Goods The deficit on goods increased to $218.6 billion in the third quarter from $210.6 billion
in the second.
Goods exports increased to $262.1 billion from $252.8 billion. The increase resulted from
increases in all major commodity categories

http://www.bea.gov/bea/newsrelarchive/2006/trans306.pdf

Interesting, I thought the story was lower imports, but really, gap between import and export growth in Dollar terms isnt that great. I guess everything now hinges on oil and natural gas prices. The trade gap in goods terms still grows.

Oh, that and how well investments overseas perform.

Another Fed gift to Wall Street
The bulls thought last week’s quarter-point interest-rate cut wasn’t enough. So the central bank found another way to lift the spirits of our bailout nation.

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/AnotherFedGiftToWallStreet.aspx

By Bill Fleckenstein

Hours before the Federal Reserve announced its liquidity plan Wednesday, I wrote in my daily column on my Web site: “I suppose now the bulls will start chanting ‘inter-meeting rate cut’ or some other battle cry.”

Little did I know how swiftly and dramatically their prayers would be answered.

Wednesday’s party in the stock market — at least for much of the day — actually started the afternoon before, when, as several e-mails from my daily readers noted, a talking head on Bubblevision said the Fed was disappointed by the stock market’s reaction to its quarter-point cut (that being the comment of a Fed governor who’d supposedly contacted him).

The Fed tends its flock
Then, shortly before the market’s opening, the Fed announced its new term-auction-facility plan, whereby banks can borrow (pledging collateral to be determined) and receive funds at the prevailing rate that day. Thus, those who believe that markets should go up 1% or more a day — but that the risks should be borne by the government — won another round.

We are where we are today because then-Fed Chairman Alan Greenspan’s policies created a massive stock bubble that was bailed out by an even more massive real-estate bubble, and because of the deregulation of financial institutions, under which we saw the unsupervised renunciation of lending standards in this country. That process continued for several years, creating mortgage-related collateral that varied between marginally OK and totally worthless. (As to the “genius” responsible, I’ll have more comments…)

That problem reared its head throughout 2007 but was deemed to be contained. Then we had a surprise rate cut. Then we had the “SIV Mae” bailout plan (SIV is short for structured investment vehicle). Then we had a couple of more planned rate cuts. Then we had Treasury chief Hank Paulson’s mortgage-bailout nonplan plan. Then we had another rate cut. And Wednesday, we had the post-rate-cut liquidity vehicle.

It’s beginning to look a lot like Christmas
That the Fed and the government are catering to Wall Street is obvious. They’ve created such a moral hazard that even if you could make an argument that, on the liquidity front, the Fed is simply attempting to do its original job, the way it is carrying out the mission is making matters worse…

And the rest of Fleckenstein’s article just get worse… I mean better.

The Chinese have no ambitions to be the “Global Supercop” like the United States. The China PLA doesn’t have Aircraft Carriers for even regional military power projection. If the Chinese wanted an Aircraft Carrier, they could have easily purchased several of them from Russia as the Indian Navy has. Rarely does the China PLA Navy venture far into the blue water Pacific, its primary tasking is to deter US military intervention in the Taiwan straits. The Republic of China, Taiwan, is an unfinished Chinese civil war, and none of the US damn business.

In the long term, the global economy would be far better off with a multi-polar world order without US interference in the internal affairs of other sovereign nations. US Dollar hegemony is distorted the globalization process with a race to the bottom for living standards across the world. Most of the developing world will laud the day when the planet is finally free from US gunboat diplomacy, Neo-liberalism economics, Neo-imperialism democracy in Iraq, 30 second television sound bites on foreign policy, and insipid Thomas Friedman’s latest theory in market globalization for every unique culture on the planet.

The Latest from Stephen Roach,
http://www.nytimes.com/2007/12/16/opinion/16roach.html?_r=1&oref=slogin

America’s central bank has mismanaged the biggest risk of our times. Ever since the equity bubble began forming in the late 1990s, the Federal Reserve has been ignoring, if not condoning, excesses in asset markets. That negligence has allowed the United States to lurch from bubble to bubble.

Fixated on the narrow “core inflation” rate, which excludes the necessities of food and energy, the Fed has ignored new and powerful linkages that have developed between economic activity and increasingly risky financial markets.

Over time, America’s bubbles have gotten bigger, as have the segments of the real economy they have infected. The Fed needs to rethink its reckless, bubble-prone policy. Once the current crisis subsides, the economy will require the tight money of higher interest rates — the only hope America has for breaking the lethal chain of endless asset bubbles.

— Stephen S. Roach, the chairman of Morgan Stanley Asia.

We are all Belgians

“…for more than a half-year Belgium has been unable to form a government because its 10.4 million citizens can’t decide what the state is for…” http://www.nytimes.com/2007/12/17/opinion/17cohen.html?ref=opinion

their strength seems to be in anonymity

“…a large cache of counterfeit drugs from Euro Gulf’s warehouse deep inside a sprawling free trade zone… reveals its link to a complex supply chain of fake drugs that ran from China through Hong Kong, the United Arab Emirates, Britain and the Bahamas, ultimately leading to an Internet pharmacy… “counterfeiters are using it as a way to hide where their products are originally sourced.”…” http://www.nytimes.com/2007/12/17/world/middleeast/17freezone.html?ref=business

http://ftalphaville.ft.com/blog/2007/12/17/9661/tony-jackson-dont-look-to-the-swfs-to-fix-the-mess/