Time projection made in early DEC.

The Conference Board, a business research group based in New York, said its closely watched index of consumer confidence fell to 91.3 from a revised 92.5 in November.

Chart below posted in 11/26

black wave 2 should be contained in this price range.

AFP , BEIJING
Without fanfare, China may be moving to unpeg the yuan from the US dollar and peg it instead to its 10 largest trading partners' currencies

Not One, But Two Sources Of Chinese Malinvestment
The U.S. economy was rife with malinvestment during the late 1990s because the Fed held the interest rate below its equilibrium level. Evidence of this was the explosion in the U.S. money supply at that time. When central banks prevent interest rates from rising to their natural or equilibrium levels, they encourage private investment decisions that will prove to be unprofitable once interest rates start to move toward their equilibrium values. Today, the People’s Bank of China (PBOC) is making the same policy mistake as did the Fed, as evidenced by the 20+% in the yuan M2 money supply. So, the PBOC is aiding and abetting Chinese malinvestment. But if that were not bad
enough, the continued high degree of government central planning in the Chinese economy provides yet another source of malinvestment. When the PBOC finally has to clamp down on bank credit and money growth because of rising inflation – a whiff of which was present in November’s 3.0% yearover-
year increase – the collapse of the Chinese economy will far eclipse the recent U.S. economic “soft patch.” But don’t worry about the PBOC clampdown now. It probably won’t happen until 2005.
Paul Kasriel, Director of Economic Research, Northern Trust

The Bank of England has warned that even a small default by a medium-sized financial insitution could bring a major part of the payment mechanism to a halt, crippling economic and social activity.

Buried on page 96 of the Bank's recent Financial Stability Review is a warning that, should an institution be unable to meet its obligations, none of the other members would be able to settle their obligations to one another.
Indeed, 'amounts due from and paid by the Bank of England would also be blocked'.

Incentive actions speak louder than words
GM reportedly instated another new incentives program last week.
The program includes regional cash incentives of as much as $8,000 per vehicle.
On its November sales conference call, GM management sounded more bullish on pricing/incentives by suggesting that pricing may be less difficult going forward. This recent incentive action does not appear to reflect such a scenario. (S.G.,MS)

CSCO

Not likely a LU-only occurence...

Lucent Technologies (LU) said its backlog for the quarter ended Sept. 30 was $2.2 billion, up from $1.9 billion in the same quarter last year, according to a regulatory document with the Securities and Exchange Commission filed Tuesday. The telecom equipment maker said that substantially all" of the orders included in the backlog are scheduled for delivery during fiscal 2004, though it noted that all orders are subject to rescheduling by customers.

Opec mulls switch to euro pricing

I mentioned in last Thursday's column that top Federal Reserve officials are privately telling people that they plan to add massive amounts of liquidity into the nation's banking system this coming year.

The problem is, with interest rates as low as they are, the only way this can be done is by a so-called monetizing of the national debt. That means the Fed will essentially buy back government securities it sold years ago, toss them in the trash and continue to sell massive amounts of new debt to cover the increasing budget deficit.
If this is done, it will cause additional problems for the dollar's value, scare away foreign investors and jack up interest rates.
The Fed, at some point, will have to pretend it's thinking of tightening credit in order to rescue the dollar.

Long Tivo

link to brief

October Consumer Credit Review:
Average auto loan maturities continue to climb to record lengths -
Average loan maturities at the Big Three finance companies reached yet another all-time record of 63.52 months, up from 63.24 months last month and 57.24 months last year. Longer loan maturities could push consumers' replacement cycle out even further, which would dampen future demand growth. Increased maturities also heighten the risk of delinquent loans at finance companies.

...recent intelligence that has counterterrorism officials increasingly worried about a possible attack against soft targets, such as shopping malls, as the holiday season approaches.

"As recently as two weeks ago, the intelligence community was telling the Homeland Security Department that this felt a lot like the summer of 2001," said Roger Cressey, a former counterterrorism official with the National Security Council. "[We're] seeing lots of data, lots of information coming together that paints a very disturbing picture."

Prices (blue wave 2) should be contained by the 1070.04 natural level and proceed to wave 3 (lower) tomorrow/monday.

High print should be made within the next 15min bar.

China would prevent Taiwan from formally declaring independence even if that meant pushing the mainland economy into a recession or destroying its plans to be host to the 2008 Olympics.

"Taiwan independence means war," Mr. Peng said. "This is the word of 1.3 billion people, and we will keep our word."
link

Spread between 'official' CPI and and market-determined inflation is widening under the Federal Reserve's deflationary smoke screen. Future events are shaped by current expectations.

China plans to ease rapid growth
China is set to touch the brakes in 2004, taking the edge off wildfire growth, according to state media.