This week is going to be critical, barring a big reversal, we will have two big up bars on the monthly chart, the odds should then be for a jump to 1.10-1.12 (also measured move from last fall consolidation) then a bigger and longer correction is more likely. Of course we are due for a short term pullback of a week or two but I think we'll quickly go to 1.10 next month . I don't trade FX,it's a great market for position traders but short term trading creates nasty surprises. I put all my cash in euros though.
Time to short Euro ?
- Thread starter taodr
- Start date
I found this US report which relates to the US and global economies which may interest some of you:
http://cbs.marketwatch.com/news/print_story.asp?print=1&guid={32492E74-5033-4C03-AF05-BEBDDB1C719F}&siteid=mktw
MARSHALL LOEB
The shape of tomorrow
Here are some trends that stand to make a difference
By Marshall Loeb, CBS.MarketWatch.com
Last Update: 12:01 AM ET Jan. 27, 2003
http://cbs.marketwatch.com/news/print_story.asp?print=1&guid={32492E74-5033-4C03-AF05-BEBDDB1C719F}&siteid=mktw
MARSHALL LOEB
The shape of tomorrow
Here are some trends that stand to make a difference
By Marshall Loeb, CBS.MarketWatch.com
Last Update: 12:01 AM ET Jan. 27, 2003
dollar is oversold, dollar bounce and major stock indexes bounce at the same time.
MARSHALL LOEB
The shape of tomorrow
Here are some trends that stand to make a difference
By Marshall Loeb, CBS.MarketWatch.com
Last Update: 12:01 AM ET Jan. 27, 2003
NEW YORK (CBS.MW) -- Sometimes it pays to rise above everyday events and look for broader trends in the economy, politics and society at large.
To do this, Robert Dilenschneider has produced a list of global and domestic trends, based on interviews over the last twelve months with 420 experts in diverse fields including business, finance, journalism, the arts, academe and the non-profit sector. He is the head of his own Manhattan-based international public relations firm, and the author of eight books.
I have found his well-sourced trends lists to be always stimulating and often prescient. Among many other things, he was early to warn of the perils of terrorism and Osama bin Laden, of diplomatic troubles between the U.S. and Europe, and the U.S. and Saudi Arabia.
Here are some trends from his latest report:
The U.S. is digging deeper in deficit
How weak is the U.S. economy? Consider:
*The multi-trillion dollar federal budget surpluses protected for the decade following the Clinton Administration has vanished and the prospect of red-ink federal budgets far into the future is very real.
*The federal budget surplus of 2.3 percent of Gross Domestic Product (about $230 billion) in the last year of Clinton's administration has, in two years of Bush, turned into a federal deficit of 2.3 percent of GDP (about $230 billion). This is the largest two-year negative shift in the federal budget since World War II.
Fiscal crises are sweeping the states
The National Governors Association reported in November that the states are facing "the most dire situation since World War II, with virtually every state in fiscal crises."
Consider:
*Oklahoma Governor Frank Keating, a conservative Republican, asked the Pardon and Parole Board to identify 1,000 non-violent inmates for early release in order to cut costs.
*Kentucky Governor Paul Patton plans to release 567 state prison inmates to help reduce a $500 million budget deficit.
*Montana, Arkansas and Texas also plan to release convicted felons early.
*Many states plan to follow Michigan's lead in repealing strict mandatory sentencing laws for drug crimes.
*Oregon is considering shortening its school year for elementary and high schools by 15 days.
*Budget constraints are also slowing health care reform. In all, 41.2 million Americans -- 10 million of them children -- lack any kind of health insurance. Employers are railing against continually mounting premiums (up 11 percent last year). As the 2004 presidential sweepstakes gathers steam, we will hear a great deal about health care.
China keeps on rising
China, the world's most populous nation and Asia's most dynamic economy, continues to accelerate. The new China, which has re-emerged as "the factory of the world," is also creating considerable anxiety for all its Asian neighbors -- both as a potential military threat and a formidable economic competitor with a powerful work ethic.
Chinese already own more mobile phones than Americans. While world trade stagnated, Chinese exports rose some 21 percent in the first ten months of 2002. Foreign investment is up 20 percent to $46 billion. More than half of China's industrial output now comes from the private sector.
It has the world's deepest, and cheapest, pool of manufacturing labor. China's population is 1.3 billion, and nearly 700 million people live on farms, earning on average just $285 per year compared with the average U.S. household income of nearly $40,000 a year. This has created a bonanza for factory bosses in China with an almost endless supply of cheap labor.
India becomes a haven for criminality
Corruption in India, with one of the world's largest populations -- just over 1 billion -- is at an all-time high and most see little hope for a turnaround soon.
In Uttar Pradesh and Bihar, Indian states that are home to about 250 million of the world's poorest people, it is estimated that less than one-third of the federal government's development money reaches its intended goals. Nearly 200 of those states' legislators have criminal backgrounds, ranging from larceny to contract killing.
Even in the capital of New Delhi, approximately 20 percent of the members of Parliament have a criminal past. It is estimated that 18,000 of the city's 42,000 municipal workers regularly fail to show up for work. A recent study found nearly 40 percent of India's famine relief stock was sold on the black market.
Look for change in Iran
Many signs indicate Iran may begin to emerge and a model of a more liberal Muslim state in 2003-4.
Ruling mullahs, actually a small percentage of Iran's Shiite clergy, are having a hard time keeping young people in check. Two key mullahs, Taheri and Montazeni, have even called for the clergy to be removed from government.
Support for change is coming from various levels of the country. Serious investors may soon be taking a larger role in Iran. Many Ayatollahs who have squirreled away huge sums in Dutch banks -- the Swiss are not considered as reliable as they once were -- are also inquiring about how these funds can be used domestically. Iran is still, however, aching over a vicious and bloody war with Iraq, 1980-1988, which claimed at least 300,000 Iranian lives and injured more than 500,000.
The crackdowns on personal behavior in Iran are much less severe today and fashion and other staples of normal life are starting to reappear. There is also a groundswell of support from the more than 70,000 students who were in the U.S. in the 1980's (less than 2,000 are here now).
Although the divide between the West and the Muslim world has deepened in recent years, many reasonable people in both camps yearn to see another major moderate Muslim state emerge, which could be Iran.
Latin America's troubles continue
All over Latin America problems worsen.
Argentina has been through an economic nightmare; Venezuela is in political chaos and stands to lose the advantage of its tremendous oil stash. Columbia is increasingly lawless. Brazil, the world's fourth largest democracy with 170 million people, has a new president, Luis "Lula" da Silva, who is both untested and who will have to deal with widespread corruption, violent crime, a problematic rule of law, and widespread poverty.
Even Mexico, long a leading location for foreign direct investment and manufacturing job creation, is now losing out to other cheaper-labor nations. Mexican factory workers earn about $3,300 a year without bonuses and benefits, much higher than Asian workers. All told, 529 factories and 223,000 related jobs have left Mexico since December, 2000, many going to China.
Away from dependence in oil?
The United States has three percent of the world's proven oil reserves but consumes 26 percent of the world's oil production -- much of it coming from some of the most politically unstable areas of the world.
We are, however, seeing a number of positive signs, including expanding use of renewable alternative energy sources. Auto-makers are also beginning to wean themselves away from oil. Hybrid electric vehicles, which combine a traditional internal combustion engine with an electric motor to achieve dramatic improvements in mileage and reduced emissions, are rapidly growing in popularity.
In 1999, just 17 hybrid electric vehicles were sold in the United States. Last year, 20,000 were sold, and this year the number is expected to reach more than 40,000. The authoritative automotive research firm, J.D. Power, estimates that annual sales could exceed 500,000 vehicles by 2006, from 12 different companies
While Toyota and Honda are the only two auto-makers selling hybrids right now, Ford is planning to introduce a hybrid version of its popular Escape SUV in late 2003. It will be in dealer showrooms by early 2004. Ford estimates first-year sales at 20,000 or more. GM and DaimlerChrysler are also planning the introduction of hybrid pickup trucks and SUVs, in the 2004 model year.
Contributing to this trend will be further advances in research for fuel-cell powered vehicles and continued political pressure in California to maintain the nation's toughest environmental regulations for autos. With 10 percent of all U.S. auto sales in California, the state will continue to lead the regulatory movement toward cleaner and more fuel-efficient vehicles.
PART TWO Follows....
The shape of tomorrow
Here are some trends that stand to make a difference
By Marshall Loeb, CBS.MarketWatch.com
Last Update: 12:01 AM ET Jan. 27, 2003
NEW YORK (CBS.MW) -- Sometimes it pays to rise above everyday events and look for broader trends in the economy, politics and society at large.
To do this, Robert Dilenschneider has produced a list of global and domestic trends, based on interviews over the last twelve months with 420 experts in diverse fields including business, finance, journalism, the arts, academe and the non-profit sector. He is the head of his own Manhattan-based international public relations firm, and the author of eight books.
I have found his well-sourced trends lists to be always stimulating and often prescient. Among many other things, he was early to warn of the perils of terrorism and Osama bin Laden, of diplomatic troubles between the U.S. and Europe, and the U.S. and Saudi Arabia.
Here are some trends from his latest report:
The U.S. is digging deeper in deficit
How weak is the U.S. economy? Consider:
*The multi-trillion dollar federal budget surpluses protected for the decade following the Clinton Administration has vanished and the prospect of red-ink federal budgets far into the future is very real.
*The federal budget surplus of 2.3 percent of Gross Domestic Product (about $230 billion) in the last year of Clinton's administration has, in two years of Bush, turned into a federal deficit of 2.3 percent of GDP (about $230 billion). This is the largest two-year negative shift in the federal budget since World War II.
Fiscal crises are sweeping the states
The National Governors Association reported in November that the states are facing "the most dire situation since World War II, with virtually every state in fiscal crises."
Consider:
*Oklahoma Governor Frank Keating, a conservative Republican, asked the Pardon and Parole Board to identify 1,000 non-violent inmates for early release in order to cut costs.
*Kentucky Governor Paul Patton plans to release 567 state prison inmates to help reduce a $500 million budget deficit.
*Montana, Arkansas and Texas also plan to release convicted felons early.
*Many states plan to follow Michigan's lead in repealing strict mandatory sentencing laws for drug crimes.
*Oregon is considering shortening its school year for elementary and high schools by 15 days.
*Budget constraints are also slowing health care reform. In all, 41.2 million Americans -- 10 million of them children -- lack any kind of health insurance. Employers are railing against continually mounting premiums (up 11 percent last year). As the 2004 presidential sweepstakes gathers steam, we will hear a great deal about health care.
China keeps on rising
China, the world's most populous nation and Asia's most dynamic economy, continues to accelerate. The new China, which has re-emerged as "the factory of the world," is also creating considerable anxiety for all its Asian neighbors -- both as a potential military threat and a formidable economic competitor with a powerful work ethic.
Chinese already own more mobile phones than Americans. While world trade stagnated, Chinese exports rose some 21 percent in the first ten months of 2002. Foreign investment is up 20 percent to $46 billion. More than half of China's industrial output now comes from the private sector.
It has the world's deepest, and cheapest, pool of manufacturing labor. China's population is 1.3 billion, and nearly 700 million people live on farms, earning on average just $285 per year compared with the average U.S. household income of nearly $40,000 a year. This has created a bonanza for factory bosses in China with an almost endless supply of cheap labor.
India becomes a haven for criminality
Corruption in India, with one of the world's largest populations -- just over 1 billion -- is at an all-time high and most see little hope for a turnaround soon.
In Uttar Pradesh and Bihar, Indian states that are home to about 250 million of the world's poorest people, it is estimated that less than one-third of the federal government's development money reaches its intended goals. Nearly 200 of those states' legislators have criminal backgrounds, ranging from larceny to contract killing.
Even in the capital of New Delhi, approximately 20 percent of the members of Parliament have a criminal past. It is estimated that 18,000 of the city's 42,000 municipal workers regularly fail to show up for work. A recent study found nearly 40 percent of India's famine relief stock was sold on the black market.
Look for change in Iran
Many signs indicate Iran may begin to emerge and a model of a more liberal Muslim state in 2003-4.
Ruling mullahs, actually a small percentage of Iran's Shiite clergy, are having a hard time keeping young people in check. Two key mullahs, Taheri and Montazeni, have even called for the clergy to be removed from government.
Support for change is coming from various levels of the country. Serious investors may soon be taking a larger role in Iran. Many Ayatollahs who have squirreled away huge sums in Dutch banks -- the Swiss are not considered as reliable as they once were -- are also inquiring about how these funds can be used domestically. Iran is still, however, aching over a vicious and bloody war with Iraq, 1980-1988, which claimed at least 300,000 Iranian lives and injured more than 500,000.
The crackdowns on personal behavior in Iran are much less severe today and fashion and other staples of normal life are starting to reappear. There is also a groundswell of support from the more than 70,000 students who were in the U.S. in the 1980's (less than 2,000 are here now).
Although the divide between the West and the Muslim world has deepened in recent years, many reasonable people in both camps yearn to see another major moderate Muslim state emerge, which could be Iran.
Latin America's troubles continue
All over Latin America problems worsen.
Argentina has been through an economic nightmare; Venezuela is in political chaos and stands to lose the advantage of its tremendous oil stash. Columbia is increasingly lawless. Brazil, the world's fourth largest democracy with 170 million people, has a new president, Luis "Lula" da Silva, who is both untested and who will have to deal with widespread corruption, violent crime, a problematic rule of law, and widespread poverty.
Even Mexico, long a leading location for foreign direct investment and manufacturing job creation, is now losing out to other cheaper-labor nations. Mexican factory workers earn about $3,300 a year without bonuses and benefits, much higher than Asian workers. All told, 529 factories and 223,000 related jobs have left Mexico since December, 2000, many going to China.
Away from dependence in oil?
The United States has three percent of the world's proven oil reserves but consumes 26 percent of the world's oil production -- much of it coming from some of the most politically unstable areas of the world.
We are, however, seeing a number of positive signs, including expanding use of renewable alternative energy sources. Auto-makers are also beginning to wean themselves away from oil. Hybrid electric vehicles, which combine a traditional internal combustion engine with an electric motor to achieve dramatic improvements in mileage and reduced emissions, are rapidly growing in popularity.
In 1999, just 17 hybrid electric vehicles were sold in the United States. Last year, 20,000 were sold, and this year the number is expected to reach more than 40,000. The authoritative automotive research firm, J.D. Power, estimates that annual sales could exceed 500,000 vehicles by 2006, from 12 different companies
While Toyota and Honda are the only two auto-makers selling hybrids right now, Ford is planning to introduce a hybrid version of its popular Escape SUV in late 2003. It will be in dealer showrooms by early 2004. Ford estimates first-year sales at 20,000 or more. GM and DaimlerChrysler are also planning the introduction of hybrid pickup trucks and SUVs, in the 2004 model year.
Contributing to this trend will be further advances in research for fuel-cell powered vehicles and continued political pressure in California to maintain the nation's toughest environmental regulations for autos. With 10 percent of all U.S. auto sales in California, the state will continue to lead the regulatory movement toward cleaner and more fuel-efficient vehicles.
PART TWO Follows....
Big deals flop
Nearly $4 trillion of corporate mergers were completed from 1998 to 2000 -- more than in all of the preceding 30 years.
The great majority did not pay off for shareholders, employees who lost their jobs, or customers seeking greater efficiencies and lower prices.
A BusinessWeek study of deals over $500 million found:
*Fully 61 percent of buyers destroyed their own shareholders' wealth. A year after their deals, the losers' average return on equity was 25 percentage points below that enjoyed by their industry peers.
*The buyers lost largely because they paid too much, transferring wealth to the sellers' shareholders.
*About four-fifths still showed negative return after 24 months.
*Companies that paid for their acquisitions solely with stock -- 65 percent of the cases -- showed the worst results. After a year, they lagged behind their peers by 8 percent. By contrast, those paying entirely cash gained 0.3 percent.
More protests on campus?
Have the seeds been planted among students from Boston College to Berkeley to start major anti-war protests? This phenomenon is still in its early stages, but the Institute for Policy Studies -- a liberal think tank -- is helping students on 135 campuses in 35 states organize against the war. And more than 10,000 university faculty members have already signed an Internet letter opposing any war in Iraq.
Trying for tort reform
Advocates of tort reform are sharpening their knives to have yet another go at enacting meaningful legislation to cut the stranglehold that the plaintiffs' bar has on many sectors of the economy.
Two areas that President Bush has targeted are imposing caps on non-economic damages in medical malpractice cases and shifting most class action suits from state to federal courts. The argument in favor of a malpractice cap is that multi-million dollar malpractice awards in recent years have driven doctors' insurance premiums through the roof, forcing many doctors to either abandon their practices or move to other states.
The same is the case with class-action litigation. Traditionally, anti-business state court juries in so-called "judicial hellholes" like Mississippi, Louisiana, West Virginia, and Illinois have awarded tens, sometimes hundreds, of millions of dollars on the most specious of product liability claims. Making it easier to shift these cases to federal court would, it is believed, impose some rational limits on this type of litigation.
The plaintiffs' bar, through the Association of Trial Lawyers of America (ATLA), has vowed to fight any efforts on tort reform. As the single largest contributor to Democratic Party candidates, the trial lawyers are already bragging that it will take 60 votes in the Senate for any tort reform bill to pass, meaning, of course, they will filibuster it to the end.
The most creative cities
Where will the next "big idea" come from in the U.S.? Carnegie-Mellon University has formulated a "creativity index" that identifies the top cities, where an unusually creative and gifted population is most likely to produce the "big ideas" that will bring positive change. They are:
1. San Francisco
2. Austin
3. San Diego, Boston (tie)
5. Seattle
6. Raleigh-Durham
7. Houston
8. Washington-Baltimore
9. New York
10. Dallas, Minneapolis-St. Paul (tie)
Tough times for widows and orphans
Expect notably higher utility rates in 2003. Many utility holding companies, scalded by ill-advised entries into unregulated businesses such as commodity trading, are increasingly looking to pass some of their financial burden onto their utility units. A financial crisis more acute than any in modern history is facing the industry. This will have a major impact on the stock market. Those legendary "widows and orphans," who used to count on dividends and growth from utility stocks, are living in bad times.
There will likely be no light at the end of the tunnel until 2004 or even 2005.
# # #
Reporter Rebecca Samuels contributed to this article.
Marshall Loeb, former editor of Fortune, Money, and The Columbia Journalism Review, writes "Your Dollars" exclusively for CBS.MarketWatch.com.
Nearly $4 trillion of corporate mergers were completed from 1998 to 2000 -- more than in all of the preceding 30 years.
The great majority did not pay off for shareholders, employees who lost their jobs, or customers seeking greater efficiencies and lower prices.
A BusinessWeek study of deals over $500 million found:
*Fully 61 percent of buyers destroyed their own shareholders' wealth. A year after their deals, the losers' average return on equity was 25 percentage points below that enjoyed by their industry peers.
*The buyers lost largely because they paid too much, transferring wealth to the sellers' shareholders.
*About four-fifths still showed negative return after 24 months.
*Companies that paid for their acquisitions solely with stock -- 65 percent of the cases -- showed the worst results. After a year, they lagged behind their peers by 8 percent. By contrast, those paying entirely cash gained 0.3 percent.
More protests on campus?
Have the seeds been planted among students from Boston College to Berkeley to start major anti-war protests? This phenomenon is still in its early stages, but the Institute for Policy Studies -- a liberal think tank -- is helping students on 135 campuses in 35 states organize against the war. And more than 10,000 university faculty members have already signed an Internet letter opposing any war in Iraq.
Trying for tort reform
Advocates of tort reform are sharpening their knives to have yet another go at enacting meaningful legislation to cut the stranglehold that the plaintiffs' bar has on many sectors of the economy.
Two areas that President Bush has targeted are imposing caps on non-economic damages in medical malpractice cases and shifting most class action suits from state to federal courts. The argument in favor of a malpractice cap is that multi-million dollar malpractice awards in recent years have driven doctors' insurance premiums through the roof, forcing many doctors to either abandon their practices or move to other states.
The same is the case with class-action litigation. Traditionally, anti-business state court juries in so-called "judicial hellholes" like Mississippi, Louisiana, West Virginia, and Illinois have awarded tens, sometimes hundreds, of millions of dollars on the most specious of product liability claims. Making it easier to shift these cases to federal court would, it is believed, impose some rational limits on this type of litigation.
The plaintiffs' bar, through the Association of Trial Lawyers of America (ATLA), has vowed to fight any efforts on tort reform. As the single largest contributor to Democratic Party candidates, the trial lawyers are already bragging that it will take 60 votes in the Senate for any tort reform bill to pass, meaning, of course, they will filibuster it to the end.
The most creative cities
Where will the next "big idea" come from in the U.S.? Carnegie-Mellon University has formulated a "creativity index" that identifies the top cities, where an unusually creative and gifted population is most likely to produce the "big ideas" that will bring positive change. They are:
1. San Francisco
2. Austin
3. San Diego, Boston (tie)
5. Seattle
6. Raleigh-Durham
7. Houston
8. Washington-Baltimore
9. New York
10. Dallas, Minneapolis-St. Paul (tie)
Tough times for widows and orphans
Expect notably higher utility rates in 2003. Many utility holding companies, scalded by ill-advised entries into unregulated businesses such as commodity trading, are increasingly looking to pass some of their financial burden onto their utility units. A financial crisis more acute than any in modern history is facing the industry. This will have a major impact on the stock market. Those legendary "widows and orphans," who used to count on dividends and growth from utility stocks, are living in bad times.
There will likely be no light at the end of the tunnel until 2004 or even 2005.
# # #
Reporter Rebecca Samuels contributed to this article.
Marshall Loeb, former editor of Fortune, Money, and The Columbia Journalism Review, writes "Your Dollars" exclusively for CBS.MarketWatch.com.