More on Global

Clarifying my earlier thoughts,

The US..

Reduction in GDP. This is being forecast by some of the more sober economists out there..
No recession, not enough people out of work.
http://research.stlouisfed.org/publications/net/page3.pdf

CPI similar levels to 06. Core not taken off yet. PPI taking off. Could feed through to core at some stage?.. Change in rates next year?
http://research.stlouisfed.org/publications/net/page8.pdf

Federal Deficeit still to low. Maybe new fiscal package will correct this.
http://research.stlouisfed.org/publications/net/page17.pdf

Trade Dollar dives and Trade balance starts to correct. Change from import economy to export economy. Note how talk in the press has changed from China financing US consumers to, How do we regulate these pesky soveriegn wealth funds? Dollar now low enough to allow O/S investors to start buying US goods, services and assets. Low enough to start undermining Euro exports? Look out for Euro based problems ahead? I do not know how to confirm these theories, need to watch how this plays out, I suppose. Ananlysing financial markets must be Bayesian in nature?
http://research.stlouisfed.org/publications/net/page18.pdf

Time to start buying US equities on a relative value basis? Could be, exporters and large caps. Reckon the Dow could go lower down the the 9-10K level. I loathe having most of my assets being denominated in $AUD. Have taken a bath on the O/S funds that I own, they also have to much exposure to Europe, yuk... Bad buying on my part.
Ken Fisher on large caps:
http://www.forbes.com/columnists/forbes/2008/0324/168.html
Bottom line: weakness and high prices

Europe:

CPI and core both rising.
http://www.blogger.com/post-create.g?blogID=2853453991003372400
Trichet has already marked his fire hydrant and advised no rate cuts for you!!

GDP slowing led by private expenditure.
http://www.ecb.int/pub/pdf/stapobo/spb200803en.pdf

Trade, small jump in BOP for the last year. Jump in imports and drop in exports to US, redirected to Asian countries. Interesting. Possibly supporting my above arguments on US trade? Has the exact opposite problem to the US, high euro making
http://www.ecb.int/pub/pdf/stapobo/spb200803en.pdf

Government finance, I calculate a small deficeit although is lagging. Roughly offset by BOP means private sector not with enough reserves therefore resulting in dropping private spending?
http://www.ecb.int/pub/pdf/stapobo/spb200803en.pdf

Employment, slowly reducing from 2004 levels taken about 3 years to reduce 1%.
http://www.ecb.int/pub/pdf/stapobo/spb200803en.pdf

A quick dirty look, seems to indicate the household sector is continuing to net save and reduce loans.
http://www.ecb.int/press/pdf/ffi/eaefd_3q2007.pdf
Wheres the decrease in employment coming from?

Muddling through, Euro members will be dragged into deficiet and higher unemployment if net saving and reduction of loans continues to occur. Loathe Euro assets due to Maastricht Treaty design for payment sytem. see:
http://www.ecb.int/paym/pol/payover/html/index.en.html
and
http://shop.ceps.eu/BookDetail.php?item_id=1340
for further reading. Essentially member country reserve banks have responsibility for integrity of local institutions. This arrangement is yet to be tested. Why are the British so hellbent on joining. Bottom line, weakness and exporters gasping for currency, higher prices feeding through.

Regards
TheBagwan