<a href="http://img329.imageshack.us/my.php?image=peterschiffsheartattackmj0.png>This chart is dedicated to Popeye, and should be looked at by all Euro bullz
A-mouse,
I thank you for the honor... it is my hope you will allow me to bank it {in my backyard}, just in case we come to disagree at some point in the future.
"owning them and leasing them to the shipping companies."
Cudda been. I understand that much of the previous break bulk cargo (think grains) have had to be moved to containerization simply for lack of steamer capacity. This may account for a part of the rise in TEU's ex- LB and LA.
Takes a long time to bring on more capacity in break bulk.
Right now I'd be also interested in rail stock manufacture. Winter was talking about it a while back, before he went subscription....
the real story behind the Euro cracking is three fold.
It starts in the Baltics, being financed by the Nordic banks. The Baltics are about to go under, and I mean hard. This specifically calls into question Swedbank (aka Hansabank).
This is where it gets tricky, When the Euros get wind of this the inflation starts East to West....France or Italy will balk on the Euro....its a race to the bottom people.....The Germans dont even want Euro printed in Italy already....The Irish will vote until they get it right.....just my wingnut conclusion.
In other news... recreational marinas, in a bid to stay profitable, have invested heavily in upgrading their slips to take advantage of the burgeoning demand for tender-based "micro container" shipping.
Some Chinese manufacturers have flatly refused containers altogether, and are simply coating their boxed merchandise in wax, setting them adrift and hoping for a favorable wind to carry the packages to a still solvent port of call. Corked bottles have conveniently been included for ease of payment.
Anak and Anon,
There are 2 publicly traded companies in the US that own and lease shipping containers, TAL and TGH, and several other private companies.
Anak is right that more and more bulk items are moving to containers. In addition to it being partially a function of bulk capacity, it simply is more logistically efficient and cost effective to move some of these bulk goods in containers rather than bulk ships to drayage to rail cars.
The container as really changed the way products move and will continue to do so in the future.
Anon is right that it's been a very good business for a long time.
FYI .. Containerization is another one of those innovations that were largely brought to you by the hated Federal Government.
Although some shipping companies and rail lines had used containers before, it wasn't until the US Army developed standard sizing and construction, that containerization (and globalization) really took off.
Will U.S. exports continue to grow as economic growth slows or turns negative for U.S. trading partners?
My guess is exports will slow. However I also believe non-oil imports will decline even more UNTIL the dollar significantly strengthens - say to $1.10-1.15 vs euro and >130 yen to the dollar. RMB has to get back to something like 8:1... until that happens imports will be weak & their producers 'marginal'.
And will a combination of some U.S. export growth and lower oil prices provide enough of a cushion to keep the U.S. out of a severe recession?
I have no idea - I doubt it personally. Too much debt to push through the python to not be noticed.
But I would still expect to see domestic producers increase their market share. Most all will stay working just working hard for a whole less purchasing power. I see that everyday - help wanted in front of factories all over the Midwest w/ starting pay in the $11 range... was in one today... expanded & expanded again (4X the size it was mid-90s... pay the same). Busy as hell...
Corps will feel the same pinch - running hard on the revenue treadmill and generating far less earnings in the process.
Europe is in far worse shape than the US. Not just the financial system but every aspect of the society.
The Euro nations debt structure is a recipe for guaranteed failure. For a microcosm of European problems
The International Monetary Fund (IMF) has warned Swedish banks that the global credit crisis means increased risks for Swedish banks investing in the Baltic area.
In their country report on Sweden, the IMF pinpointed Swedbank and SEB banks as two banks with extensive investments in the Baltic area.
The banks are active in Estonia, Latvia and Lithuania where economic growth has slammed to a sudden halt and where rising inflation is a fact .
Over the forcast period Latvia looks to be borrowing nearly a years GDP! That is in a country which is clearly in some economic difficulty right now!
Swedbank is the lender to Latvia, Estonia and Lithuania these countries are running close to 25% Current Account deficits.
All of Eastern Europe is just as bad. Unfortunately for the ECB, the member nations have given it the ability to only fight inflation. The ECB has no taxing authority, no way to support the Euro. The Euro money supply growth over the last year has been 17%. This is throwing in the towel on inflation. Interest rate is immaterial if you can get moneys. Euro currency is being passed out.
Next step which country bails on the Euro first. I think France, but a good chance is Italy. Currently Italian issued Euros are not as desirable as German issued Euros. No sovereign nation is going to let its people go down the tubes to support a pan European currency.
But isn't the mfg commodity driven, I mean by the huge run-up in energy (oil/gas), metals, and esp. agriculture, producing more machines to extract/refine/deliver such products? What about if (when) commodities take a seriously nosedive? TIA - fan of your work
Yossarian,
Actually, the US govt has been a disaster as it relates to container standardization. The international standard for decades has been twenty foot equivalents (or TEUs) - so containers are made in 20 foot units or 40 foot units allowing them to fit nicely on the ships that are specifically designed for that dimension. The containers that going through the port at Long Beach are international containers measured in TEUs. In the US, domestic containers (those that move goods within the US) now have a standard of 53 feet. Less than 10 years ago that standard was 48 feet - why? Who knows - blame some lobbyist. The problem with having a different standard than the international standard is obvious - it forces those 53 ft and 48ft containers to remain strictly domestic which makes it necessary to move shipments from 53 foot containers to international containers at times which obviously costs more money and time. The problem with continuously changing standards is that it effectively obsoletes the older containers quicker as well as the rail cars and truck chassis that were designed for these older containers.
All of that makes the domestic container business a very bad business while the international container business is a very good business.
The publicly traded container leasing businesses that I mentioned before only deal in international containers so they dont have to deal with the "non-conforming" US standard.
There are few of these deals now priced at par or above, which is bondspeak for they are all underwater. We, as well as our SWF and central bank counterparts, are reluctant to make additional commitments.
Will someone please call B.S. Bernutty and tell him to pick up his friggin' containers. It's been a year since he said it was all contained and yet he still has come to Long Beach to pick these damned things up.
If he doesn't show up soon I'm gonna build some damned condo's out of them.
Misean
I'd appreciate it if you would take a slug of your favorite drink and say that A-gah-gah-gah-gah-gah-gah!" part in English... Just asking for a favor.
"I'd appreciate it if you would take a slug of your favorite drink and say that A-gah-gah-gah-gah-gah-gah!" part in English... Just asking for a favor."
You think I didn't? It's 'tini time. I've already stopped by Lefty's and had a few.
"cracker writes:
All of Eastern Europe is just as bad. Unfortunately for the ECB, the member nations have given it the ability to only fight inflation. The ECB has no taxing authority, no way to support the Euro. The Euro money supply growth over the last year has been 17%. This is throwing in the towel on inflation. Interest rate is immaterial if you can get moneys. Euro currency is being passed out.
Next step which country bails on the Euro first. I think France, but a good chance is Italy. Currently Italian issued Euros are not as desirable as German issued Euros. No sovereign nation is going to let its people go down the tubes to support a pan European currency."
You point about the ECB having limited powers leads to an interesting point. The euro area countries are now unique in that they no longer have complete control over their central bank, and thus pose a chance of default. (Other countries can inflate away their default risk.)
That's been a favorite fringe theory floating aound the hedge fund community for years. However, the mainstream opinion is that far too much political capital has been invested in the euro to allow it to fail, even if the currency does not make complete economic sense.
Another obvious reason that the euro is not easily undone is that the entire banking system would be destroyed if a country left the euro, as it would create huge currency losses on their cross-european loan books.
But isn't the mfg commodity driven, I mean by the huge run-up in energy (oil/gas), metals, and esp. agriculture, producing more machines to extract/refine/deliver such products? What about if (when) commodities take a seriously nosedive? TIA - fan of your work
Anonymouse | Homepage | 09.04.08 - 9:20 pm | #
Absolutely. That and aerospace. But that demand is real - question is at what 'price'.
In other words the world needs food, needs energy, needs transportation - the base demand ids there. The world will NOT go without food easily. Nor energy. The only question is what will the money supply be worldwide to price that demand? I'm guessing inflation - others deflation - we'll see.
I mean folks who work in 'discretionary goods & services' don't fathom demand for basic needs. These really are pretty inelastic. We have 2-3 billion additional folks now in the world economy shifting from subsistence to urban living (even if poor squatter urban)... that begs the question who is growing the food & working the mines they used to work?
Answer is a lot more machines & a lot more energy to run those machines (requiring even more machines)... currency exchange rates & productivity tell you who will be making those machines (or at least who will be busiest making them)... money supply tells you the prices they can charge in fiat.
The US is getting busy but we aren't making money in purchasing power doing it. Its a treadmill - I've been bullish on business but bearish on profitability.
However that beats the only available alternative which is NOT being busy and even poorer (except for a few asset heavy wealthy individuals).
I think the Finance Ministry & PBoC will work to change that (see John M's NYT link above - VERY good IMO).I think they realize their miracle wasn't due to superior Chinese character or even 'hard work'... they'll get back focusing on what got them there. Then it gets interesting in a not so nice way.
Rob Dawg writes:
Bill Gross is complaining that he can no longer mis-price risk and pocket the difference plus fees.
Dawg, let me ask you. Doesn't Gross have access to important ears ? Should we sort of expect his whines to be answered ? He does seem to have a track record for unanticipated pre-announcements, doesn't he ?
dryfly writes:
I mean folks who work in 'discretionary goods & services' don't fathom demand for basic needs. These really are pretty inelastic. We have 2-3 billion additional folks now in the world economy shifting from subsistence to urban living...
That begs the question, are they coming into their own material world because the U.S. increasingly demanded exports from their countries, purchased via vendor-financing w/ recycled dollars from one asset-bubble to the next, that is now coming to an end? They'll go back to eating mud, and commodity machine producers like John Deere will go back to '90s level output. Not likely I take it?
CR is a great blogger and does outstanding charts, but on the trade deficit he is just off key.
The issue with the trade deficit isn't just the direction of those black, red and blue lines. It's where they are and the persistency of where they are.
Any month that the blue line is below -$30 (or so) is a bad month for the U.S. economy and dollar. Because no country has ever sustained such huge trade deficits and they have cumulative erosive impact on the value of the currency. You can't perpetually export $30 billion of wealth per month and have a strong currency.
CR is right that the black line (oil) will flatten out in the months ahead and maybe improve. But the red line will drop sharply. And the blue line will stay in the range of about -$50 to -$60 per month, on average.
Don't get caught up in this strengthening dollar crap. The dollar can't strengthen permanently or meaningfully until the blue line moves well back toward zero. Maybe it can make gains against a weakened euro, and thanks for the excellent commentary here about why the euro is weak. But there's other currencies in the world besides a weak dollar and a weaker euro.
I posted a few days ago about my observations of traffic at the Port of Charleston. Summary: My guess is import/export shipping numbers on the East Coast are going to show a steep drop very soon.
On the Baltics. I wanted to go to Kalingrad while I was in the Baltics. Basically my family said "No way!" Maybe I should not have shown them the website where former Soviet army personel will escort you (armed). Or the tour people who advertise their good connections with the local police and military.Yet you can ride in tanks! Even the T-36!
Basically in that area it is amber sent to Poland and controlled by the Russian Army. The other major activity is going to Germany and stealing Benz's for resale back in the Motherland. Drive fast through Poland!
JIT is so 80's. In the new age of "Green-think", we have no need for that impulsive commercialization enabled by large ships traversing the world's seas delivering an ever tantalizing assortment of the world's bounty in record time to our salivating wallets.
(channeling Fletch) "We have no need but for the creature comforts...and lots of 'em"
Now, if you'll excuse me, I have to go rinse my hair shirt.
Does anybody but me think the Republican thing is just becoming a freak show?
I mean, millions of people are watching their families money disappear in 401ks and 529 plans, and the Republicans keep talking about their own friggin' families and how great (and rich) they are??
Dawg, let me ask you. Doesn't Gross have access to important ears ? Should we sort of expect his whines to be answered ? He does seem to have a track record for unanticipated pre-announcements, doesn't he ?
The boy who cried wolf. He's burning good will in a desperate attempt to save his companies' positions.
Nova,
The height of hubris was shortly after the wall went down. The Germans were so full of themselves that they posted a sign in the ban stating that train service would shortly be restored to Kaliningrad.
Interesting quote from that article on China's Central Bank:
To keep the banks strong when they were getting such little interest on their reserves, the central bank has kept deposit rates low. The gap between what banks are paying on deposits and the rates they are charging ordinary customers to borrow is several percentage points. This amounts to a transfer of wealth from ordinary Chinese savers to the central bank and on to Americans who are selling their debt to the Chinese.
I'm surprised Toll Brothers held up so well . I know they had fewer cancellation but , they sold less .Less buyers less cancellations duh. I guess bob wanted to hold up the stock price so he can shed more shares. Are investors buying Toll ... any thoughts anyone else short Toll
rich writes:
Don't get caught up in this strengthening dollar crap. The dollar can't strengthen permanently or meaningfully until the blue line moves well back toward zero.
You made some excellent points. However, CR's chart is in nominal dollars. The U.S. had an unsustainable trade deficit (albeit not as large a % of GDP) in the late '90s and the $ was relatively strong. In my view, there's very little value placed in forecasting currency movements based on relative trade deficits (key here: in major pairs, like USD/Euro, USD/YEN, YEN/CND, etc). Currency trading has everything to do with expectations for future relative real (and nominal) interest rates. And that's over the short and long term. So a trade deficit out-a-whack like ours could play in to the above equation; I just don't see it as a significant factor.
That being said, I've thought since around '03 when I started finding an interest in all things economics/finance, that the resolution of the U.S. trade deficit would occur by a major world-wide recession (depression?), with U.S. imports slowing YOY a bit faster than exports slow, but having marginal positive benefits on U.S. GDP. I still hold that view, and it seems to be playing out. I'm still in the deflationary sh*t storm camp.
"Popeye writes:
Dawg, let me ask you. Doesn't Gross have access to important ears ? Should we sort of expect his whines to be answered ? He does seem to have a track record for unanticipated pre-announcements, doesn't he ?"
As the head of the largest bond fund in the U.S., I'd certainly hope he has access to important ears.
Based on what he's publicly released, Pimco's Total Return Fund is heavily overweight Agency debt. Which will probably mean that Pimco is the probably the largest non-bank holder of Agency paper in the private sector (but note that the holdings of central banks will dwarf Pimco's). Which in turn implies that he would be a major player in the creditor's committee in the scenario of the Agencies being restructured. (The central banks may have a lot of Agency holdings, but they have zero experience in restructuring debt.)
Therefore, his opinions on the matter will have to be taken into account.
rich writes:
Does anybody but me think the Republican thing is just becoming a freak show?
RICH,
My wife made a very good point last night as I commented on the GOP convention [which I forced her to watch]. She simply said, "You do realize that they probably felt exactly the same thing you do now, when the other program was playing."
That begs the question, are they coming into their own material world because the U.S. increasingly demanded exports from their countries, purchased via vendor-financing w/ recycled dollars from one asset-bubble to the next, that is now coming to an end? They'll go back to eating mud, and commodity machine producers like John Deere will go back to '90s level output. Not likely I take it?
Anonymouse | Homepage | 09.04.08 - 9:47 pm | #
I don't know - really no idea.
I know this - I'm in Waterloo IA tonight and Deere is buzzing. Big plans for big expansion - hiring too. They've over done it before and been spanked but not often - they are usually pretty savvy when it comes to where they put the capacity - adding it in NAFTA Zone says a LOT about what they see regarding exchange rates going forward.
BTW - Deere was one of the earliest adopters of Globalization - started in the 60s WAY before automotive. So if they sense its time to put more capacity state-side something is up or they are horribly wrong.
It isn't like our deficit will go away overnight though - but the forces pushing for rebalancing are starting to be felt.
Again - that doesn't mean we'll be 'richer' just working harder so we won't be so much more poorer. Before this we were being subsidized by folks like BoJ & PBoC - they will try to continue but from John M's NYT link...
China spent more than one-eighth of its entire economic output last year on foreign bonds, and then picked up the pace during the first half of this year. Chinese officials have suggested in recent comments that they are increasingly interested in stopping the yuans rise, and thus are willing to continue buying foreign securities to support the dollar. In fact, the yuan weakened slightly against the dollar last month after 26 consecutive months of gains.
How long do you think they can continue doing that and still be increasing their peoples' standard of living?
"We're quickly approaching the "Time for Politicians to Panic and Do Something Really Stupid that Hobbles Our Economy for Decades" phase."
Don't know about that, but in the near term I would say that the probabilities of the market falling further to test the low and then by the 16th a policy induced intervention short covering rally is a pretty safe bet.
Popeye writes:
Anonymous writes:
"...a policy induced intervention short covering rally is a pretty safe bet."
Popeye says it's only a matter of time ... it is not a matter of "if"....
I'll pull out <a href="http://www.haloscan.com/comments/calculatedrisk/3125702401143465860/?dt=1219457113#552479>this comment again when we hit my target:
Now I'm speculating, with solid evidence, that the SPX is doing a monster A-B-C down to around 1080. Only question then is, what will the Fed respond with during that panic? I suspect it'll be merging a couple of large national banks.
Don't get caught up in this strengthening dollar crap. The dollar can't strengthen permanently or meaningfully until the blue line moves well back toward zero. Maybe it can make gains against a weakened euro, and thanks for the excellent commentary here about why the euro is weak. But there's other currencies in the world besides a weak dollar and a weaker euro.
I don't think it's appropriate to use words like "strengthening" when you're comparing one pile of trash to another.
The dollar isn't getting stronger; the Euro's stench is just getting worse faster at the moment and is attracting some of the flies away from the USD.
That doesn't mean bucky doesn't belong in the landfill.
We need some traveling salesman jokes. Skwerls go only so far.
Who's up for a CR and Tanta convention next summer in Glenwood Springs Colo?
The rich guys like MS and Misean can stay in Aspen and the rest of us pitch tents by the Crystal River.
We can unmask CR and see if Tanta wears feathers.
I did go in with some execs from Liberty Media a few years back and we have an exclusive lease on a private trout lake. Primary rule is anything under 7 lbs, must be released.
Ole Ben Frankin said during the Declaration confab that
"We must all hang together or we shall all hang separately"
I think that is true for the EU and the Euro is the everyday face of the EU.
Putin's invasion of Georgian territory was as stupid as Iraq.
An external enemy is always a strong prod to working out differences. Putin just gave the EU that enemy. Somehow with or without the new constitution they will find a way to limit Italian spending. Ditto the Baltics.
Sign me up Ross - though to get CR there we'll probably have to organize a 30 mile hike or two - for him, not me. My knees say 30 mile days are behind me.
someone in these parts was chattin up that trade bigtime, had the sep 150's i believe.
Stellar Call!
shazzammm
Just for the record I never said buying FXE puts might be a good idea back with it was close to 160.
This isn't an investment site. And it would be foolish and irresponsbile to make that kind of suggestion. Not to mention disrespectful to the site owners.
bond guy writes:
"Popeye writes:
Dawg, let me ask you. Doesn't Gross have access to important ears ? Should we sort of expect his whines to be answered ? He does seem to have a track record for unanticipated pre-announcements, doesn't he ?"
As the head of the largest bond fund in the U.S., I'd certainly hope he has access to important ears.
Based on what he's publicly released, Pimco's Total Return Fund is heavily overweight Agency debt. Which will probably mean that Pimco is the probably the largest non-bank holder of Agency paper in the private sector (but note that the holdings of central banks will dwarf Pimco's). Which in turn implies that he would be a major player in the creditor's committee in the scenario of the Agencies being restructured. (The central banks may have a lot of Agency holdings, but they have zero experience in restructuring debt.)
Therefore, his opinions on the matter will have to be taken into account.
I am a Sailor and running presently US/China-Japan run. Our Ships are now running at slow speed compared to last year or two, as per orders from our Owners.
Can someone tell me if we may lose our jobs soon, if this weakness persists.
Footonthehill,
Beg to differ. If you want some insight on Russia, I suggest Mauldin's site. He has a great piece from Stratfor about Solzhenitsyn and the 'soul' of Russia.
I met Solzhenitsyn in 02 at a reception in Moscow. Bush should have looked into HIS eyes to see the real Russia.
Interesting quote from that article on China's Central Bank:
To keep the banks strong when they were getting such little interest on their reserves, the central bank has kept deposit rates low. The gap between what banks are paying on deposits and the rates they are charging ordinary customers to borrow is several percentage points. This amounts to a transfer of wealth from ordinary Chinese savers to the central bank and on to Americans who are selling their debt to the Chinese.
"Can someone tell me if we may lose our jobs soon, if this weakness persists"
Won't be long. First thing to get cut after the low hanging fruit, like operating discretionary expenses (excess fuel) is discretionary tech, new initiatives etc. Next it's heads.
From NYT link above He said the officials blamed the United States and believed the controversial assertions set forth in the book Currency War, a Chinese best seller published a year ago. The book suggests that the United States deliberately lured China into buying its securities knowing that they would later plunge in value.
A lot of policy makers in China, at least midlevel policy makers, believe this, Mr. Shih said.
So in case those GSEs failure, and the US Gov refuse to pump, or print, I guess it's legitimate in the eyes of Chinese midlevel policy makers to "nationalize" those FDI from US during the last 30 years ?
RICH,
My wife made a very good point last night as I commented on the GOP convention [which I forced her to watch]. She simply said, "You do realize that they probably felt exactly the same thing you do now, when the other program was playing."
There's a big difference. The Democrats were programmed to say to diverse people, "even if you don't like us much, here's why you should give us a try."
Every time I turn around, the Republicans are pissing off another large group of voters.
The thing about giving parents free choice among private schools, instead of sending children to failing public schools, is an old dead card. Nobody actually believes it will come to pass.
It serves one purpose, which is to piss off tens of millions of public school employees.
My boss and I were talking after the market close today. Kind of a post mortem or surveying the wreckage talk. We've been sensing that the market smells like a big liquidity squeeze, but we couldn't identify the source.
Between the China Central Bank, the Korean won F/X issues, Bill Gross, and Lehman Brothers, I am suspecting that holders of mortgage-backed and Fannie/Freddie paper are moving from denial to appreciating the gravity of their predicament.
Norka West writes:
My boss and I were talking after the market close today. Kind of a post mortem or surveying the wreckage talk. We've been sensing that the market smells like a big liquidity squeeze, but we couldn't identify the source.
Between the China Central Bank, the Korean won F/X issues, Bill Gross, and Lehman Brothers, I am suspecting that holders of mortgage-backed and Fannie/Freddie paper are moving from denial to appreciating the gravity of their predicament.
Popeye says: getting over denial is step one - that's nice - or to quote Martha - "it's a good thing"
The container post made me remember that today I drove past a house's driveway that had a rental dumpster with "Rent A Dump" as the name of the dumpster's owner.That made me think of other bad names I've seen people use.One that I'll always remember is a local Bar-B-Q joint that had a slogan they used in the paper,fliers and on their sign was "When You Can Smell Our Butt...You're Here". I hate to be cruel,but I always hope people that come up with things like that go broke. I hope that the people who start the first of the coming Squirrel stands don't come up with funny/silly names like the ones that I'm inviting you to come up with now. Like "The Other Rat Meat Stand".
Norka, take Occam's razor.
All the hedge funds geared through Lehman.
Think about it.
They need capital/cash so they call the loans and sell collateral.
Delevering on a massive scale.
Now the rest of the 2 and 20 crowd are thick into the same things.
Hence this huge commodity smash up.
Can I really buy some ADM that cheap?
Yup.
GDX, check, glod, sliver, etc.
The only really good telltale is the disconnect in gold and silver from the physical market, which has actually propped up the paper market, albeit through potential deliveries;-}
Now, nothing like the margin call of cthulu to send fools to their dreamquest of unknown kadath.
Rich is right on. My wife is a public school employee and I had her on board with McCain until tonight when he chose to beat up on public schools. She went out and chipped the bumper sticker off her car before she went to bed. Why would he take a dumb shot like that?
The Philippine peso recovered from its weakest levels in nearly a year after the central bank sold dollars on the market on Friday to defend the currency near the 46.90-per-dollar level, traders said.
Sailor writes:
I am a Sailor and running presently US/China-Japan run. Our Ships are now running at slow speed compared to last year or two, as per orders from our Owners.
Can someone tell me if we may lose our jobs soon, if this weakness persists.
Sailor | 09.04.08 - 10:38 pm | #
Hey I always wanted to know what is the differnce between a between a sailor and a seaman? I have met many merchant seamen but not many merchant sailors
Sailor writes:
I am a Sailor and running presently US/China-Japan run. Our Ships are now running at slow speed compared to last year or two, as per orders from our Owners.
Can someone tell me if we may lose our jobs soon, if this weakness persists.
Popeye writes: I was recently taught a lesson about Trolls - and suggests that you exercise care.
The Malaysian central bank was suspected of selling dollars on Friday, joining counterparts in South Korea, Indonesia and the Philippines in defending their weakening currencies.
Ross,
I admire you as well. To be honest, I was at first flattered to have my posts used as a launch by others - but increasingly began to wonder whether I had become the butt-end of a larger joke - - in the end, I decided, hey, I yam what I yam
Yeah, most drug deals switched over to using Euros because they print a 500 Euro note - fits more Euro/$ in a suitcase
Anonymouse | Homepage | 09.04.08 - 9:42 pm | #
yeah, dont you just hate it when your Franklin's are all dusty with that white powder shit
...The dollar isn't getting stronger; the Euro's stench is just getting worse faster at the moment and is attracting some of the flies away from the USD.
That doesn't mean bucky doesn't belong in the landfill. @ 10:20 pm | #
Mock,
S&P will bounce @ or near 1214. Uncle Ben & friends have thus far mounted a stellar defense. As a matter of personal belief, I doubt today will cause them to give up the "game". But that's just me.
I'm on the phone to Warsh and things look bad for the opening:
In Japan, the benchmark Nikkei 225 index was down 2.9 percent at 12,196.47 in early afternoon trading.
Hong Kong's Hang Seng index tumbled 3.1 percent to 19,752.65, dropping below the key psychological level of 20,000 and hitting its lowest point in more than a year.
Hedge fund company Atticus Capital denied market rumors it was liquidating its positions and closing down and said it had a large net capital position and was looking for investment opportunities, the Wall Street Journal reported on Thursday. Atticus's two main hedge funds have been hit with losses of between 25 percent and 32 percent this year through August, but investors are largely sticking with it, according to unnamed investors cited by the Journal.
Hedge funds that picked on Lehman Brothers and Bear Stearns now are picking on each other," said the head of prime brokerage at a major investment bank.
A number of hedge funds are nervous that their investors might ask to pull out in the weeks and months ahead, amid a disappointing year for many funds. That's sparking anxiety in the market.
Atticus, however, says its investors are largely sticking with it, despite losses of between 25% and 32% in its two main hedge fund this year, through August, according to investors. Losses this month have not been dramatic, these investors say.
"As a firm we have had less than 10% of our capital put in for redemptions for September 30," says Mr. Barakett. "There are no funds that we are even considering closing down. Our flagship fund, Atticus Global, has had redemptions of about 3% of capital."
Part of the concern about Atticus, and about the health of other big hedge funds, stems from news this week that Ospraie Management, one of the biggest players in commodities, is closing its largest fund after substantial losses. Unlike Ospraie, Atticus doesn't have a trigger allowing investors to pull out if heavy losses are experienced.
Sept 1 (Reuters) - U.S. activist hedge fund Atticus Capital has lost more than $5 billion this year, a source familiar with the matter told Reuters, after its funds were hit by heavy falls in financial stocks.
Atticus, a high-profile player in deals such as Barclays' unsuccessful bid for ABN Amro last year, saw total assets under management fall to around $14 billion at end-July from more than $20 billion last year, the source said.
The losses were mainly due to a 32.9 percent loss in the $7 billion Atticus European fund from the start of the year to the end of August and a 25 percent fall in the Atticus Global fund.
Yep, now it's a global adverse feeback loop. This loop will feed on itself and all assets until there's not much food left. Let's say, around 2013, for an unlucky guess.
by Vanity Fair
September 4, 2008, 10:29 AM
One of the persistent memes in the Republican line of attack against Barack Obama is the notion that he is an elitist, whereas the G.O.P. represent real working Americans like Levi F-in Redneck Johnston.
It caught our attention, then, when First Lady Laura Bush and would-be First Lady Cindy McCain took the stage Tuesday night wearing some rather fancy designer clothes. So we asked our fashion department to price out their outfits.
Laura Bush
Oscar de la Renta suit: $2,500
Stuart Weitzman heels: $325
Pearl stud earrings: $600$1,500
Total: Between $3,425 and $4,325
Cindy McCain
Oscar de la Renta dress: $3,000
Chanel J12 White Ceramic Watch: $4,500
Three-carat diamond earrings: $280,000
Four-strand pearl necklace: $11,000$25,000
Shoes, designer unknown: $600
Total: Between $299,100 and $313,100
Wow! No wonder McCain has so many houses: his wife has the price of a Scottsdale split-level hanging from her ears.
(All prices except Lauras shoes and Cindys watch are estimates, and the jewelry prices are based on the assumption that the pieces are real.)
The comments about the euro are fascinating, but it occurs to me that many here might be missing something. A point which has nothing to do with the strong anti-euro bias of the English press (a non-euro country, after all). Or how silly rumors get repeated (nobody I know in Germany is paying any attention to their paper euros, except for sometimes checking 50 euro bills and up for the UV strip).
Europeans generally like the euro in terms of something which Americans never consider - being able to travel a good distance, and still spend the same money. Europeans travel much more than Americans, and have much more time to do so.
Further, most younger Europeans find the euro further proof that Europe is becoming something, a very hard to define something admittedly, but something new, and something which they are a part of. Lots of barricades are being removed, and most people seem to benefit from the increased freedom this brings.
Now imagine that some in the U.S. started seriously talking about making dollars 'regional' - that is, California dollars are not the same as Oregon or Idaho dollars. Further, imagine that those who buy potatoes from Idaho need Idaho dollars to pay. And that the trucks carrying them to Nevada need California dollars to buy fuel in California. Further, let's imagine that in California, the fuel tax is twice as high as in Oregon - would it make sense to then have Oregon dollars too, and then run the route just to save the taxes? I can go on - bank fees involved with dollar accounts that aren't 'native,' exchange rate costs in general, and exchange rate based risks specifically.
After seeing all the advantages of the regional dollar system more accurately reflecting economic reality, you wonder why Americans aren't clamoring for it.
This isn't to say the ECB will be able to keep the lid on, or that Italy's answer to Bush won't continue to be as stupid as he was in the past, but that the advantages of the euro are perhaps wider spread than most Americans can imagine, having had those same benefits .
And as a final note - Sweden is not part of the euro zone, and neither are the Baltics. For that matter, Eastern Europe basically isn't yet part of the euro zone, though of course, it is certainly within the euro's sphere of influence.
The New Zealand dollar was hammered today but it was part of a global flight from risk.
The NZ dollar dropped to US65.90c mid-morning for the first time in 22 months but made it back to US66.60c by 5pm.
It was a big fall because the currency had been around US68.80c at 1am and closed yesterday at US68.17c.
The decline was all about risk aversion and liquidation of so-called carry traded, said Murray Hindley, ANZ Institutional Bank chief foreign exchange dealer.
Those US exports just got a little bit more expensive today, oh and Gas too!
The global or globalized economy is facing a probable Depression.
How'd we get to this?
If you ask that, I've found that the mass media and popular blog editing I've mentioned avoid several subjects or areas of inquiry:
~You can't talk about what happened on 911 and how it affected our economy post-911 when this big debt bubble was really blown up.
~You can't talk about the crushing costs and the effects on the debt bubble economy of the post-911 Wars in the Middle East.
~You can't talk of central banking or Federal Reserve accountability for this post-911 debt bubble. The Federal Reserve is more revered than the U.S. Government and when the debt bubble enters a Depression and even the U.S. Government fails, the Federal Reserve will still be standing and owed more money than would be possible to ever pay back.
So you can't talk about this stuff in detail on any popular Econ blog thread for long before the 'troll' hunters or blog content police come along and pick a fight to bounce the politically incorrect blogger.
That's what some of these so-called flame wars are about. It's about a regulated control of content that has to be allowed as 'appropriate'.
Big down days like today send me to the 10 year charts, which point to targets 8%-10% lower at new lower lows in the ongoing bear market near DJIA 10,000, NYA 7300, SPX 1100 and NAZ 2000.
Recent silence from the fed open mouth squad tells me the banks and brokers finally have their seats and tray tables to the upright position and the unfolding parabolic descent could be complete within days.
@rent_to_own: I know the Baltics aren't part of the Euro zone, but I have a feeling they have the same issue as Ukraine, where cars and houses are priced in Euros, and even paid for with loans and mortgages taken out in Euros; normal economic activity happens in lats, litas or kroons, but every sub-prime mortgage has a large cherry of currency risk on top.
I'd be interested to hear where this stupid rumour about Germans not taking Italian-printed Euros comes from; I've only ever heard it from Americans ...
The New Zealand dollar was hammered today but it was part of a global flight from risk.
The NZ dollar dropped to US65.90c mid-morning for the first time in 22 months but made it back to US66.60c by 5pm.
It was a big fall because the currency had been around US68.80c at 1am and closed yesterday at US68.17c.
The decline was all about risk aversion and liquidation of so-called carry trades, said Murray Hindley, ANZ Institutional Bank chief foreign exchange dealer.
Those US exports just got a little bit more expensive today, oh and Gas too!
Andy, the NZ economy likes a low kiwi dollar, those farmers and tourism operators will be coining it, our few remaining manufacturers get a stay of execution, the reserve bank can finally cut the cash rate from 8 percent..
ok, we pay more for plasma screens... or do we, Briscoes said today they are on 24/7 sale mode just to get anything out the door
maybe the pain is just gonna be felt where you live, in auckland, and maybe you lose the Ranfurly Shield today...
you can always vote with the herd for an ex-merrill banker in november... guaranteed brownie points on this board...
mind you, helengrad was treated like sarah palin way back in the day
When I attempted to explain this wasn't so, at least in the Germany I live in, my comment was deleted. (Nothing like making sure you are right all the time by unpublishing whatever disturbs your own take on reality - this is becoming increasingly common on the web, actually).
A commenter at the time actually explained about that the Handelsblatt article was misrepresented by the British paper (another shock - British press distorting European reality). Unfortunately, it seems as if all comments to the article are no longer available.
One of things that makes this so stupid is that identifying the origin of an euro coin is child's play - each country has its own design on the back, but till now, no one, and I mean no one, is caring the least about the coins. The same is equally true of the bills, making this whole thing so stupid.
But then, as noted in my comment at the time, look into the issue of pound notes in the UK - fascinating. At least the Telegraph is used to the idea that pound notes from one part of the UK aren't easily accepted in another part. Banknotes of the pound sterling - Wikipedia, the free encyclopedia
The joke of shipping imports from China to the US is that unless China subsidized the shipping containers and artificially kept their currency low, the products would be cheaper to make in the US, even with decent wages. Shipping containers are not cheap. The other joke is that most of them go back empty...so much for "trade agreements". Thanks to Billy-playboy-Clinton for opening the door for "fair" Chinese trade. The "strategic Bush-McCain plan" now is to bypass shipping containers and make all of the same stuff in Mexico, and deliver it using Mexican truck drivers. Seems like a "better" alternative considering that trade with China supports communism, human rights abuses, and a growing Sino-Russian military threat. Now China is drilling for oil off of Cuba/US waters, and Russia wants to control the flow of oil in Europe. US energy independent is definitely a must, and more supply is definitely the only answer. I guess that we'll just have to keep dealing with illegals regardless of who's elected.
"The index is off over 61% from the peak. This suggests a slowdown in the Chinese economy, and probably less business investment in China."
No, this suggests huge losses of speculative money from Chinese investors and 'hot money' from outside China (B shares losses much worse than A on Shanghai) and the loss of equity in several big firms where Beijing remains the principal shareholder, i.e., PetroChina.
the Chinese economy has barely slowed at all so far this year and FDI remains strong.
I vaguely care about the marks on the back of Euro coins; it would be nice to collect a whole set, even if it did require a trip to Luxembourg or Malta ...
The Austrian Parliament visitors' centre sells a full set of Euro coins from all the countries in the zone for about 120 euros, four or five times the face value
what dek said --
nice reiteration of rush talking points but it is obvious you know nothing about the WTO Accession trade act. Not only is China now our fastest growing export market but it will soon eclipse Japan in importance to US exporters - manufacturing impact not services exports.
Even now at triple the price a container of any weight costing around $6K from China is cheaper than moving it around California by truck.
All this talk about China taking American manufacturing jobs is just a political hobby horse.
I just wanted to say that using the LA/LB ports as a reference slightly overstates the case. Part of the decline in volume there, and in Seattle/Vancouver, is due to shifting of business to east coast ports.
I don't mean to imply that the gains on the east coast offset the decline in the west, they don't. Or that container volume or that container volume in general is holding steady, its not. I just wanted to point out that this one data point magnifies the problems in the industry.
In the beginning of the game, I play together with friends to fight more monsters, and lead novice with a wide range of tasks. I experienced a lot of happiness and satisfaction; no matter how many die back, spend how much time, see others expect eyes, thank the speech, I am every happy all time. Because I help others grow, and also help myself grow. In the game, the cheap mabinogi attract many players to join us to play with us.
replica watches are made by the rating 1:1 according to the original watches, and you can't distinguish the original and the fake watches when you look at the surface of the watches. Rolex Masterpiece replica watches
we don't think it is reasonable to spend hundreds thousands dollars to buy a decorating watch. you can use those money to invest in other industry which will return you good profit.
here you just need to spend 100-200 dollars to buy a replica rolex watches. Louis Vuitton replica watches are made by the rating 1:1 according to the original watches, and you can't distinguish the original and the fake watches when you look at the surface of the watches.
Wow - looks like the container business has been a very very good business to be in for a long time.
How do I get a piece of that action?
I can't believe that barrack obama will increase in the income of 95% of the population by 500% more than McCain. Yowzer!
"Wow - looks like the container business has been a very very good business to be in for a long time."
Do you mean making them or moving them?
A-mouse,
go short
<a href="http://img329.imageshack.us/my.php?image=peterschiffsheartattackmj0.png>This chart is dedicated to Popeye, and should be looked at by all Euro bullz
Anak -
I mean making them or even better just owning them and leasing them to the shipping companies.
OT- I'm looking for the link to the Dow Futures; I want an idea of what to expect tomorrow. Anyone know the link?
The strong seasonality developing in reent years in the container numbers is quite interesting. Is that when they haul all the Christmas crap in?
<a href="http://www.ino.com/>www.ino.com provides 10-minute delay (free) e-mini contracts (seen on right-hand side)
OT -
"Chinas Central Bank Is Short of Capital", by Keith Bradsher, New York Times, September 4, 2008.
A-mouse,
I thank you for the honor... it is my hope you will allow me to bank it {in my backyard}, just in case we come to disagree at some point in the future.
Hmmm. Only 99 visitors online. I'm surprised there isn't more considering the state of the market.
NYT link didn't work, trying this:
Main Bank Of China Is in Need Of Capital - NY Times
"owning them and leasing them to the shipping companies."
Cudda been. I understand that much of the previous break bulk cargo (think grains) have had to be moved to containerization simply for lack of steamer capacity. This may account for a part of the rise in TEU's ex- LB and LA.
Takes a long time to bring on more capacity in break bulk.
Right now I'd be also interested in rail stock manufacture. Winter was talking about it a while back, before he went subscription....
the real story behind the Euro cracking is three fold.
It starts in the Baltics, being financed by the Nordic banks. The Baltics are about to go under, and I mean hard. This specifically calls into question Swedbank (aka Hansabank).
This is where it gets tricky, When the Euros get wind of this the inflation starts East to West....France or Italy will balk on the Euro....its a race to the bottom people.....The Germans dont even want Euro printed in Italy already....The Irish will vote until they get it right.....just my wingnut conclusion.
"Is that when they haul all the Christmas crap in?"
Exactly, and pay top $ for freight. You'll also notice, I think, a recent aggrevation of the seasonality, which is hard to figure out.
Contra wise, there are also bulky imports that come in during the spring. Think lawn furniture, barbeques and sporting goods. Cheaper to move then.
I'm pleasantly surprised by the minds this site brings together.
Just a bunch of born-n-bred ... !
In other news... recreational marinas, in a bid to stay profitable, have invested heavily in upgrading their slips to take advantage of the burgeoning demand for tender-based "micro container" shipping.
Some Chinese manufacturers have flatly refused containers altogether, and are simply coating their boxed merchandise in wax, setting them adrift and hoping for a favorable wind to carry the packages to a still solvent port of call. Corked bottles have conveniently been included for ease of payment.
Anak and Anon,
There are 2 publicly traded companies in the US that own and lease shipping containers, TAL and TGH, and several other private companies.
Anak is right that more and more bulk items are moving to containers. In addition to it being partially a function of bulk capacity, it simply is more logistically efficient and cost effective to move some of these bulk goods in containers rather than bulk ships to drayage to rail cars.
The container as really changed the way products move and will continue to do so in the future.
Anon is right that it's been a very good business for a long time.
FYI .. Containerization is another one of those innovations that were largely brought to you by the hated Federal Government.
Although some shipping companies and rail lines had used containers before, it wasn't until the US Army developed standard sizing and construction, that containerization (and globalization) really took off.
Containerizatio - Wikipedia, the free encyclopedia
We are all container-ized now.
... and don't get me started about the American Civil War's effect on standardizing men's clothing.
"micro container" shipping
It's not exactly JIT delivery, but the currents do their job according to the friendly floatees:
275 – The Friendly Floatees’ World Tour « Strange Maps
Will U.S. exports continue to grow as economic growth slows or turns negative for U.S. trading partners?
My guess is exports will slow. However I also believe non-oil imports will decline even more UNTIL the dollar significantly strengthens - say to $1.10-1.15 vs euro and >130 yen to the dollar. RMB has to get back to something like 8:1... until that happens imports will be weak & their producers 'marginal'.
And will a combination of some U.S. export growth and lower oil prices provide enough of a cushion to keep the U.S. out of a severe recession?
I have no idea - I doubt it personally. Too much debt to push through the python to not be noticed.
But I would still expect to see domestic producers increase their market share. Most all will stay working just working hard for a whole less purchasing power. I see that everyday - help wanted in front of factories all over the Midwest w/ starting pay in the $11 range... was in one today... expanded & expanded again (4X the size it was mid-90s... pay the same). Busy as hell...
Corps will feel the same pinch - running hard on the revenue treadmill and generating far less earnings in the process.
JMHO.
Europe is in far worse shape than the US. Not just the financial system but every aspect of the society.
The Euro nations debt structure is a recipe for guaranteed failure. For a microcosm of European problems
The International Monetary Fund (IMF) has warned Swedish banks that the global credit crisis means increased risks for Swedish banks investing in the Baltic area.
In their country report on Sweden, the IMF pinpointed Swedbank and SEB banks as two banks with extensive investments in the Baltic area.
The banks are active in Estonia, Latvia and Lithuania where economic growth has slammed to a sudden halt and where rising inflation is a fact .
Over the forcast period Latvia looks to be borrowing nearly a years GDP! That is in a country which is clearly in some economic difficulty right now!
Swedbank is the lender to Latvia, Estonia and Lithuania these countries are running close to 25% Current Account deficits.
All of Eastern Europe is just as bad. Unfortunately for the ECB, the member nations have given it the ability to only fight inflation. The ECB has no taxing authority, no way to support the Euro. The Euro money supply growth over the last year has been 17%. This is throwing in the towel on inflation. Interest rate is immaterial if you can get moneys. Euro currency is being passed out.
Next step which country bails on the Euro first. I think France, but a good chance is Italy. Currently Italian issued Euros are not as desirable as German issued Euros. No sovereign nation is going to let its people go down the tubes to support a pan European currency.
dryfly,
But isn't the mfg commodity driven, I mean by the huge run-up in energy (oil/gas), metals, and esp. agriculture, producing more machines to extract/refine/deliver such products? What about if (when) commodities take a seriously nosedive? TIA - fan of your work
my guess is... in accord with dryfly ...Too much debt to push through the python to not be noticed."
the existence of debt cancels much of the need to move goods. But, again, that's just my humble opinion.
Yossarian,
Actually, the US govt has been a disaster as it relates to container standardization. The international standard for decades has been twenty foot equivalents (or TEUs) - so containers are made in 20 foot units or 40 foot units allowing them to fit nicely on the ships that are specifically designed for that dimension. The containers that going through the port at Long Beach are international containers measured in TEUs. In the US, domestic containers (those that move goods within the US) now have a standard of 53 feet. Less than 10 years ago that standard was 48 feet - why? Who knows - blame some lobbyist. The problem with having a different standard than the international standard is obvious - it forces those 53 ft and 48ft containers to remain strictly domestic which makes it necessary to move shipments from 53 foot containers to international containers at times which obviously costs more money and time. The problem with continuously changing standards is that it effectively obsoletes the older containers quicker as well as the rail cars and truck chassis that were designed for these older containers.
All of that makes the domestic container business a very bad business while the international container business is a very good business.
The publicly traded container leasing businesses that I mentioned before only deal in international containers so they dont have to deal with the "non-conforming" US standard.
OT (but its after 6):
There are few of these deals now priced at par or above, which is bondspeak for they are all underwater. We, as well as our SWF and central bank counterparts, are reluctant to make additional commitments.
Bill Gross is such a effing cry baby.
Will someone please call B.S. Bernutty and tell him to pick up his friggin' containers. It's been a year since he said it was all contained and yet he still has come to Long Beach to pick these damned things up.
If he doesn't show up soon I'm gonna build some damned condo's out of them.
Container Condo To Be Built In Detroit : TreeHugger
Cheers,
squeezed,
Yes that's true, but the man has "the man's ear" - put that in your pipe and smoke it.
Thanks, anonymouse.
Popeye,
"Yes that's true, but the man has "the man's ear" - put that in your pipe and smoke it."
A-gah-gah-gah-gah-gah-gah!
Cheers,
The Baltics screwed up royally by getting in bed with the West. No nat resources, just some amber trinkets.
It's a revenge against the Teutonic Knights and the Livonian Brotherhood.
Imports down? I hope my pink plastic flamingos make it before X-Mas.
"Currently Italian issued Euros are not as desirable as German issued Euros."
If I could trade 95 German euros for 100 italian euros I'd be well on my way to world domination.
squeezed,
""Currently Italian issued Euros are not as desirable as German issued Euros."
That's how F'd up the Euro is. Stoopid system. It would be like someone was hoarding $'s printed issued by some FRB and selling say NY.
Cheers,
Misean
I'd appreciate it if you would take a slug of your favorite drink and say that A-gah-gah-gah-gah-gah-gah!" part in English... Just asking for a favor.
Ross,
"The Baltics screwed up royally by getting in bed with the West."
Yeah no shite. Russian supply lines are like 100 klicks. NATO's are just a weee bit longer.
Cheers,
Hurr Ike,
The 53' standard fits the maximum length of U.S. trucks. The old standard was 48'.
It's for the truckers.
Popeye,
"I'd appreciate it if you would take a slug of your favorite drink and say that A-gah-gah-gah-gah-gah-gah!" part in English... Just asking for a favor."
You think I didn't? It's 'tini time. I've already stopped by Lefty's and had a few.
Cheers,
"cracker writes:
All of Eastern Europe is just as bad. Unfortunately for the ECB, the member nations have given it the ability to only fight inflation. The ECB has no taxing authority, no way to support the Euro. The Euro money supply growth over the last year has been 17%. This is throwing in the towel on inflation. Interest rate is immaterial if you can get moneys. Euro currency is being passed out.
Next step which country bails on the Euro first. I think France, but a good chance is Italy. Currently Italian issued Euros are not as desirable as German issued Euros. No sovereign nation is going to let its people go down the tubes to support a pan European currency."
You point about the ECB having limited powers leads to an interesting point. The euro area countries are now unique in that they no longer have complete control over their central bank, and thus pose a chance of default. (Other countries can inflate away their default risk.)
That's been a favorite fringe theory floating aound the hedge fund community for years. However, the mainstream opinion is that far too much political capital has been invested in the euro to allow it to fail, even if the currency does not make complete economic sense.
Another obvious reason that the euro is not easily undone is that the entire banking system would be destroyed if a country left the euro, as it would create huge currency losses on their cross-european loan books.
Misean,
I had an outrageously great day too... we are very much in the same place.
Bill Gross is complaining that he can no longer mis-price risk and pocket the difference plus fees.
WHere's Sebastian and what does the Wright Model B suggest about the economy's imminent peril?
bond guy writes:
Euro currency is being passed out.
Yeah, most drug deals switched over to using Euros because they print a 500 Euro note - fits more Euro/$ in a suitcase
But isn't the mfg commodity driven, I mean by the huge run-up in energy (oil/gas), metals, and esp. agriculture, producing more machines to extract/refine/deliver such products? What about if (when) commodities take a seriously nosedive? TIA - fan of your work
Anonymouse | Homepage | 09.04.08 - 9:20 pm | #
Absolutely. That and aerospace. But that demand is real - question is at what 'price'.
In other words the world needs food, needs energy, needs transportation - the base demand ids there. The world will NOT go without food easily. Nor energy. The only question is what will the money supply be worldwide to price that demand? I'm guessing inflation - others deflation - we'll see.
I mean folks who work in 'discretionary goods & services' don't fathom demand for basic needs. These really are pretty inelastic. We have 2-3 billion additional folks now in the world economy shifting from subsistence to urban living (even if poor squatter urban)... that begs the question who is growing the food & working the mines they used to work?
Answer is a lot more machines & a lot more energy to run those machines (requiring even more machines)... currency exchange rates & productivity tell you who will be making those machines (or at least who will be busiest making them)... money supply tells you the prices they can charge in fiat.
The US is getting busy but we aren't making money in purchasing power doing it. Its a treadmill - I've been bullish on business but bearish on profitability.
However that beats the only available alternative which is NOT being busy and even poorer (except for a few asset heavy wealthy individuals).
I think the Finance Ministry & PBoC will work to change that (see John M's NYT link above - VERY good IMO).I think they realize their miracle wasn't due to superior Chinese character or even 'hard work'... they'll get back focusing on what got them there. Then it gets interesting in a not so nice way.
It's getting scary out there.
We're quickly approaching the "Time for Politicians to Panic and Do Something Really Stupid that Hobbles Our Economy for Decades" phase.
Rob Dawg writes:
Bill Gross is complaining that he can no longer mis-price risk and pocket the difference plus fees.
Dawg, let me ask you. Doesn't Gross have access to important ears ? Should we sort of expect his whines to be answered ? He does seem to have a track record for unanticipated pre-announcements, doesn't he ?
squeezed,
"Sure Brain, but without ears we'd look like weasels!"
Anyone know why the futures took a massive dirt nap around 5PM, then sprang back from the land of the dead?
Somebody leaked the non-farm payroll numbers, perhaps?
Or just another hedge fund being blow to smithereens?
dryfly writes:
I mean folks who work in 'discretionary goods & services' don't fathom demand for basic needs. These really are pretty inelastic. We have 2-3 billion additional folks now in the world economy shifting from subsistence to urban living...
That begs the question, are they coming into their own material world because the U.S. increasingly demanded exports from their countries, purchased via vendor-financing w/ recycled dollars from one asset-bubble to the next, that is now coming to an end? They'll go back to eating mud, and commodity machine producers like John Deere will go back to '90s level output. Not likely I take it?
CR is a great blogger and does outstanding charts, but on the trade deficit he is just off key.
The issue with the trade deficit isn't just the direction of those black, red and blue lines. It's where they are and the persistency of where they are.
Any month that the blue line is below -$30 (or so) is a bad month for the U.S. economy and dollar. Because no country has ever sustained such huge trade deficits and they have cumulative erosive impact on the value of the currency. You can't perpetually export $30 billion of wealth per month and have a strong currency.
CR is right that the black line (oil) will flatten out in the months ahead and maybe improve. But the red line will drop sharply. And the blue line will stay in the range of about -$50 to -$60 per month, on average.
Don't get caught up in this strengthening dollar crap. The dollar can't strengthen permanently or meaningfully until the blue line moves well back toward zero. Maybe it can make gains against a weakened euro, and thanks for the excellent commentary here about why the euro is weak. But there's other currencies in the world besides a weak dollar and a weaker euro.
I posted a few days ago about my observations of traffic at the Port of Charleston. Summary: My guess is import/export shipping numbers on the East Coast are going to show a steep drop very soon.
On the Baltics. I wanted to go to Kalingrad while I was in the Baltics. Basically my family said "No way!" Maybe I should not have shown them the website where former Soviet army personel will escort you (armed). Or the tour people who advertise their good connections with the local police and military.Yet you can ride in tanks! Even the T-36!
Basically in that area it is amber sent to Poland and controlled by the Russian Army. The other major activity is going to Germany and stealing Benz's for resale back in the Motherland. Drive fast through Poland!
Anak-
JIT is so 80's. In the new age of "Green-think", we have no need for that impulsive commercialization enabled by large ships traversing the world's seas delivering an ever tantalizing assortment of the world's bounty in record time to our salivating wallets.
(channeling Fletch) "We have no need but for the creature comforts...and lots of 'em"
Now, if you'll excuse me, I have to go rinse my hair shirt.
bearly,
"WHere's Sebastian and what does the Wright Model B suggest about the economy's imminent peril?"
The Wright Model B Flying Turkey is currently doing this:
wkrp in cincinnati thanksgiving turkey bomb - Video Search Results - AOL Video
Cheers,
c_s,
Dunno but most of the currency crosses performed similarly, for example USD/JPY moved about 150 pips and since has taken it all back off...
IF I EAT THE OLIVES - CAN THAT COUNT AS DINNER ???
Does anybody but me think the Republican thing is just becoming a freak show?
I mean, millions of people are watching their families money disappear in 401ks and 529 plans, and the Republicans keep talking about their own friggin' families and how great (and rich) they are??
Dawg, let me ask you. Doesn't Gross have access to important ears ? Should we sort of expect his whines to be answered ? He does seem to have a track record for unanticipated pre-announcements, doesn't he ?
The boy who cried wolf. He's burning good will in a desperate attempt to save his companies' positions.
Nova,
The height of hubris was shortly after the wall went down. The Germans were so full of themselves that they posted a sign in the ban stating that train service would shortly be restored to Kaliningrad.
Like they were ever going to get it back.
Interesting quote from that article on China's Central Bank:
To keep the banks strong when they were getting such little interest on their reserves, the central bank has kept deposit rates low. The gap between what banks are paying on deposits and the rates they are charging ordinary customers to borrow is several percentage points. This amounts to a transfer of wealth from ordinary Chinese savers to the central bank and on to Americans who are selling their debt to the Chinese.
Aren't central banks just peachy?
I'm surprised Toll Brothers held up so well . I know they had fewer cancellation but , they sold less .Less buyers less cancellations duh. I guess bob wanted to hold up the stock price so he can shed more shares. Are investors buying Toll ... any thoughts anyone else short Toll
rich writes:
Don't get caught up in this strengthening dollar crap. The dollar can't strengthen permanently or meaningfully until the blue line moves well back toward zero.
You made some excellent points. However, CR's chart is in nominal dollars. The U.S. had an unsustainable trade deficit (albeit not as large a % of GDP) in the late '90s and the $ was relatively strong. In my view, there's very little value placed in forecasting currency movements based on relative trade deficits (key here: in major pairs, like USD/Euro, USD/YEN, YEN/CND, etc). Currency trading has everything to do with expectations for future relative real (and nominal) interest rates. And that's over the short and long term. So a trade deficit out-a-whack like ours could play in to the above equation; I just don't see it as a significant factor.
That being said, I've thought since around '03 when I started finding an interest in all things economics/finance, that the resolution of the U.S. trade deficit would occur by a major world-wide recession (depression?), with U.S. imports slowing YOY a bit faster than exports slow, but having marginal positive benefits on U.S. GDP. I still hold that view, and it seems to be playing out. I'm still in the deflationary sh*t storm camp.
"Popeye writes:
Dawg, let me ask you. Doesn't Gross have access to important ears ? Should we sort of expect his whines to be answered ? He does seem to have a track record for unanticipated pre-announcements, doesn't he ?"
As the head of the largest bond fund in the U.S., I'd certainly hope he has access to important ears.
Based on what he's publicly released, Pimco's Total Return Fund is heavily overweight Agency debt. Which will probably mean that Pimco is the probably the largest non-bank holder of Agency paper in the private sector (but note that the holdings of central banks will dwarf Pimco's). Which in turn implies that he would be a major player in the creditor's committee in the scenario of the Agencies being restructured. (The central banks may have a lot of Agency holdings, but they have zero experience in restructuring debt.)
Therefore, his opinions on the matter will have to be taken into account.
OT: Watching RNC "Triumph of The Will" comes to mind for some reason...
Leni Riefenstahl - scene from "Triumph of The Will"
YouTube -
I mean making them or even better just owning them and leasing them to the shipping companies.
my old landlord married a guy who produced some software to track all those silly containers all over the world..
Multi-8 figures deep!
rich writes:
Does anybody but me think the Republican thing is just becoming a freak show?
RICH,
My wife made a very good point last night as I commented on the GOP convention [which I forced her to watch]. She simply said, "You do realize that they probably felt exactly the same thing you do now, when the other program was playing."
I married a pretty smart person.
The Euro is more a flawed currency than the American peso. It will come unraveled even sooner than I thought.
The disparity among the Euro countries argues for total chaos at some point.
Economics is stronger than politics. But elections are run by politicians. Politicians buy votes.
Hmm Luigi buys votes with Euros campaigning on a promise of the return of the Lira.
Actually I miss my D-Marks.
That begs the question, are they coming into their own material world because the U.S. increasingly demanded exports from their countries, purchased via vendor-financing w/ recycled dollars from one asset-bubble to the next, that is now coming to an end? They'll go back to eating mud, and commodity machine producers like John Deere will go back to '90s level output. Not likely I take it?
Anonymouse | Homepage | 09.04.08 - 9:47 pm | #
I don't know - really no idea.
I know this - I'm in Waterloo IA tonight and Deere is buzzing. Big plans for big expansion - hiring too. They've over done it before and been spanked but not often - they are usually pretty savvy when it comes to where they put the capacity - adding it in NAFTA Zone says a LOT about what they see regarding exchange rates going forward.
BTW - Deere was one of the earliest adopters of Globalization - started in the 60s WAY before automotive. So if they sense its time to put more capacity state-side something is up or they are horribly wrong.
It isn't like our deficit will go away overnight though - but the forces pushing for rebalancing are starting to be felt.
Again - that doesn't mean we'll be 'richer' just working harder so we won't be so much more poorer. Before this we were being subsidized by folks like BoJ & PBoC - they will try to continue but from John M's NYT link...
China spent more than one-eighth of its entire economic output last year on foreign bonds, and then picked up the pace during the first half of this year. Chinese officials have suggested in recent comments that they are increasingly interested in stopping the yuans rise, and thus are willing to continue buying foreign securities to support the dollar. In fact, the yuan weakened slightly against the dollar last month after 26 consecutive months of gains.
How long do you think they can continue doing that and still be increasing their peoples' standard of living?
We are at a pivotal threshold.
I know this - I'm in Waterloo IA
I grew up in Ottumwa.
energy,
"Sure Brain, but without ears we'd look like weasels!"
05 brainania - Video Search Results - AOL Video
Cheers,
"We're quickly approaching the "Time for Politicians to Panic and Do Something Really Stupid that Hobbles Our Economy for Decades" phase."
Don't know about that, but in the near term I would say that the probabilities of the market falling further to test the low and then by the 16th a policy induced intervention short covering rally is a pretty safe bet.
dryfly,
OT - On take your child to work day, did you just drive them across the mid-West?
OT - On take your child to work day, did you just drive them across the mid-West?
Anonymouse | Homepage | 09.04.08 - 10:05 pm | #
Yes. Just like my father did the same thing for (to) me...
dryfly,
"I know this - I'm in Waterloo IA tonight and Deere is buzzing."
So long as you aren't placing your right hand in your shirt over your heart and wearing a funny hat. Sounds about ominous to me.
Cheers,
Dryfly,
Deere is a totally awesome company along with Cat and a few others like Timken and Briggs.
I was always a pleasure following these companies except for the mid winter updates in their northern climes.
Cat was all ga ga in the 70's about the Itiaupu dam in S. America. I guess that damn Chinese dam is an even bigger project.
A cyclical is a cyclical but some are better than others.
Misean - I'm not fond of Waterloo BUT I'd do anything to get away from the Twin Cities this week - if ya know what I mean.
Anonymous writes:
"...a policy induced intervention short covering rally is a pretty safe bet."
Popeye says it's only a matter of time ... it is not a matter of "if"....
A cyclical is a cyclical but some are better than others.
Ross | 09.04.08 - 10:11 pm | #
Exactly. They'll get spanked again someday - but not as badly as their competitors will.
Misean,
The best part: "The money, we'll get it from the US government!"
Never fails [sigh]
Popeye writes:
Anonymous writes:
"...a policy induced intervention short covering rally is a pretty safe bet."
Popeye says it's only a matter of time ... it is not a matter of "if"....
I'll pull out <a href="http://www.haloscan.com/comments/calculatedrisk/3125702401143465860/?dt=1219457113#552479>this comment again when we hit my target:
Now I'm speculating, with solid evidence, that the SPX is doing a monster A-B-C down to around 1080. Only question then is, what will the Fed respond with during that panic? I suspect it'll be merging a couple of large national banks.
Who here had those FXE puts...!
someone in these parts was chattin up that trade bigtime, had the sep 150's i believe.
Stellar Call!
Don't get caught up in this strengthening dollar crap. The dollar can't strengthen permanently or meaningfully until the blue line moves well back toward zero. Maybe it can make gains against a weakened euro, and thanks for the excellent commentary here about why the euro is weak. But there's other currencies in the world besides a weak dollar and a weaker euro.
I don't think it's appropriate to use words like "strengthening" when you're comparing one pile of trash to another.
The dollar isn't getting stronger; the Euro's stench is just getting worse faster at the moment and is attracting some of the flies away from the USD.
That doesn't mean bucky doesn't belong in the landfill.
Anonymouse writes:
Popeye writes:
Anonymous writes:
who said what
Dryfly,
We need some traveling salesman jokes. Skwerls go only so far.
Who's up for a CR and Tanta convention next summer in Glenwood Springs Colo?
The rich guys like MS and Misean can stay in Aspen and the rest of us pitch tents by the Crystal River.
We can unmask CR and see if Tanta wears feathers.
I did go in with some execs from Liberty Media a few years back and we have an exclusive lease on a private trout lake. Primary rule is anything under 7 lbs, must be released.
big banks fanfare shotgun weddings.
Im going to Frannies house for the afterparty.
Re:The Euro
Ole Ben Frankin said during the Declaration confab that
"We must all hang together or we shall all hang separately"
I think that is true for the EU and the Euro is the everyday face of the EU.
Putin's invasion of Georgian territory was as stupid as Iraq.
An external enemy is always a strong prod to working out differences. Putin just gave the EU that enemy. Somehow with or without the new constitution they will find a way to limit Italian spending. Ditto the Baltics.
Lehman Brothers now in the "sheep business" LMFAO!!:
404 - Page not found
We can unmask CR and see if Tanta wears feathers.
Sign me up Ross - though to get CR there we'll probably have to organize a 30 mile hike or two - for him, not me. My knees say 30 mile days are behind me.
Who here had those FXE puts...!
someone in these parts was chattin up that trade bigtime, had the sep 150's i believe.
Stellar Call!
shazzammm
Just for the record I never said buying FXE puts might be a good idea back with it was close to 160.
This isn't an investment site. And it would be foolish and irresponsbile to make that kind of suggestion. Not to mention disrespectful to the site owners.
I'm a better person than that.
And here's another excellent point:
bond guy writes:
"Popeye writes:
Dawg, let me ask you. Doesn't Gross have access to important ears ? Should we sort of expect his whines to be answered ? He does seem to have a track record for unanticipated pre-announcements, doesn't he ?"
As the head of the largest bond fund in the U.S., I'd certainly hope he has access to important ears.
Based on what he's publicly released, Pimco's Total Return Fund is heavily overweight Agency debt. Which will probably mean that Pimco is the probably the largest non-bank holder of Agency paper in the private sector (but note that the holdings of central banks will dwarf Pimco's). Which in turn implies that he would be a major player in the creditor's committee in the scenario of the Agencies being restructured. (The central banks may have a lot of Agency holdings, but they have zero experience in restructuring debt.)
Therefore, his opinions on the matter will have to be taken into account.
dryfly,
"I'm not fond of Waterloo BUT I'd do anything to get away from the Twin Cities this week - if ya know what I mean."
Hell yes I do. I was playing off of Waterloo...and Napleon...Hand in shirt over heart and funny hat.
Good luck tho.
Cheers,
I should get plastered and ask questions more often.
energy,
"The best part: "The money, we'll get it from the US government!""
Exactly why I picked that episode to post.
God I loved that show.
"I think so Brain, but how do we get the hiipos into the rubber suits?"
Cheers,
I am a Sailor and running presently US/China-Japan run. Our Ships are now running at slow speed compared to last year or two, as per orders from our Owners.
Can someone tell me if we may lose our jobs soon, if this weakness persists.
Footonthehill,
Beg to differ. If you want some insight on Russia, I suggest Mauldin's site. He has a great piece from Stratfor about Solzhenitsyn and the 'soul' of Russia.
I met Solzhenitsyn in 02 at a reception in Moscow. Bush should have looked into HIS eyes to see the real Russia.
ac writes:
Interesting quote from that article on China's Central Bank:
To keep the banks strong when they were getting such little interest on their reserves, the central bank has kept deposit rates low. The gap between what banks are paying on deposits and the rates they are charging ordinary customers to borrow is several percentage points. This amounts to a transfer of wealth from ordinary Chinese savers to the central bank and on to Americans who are selling their debt to the Chinese.
Aren't central banks just peachy?
Thank you AC - I had missed that.
Ross writes:
Beg to differ. If you want some insight on Russia,
... you should have listened to Palin's speech last night.
{ sorry Mock, I had to }
"Can someone tell me if we may lose our jobs soon, if this weakness persists"
Won't be long. First thing to get cut after the low hanging fruit, like operating discretionary expenses (excess fuel) is discretionary tech, new initiatives etc. Next it's heads.
ac,
"I don't think it's appropriate to use words like "strengthening" when you're comparing one pile of trash to another."
Yeah, what matters is who's pile of shite is growing faster than whom's. Appears EU is growing faster now.
hooocoodanode?!
Cheers,
Oh Popeye,
Haven't voted since Tricky in 68. Who is the Paladin, "Have gun will travel"?
About Olive Oil, I've always wondered.
Extra virgin, first press or no?
From NYT link above
He said the officials blamed the United States and believed the controversial assertions set forth in the book Currency War, a Chinese best seller published a year ago. The book suggests that the United States deliberately lured China into buying its securities knowing that they would later plunge in value.
A lot of policy makers in China, at least midlevel policy makers, believe this, Mr. Shih said.
Google for "us china fdi" I got this
Foreign Direct Investment (FDI) in China
So in case those GSEs failure, and the US Gov refuse to pump, or print, I guess it's legitimate in the eyes of Chinese midlevel policy makers to "nationalize" those FDI from US during the last 30 years ?
Just asking...
Ross,
"Extra virgin, first press or no?"
Naw way to flat. That's just the cheap stuff. Unfiltered has much more body.
Cheers,
Popeye writes: Don't mess with Olive... she's ma goil - "we'll drill them now" - does not apply
Post tips, rumors, memos and other good stuff anonymously at HALOWARSOWNAGE - Index
dry-
Briggs??? they may be a great company on paper but their engines...
Well, they used to build a good engine. But, I'd bet dollars to donuts their equity wasn't worth squat 25 years ago when they did.
Anyway, have a safe trip and good luck!
Misean writes:
"I don't think it's appropriate to use words like "strengthening" when you're comparing one pile of trash to another."
Yeah, what matters is who's pile of shite is growing faster than whom's. Appears EU is growing faster now.
Popeye says, until you open the can, you can only imagine that there are still good fish in there.
Popeye shoudda said "sardines" insteada fish.
Pat my butt and call me a dyke, those Asian markets are getting whomped overnight.
We usually teeter totter with Asia. This is not a good sign.
Hey, some SWF's funds are run as hedge funds. Maybe we are lookin in the wrong place for blowups?
Holy Hiroshima Batman...Asia's getting pounded.
Cheers,
Ross,
What ever your personal preferences may be .... I think you are smart.
There's a big difference. The Democrats were programmed to say to diverse people, "even if you don't like us much, here's why you should give us a try."
Every time I turn around, the Republicans are pissing off another large group of voters.
The thing about giving parents free choice among private schools, instead of sending children to failing public schools, is an old dead card. Nobody actually believes it will come to pass.
It serves one purpose, which is to piss off tens of millions of public school employees.
But they can't help themselves.
My boss and I were talking after the market close today. Kind of a post mortem or surveying the wreckage talk. We've been sensing that the market smells like a big liquidity squeeze, but we couldn't identify the source.
Between the China Central Bank, the Korean won F/X issues, Bill Gross, and Lehman Brothers, I am suspecting that holders of mortgage-backed and Fannie/Freddie paper are moving from denial to appreciating the gravity of their predicament.
F'ing B.S. The BBC is showing the Rebooblicrat crap rather than Ramsey's Kitchen Nightmares.
Sucks living in an empire.
Cheers,
"Extra virgin, first press or no?"
like Bristol Palin?
Norka West writes:
My boss and I were talking after the market close today. Kind of a post mortem or surveying the wreckage talk. We've been sensing that the market smells like a big liquidity squeeze, but we couldn't identify the source.
Between the China Central Bank, the Korean won F/X issues, Bill Gross, and Lehman Brothers, I am suspecting that holders of mortgage-backed and Fannie/Freddie paper are moving from denial to appreciating the gravity of their predicament.
Popeye says: getting over denial is step one - that's nice - or to quote Martha - "it's a good thing"
badger boy writes:
"Extra virgin, first press or no?"
Popeye writes: It's none of your friggin business.
The container post made me remember that today I drove past a house's driveway that had a rental dumpster with "Rent A Dump" as the name of the dumpster's owner.That made me think of other bad names I've seen people use.One that I'll always remember is a local Bar-B-Q joint that had a slogan they used in the paper,fliers and on their sign was "When You Can Smell Our Butt...You're Here". I hate to be cruel,but I always hope people that come up with things like that go broke. I hope that the people who start the first of the coming Squirrel stands don't come up with funny/silly names like the ones that I'm inviting you to come up with now. Like "The Other Rat Meat Stand".
My life has slowed down to the point where I can't move as well as I once did.
Norka, take Occam's razor.
All the hedge funds geared through Lehman.
Think about it.
They need capital/cash so they call the loans and sell collateral.
Delevering on a massive scale.
Now the rest of the 2 and 20 crowd are thick into the same things.
Hence this huge commodity smash up.
Can I really buy some ADM that cheap?
Yup.
GDX, check, glod, sliver, etc.
The only really good telltale is the disconnect in gold and silver from the physical market, which has actually propped up the paper market, albeit through potential deliveries;-}
Now, nothing like the margin call of cthulu to send fools to their dreamquest of unknown kadath.
Call me Sam.
Someday this war's gonna end...
Indonesia's central bank sold dollars on Friday to support the weakening rupiah, traders said.
Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
Sucks when the carry trade unwinds and the hot money is running like squirrel with his tail on fire.
Rich is right on. My wife is a public school employee and I had her on board with McCain until tonight when he chose to beat up on public schools. She went out and chipped the bumper sticker off her car before she went to bed. Why would he take a dumb shot like that?
The Philippine peso recovered from its weakest levels in nearly a year after the central bank sold dollars on the market on Friday to defend the currency near the 46.90-per-dollar level, traders said.
Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
Asian contagio
Um sold dollars, nope sold agencies and treasuries.
More fuel on the fire.
We don't have much foreign holdings in our treasury accounts either.
So now we wait and see which shoe drops next.
Someday this war's gonna end...
Hanging by a thread asks:
Why would he take a dumb shot like that?
Popeye suggests, he said it because he believes it or has to pretend he does if he is going to represent the powers who run the GOP.
That's my honest opinion and not a cheap shot.
Sailor writes:
I am a Sailor and running presently US/China-Japan run. Our Ships are now running at slow speed compared to last year or two, as per orders from our Owners.
Can someone tell me if we may lose our jobs soon, if this weakness persists.
Sailor | 09.04.08 - 10:38 pm | #
Hey I always wanted to know what is the differnce between a between a sailor and a seaman? I have met many merchant seamen but not many merchant sailors
Sailor writes:
I am a Sailor and running presently US/China-Japan run. Our Ships are now running at slow speed compared to last year or two, as per orders from our Owners.
Can someone tell me if we may lose our jobs soon, if this weakness persists.
Popeye writes: I was recently taught a lesson about Trolls - and suggests that you exercise care.
Oh Popeye,
My lovely bride of 37 years is convinced I go to Moscow for superior vodka.
Sorry bout the dyke remark. Just feelin frisky and a sinope mis-fired.
Like your posts, by the way.
About double standards (gender)
Video: Sarah Palin Gender Card | The Daily Show | Comedy Central
Hey, isn't 1080 about 61% of the Fibbonacci line? We have a nice Merlot from Fibbonacci too, aisle 3, next to the church keys.
The Malaysian central bank was suspected of selling dollars on Friday, joining counterparts in South Korea, Indonesia and the Philippines in defending their weakening currencies.
Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
Japanese are repatriating a lot of dough to the delight of China.
Ross,
I admire you as well. To be honest, I was at first flattered to have my posts used as a launch by others - but increasingly began to wonder whether I had become the butt-end of a larger joke - - in the end, I decided, hey, I yam what I yam
A mouse wrote
Yeah, most drug deals switched over to using Euros because they print a 500 Euro note - fits more Euro/$ in a suitcase
Anonymouse | Homepage | 09.04.08 - 9:42 pm | #
yeah, dont you just hate it when your Franklin's are all dusty with that white powder shit
Leftys Liquors writes:
We have a nice Merlot from Fibbonacci too, aisle 3, next to the church keys.
Oh Lefty, you'll bury us all
Lefty,
I posted that at 1172, but I could be wrong. Naw, I'm right.
Shouldn't the trade deficit shown be on the positive axis? If Deficit, being negative, is shown on the negative axis isn't that a surplus?
Just asking.
ac wrote
...The dollar isn't getting stronger; the Euro's stench is just getting worse faster at the moment and is attracting some of the flies away from the USD.
That doesn't mean bucky doesn't belong in the landfill. @ 10:20 pm | #
we're all goin to hell arnt we
doesnt it feel like mid march 08 again???
shendi,
I had a very good day today, and you are too many martini's late to ask such a question.
shendi bhatta
St. Louis Fed: Series: BOPGSTB, Trade Balance: Goods and Services, Balance of Payments Basis
Think this is a better pictur of reality.
Mock,
S&P will bounce @ or near 1214. Uncle Ben & friends have thus far mounted a stellar defense. As a matter of personal belief, I doubt today will cause them to give up the "game". But that's just me.
Anon @ 12:25
Thanks! That's much better. Trade balance it is.
Pops, pardone. No intention of ruining your good day, especially after the martinis.
Pops ?? LOL..... meet me tomorrow morning when the market opens.
Quick, go upthread!
CR posted photos of his hike.
Leftys Liquors writes:
Hey, isn't 1080 about 61% of the Fibbonacci line?
actually its right up close to the financial maginot line
ok, Mock,
I'm drawing that Fibbonacci line at 1172. Are you telling me I need to go back and check ??
Yup, mock turtle thats where it is.
popeye
lefty
i wouldnt know
but bet they will try to hold to some line in the sand...if they can
what 1,2 3, 5, 8, 13, 21, 34...has to do with it not sure
I'm on the phone to Warsh and things look bad for the opening:
In Japan, the benchmark Nikkei 225 index was down 2.9 percent at 12,196.47 in early afternoon trading.
Hong Kong's Hang Seng index tumbled 3.1 percent to 19,752.65, dropping below the key psychological level of 20,000 and hitting its lowest point in more than a year.
Hedge fund company Atticus Capital denied market rumors it was liquidating its positions and closing down and said it had a large net capital position and was looking for investment opportunities, the Wall Street Journal reported on Thursday. Atticus's two main hedge funds have been hit with losses of between 25 percent and 32 percent this year through August, but investors are largely sticking with it, according to unnamed investors cited by the Journal.
Hedge funds that picked on Lehman Brothers and Bear Stearns now are picking on each other," said the head of prime brokerage at a major investment bank.
A number of hedge funds are nervous that their investors might ask to pull out in the weeks and months ahead, amid a disappointing year for many funds. That's sparking anxiety in the market.
Atticus, however, says its investors are largely sticking with it, despite losses of between 25% and 32% in its two main hedge fund this year, through August, according to investors. Losses this month have not been dramatic, these investors say.
"As a firm we have had less than 10% of our capital put in for redemptions for September 30," says Mr. Barakett. "There are no funds that we are even considering closing down. Our flagship fund, Atticus Global, has had redemptions of about 3% of capital."
Part of the concern about Atticus, and about the health of other big hedge funds, stems from news this week that Ospraie Management, one of the biggest players in commodities, is closing its largest fund after substantial losses. Unlike Ospraie, Atticus doesn't have a trigger allowing investors to pull out if heavy losses are experienced.
Sept 1 (Reuters) - U.S. activist hedge fund Atticus Capital has lost more than $5 billion this year, a source familiar with the matter told Reuters, after its funds were hit by heavy falls in financial stocks.
Atticus, a high-profile player in deals such as Barclays' unsuccessful bid for ABN Amro last year, saw total assets under management fall to around $14 billion at end-July from more than $20 billion last year, the source said.
The losses were mainly due to a 32.9 percent loss in the $7 billion Atticus European fund from the start of the year to the end of August and a 25 percent fall in the Atticus Global fund.
Yep, now it's a global adverse feeback loop. This loop will feed on itself and all assets until there's not much food left. Let's say, around 2013, for an unlucky guess.
SHORT EVERYTHING
by Vanity Fair
September 4, 2008, 10:29 AM
One of the persistent memes in the Republican line of attack against Barack Obama is the notion that he is an elitist, whereas the G.O.P. represent real working Americans like Levi F-in Redneck Johnston.
It caught our attention, then, when First Lady Laura Bush and would-be First Lady Cindy McCain took the stage Tuesday night wearing some rather fancy designer clothes. So we asked our fashion department to price out their outfits.
Laura Bush
Oscar de la Renta suit: $2,500
Stuart Weitzman heels: $325
Pearl stud earrings: $600$1,500
Total: Between $3,425 and $4,325
Cindy McCain
Oscar de la Renta dress: $3,000
Chanel J12 White Ceramic Watch: $4,500
Three-carat diamond earrings: $280,000
Four-strand pearl necklace: $11,000$25,000
Shoes, designer unknown: $600
Total: Between $299,100 and $313,100
Wow! No wonder McCain has so many houses: his wife has the price of a Scottsdale split-level hanging from her ears.
(All prices except Lauras shoes and Cindys watch are estimates, and the jewelry prices are based on the assumption that the pieces are real.)
The comments about the euro are fascinating, but it occurs to me that many here might be missing something. A point which has nothing to do with the strong anti-euro bias of the English press (a non-euro country, after all). Or how silly rumors get repeated (nobody I know in Germany is paying any attention to their paper euros, except for sometimes checking 50 euro bills and up for the UV strip).
Europeans generally like the euro in terms of something which Americans never consider - being able to travel a good distance, and still spend the same money. Europeans travel much more than Americans, and have much more time to do so.
Further, most younger Europeans find the euro further proof that Europe is becoming something, a very hard to define something admittedly, but something new, and something which they are a part of. Lots of barricades are being removed, and most people seem to benefit from the increased freedom this brings.
Now imagine that some in the U.S. started seriously talking about making dollars 'regional' - that is, California dollars are not the same as Oregon or Idaho dollars. Further, imagine that those who buy potatoes from Idaho need Idaho dollars to pay. And that the trucks carrying them to Nevada need California dollars to buy fuel in California. Further, let's imagine that in California, the fuel tax is twice as high as in Oregon - would it make sense to then have Oregon dollars too, and then run the route just to save the taxes? I can go on - bank fees involved with dollar accounts that aren't 'native,' exchange rate costs in general, and exchange rate based risks specifically.
After seeing all the advantages of the regional dollar system more accurately reflecting economic reality, you wonder why Americans aren't clamoring for it.
This isn't to say the ECB will be able to keep the lid on, or that Italy's answer to Bush won't continue to be as stupid as he was in the past, but that the advantages of the euro are perhaps wider spread than most Americans can imagine, having had those same benefits .
And as a final note - Sweden is not part of the euro zone, and neither are the Baltics. For that matter, Eastern Europe basically isn't yet part of the euro zone, though of course, it is certainly within the euro's sphere of influence.
Our dollar just got thumped:
The New Zealand dollar was hammered today but it was part of a global flight from risk.
The NZ dollar dropped to US65.90c mid-morning for the first time in 22 months but made it back to US66.60c by 5pm.
It was a big fall because the currency had been around US68.80c at 1am and closed yesterday at US68.17c.
The decline was all about risk aversion and liquidation of so-called carry traded, said Murray Hindley, ANZ Institutional Bank chief foreign exchange dealer.
Those US exports just got a little bit more expensive today, oh and Gas too!
The global or globalized economy is facing a probable Depression.
How'd we get to this?
If you ask that, I've found that the mass media and popular blog editing I've mentioned avoid several subjects or areas of inquiry:
~You can't talk about what happened on 911 and how it affected our economy post-911 when this big debt bubble was really blown up.
~You can't talk about the crushing costs and the effects on the debt bubble economy of the post-911 Wars in the Middle East.
~You can't talk of central banking or Federal Reserve accountability for this post-911 debt bubble. The Federal Reserve is more revered than the U.S. Government and when the debt bubble enters a Depression and even the U.S. Government fails, the Federal Reserve will still be standing and owed more money than would be possible to ever pay back.
So you can't talk about this stuff in detail on any popular Econ blog thread for long before the 'troll' hunters or blog content police come along and pick a fight to bounce the politically incorrect blogger.
That's what some of these so-called flame wars are about. It's about a regulated control of content that has to be allowed as 'appropriate'.
Big down days like today send me to the 10 year charts, which point to targets 8%-10% lower at new lower lows in the ongoing bear market near DJIA 10,000, NYA 7300, SPX 1100 and NAZ 2000.
Recent silence from the fed open mouth squad tells me the banks and brokers finally have their seats and tray tables to the upright position and the unfolding parabolic descent could be complete within days.
@rent_to_own: I know the Baltics aren't part of the Euro zone, but I have a feeling they have the same issue as Ukraine, where cars and houses are priced in Euros, and even paid for with loans and mortgages taken out in Euros; normal economic activity happens in lats, litas or kroons, but every sub-prime mortgage has a large cherry of currency risk on top.
I'd be interested to hear where this stupid rumour about Germans not taking Italian-printed Euros comes from; I've only ever heard it from Americans ...
Tom: Probably the same place where the 'Europe is being invaded by muslims' mantra came from.
andy in nz writes:
Our dollar just got thumped:
The New Zealand dollar was hammered today but it was part of a global flight from risk.
The NZ dollar dropped to US65.90c mid-morning for the first time in 22 months but made it back to US66.60c by 5pm.
It was a big fall because the currency had been around US68.80c at 1am and closed yesterday at US68.17c.
The decline was all about risk aversion and liquidation of so-called carry trades, said Murray Hindley, ANZ Institutional Bank chief foreign exchange dealer.
Those US exports just got a little bit more expensive today, oh and Gas too!
Andy, the NZ economy likes a low kiwi dollar, those farmers and tourism operators will be coining it, our few remaining manufacturers get a stay of execution, the reserve bank can finally cut the cash rate from 8 percent..
ok, we pay more for plasma screens... or do we, Briscoes said today they are on 24/7 sale mode just to get anything out the door
maybe the pain is just gonna be felt where you live, in auckland, and maybe you lose the Ranfurly Shield today...
you can always vote with the herd for an ex-merrill banker in november... guaranteed brownie points on this board...
mind you, helengrad was treated like sarah palin way back in the day
This first time came up in June, the source seemed to be Handelsblatt, as reflected through the Telegraph ( Support for euro in doubt as Germans reject Latin bloc notes - Telegraph ), given very wide play through Mish Shedlock.
When I attempted to explain this wasn't so, at least in the Germany I live in, my comment was deleted. (Nothing like making sure you are right all the time by unpublishing whatever disturbs your own take on reality - this is becoming increasingly common on the web, actually).
A commenter at the time actually explained about that the Handelsblatt article was misrepresented by the British paper (another shock - British press distorting European reality). Unfortunately, it seems as if all comments to the article are no longer available.
One of things that makes this so stupid is that identifying the origin of an euro coin is child's play - each country has its own design on the back, but till now, no one, and I mean no one, is caring the least about the coins. The same is equally true of the bills, making this whole thing so stupid.
But then, as noted in my comment at the time, look into the issue of pound notes in the UK - fascinating. At least the Telegraph is used to the idea that pound notes from one part of the UK aren't easily accepted in another part. Banknotes of the pound sterling - Wikipedia, the free encyclopedia
The joke of shipping imports from China to the US is that unless China subsidized the shipping containers and artificially kept their currency low, the products would be cheaper to make in the US, even with decent wages. Shipping containers are not cheap. The other joke is that most of them go back empty...so much for "trade agreements". Thanks to Billy-playboy-Clinton for opening the door for "fair" Chinese trade. The "strategic Bush-McCain plan" now is to bypass shipping containers and make all of the same stuff in Mexico, and deliver it using Mexican truck drivers. Seems like a "better" alternative considering that trade with China supports communism, human rights abuses, and a growing Sino-Russian military threat. Now China is drilling for oil off of Cuba/US waters, and Russia wants to control the flow of oil in Europe. US energy independent is definitely a must, and more supply is definitely the only answer. I guess that we'll just have to keep dealing with illegals regardless of who's elected.
"The index is off over 61% from the peak. This suggests a slowdown in the Chinese economy, and probably less business investment in China."
No, this suggests huge losses of speculative money from Chinese investors and 'hot money' from outside China (B shares losses much worse than A on Shanghai) and the loss of equity in several big firms where Beijing remains the principal shareholder, i.e., PetroChina.
the Chinese economy has barely slowed at all so far this year and FDI remains strong.
I vaguely care about the marks on the back of Euro coins; it would be nice to collect a whole set, even if it did require a trip to Luxembourg or Malta ...
The Austrian Parliament visitors' centre sells a full set of Euro coins from all the countries in the zone for about 120 euros, four or five times the face value
what dek said --
nice reiteration of rush talking points but it is obvious you know nothing about the WTO Accession trade act. Not only is China now our fastest growing export market but it will soon eclipse Japan in importance to US exporters - manufacturing impact not services exports.
Even now at triple the price a container of any weight costing around $6K from China is cheaper than moving it around California by truck.
All this talk about China taking American manufacturing jobs is just a political hobby horse.
I just wanted to say that using the LA/LB ports as a reference slightly overstates the case. Part of the decline in volume there, and in Seattle/Vancouver, is due to shifting of business to east coast ports.
I don't mean to imply that the gains on the east coast offset the decline in the west, they don't. Or that container volume or that container volume in general is holding steady, its not. I just wanted to point out that this one data point magnifies the problems in the industry.
JMS
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