his arguments are what some of you view as meaningless funnymentals when pitched against a backdrop of TA. Somewhere under this smoldering pile of TA driven paper is the real world which will do it's own thing in it's own time regardless of how many fibbin nachos, cup handles, flags or shooting stars appear in the charts.

Have I pissed you all off yet? No? Then let me continue. TA serves the traders in the short term but IMO fails miserably for longer term or macro issues. Funnymentals on the other hand are terrible for short term prognostications, but do an excellent job at predicting longer term trends and macro issues. In the real world, operating a real business attempting to apply any sort of TA would result in unmitigated disaster. I know I speak from experience. 20+ years ago I was introduced to a mangement system that attempted to do just that. Keep your head buried in the numbers and make your projections based on that. After almost three years of invariably having the wrong inventory in the wrong amounts at the wrong time and then trying to readjust based on more TA I threw the whole thing in the trash can and have never looked back. The problem is you can't effectively make real time TA based adjustments in the real world. If you can't take the funnymentals and make decent projections on the macro situation down the road six months plus from now you're going to constantly find yourself pissing into a strong headwind.

Many of you think that all of the markets are rigged. In a snap shot view or even perhaps in the short term, they may be. I'm of the opinion though that beyond short term manipulations, the markets will follow the funnymentals. Note I said follow, not lead.

No I cannot sit quietly on this one, nor as I’ve mentioned, have other notables in the past few years. The CPI as calculated may not be a conspiracy but it’s definitely a con job foisted on an unwitting public by government officials who choose to look the other way or who convince themselves that they are fostering some logical adjustment in a New Age Economy dependent on the markets and not the marketplace for its survival. If the CPI is so low and therefore real wages in the black, tell me why U.S. consumers are resorting to hundreds of billions in home equity takeouts to keep consumption above the line. If real GDP growth is so high, tell me why this economy hasn’t created any jobs over the past four years. High productivity? Nonsense, in part – statistical, hedonically created nonsense. My sense is that the CPI is really 1% higher than official figures and that real GDP is 1% less. You are witnessing a “haute con job” and one day those gorgeous statistics just like those gorgeous models, will lose their makeup, add a few pounds and wind up resembling a middle-aged Mom in a cotton skirt with better things to do than to chase the latest fad or ephemeral fashion. If those Moms are holders of government bonds based upon a benign outlook for inflation, they had better cash some of them in, especially at today’s 4.0% yield for 10-year Treasuries.

Haute Con Job

Look carefully at that paragraph. Gross on one hand is bemoaning the weak economy and on the other hand complainig about the phony CPI and ultimately ends up warning us that bond prices are set to fall. Perhaps Gross thinks his mega fund can control the markets. Personally I think Gross answered his own question of the future direction of the bond market. It's the economy stupid.

I also think he's a little confused on the hedonics issue. Take a computer for example. If you start with a 333 P-I computer that cost in real terms $1500 as a base line and then move forward to a 1.8 P-IV computer that costs $750 in real terms, what the government hedonics does is say that the newer more powerful model is worth 5 times as much as the older model based on power. So your $750 computer becomes a $7500 computer - all in simplistic terms for illustration.
This does wonders for GDP but instead of hiding inflation it actually is hiding deflation. Hedonics adjusts the "value", not the actual price. Cars today are cheaper than they were 10 years ago. I can today go buy the equivalent truck I purchased 10 years ago for the same or less nominal dollars that I paid then, and of course we all recognize that some inflation has occurred over ten years meaning those are smaller dollars I spend today. But enough on Gross. It's impossible to say whether he is earnestly writing about what he sees or whether he is talking his own book. Perhaps he's short the 10 year in a big way.

And then there's this little snippet for consideration:

Want to know where global interest rates are heading? Watch the Bank of England.

Since its Monetary Policy Committee took over the task of setting rates from the chancellor in 1997, it has become the pacesetter for global interest rates.

Right now, a consensus has emerged that U.K. rate increases will end soon. The benchmark rate won't go much higher than the current 4.75 percent.

``We now believe that there will be just one more interest rate rise, probably in November, causing rates to peak at 5 percent,'' the London-based consulting firm Capital Economics Ltd. said in a note to investors this week.

Others suspect even that increase won't materialize. ``U.K. GDP is already losing momentum,'' said Stephen Lewis, chief economist at Monument Securities Ltd., a London-based brokerage, in an e-mailed response to questions. ``We expect lower growth to continue into 2005 and beyond. The Monetary Policy Committee may well see no further opportunity to raise rates in this cycle.''


Bank of England Sets Pace on World Interest Rates: Matthew Lynn

Needless to say I have a much different view of where the bond markets and the dollar will be a year from now than the vast majority of you hold. But then I'm a born contrarian. It has served me well over these last 4 and half difficult years so don't expect me to ever join the consensus. IMO the consensus view tells you what has already happened not what will happen.

I could go into commodities, but in deference to peace and tranquility I won't other than to say, somwthing wicked this way comes.

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Posted 30 September 2004 - 08:04 AM

Nortel"s new projected layoffs

Region Approximate Employee Reductions
------ -------------------------------
United States 1,400
Canada 950
Europe, Middle East and Africa (EMEA) 650
Other 250



http://biz.yahoo.com...0/305302_1.html

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Posted 30 September 2004 - 08:13 AM

PepsiCo Inc

The company also said it was closing four plants at Frito-Lay, resulting in 780 job cuts at those locations. About 250 of those jobs will be moved to other Frito-Lay operations. The company said it will take a charge of $160 million from the cuts.

#8 PeakOil

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Posted 30 September 2004 - 08:13 AM

Hmm... cash dollah 87.88. -.25%

#9 Lock Limit Down

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Posted 30 September 2004 - 08:16 AM

Make that 87.78 -.50
87.50 goes and LOB
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"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." --- Thomas Jefferson

#10 Guest_yobob1_*

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Posted 30 September 2004 - 08:17 AM

Regarding China, the G7 and primarily the yuan peg, I think this article is 100% correct. I don't for one minute think the Chinese are anywhere near ready to de-peg, nor do I think they can be bullied into it.

Sept. 29 (Bloomberg) -- Upstaging the richest economies is no small feat, and something China is sure to do this weekend when it participates in its first Group of Seven meeting.

Industrialized nations didn't invite Chinese officials to Washington out of altruism; it was out fear and perhaps even a tinge of envy. For all of China's problems, its economy is the hottest anywhere. Its rapid growth and air of ascendancy has Americans and Europeans feeling left out of the magic.

Yet if G-7 officials think they are holding the cards, that China is going to bow to their demands, they should think again. So should investors expecting big news on the China front this weekend.


Asia Power -- China Joins Japan at G-7 Table: William Pesek Jr.

Of course these. like so many others are strictly this author's own views, but I do agree with most of the points. Want my guess as to what might ultimately cause the Chinese to decouple? Oil. But that would require the assumption of oil prices continuing to the moon and the dollar remaining the medium of exchange for oil. Oil prices one day will head to outer space, but in my crystal ball I see the possiblity of a global depression causing a drop in demand greater than the drop in supply for a period of time. I don't think we will ever see $10 oil again but I think $30 is a very real possibility. I also think the dollar will retain it's reserve status for a much longer period than most here would guess. That's by default not by superior performance.

#11 The brown one

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Posted 30 September 2004 - 08:20 AM

Great av LLD!

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Posted 30 September 2004 - 08:22 AM

The number of people behind on credit card payments rose to 4.28 percent from April through June, compared with 4.21 percent in the first quarter, according to the Washington-based group's survey.

http://www.sanmateoc...2436301,00.html

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Posted 30 September 2004 - 08:25 AM

OOPsie

8:16am [MRK] MERCK WITHDRAWS VIOXX WORLDWIDE

8:20am [MRK] Merck shares off 9% in pre-market trading on Instinet

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Posted 30 September 2004 - 08:27 AM

Fresh Del Monte issues profit warning

http://cbs.marketwat...7D&siteid=aolpf

#15 PeakOil

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Posted 30 September 2004 - 08:28 AM

Make that 87.78 -.50
87.50 goes and LOB

INO now showing 87.6 (30 minute delayed)

Anyone have a real-time USDX cash quote??

Am showing USD/EUR at 1.241 +.61% (real-time)





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