The Taipan Group's 247profits e-Dispatch
Baltimore, New York, Chicago, Berlin, Bonn, London and Paris
September 16-17, 2004
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***50% in a week off TLK, has Shanghai found a
floor? The CPI, Ivan, Sweet Crude and so much
more�
***Indonesian elections break new ground� find out
where to put your money. Details follow!
***Don't Miss This Important Market Warning:
You must act immediately to prepare for the volatile
market ahead.
Current economic, political and security factors are
forming a turbulent market climate that will bring
masses of unprepared investors to their knees.
But a select few inventors who see it coming - and act
accordingly - will prosper.
Don't be left out. View the Full Report right here:
http://www.youreletters.com/t/59320/3785361/556051/70/
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>From the Desk of Christian DeHaemer
Dear Friend,
There are three big stories today: Ivan, CPI and oil.
All of which have aligned to boost the markets by a
bit. Ivan, like a mad Russian drunk, blundered on
shore overnight and despite killing 12 people was less
severe than the market had anticipated.
If you are looking for some ominous news, the Federal
Reserve Bank of Philadelphia reported that
manufacturing in that region has decelerated
dramatically, much like the Eagles in the annual NFC
championship game.
The Philly Fed's activity index fell to 13.4 in
September from 28.5 in August. Analysts expected a
drop to 24.5 - hey, they were only off by 82%.
This drop was ignored in New York. The traders only
cared about the drop in oil, now bouncing around
US$42.95, which fell because Ivan didn't destroy the
oil and gas output that originates in the Gulf of Mexico.
***The Labor Department tells us that there was only
a 0.1% rise in consumer prices for August. And you
ask why does a can of chili cost US$2.50 when it
used to cost US$0.98 the last time your wife let you
go shopping, and it still costs US$1.92 a gallon to fill
up your minivan? Well, that's because they exclude
food and energy.
This means that the Fed has wiggle room. It means
they might not hike rates a quarter point next Tuesday.
We'll have to wait and see� can you stand the
suspense?
***Unemployment: I don't know if anyone on Wall
Street still cares about unemployment, but if you do,
rest assured that the number of workers filing for state
unemployment benefits rebounded by 16,000 in the
week ended September 11 to 333,000.
***Indonesian elections: P.T. Telecom, our favorite
"plasma on the tarmac" play, climbed again today to
US$18.16. This raised our call options to US$1.25
and gave us a nifty little 50% gain.
Indonesia is up across the board as the presidential
campaign winds down. President Megawati
Sukarnoputri is set to get stomped by her challenger,
Susilo Bambang Yudhoyono.
Today is the last day of official campaigning for
Monday's election. This will mark the first time that
Indonesians are choosing their leader directly. Both
candidates are running on anti-corruption platforms
that should benefit free traders.
We will close out our long positions on Friday, as
whoever gets elected will have to raise interest rates or
the rupiah will fade. Beside, Indonesia is always just a
few months away from a riot or explosion or forest fire
or something. You buy the bad news and sell the
good. That's how it's done.
***For those of you who followed my advice and
bought the Chinese Internet stocks on the false "China
Slowing" selloff, you about as happy John Kerry at a
Teva convention (flip-flop, get it?)
Our fab four have been climbing about 6% a day over
the past few days. The Shanghai Composite Index is
bouncing hard off a five-year low. The rumor is that
the government is taking action to revive markets with
a reshuffling of regulators.
Traders expect the chairman of the China Securities
Regulatory Commission, Shang Fulin, to be replaced
by former Shanghai official Huang Qifan. There is no
official word, but the Shanghai Composite Index
ended 1.2% higher last night at 1,371.20. It has
rebounded around 9% since hitting a five-year low
Monday. The Shenzhen Composite Index rose 1.3%
to 344.58.
This is good news for Red Zone and Taipan readers
who bought into my China Internet Value portfolio a
mere two weeks ago.
Until next time,
Christian DeHaemer
Senior Editor, Taipan, The Red Zone, The Red Zone
VIP
Who says you can't make money in this market?
This amazing wealth-building secret generates 3,684%
gains.
Want Proof? See the Red Zone VIP portfolio:
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Earnings Announcements for Friday, September
17, 2004:
Circuit City Stores Inc. and ConAgra Inc. are
reporting earnings.
***Quote of the Day:
"[I] watched 60 Minutes II so you don't have to.
Did you know that the interview was conducted
this very afternoon? Flew her in from Houston,
they did. While you and I were sitting at our
computers refreshing the Drudge Report, hoping
against hope that CBS would finally recant and
apologize, they were busy trying to coax a get-out-
of-jail-free card out of Killian's typist. As for what
was said, I won't belabor it with a long play by
play. All you need to know is that she thinks the
memos are fake, that some of the terminology used
in them is wrong, and yet somehow every last bit
of information in them accurately reflects the facts
as they were. Rather actually had the nuts to end
the segment by noting that whatever quibbles there
might be about the hard evidence, no one has yet
challenged 'the major thrust' of the story. If
Edward R. Murrow wasn't already dead, he'd kill
himself."
--Allahpundit.com, September 15, 2004
***DESK OF DENHOLM***
This just in from Taipan's resident Editor-at-Large,
Martin Denholm:
Well, thankfully New Orleans dodged Hurricane
Ivan's bullet this morning. The city lives to raise hell for
another day! Now, from a place renowned for its
boisterous, hard-partying style, we move swiftly
across the Atlantic to a country known more for
reserve than raucousness. That's right� time for a trip
to Britain.
***All Economic Systems Are "Go" in Britain: Having
endured another night of broken sleep and gotten
stuck watching today's economic news releases and
trading activity on London's FTSE index on CNBC at
some ungodly hour this morning, I'm feeling quite
patriotic� if a little sleep-deprived! Fortunately, I just
stuffed a waffle down my face, so with a burst of
energy, let's pound out the UK news in one go�
First up: retail sales. The Bank of England was ignored
again in August, with the Great British Consumer
making frequent appearances at the nation's stores.
Having boldly forecast a 0.3% monthly drop,
economists were left with egg on their faces as sales
rose a healthy 0.6%. Year-over-year sales growth
sped to 6.5%.
It seems like the "back-to-school" crew were out in
force, snapping up clothes and footwear at a 3.7%
growth clip - the fastest since June 2003. Department
store sales climbed 3.3% - the best performance since
July 2002.
So why the sudden spike? Well, hefty end-of-summer
discounts had a lot to do with it, as retailers tried to
shift excess inventory and make room for new
seasonal goods. But a double dose of falling
unemployment and inflation also played a large part.
The robust UK economy, which has now grown for
43 straight quarters, extended another streak in August
as unemployment fell for the 15th straight month.
Jobless claims declined 6,100 for the month. In the
three months to July, the number of folks without a job
fell by 16,000 to 1.4 million, keeping national
unemployment at the lowest level since 1984.
And in what will provide a boost to the Bank of
England, average earnings growth from May through
July totaled 3.8%, down from the 4.3% growth of the
previous three-month period. The figure was the
weakest since December 2003. That shows inflation is
subdued despite the solid economic performance.
Indeed, consumer price growth actually declined from
1.4% to 1.3% in August - again surprising, given the
strength of the UK economy and previous cautionary
notes from the Bank of England. And look here: prices
of clothing and footwear slumped 5.7% - the biggest
decline since December 2002. Ah, now I see why
August's sales rose so solidly! The annual inflation rate
has remained below the government's target 2% figure
since May 1998.
It's ten months now since the Bank of England began
tightening monetary policy. Interest rates now stand at
4.75%, but today's retail growth bolstered the pound
and threw more weight behind the argument that
additional hikes are needed. But with signs finally
pointing to a long-awaited slowdown in the housing
market (house prices declined for the first time in two
years last month), I doubt the bank will raise rates
beyond 5% before the first quarter of 2005.
Cheerio for now.
***TAIPAN TIDINGS***
***Thanks, Louisa! e-Dispatch reader Louisa R.
writes in response to our recent exploration of the
supposed US real-estate "bubble":
"Thank you for the only rational article I've seen on
this housing 'bubble' that so many prattle about.
Having helped people sell and buy residential real
estate for about 15 years, I have seen prices fall and
rise, but very few people were badly hurt when they
fell. At the bottom of the market, in the mid 1990's, a
few who had second mortgages found themselves
'upside down,' owing as much or more than the
current value. Even they were hurt only if they were
compelled to sell. Nobody hates short sales more than
real-estate agents, since the lenders take their share
and we get paid only if there's any money left. But I
see very few signs of big a drop in prices, only a
slowing in the rise or maybe even a flattening of prices.
Prices will always rise and fall, but prices of residential
real estate will rarely plummet rapidly, barring some
rare catastrophe."
*** Not only is the looming "real-estate crash" a Big
Lie� but a new hidden real-estate boom is emerging -
and it's making some people very rich.
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Executive Publisher
and The Taipan Group's
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