On April 21st., Greenspan testified before Congress that he was
"certain" that our Sino partners will float their currency, the
remnibi in the interest of its' economy. This on the heels of a
newsfeed 48 hours earlier from China that signaled a significant
change in its' remnibi policy! This will undoubtedly translate into
good news for an already beleaguered dollar. At it lowest point the
dollar was below 81 euros to a dollar.

Greenspan ability to engineer and telegraf a certainty in a matter of
a little more tha 48 hours in the matter of China's currency
re-evaluation has come not only as a surprise to me but as i've
learnt to managers of major and key foreign exchange houses as well.
Moreover, the fact that China has benefited greatly from this
favorable 8.3 conversion peg for the last decade by making its'
exports into the U.S. much cheaper and hence favorably marketwise, at
the expense of other countries was not revealed!... and it won't be
to the commoners. Applying Goethe's(J. Wolfgang von Goethe) strategic
focus of looking at the constituents of China's 'larger picture,'
its' respective core issues may shed some light into the elements
favoring the argument that doing trade with China was not one based
on want but of NEED!... A necessity to fuel the growth of a matured
developed economy void of an alternative solution/s to perpetuate
its' existence; a perpetuation set in-motion and initiated with
forethought...

The economic calender merits a close watch on May 6th. when metrics
on the employment report reveal whether a slower growth is
sustainable or are the undercurrents strong enough to drag us to the
brink of stagflation. Our first indicator(Macro), The Gortz Indicator
(G. Heinrich von Gortz) revealed the perceived risk of inflation
was 'elevated' enough to warrant the pricing in of a real risk
premium for inflation pressures as efficient markets should. Contrary
to that belief, forces of inefficiencies have crept in exacerbating
the haze of uncertainty that has cloaked the general market. In such
situations, it is most helpful at least for me to move away from a
macro view and employ a micro one... the von Reuter(micro) Indicator.

This indicator is named after another Baron, the second, (Paul Julius)
The Baron von Reuter, the father of the global news network called
Reuters. Originally founded on the idea of moving stock news
information between 2 points A (Aachen) and B (Brussels) and back to
A... When the general equity market is deemed unfavorable, investors
move their financial interest into BONDS. On Feb. 16th of this year
Greenspan reflected the decline in long-term bond yields as
a "conundrum" and defined it "a short-term abberration" expecting the
situation to resolve itself... bond yield revert upwards to restore
balance... on May 6th the FOMC is anticipating a "friendly" jobs
report; one that doesn't surprise on inflationary pressures and more
importantly one that will help coax the long yields up or to a
turning point at the least at their measured pace of rate increses.
In an environment of rising inflation and yields, price to earnings
ratios of equities tend to decline. Cos will begin revising down
earnings if they have already done so in the face of a seemingly
slowing economy. In that environment prices of equities may have to
come down to keep pace with an acceptable price-to-earnings.
Furthermore, current pe levels of S & P 500 cos currently(25) are
above historical average(16) may favor lower equity prices...

Result: The Reuter Indicator is 'elevated' with a real risk bias than
a perceived one for lower equity prices for the intermediate term.
Keeping in mind that stocks are currently at oversold levels and may
favor a rally especially with a "friendly" jobs report on May 6th.

In light of the uncertainty that has gripped the market, it may help
to remember that a certain Material Girl once said that we're living
in a material world and when material boys and girls can't see the
light, the ones holding cash will make their rainy day and be "Mister
Right" and misses, of course...

May all your endeavors be a prosperous one...


P. Mavin