Quick Overview

• Growing concerns about the subprime mortgage market dragged down shares of Bear Stearns and Goldman Sachs
  
  
  

• The National Association of Realtors said that U.S. existing home sales were down 0.3% MoM -- better than expected.
  
  

• Peru said their silver production was down 11.4% YoY, and gold production was down 28% YoY. Peru is the worlds largest silver producer.
  
  
  

Quick Overview

• The Ifo Institute's index of business confidence in Germany fell from 108.6 to 107.0 in June.
  

• The USDA said that there were 11.272 million head of cattle on feed as of June 1st, up 0.8% YoY.
  

• There were 57.2 million pounds of frozen bellies in storage, down 3% YoY.
  

• Frozen pork in storage totaled 491 million pounds, up 3% YoY.
  

• There were 851 million pounds of frozen orange juice in U.S. cold storage, down 17% YoY.
  

``The problem is not what we see happening, but what we don't see,''
said Joseph Mason, associate professor of finance at Drexel University in Philadelphia and co-author of an 84-page study this year on the CDO market. ``We don't know the price of these assets. We don't know which banks are exposed to this sector. These conditions are the classic conditions for financial crises across history.''
The bailout of the fund would be the largest since Long- Term Capital Management LP, which received $3.625 billion from 14 lenders in 1998.

Yen Reaches 4 1/2-Year Low Against Dollar; Carry Trades to Rise
Japanese finance companies will market more than 1.5 trillion yen ($12.1 billion) of foreign-currency investment trusts before the end of June, according to data compiled by Bloomberg. The funds are aimed at individual investors who want to seek out assets with higher yields.

``It's an industry issue,'' What are their true prices?
Investors from hedge funds to pension funds and foreign banks have snapped up CDOs, securities backed by pools of assets, as a new way to invest in debt, making it the fastest-growing market and pushing the amount outstanding to more than $1 trillion.

Quick Overview

• U.S. Leading indicators rose 0.3% in May
  

• Retail sales in Canada were up 0.4% MoM and up 4.7 YoY.
  

• The DoE said that underground supplies of natural gas were up 89 billion cubic feet to 2.344 trillion cubic feet.
  

Sakakibara Says Bank of Japan Must Lift Rates to Strengthen Yen
``Japan's interest rates are absurdly low and creating a carry trade bubble, and this is quite dangerous,'' said Sakakibara

Bear Stearns Fund Collapse Sends Shock Through CDOs A sale would give banks, brokerages and investors the one thing they want to avoid: a real price on the bonds in the fund that could serve as a benchmark. The securities are known as collateralized debt obligations, which exceed $1 trillion and comprise the fastest-growing part of the bond market.

Quick Overview

• Leading indicators in Australia rose 6.7% YoY.
  

• Japan's merchandise trade surplus rose 15.1% YoY.
  
  

• The U.S. DoE said that:
  Supplies of crude oil rose 6.9 million barrels to 349.3 million barrels
  Supplies of gasoline rose 1.8 million barrels
  Supplies of heating oil fell 400,000 barrels.
  Gasoline demand was up 1.5% YoY
  Distillate demand was up 2.8% YoY.

Excluding Ron Paul After our call, I got to thinking about this Failor character: what kind of person running a "tax relief" organization would exclude the presidential candidate with – and this is no exaggeration – possibly the best record on taxation in all of American history, someone who favors the abolition of the income tax and the drastic reduction or elimination of nearly all other federal taxes? Should this be the Iowans For a Little Tax Relief, But Not Too Much?

Quick Overview

• U.S. Housing starts were down 2.1% MoM and down 26% YoY. Building permits were up 3% MoM.
  

• China sold $5.8 billion of U.S. T-bonds in April, the biggest monthly sale in seven years.
  

• Canadian CPI rose 2.2% YoY
  

• Investor confidence in Germany dropped from 24 to 20.3 in June, more than expected.
  

• Australia’s wheat crop will total 22.5 tons, down from a previous estimate of 25 tons due to dry conditions.
  

• Liaoning province in northeast China is having its worst drought in 30 years. Some 7% of China's corn and 5% of its wheat come there.
  

Quick Overview

• YoY Swiss industrial production rose 7.3%.
  

• Standard and Poor's raised credit ratings for three large Japanese banks, citing improved balance sheets and an improved economy.
  

• The National Association of Homebuilders sentiment index fell from 30 to 28 in June. The lowest level in more than 16 years.
  

• Brazil, the world's biggest producer of the sweetener and sugarcane-based ethanol, will increase the required blend of the biofuel in domestic gasoline to 25 percent from 23 percent starting July 1.
  
  

• Shanghai is set to overtake Singapore as the world's busiest port in 2008.

Housewives Outmaneuver UBS, Deutsche Bank in Yen Carry Trading
In Japan, individuals have opened 600,000 so-called margin trading accounts at brokerages that lend money for currency bets, 80 percent more than a year ago, according to Yano Research.

• U.S.. Consumer prices rose 0.7% in May and 2.7% YoY.
  

• U.S. Industrial production was unchanged in May.
  

• U.S. Capacity utilization was 81.3%, down from 81.5% MoM.
  

• The New York Federal Reserve's index of manufacturing rose from 8.0 to 25.8 in June, the highest level in a year.
  

• The University of Michigan’s consumer sentiment index dropped from 88.3 to 83.7 in June.
  

• The International Cocoa Organization expects world production to fall short of consumption by 145,000 tons.
  

• The yen dropped to a fifteen year low against the pound and a fresh four-and-a-half-year against the dollar after the Bank of Japan left interest rates on hold at its monthly policy meeting.
  
  
• Concerns about dry weather in the eastern and southeastern U.S. continue to support grain prices. Some weather forecasts increased the moisture in next week's outlook, but traders weren't biting. They've been bitten too many times when similar forecasts dried up.

Quick Overview

• U.S. producer prices rose 0.9% in May and up 4.1% YoY.
  

• U.K. Retail sales rose 0.4% in May and up 3.9% YoY.
  

• Consumer prices in the Euro area rose 1.9%
  

• Retail sales in New Zealand were down 1.2%.
  
  

• China's May industrial production at 18.1% YoY, up from 17.4% in April.
  
  

• The Swiss want to sell 250 tons of gold over the next couple of years.
  
  

The Art of Being Rich
Indians, Russians, Chinese - not to mention Americans and Englishmen - they are all throwing their money around like people who just got rich…and got rich so easily they don't know the value of it. What to make of it?

Turkey is Poised for War against Iraq's Kurds Turkey is dangerously close to launching a full-scale war across its eastern border into northern Iraq. The aim would be to wipe out the bases of the militant Kurdistan Workers Party (PKK), destroy once and for all the party's separatist ambitions, and put an end to cross-border terrorist attacks and hit-and-run raids by the PKK, which have inflamed nationalist opinion in Turkey.

Quick Overview

• U.S. Retail sales were up 1.4% in May, stronger than expected.
  

• U.K.’s Unemployment rate unchanged at 5.5%.
  

• Canada's manufacturing shipments fell 0.6%.
  

• Retail sales in China rose 15.9% YoY.
  

• Japan will get its first nursing home for dogs with round-the-clock monitoring by doctors and a team of puppies to help aging pooches feel younger, a pet products company said Wednesday. Owners pay 98,000 yen ($800) a month.
  
  

• The U.S. DOE said that:
  Supplies of crude oil were up 100,000 barrels to 342.4 million barrels.
  Supplies of gasoline were unchanged.
  Supplies of heating oil were down 2.8 million barrels.
  Gasoline demand was up 1.4% YoY
  Distillate demand was up 2.9% YoY.
  

• Japanese officials announced they will stop 100% inspections of U.S. beef imports Wednesday and instead go to spot-checks.
  

• Las Vegas oddsmakers had Ron Paul at 200 to 1 to win the primaries. Now he is at 7 to 1
  

Quick Overview

• China's CPI rose 3.4% in May, more than expect, and the highest level in over 2 years.
  
  

• For the first eight months of the year, the U.S. federal government deficit is $148.5 billion, down from $227 billion a year ago.
  

• YoY Consumer prices in the U.K. were up 2.5%.
  

• Industrial production was down 0.8% in the Euro zone.
  

• YoY Industrial production in India was up 13.6%.
  

• The People's Bank of China will be issuing commemorative Olympic silver coins.
  
  

Corn, wheat futures shoot higher on supply worries "USDA cut the production estimate for the world by more than six million metric tons," Brugler said. "They cut the ending stocks by another million-and-a-half or so - one of the tightest stocks-to-usage rations since 1960 - and the market's reacting to that."

Quick Overview

• A slowdown in the United States' housing market may have knocked one percentage point off annual growth, but does not seem to have affected consumer demand much, a Federal Reserve official said.
  

• Japan's economy grew at an annual rate of 3.3% in the first quarter of 2007, up from an earlier estimate of 2.4%. YoY GDP rose 2.6%.
  

• YoY Japan's wholesale inflation rose 2.2 percent in May.

• Industrial production in France fell 0.8%.
  

• The USDA estimates 2007-2008 U.S. ending stocks of:
  Corn up from 947 to 997 million bushels.
  Soybeans remained at 320 million bushels.
  Wheat fell from 469 to 443 million bushels.
  Sugar rose from 1.340 to 1.417 million tons.
  Cotton rose from 6.40 to 6.70 million bales.
  

• The USDA estimates 2007-2008 world ending stocks of:
  Corn rose to 92 million tons up from 90 million tons.
  Soybeans at 54 million tons, down from 64.
  Wheat down from 113 to 112 million tons.
  Cotton rose to 51 million tons.
  

• The USDA kept its estimate of Florida's 2006-2007 orange production at 131 million boxes with a juice yield of 1.65 gallons per box.
  

• The USDA estimates 2007-2008 world ending stocks of coffee at 16.8 million bags, the lowest since 1961.
  
  

Updates resume June 10

Quick Overview

• U.S. factory orders rose 0.3% in April, weaker than expected.
  

• YoY Japan's capital spending rose 13.6% in the first quarter.

Half of humanity set to go urban
In 1900, only 14% of humanity lived in cities. By the century's close, 47% of us did so. This change is revealed in the growth of the number of medium-sized cities. In 1950, there were 83 cities with populations exceeding one million; but by 2000, this had risen to 411.

Banks Sell 'Toxic Waste' CDOs to Calpers, Texas Teachers Fund
`Lipstick on a Pig'
Chriss Street, treasurer of Orange County, California, the fifth-most-populous county in the U.S., says no public fund should invest in equity tranches. He says fund managers are ignoring their fiduciary responsibilities by placing even 1 percent of pension assets into the riskiest portion of a CDO.

Quick Overview

• U.S. unemployment rate remained at 4.5%
  

• The Institute of Supply Management's manufacturing index increased from 54.7 to 55.0
  

• The University of Michigan's index of consumer sentiment increased from 87.1 to 88.3
  

• U.S. personal incomes were down 0.1%
  

• U.S. consumer spending was up 0.5%.
  

• YoY a measure of core inflation slowed to a 2.0% gain in April
  

• Manufacturing in the U.K. rose from 54.1 to 54.9
  

• Manufacturing in Australia rose from 51.7 to 55.2
  

• The unemployment rate in the Euro area improved from 7.2% to 7.1%.
  

• YoY GDP in the Euro area rose 3.0% in the first quarter.
  

• India's economy grew at a record 9.4 percent last year - its fastest pace in nearly two decades.
  

• Renewable Fuels Association said that the U.S. produced 384,000 barrels of ethanol per day in March and used 414,000 barrels daily.
  

• The Chicago Board of Trade set an all time record for monthly total trade volume during May 2007

Barred From Testing for Mad Cow, Niche Meatpacker Loses Clients
His staff was trained in testing for mad cow, using a machine that gives results in seven hours, while the carcasses are still in the cooler.
But on April 9, the United States Department of Agriculture forbade Creekstone to test its cattle, saying there was ''no scientific justification'' for testing young steers like those Creekstone sells. Certifying some beef for Japan as disease-free, the department said, might confuse American consumers into thinking that untested beef was not safe.

As pork prices soar, Chinese put brakes on corn for ethanol
Ethanol production has put the Chinese government in an unpleasant bind, as fears rise that the environmentally friendly gasoline additive is also fueling politically dangerous increases in the price of food – particularly pork, a key staple.

Quick Overview

• U.S. GDP growth in the first quarter was 0.6%. YoY GDP was up 1.9%
  

• Chicago purchasing managers index rose from 52.9 to 61.7
  
  

• U.S. Home prices increased 0.5% in the first quarter, the slowest QoQ price gain in 10 years.
  
  

• Canada’s GDP rose 0.3% in March -- up 2.0% YoY
  

• Consumer prices in the Euro area rose 1.9%.
  

• Germany's unemployment rate remained at 9.2%.
  

• YoY GDP in India rose 9.4%.
  
  

• The U.S. DOE said that:
  Supplies of crude oil were down 2.0 million barrels at 342.2 million barrels.
  Supplies of gasoline were up 1.3 million barrels.
  U.S. Gasoline demand was up 1.4% YoY.
  Distillate demand was up 2.9% YoY.
  
  

• The International Cocoa Organization said the global cocoa shortfall this year will be 145,000 tons. Adverse weather hurt crops in the top producing countries. They estimate end of season world cocoa stocks at 1.74 million tons -- 49% of annual use.

Quick Overview

• The Mortgage Bankers' Association’s index of mortgage applications fell 7% as interest rates reached seven-month highs.
  

• Concerns about inflation trumped fears about the slumping housing market last month in the minds of Federal Reserve members.
  

• China hiked its tax on securities transactions to 0.3% from 0.1% in its strongest effort yet to cool a bull run.
  

• Japan's industrial production fell 0.1% in April.
  

• Australia's retail sales rose 0.1% in April.

• Malaysia's economy grew 5.3% YoY.
  
  

• Norway raised rates 0.25 %, the seventh hike since May 06.