Scattered Economic Data

Warning Signs: The new weekly Jobless claims jumped 43,000 to 364,000, maybe bad--maybe a simple blip with averaging only rising marginally over four weeks(wiping out the gains of the first two Weeks). The test will be tomorrow's figures on New Job creations, seriously disturbing if We dropped below 100,000 rather than the estimated 175,000. It would be the second monthly drop in a row, with the Dollar value falling, Crude Oil rising, Treasuries gaining in Interest realization, and increasing Prices overall. This must be termed Stagflation, even if it lasts only one Quarter.

The new Big Three Shipbuilders are South Korea, Japan, and China. Shipbuilders have record Orders because of the expansion of the Chinese economy, with Japan producing as much Steel as in 1973, it's previous record year. The Problem here: The price of Steel has risen approximately 30%, and most Shipbuilders are facing losses because they are completing 2002 Orders with current Steel prices. Japan, itself, borders on Recession even with the increased demand for Product, because of the increase in Energy and Material Costs.

China had restricted it's import of Soybeans in 2004, and the World price of Soybeans dropped 30% since. This does not bode well! China indicates it intends to maintain and enhance it's Trade surpluses, while refusing to unpeg the Yuan from the Dollar. This is disadvantageous to all of it's Trading partners. The Soybean crop in Brazil(second largest Producer behind the U.S.) is threatened by Asian Soy rust, which has been detected inside the United States this last year. It can destroy 80% of the planted Crop if left untreated by fungicide(2-3 applications), and spread through 80% of the Soybean Croplands of Brazil since its introduction some four years ago. (The Author once tried to buy 8,000 of Brazilian Soybean Cropland an age ago, when it was selling for $4 an acre.)

The one element which glares out from December Sales reportage is the high Price-responsiveness of the Sales. Retail Chains had to slash Prices in order to maintain Sales volume. Only Prestige Chains could maintain Prices and volume. The reported Sales volume simply suggest it was maintained at real constant volume with last year(Inflation-adjusted), only by cutting Prices and Profits to levels of real constant pricing with the previous year(Inflation adjusted). Retail pricing can be a good economic indicator in itself, and it suggests that 2004 was a No-Gainer on the economic stage. (Data derived from NYTimes, Reuters, AP) lgl