Weather warning America's housing market is in the doldrums
IF AMERICA'S housing market acts as a bellwether for its economy, then new monthly data released on March 29th by Standard & Poor's makes for particularly glum reading.

Kill teams in Afghanistan: the truth

Quick Overview

• China may raise its five-year goal for solar power capacity to 10 gigawatts from 5 GW as its nuclear power development may slow, Xinhua said.
• FSLR ,TSL, YGE, LDK, STP, SOLR, MY, JASO, SPWRA, STRI, JKS, CSIQ, EMKR.

• (FT)Russia plans to extend an export ban on cereals for several months in a move that will tighten further stretched agricultural commodities markets.
• (FT) Nowhere is the unbridled enthusiasm for silver clearer than at the level of coins and small bars – the type of product most accessible to smaller investors.
• (DJ)--The rally in the price of silver is running largely on ballooning investment and speculative interest rather than any improving fundamental picture.
• Russia's gold output this year is likely to increase by 4.5% compared with 2010, to 211.4 metric tons, the gold producers union said.
• (Bloomberg) -- Optimism among U.S. chief executive officers surpassed the highest level reached before the recession.
• (Bloomberg) -- About 1.8 million homes that are delinquent or in foreclosure loom as additional supply.
•  U.S. private-sector companies added 201,000 jobs in March
• Crude oil stocks rose by 2.9 million barrels in the week ending March 25,
  
  
  Gasoline stocks fell by 2.7 million.
  
  Distillate fuel stocks rose 0.7 million barrels
  
  
  

  
  

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Living and Dying Downwind  The unleashed isotopes of concern from the damaged Japanese reactors - Iodine-131, Cesium-137, Strontium-90 and Plutonium-239 - are well known to the Marshall Islanders living downwind of the testing sites at Bikini and Enewetak atolls in the central Pacific, following sixty-seven A- and H-bombs exploded between 1946-58.

Quick Overview

• All Japanese ports affected by the devastating earthquake and tsunami that hit the northeastern part of the country on March 11 have now reopened, according to the Ministry of Land, Infrastructure, Transport and Tourism.
• (Bloomberg) -- Japan’s ruling party is considering abandoning a proposed corporate-tax cut and boosting levies on individuals to help pay for earthquake reconstruction and reduce the need to step up bond sales.
  
  
  

• U.S personal income rose 0.3% in February
• U.S personal consumption expenditures rose by 0.7%
• The average American family's household net worth declined 23% between 2007 and 2009, the Federal Reserve said.
• The National Association of Realtors reported that its pending home sales index rose 2.1% in February, but down 8.2 YoY.

• South Korea's business sentiment plunged to 99.3 in April from 113.5 the previous month.

• China's mobile phone operators added 19.83 million new subscribers in the first two months of this year, bringing the number of the country's cell phone users to 878.83 million.

Quick Overview

• A surge in radioactive contamination reportedly was detected Saturday in seawater near Japan’s Fukushima Daiichi nuclear plant.
• Nuclear experts from Greenpeace have started monitoring radiation near the stricken Fukushima No. 1 atomic power plant. Greenpeace said it believed Japanese authorities may have been underplaying the scale of the disaster.
• Germans throughout Berlin, Hamburg, Munich, and Cologne participated in what are thought to be the country's largest-ever protests against nuclear power
• The first signs of radioactive materials from the quake-hit Fukushima Daiichi nuclear plant in Japan was found in northeast China's Heilongjiang Province on Thursday, China's nuclear authorities said on Saturday.
•  RADIOACTIVE IODINE RELEASES FROM JAPAN’S FUKUSHIMA DAIICHI REACTORS MAY EXCEED THOSE OF THREE MILE ISLAND BY OVER 100,000 TIMES  Vermont Yankee, for example, contains more spent fuel in its pool than all four stricken pools at the Fukushima Daiichi plant. Yet the Nuclear Regulatory Commission has not ordered any additional actions to protect this material.
  

• The Department of Commerce revised its Q4 2010 estimate of GDP upward to 3.1%, up from its previous estimate of 2.8%. (You may want to get the antacids ready for the year ahead)

• The U.S consumer-sentiment index fell to 67.5 in March

• The USDA's confirmation of a large corn sale of 49 million bushels to unknown, China?

• (Bloomberg) “The economy is looking pretty good,” Bullard told reporters in Marseille, France, today. “It is still reasonable to review QE2 in the coming meetings, especially this April meeting, and see if we want to decide to finish the program or to stop a little bit short.”
• Charles Plosser: The Fed should hike interest rates from the current range near zero to 2.5% within a year.

• The White House said Obama is committed to corporate tax reform, after the New York Times reported that GE owed no U.S. taxes in 2010.
• GE's tax filing is apparently 24,000 pages long........................................................................

What They're Covering Up at Fukushima

They say as you move away the radiation is reduced in inverse ratio to the square of the distance. I want to say the reverse. Internal irradiation happens when radioactive material is ingested into the body. What happens? Say there is a nuclear particle one meter away from you. You breathe it in, it sticks inside your body; the distance between you and it is now at the micron level. One meter is 1000 millimeters, one micron is one thousandth of a millimeter. That’s a thousand times a thousand: a thousand squared. That’s the real meaning of “inverse ratio of the square of the distance.” Radiation exposure is increased by a factor of a trillion. Inhaling even the tiniest particle, that’s the danger.

KO's Special Comment: Libya, Obama and the Five-Second Rule

Quick Overview

• China is hiking taxes on the mining of rare earth elements amid moves to mitigate environmental damage, control production levels and limit exports. Taxes will rise to either 30 Yuan ($4.5) or 60 Yuan ($9) per ton, depending on whether the elements are categorized as light or heavy.
• China, which controls about 95 percent of global shipments of rare earths, may start importing some of the material to meet rising domestic demand, according to Liu Junhua, a Chinese official.
• MCP

• The U.S. Interior Department said it would open up to mining land in Wyoming estimated to contain 758 million tons of low sulfur coal, in a move praised by the coal industry and condemned by environmental groups.

• A collapse of the euro currency was not "unthinkable" if it comes under too much strain, Buffett said.

• U.K retail sales fell by 0.8% in February - weaker than expected.

• A 7.0-magnitude earthquake rattled Myanmar.

• U.S. durable goods in February posted the biggest drop in four months, falling 0.9%.

• The IGC estimates world grain production to rise 4.6% to an all-time high of 1.805bn tonnes. However, even this estimate, which assumed a 4% rise in sowings to a 13-year high of 537m hectares, would be insufficient to restore production above demand.

• (WSJA) China may not be able to meet sharply rising food demand from its domestic resources, a senior Chinese agriculture official said, indicating room for further growth in imports.
  
  
  
  
  

Worst Texas Drought in 44 Years Eroding U.S. Wheat, Beef Supply
“Each day we don’t get rain, our potential yield goes down,” Anderson said. “If things turn perfect, I think we could have an average crop, but I’m talking about perfect from here on out. The odds of that are pretty slim.”

Quick Overview

• Global refined copper supply was in a deficit of 305 thousand tons in 2010, according to International Copper Study Group (ICSG).
• Rio Tinto expects global copper consumption, over the next 20-30 years, to exceed the total historical consumption to date.
• Copper demand will exceed supply by 889,000 metric tons this year, Barclays estimated in a March 15 report.

• Global merchandise trade grew 17% in Q4 of 2010 compared to the same period in 2009 reaching US$4.1 trillion, slightly up on previous quarter, reflected in air freight and sea freight volume increases. Brazil, Russia, India and China (BRIC) led the way.

• Starbucks Digital Network, debuts new content providers: The Economist, ESPN Insider and Mediabistro with Marvel Digital Comics coming soon.

• A piece of drill pipe trapped inside the Deepwater Horizon's blowout preventer kept the device from sealing the BP well, U.S. investigators said Wednesday.

• U.S. Crude oil stockpiles rose 2.1 million barrels to 352.8 million barrels, compared with an average survey estimate calling for a 1.7-million-barrel increase.
• U.S. Gasoline stockpiles fell 5.3 million barrels to 219.7 million barrels.

• U.S. sales of new homes fell 17% in February to a seasonally adjusted annual rate of 250,000, a record low. (The housing numbers are notoriously unreliable on a MoM basis) The median sales price was $202,100, while the average sales price was $246,000
  Inventories are at an 8.9 month supply.

• (Bloomberg) Meltzer, who has written a two-volume history of the central bank, said “inflation is coming.” Although price increases are currently “buried,” Meltzer said inflation “will come out as soon as housing prices stop falling.”

Quick Overview

• (Bloomberg) Goldman Sachs Group Inc. forecasts a global expansion of 4.8 percent this year, while JPMorgan calls for 4.4 percent.

• U.S. Federal Reserve Bank of Dallas President Richard Fisher said he is likely to be among the first Fed officials to press for tighter monetary policy when the time comes, warning that inflationary pressures are building.
  
  
• OPEC said $120 oil is an “acceptable” level and will not hinder global growth.
• Goldman Sachs predicts U.S. corn acreage this year at 92.1 million (37.3 million hectares), above the U.S. Department of Agriculture's current estimate for 92.0 million. The USDA will release its first plantings data for 2011 based on a farmer surveys on Mar. 31.
• U.K. index of factory orders rose to 5, the highest since March 2008, from minus 8 in February.

Quick Overview

• The National Association of Realtors reported this morning that existing U.S. home sales fell 9.6% last month and prices dropped to the lowest level in nine years.

• Citigroup announced a 1-for-10 reverse stock split and says it plans to pay a penny-a-share dividend.

• The US Treasury Department is to begin selling off toxic assets worth an estimated $142bn, in an effort to close another chapter of the financial crisis.

• The average British household has seen its real-terms income fall by 1.6% in the worst three-year squeeze since the early 1980s, research suggested today.

Safe nuclear does exist, and China is leading the way with thorium China’s Academy of Sciences said it had chosen a “thorium-based molten salt reactor system”. The liquid fuel idea was pioneered by US physicists at Oak Ridge National Lab in the 1960s, but the US has long since dropped the ball. Further evidence of Barack `Obama’s “Sputnik moment”, you could say.

The megaquake connection: Are huge earthquakes linked? "If you have a quake of, let's say, 6.2 or larger, every sand grain on the planet is moving to the music of that event," Stein says.

(Kurzweil) How an MP3 can be used to hack your car
Hackers could gain access to a vehicle’s computer systems remotely, security experts from the University of California, San Diego, and the University of Washington have found.
In one example, cell phone hardware installed in luxury cars was attacked, allowing the team to inject malicious code into the car’s electronic controls. In theory, hackers could then sell the car to a thief, giving them its location and unlocking it remotely. The team also managed to take control of the car using a Trojan app on a phone that used an Android operating system and had been paired with the car’s Bluetooth system.
The researchers were able to show that software embedded in an MP3 file could install itself into the car’s firmware, enabling similar exploits to those above. If the car had a self-parking system, it could in theory be driven away by the hacker.

Quick Overview

• The U.S PPI rose 1.6% MoM, the most since June 2009. The core measure, which excludes food and energy costs rose 0.2%

• New U.S. housing construction fell 22.5% in February to 479,000 units, just above the record low set in April 2009. Building permits fell 8.2% to a record low.

• The U.S. current account trade deficit fell 9.7 percent to 113.3 billion U.S. dollars in the last quarter of 2010, the smallest imbalance since the end of 2009

• The Eurozone annual inflation rate was is 2.4%

• The British unemployment rate increased to 8.0 %

• March 16 (Bloomberg) -- Federal Reserve officials signaled they’re unlikely to expand a $600-billion bond purchase plan as the recovery picks up steam and the threat that inflation will fall too low begins to wane.

• Portugal’s debt rating was cut by Moody’s to A3, four steps from junk.

• GOP voted to stop the Environmental Protection Agency's plan to regulate greenhouse gas emissions.

• Japan was warned over nuclear plants Wiki Leaks cables show.

• Republicans are fast tracking a bill to bar federal funding of National Public Radio (In an emergency meeting)

• 3/17 USDA announced the sale of 4.3 million bushels of old crop corn to "unknown destinations" this is probably China.

• Salt prices in China jumped to ten fold in some cities on the false belief that it can guard against a possible radiation exposure.

• The quake-tsunami-radiation-struck regions account for 6% of Japan's total agricultural land and 10% of the paddy area.

• AIG said first-quarter catastrophes including the earthquake in Japan will cost the company about $1 billion.

• AT&T agreed to buy T-Mobile  from Deutsche Telekom for $39 billion
  
  
  
  

No updates this week.

Meltdown at Fukushima
The boiling-water reactors at Fukushima — 40 years old and designed by General Electric — have spent fuel pools several stories above ground adjacent to the top of the reactor. The hydrogen explosion may have blown off the roof covering the pool, as it's not under containment. The pool requires water circulation to remove decay heat. If this doesn't happen, the water will evaporate and possibly boil off. If a pool wall or support is compromised, then drainage is a concern. Once the water drops to around 5-6 feet above the assemblies, dose rates could be life-threatening near the reactor building. If significant drainage occurs, after several hours the zirconium cladding around the irradiated uranium could ignite.

Then all bets are off.

Quick Overview

• (FT) AIR, the first of a handful of specialist catastrophe modelling agencies to release its Japan estimate, predicting losses of anything from $15bn to as much as $35bn.

• In coming quarters the quake is likely to mean more demand for copper. Japan accounts for around 5% of global copper demand.

• Inventories at U.S. businesses rose 0.9% in January.

• The Thomson Reuters and the University of Michigan consumer sentiment index fell to 68.2 in March from 77.5 in February.

• China's CPI rose 4.9% YoY in February 2011
  
  
  
  
• Michele Bachmann in a talk given to an audience in New Hampshire said the first shots of the Revolutionary War were fired in their state.
• A state of emergency was declared for all 77 Oklahoma counties as warm, dry winds fanned on the flames. Temperatures soared into the upper 70s on Friday in parts of Oklahoma, which is around 15 to 20 degrees above normal.

• State Department spokesman P.J. Crowley has resigned after he correctly called the Pentagon’s handling of Pfc. Bradley Manning, who is detained at the brig at  Quantico,“ridiculous,counterproductive and stupid.”

• (Xinhuanet) -- A Chinese government adviser has recommended that the country use some of its 2.85 trillion US dollars of foreign exchange reserves, to buy more gold.
  Li Yining, a senior economist at Peking University and a CPPCC member, says China should use the precious metal to hedge against risks of foreign currency devaluation.
  Despite many academics making similar calls, an official with the country's foreign exchange administration recently said it wasn't possible for China to make big purchases in the spot gold market. He said that was because the government is afraid of squeezing out ordinary buyers, and pushing up the gold market prices.

• DJ reports up to 20% of Japan's grain may be destroyed

• When asked if the nuclear power accident in Japan could prove to be a turning point for the industry, Immelt (sorry but I’ve got the attention span of a flea) said: "There is now almost a 50-year track record of nuclear power that people can look back on and make their own judgments about."
  
  
  
  
  
  
  
  

Quick Overview

• Monetary contraction by the EU has set off a fresh spasm of the Eurozone bond crisis

• U.S. first-time jobless claims rise by 26,000

• The USDA estimates:
• US wheat ending stock at 843 million bushels vs 818 last month
• US corn ending stocks at 675 million bushels, unchanged from last month. World ending stocks at 123.1 MMT
• US soy carryout at 140 million bushels. World ending stocks 58.33 MMT.
  
  
• The USDA increased its forecast for Florida's 2010-11 orange crop by four million 90-lb. boxes to 142 million boxes. Each box yields 1.57 gallons.

• Moody's lowered Spain's bond ratings to Aa2 from Aa1

• China posts $7.3 billion trade deficit in Feb.

• The U.S. trade deficit rose15.1% in January to $46.3 billion.

• (Dow Jones)--China is likely to re-enter the copper market as a more significant buyer of the metal in the second quarter, at a time when global supplies are forecast to be in a deficit of 500,000-600,000 metric tons.

• The Bank of England has held rates at 0.5% for the 25th month in a row, despite inflation running at 4% - double the target rate.

• U.S. foreclosure filings dropped to a 3-year low in February.

• Reports of Saudi police firing on protesters added a new worry.

• Starbucks (SBUX) is trading at an all time high.

• FDA  approved Human Genome Sciences (HGSI) Benlysta

No update today

Quick Overview

• Sens. Tom Coburn (R-Okla.) and Ben Cardin (D-Md.) introduced a bill that would repeal the 45 cents-per-gallon ethanol tax credit.

• Sleep-Deprived People Make Risky Decisions Based on Too Much Optimism. A night of sleep deprivation leads to increased brain activity in brain regions that assess positive outcomes, while at the same time, this deprivation leads to decreased activation in the brain areas that process negative outcomes, say scientists at two Duke University medical schools.

• The U.S. government has recovered 70% of total Troubled Asset Relief Program (TARP) disbursements, said the U.S. Treasury Department

• The United States remains the world's largest manufacturing economy, generating 1.6 trillion dollars of output, 11 % of the country's gross domestic product, according to a report. "Industrial restructuring has intensified, making U.S. manufacturing more competitive than ever," said LACEDC Chief Economist Nancy D. Sidhu, the report's author. "The U.S. share of global manufacturing has remained at or above 20 % for most of the past two decades.”It is a myth that manufacturing is disappearing from the region and that all operations are moving to countries with low-cost labor, the report noted.

Oil markets brace for Saudi 'rage' as global spare capacity wears thin
The world's economic fate now hangs on the success of Wahabi repression

Quick Overvview

• Japan’s January core machinery orders rose 4.2% MoM and 5.9% YoY.

• The French trade deficit in January widened to 5.89 billion Euros (8.21 billion U.S. dollars) from 5.6 billion Euros (7.8 billion dollars) in December.

• YoY import cargo volume through major us ports is expected to be up 11 % in March, according to the monthly Global Port Tracker Report.

Quick Overview

• (Bloomberg) -- China should use economic and administrative measures to curb the production and exports of corn-based products including starch and alcohol, to guarantee supply to livestock and poultry.

• China will boost its meat and sugar reserves and expand the scope of commodities reserves, the Ministry of Commerce said.

• Saudis mobilize thousands of troops to quell growing revolt.

• (Bloomberg) -- Global harvests of corn and wheat may fall short of demand again if the La Nina weather event persists through July, tightening global grain supplies, according to forecaster Telvent DTN Inc.

• (Bloomberg) -- Russia’s ban on grain exports means the country’s farmers will plant the fewest wheat fields in four years.

• (FT) The US Mint has reported record sales of silver American Eagle coins in the past two months. Sales hit 9.7m ounces in January and February combined – more than was sold in an entire year in 2005.

• The U.S unemployment rate fell to 8.9% in February, down from 9.0% the previous month.
  
  
• Moody's downgraded Greece to B1 from Ba1, and kept its outlook negative.

Quick Overview

• Trichet said on Thursday that the ECB may raise interest rates next month due to mounting inflationary pressures

• The global sugar market will be in deficit for a third year said Czarnikow. The shortfall expected is 3.7 million tons.

• The U.S. Energy Department said crude oil inventories fell 364,000 barrels to 346.4 million.

• First time claims for U.S. unemployment benefits fell by 20,000 to 368,000 in the week ending Feb. 26.

• MoM retail trade volume in the Eurozone gained 0.4 % in January

Next Update Thursday (THINKING)

I Can’t Think!
The Twitterization of our culture has revolutionized our lives, but with an unintended consequence—our overloaded brains freeze when we have to make decisions.

Quick Overview

• The ISM’s factory index rose to 61.4 from 60.8.

• Bernanke said downside risks to the recovery have receded, and the risk of deflation has become negligible.

• Ford February US sales rose 14%. GM's US auto sales rose 46%

• The global cocoa market is forecast to swing into a surplus of 119,000 metric tons in the 2010-11 crop marketing year compared with a revised 66,000-ton deficit in 2009-10, the International Cocoa Organization said.

• Gold prices rose to within $10 of their record high on Tuesday, while silver hit a 31-year high.

• (Bloomberg)Russia, the world’s biggest palladium producer, is shipping the smallest amount of metal to Switzerland in 15 years

Quick Overview

• The ISM index rose to 71.2 from 68.8 last month, the highest level since July 1988.

• The International Grains Council has lowered its forecast for Philippines rice stocks this year by 20% to a 13-year low of 1.6 million tons or 12% of annual consumption.

• U.S. Pending home resales fell 2.8 % after a revised 3.2 % decrease the prior month.

• U.S personal income rose 1.0% in Jan. -- marking the biggest increase in a year and a half.

• U.S. consumer spending rose 0.2%.

• Japan's industrial production in January climbed 2.4 percent from the previous month, marking the third straight month of increase.

• Australian business chiefs predicted a patchy economic growth outlook for 2011, with trade exposed industries particularly hit by the strength of the Australian dollar.

• Euro Dollar interest rates are approaching ZERO (100=0). Wondering where the next “big” move will be. UP or DOWN?

• The US Monetary Base is in new high ground.

• Silver lending rate is still below zero.

• Canada’s GDP rose 3.3% following an upwardly revised 1.8% gain in the previous three months. The Bank of Canada could raise rates sooner rather than later.

Quick Overview

• Warren Buffett: "We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America's best days lie ahead."

• Existing home sales rose for the third month in a row in January and they now exceed year ago levels. Sales rose by 2.7% last month to a seasonally adjusted annual rate of 5.36 million homes, which is also up 5.3% from year-ago levels.

• (FT) Northern Rock is poised to launch a range of mortgages offering up to 90 per cent of a property’s value, marking the nationalized bank’s return to riskier lending three years after its collapse and government bail-out.

• US durable goods orders rose 2.7% in January

• US first time claims for unemployment benefits fell 22,000 to 391,000 in the week ending February 19

• (FT) The Republican plan to slash government spending by $61bn in 2011 could reduce US economic growth by 1.5 to 2 percentage points in the second and third quarters of the year, a Goldman Sachs economist has warned.

• (Bloomberg) -- Japan’s public pension fund, the world’s largest, said it may become a net seller of bonds to cover payments in the world’s most rapidly aging society.

• Faced with stiff opposition from Republicans in Congress the EPA will trim costs to control toxic air pollution by 50%. Some half-dozen bills have been introduced this year to block agency regulation.

• A new Reuters report that looked at maternity leave in 190 countries show 178 guarantee paid leave for new mothers, nine have undefined policies and only three - just three - offer "no legal guarantee of paid maternity leave," -- One of those three is the United States.

I’m on strike this week -- next update Sunday

Quick Overview

• Moody's raises flag on Japan debt -- says outlook now negative.

• The S&P, Case-Shiller index of U.S. home values in 20 cities fell 2.4%, the biggest YoY decrease since December 2009.

• U.S. Feb. consumer confidence 70.4 vs 64.8 in Jan.

Why Isn't Wall Street in Jail? Financial crooks brought down the world's economy — but the feds are doing more to protect them than to prosecute them

The mental stumbling block, for most Americans, is that financial crimes don't feel real; you don't see the culprits waving guns in liquor stores or dragging coeds into bushes. But these frauds are worse than common robberies. They're crimes of intellectual choice, made by people who are already rich and who have every conceivable social advantage, acting on a simple, cynical calculation: Let's steal whatever we can, then dare the victims to find the juice to reclaim their money through a captive bureaucracy. They're attacking the very definition of property — which, after all, depends in part on a legal system that defends everyone's claims of ownership equally. When that definition becomes tenuous or conditional — when the state simply gives up on the notion of justice — this whole American Dream thing recedes even further from reality.

Quick Overview

• China raised reserve requirements for the second time this year to counter inflation and curb property-price gains.

• Silver futures climb to their highest level in about 31 years.

• Mexico buys another 6.1 mln bu US corn.

• Sugar may be in surplus next year Kingsman says

• Cotton dropped on expectations that next season’s harvest may run ahead of demand.

• (FT)Lisbon insists it has no need of a financial rescue, denying reports that the country is under pressure from other Eurozone governments to turn to the EU for assistance.

• Abbott (ABT) increased the dividend 9%.

• General Motors (GM) said it wanted to explore the potential to export vehicles manufactured in China, with South America and South Korea as initial target markets.

• The Chinese car market has experienced an explosion in demand with a record 13.7 million vehicles sold last year.

• Malaysia's GDP in 2010 grows 7.2%.

• Foreign investment in Russia fell 50% in 2010

• Farmland values in U.S. Midwest rose 12% in 2010
  
  
• The single most important decision in evaluating a business is pricing power,” Buffett told the Financial Crisis Inquiry Commission in an interview released by the panel last week. “If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”

Quick Overview

• U.S. wholesale prices rose 0.8% in January. Core PPI, which exclude food and energy, rose 0.5%-- the largest gain since October 2008.

• US Housing starts rebounded to 596,000 in Jan.

• (FT) As G20 ministers prepare to discuss inflation, Robert Zoellick, the World Bank president, has said food prices are rising to 'dangerous levels' and have already pushed another 44m people into extreme poverty.

• China's holdings of US Treasury’s in December totaled $891.6 billion, compared to $895.6 billion in November.

• (MarketWatch) -- Japan and India on Wednesday signed an agreement to abolish tariffs on about 94% of the goods traded between the two countries within a decade.

• YoY Deutsche Börse reported its Q4 loss widened to 61.2 million Euros from a loss of 33 million Euros. The German exchange said it would buy NYSE Euronext for about $9.5 billion.

• U.S. Sen. David Vitter, (R., La.) said “Louisianans are desperate to get back to work, I love fish and wildlife, but my top economic priority is to stop the economic devastation caused to humans by the moratorium." So he’ll block President Barack Obama's nominee to head the U.S. Fish and Wildlife Service until the administration issues at least 15 permits for deep-water drilling exploration.

• (Bloomberg)Drought in wheat-growing regions in China, the world’s largest producer, may persist for a further month and rain may come “too late” to avert damage to crops, pushing prices higher, British Weather Services said.

Print me a Stradivarius   How a new manufacturing technology will change the world

Next update Wednesday

Quick Overview

• U.S. consumer sentiment rose to 75.1 from 74.2 in Jan.

• China’s sugar imports will probably rise to the highest in 16 years after drought and frost in the country’s main growing region curbed domestic production, according to a report from Sucden.

• (Bloomberg) -- Sugar-cane crushing in Brazil’s main producing region probably will fail to rise in the coming 2011-12 season for the first time since 2000, according to Sucden, the trading arm of Sucres et Denrees SA.

• (Bloomberg) -- A global sugar shortage will be exacerbated this year as cold weather in China and flooding in Australia cuts harvests, likely fueling a rally in prices from the highest level in 30 years, according to Kingsman SA.

• (Bloomberg) -- The smallest U.S. beef-cow herd in almost five decades will shrink this year partly because the incentive to expand is waning for a growing number of farmers near retirement age, according to industry researcher Cattlefax.
• The number of cattle in Australian feedlots fell 3.7% QoQ to 737,429, and down 4.3% YoY. Australia is the second-biggest global beef exporter by volume after Brazil

• The UN said the outbreak of foot- and-mouth in Asia is "unlike anything that we´ve seen for at least half a century."

• Mexico's corn crop has been damaged by a freeze. It has damaged as much as 4.2M tons in Mexico, creating new worries with stocks at their tightest level in 15 years.

• Rabobank anticipates US soy oil stocks will end 2010-11(September) at 5.4% stock to use ratio, the lowest level in 34 years.

• PRNewswire-USNewswire/ -- Google has become a leading purveyor of ads by scammers who prey on struggling homeowners, according to a study released today by Consumer Watchdog, and the nonpartisan, nonprofit public interest group has asked the Federal Trade Commission to stop the Internet giant from hosting the ads.

• The U.S. trade deficit rose to 40.6 billion dollars in December.

• The Spanish economy shrank by 0.1% in 2010

• YoY Japan's GDP fell 1.1% in October-December -- not as bad as feared.

• Snowfalls in China’s major wheat growing regions failed to ease a drought, a government agency said.

• (Bloomberg) -- China reported a smaller-than- forecast trade surplus of about $6.5 billion in January as a rebounding economy and rising commodity costs helped drive a 51 percent gain in imports.

• China imported 364,240 metric tons of copper, copper alloy and semifinished products in January, an increase of 5.7% MoM and a rise of 25% YoY.

(FT) Long view: History supports bond yield fears
When worried about the short-term future, look to the long-term past for guidance

Quick Overview

• Growth in Macau and a bounce in Las Vegas helped Wynn Resorts push its bottom line back into the black in Q4.

• Kraft Q4 income fell 24% YoY.

• The U.S. government ran a budget deficit of $50 billion in January.

• EBay expects the revenue from PayPal to double in the next two years.

• U.S. weekly jobless claims drop 36,000

• Bank of England keeps interest rate unchanged at record-low 0.5 %.

• Japan's wholesale prices rose 1.6% YoY Jan.

• Cisco and Akamai issued weak earnings forecasts

• (FT) Some of the rules on newly policed swaps markets will be introduced after the July deadline, says the head of the CFTC, the main derivatives regulator.

• Sovereign debt fears returned to the Eurozone -- ECB is forced to buy Portuguese bonds.

• (FT) Michael Bloomberg, mayor of New York, has thrown his weight behind the proposed merger of Deutsche Börse and NYSE Euronext, calling the deal "very good for New York". (The CME is worried)(Ice broke out)

• (Spiegel) The Swiss vote in a referendum this Sunday on a measure to collect military-issue weapons. The aim is to store guns in public arsenals, rather than at home -- and cut down on domestic violence But it could end a tradition of gun ownership associated with Swiss independence and the legend of William Tell.

• Korea kept the seven-day repurchase rate at 2.75%

• (Bloomberg) -- Nokia Oyj, the world’s biggest maker of mobile phones, said it’s forming a software partnership with Microsoft Corp., a bet that together the two companies can better challenge Google Inc. and Apple Inc.

Quick Overview

• The U.S. Department of Agriculture lowered its projection for the U.S. corn end of year supplies 70 million bushels to 675 million = BULLISH 18.2-day supply.
• The USDA estimated world corn ending stocks at 122.51 million metric tons, down from 127 million reported in January = a 37-year low
• USDA projected 2010-11 soybean ending stocks of 140 million bushels, unchanged from the January estimate.

• USDA U.S. Carryout
• Soybeans 0.140
• Corn 0.675
• Wheat 0.818
• Cotton 1.90
• Rice 52.8

• USDA World Carryover
• Wheat 177.8
• Corn 122.5   = 54.3-day supply, tightest in the last 37 years
• Soybeans 58.2
• Cotton 42.8
• Rice 93.9

• The USDA cut by 1% to 8.70m tonnes its forecast for the US orange crop.  Juce yield was cut 2% to 1.57 gallons per box

• Coke said it earned $5.77 billion, or $2.46 a share, up from $1.54 billion, or 66 cents a share, in the same quarter of 2009.

• Corporate insiders continue to sell  more of their companies' shares than they purchase.

• Disney said it earned $1.33 billion, or 68 cents a share, in the period ended Dec. 31, compared with a profit of $844 million, or 44 cents, in the same quarter a year earlier.

• (Bloomberg) -- Deutsche Boerse AG is in advanced talks to buy NYSE Euronext

• (Blomberg) -- At least two members of the Federal Open Market Committee may vote against extending a stimulus program if the pace of U.S. economic growth climbs, according to Pacific Investment Management Co.’s Anthony Crescenzi.
  

Quick Overview

• The UN said that China's wheat crop faces a "critical situation" if a drought across most of its range does not break.
• (Dow Jones)--Wheat futures on China's Zhengzhou Commodity Exchange rose sharply Wednesday, climbing 5.4% due to worries that worsening drought conditions could cut into the country's grain output this year.
  
  
  

• The Federal Reserve should seriously consider pulling back on its $600 billion stimulus program given stronger growth and a brighter jobs picture, Richmond Fed President Jeffrey Lacker said on Tuesday.

• Euro zone’s economy grew by 0.3 % in Q3

• China raised rates to 6.06% from 5.81% on the last day of the Chinese New Year holiday to try to temper inflation. The one-year deposit rate was raised to 3 % -- still 2% less than the CPI.

• McDonald’s global sales rose 5.3% in January

• Elwynn Taylor: Dr. Wolter gives La Nina a 50%+ chance of lasting through 2011, for now the likely US corn yield stands at 155BPA, next update is 5 March.

Quick Overview

• Indonesia's economic expansion accelerated in the October-December period to 6.9% on year from 5.8% in the previous three months.

• (Bloomberg) -- Indonesia, the third-biggest rice importer in Asia, is seeking to “strengthen” its stockpiles to protect the poor against rising costs, according to Bayu Krisnamurthi, Deputy Minister of Agriculture.

• Celeres estimates Brazils 2010-11 soy crop at 69.8 MT.

• Canada estimates oat stocks at 2.1 million tons as of Dec. 31, down 31% YoY.

• U.S. consumer borrowing rose in December by $6.1 billion to $2.41 trillion.

Quick Overview

• The US Grains Council expects China to import 3 to 9 million metric tons of corn (118 to 354 million bushels) in the current year.

• U.S. Unemployment declined to 9% in January from December’s 9.4%

• Brazil's industrial output rose 10.5% in 2010.

• The IMF fears rising unemployment around world: The IMF's Strauss-Kahn said some 30 million jobs were lost during the financial crisis, but it was a small figure compared with the 400 million jobs the world has to provide to young people.

• YoY Japan's monetary base rose 5.5 %.

• Indonesia raised rates by 25 basis points.

• (WSJ) Hackers have penetrated the computer network of the company that runs the Nasdaq Stock Market numerous times over the past year.

• Bush has had to call off a trip to Switzerland next weekend because of the threat of his arrest.

Einstein was right - honey bee collapse threatens global food security
Apian atrophy is a more immediate threat than global warming, and can be solved, yet has barely risen onto the policy radar screen. This is surely a misjudgment.
Einstein was not always wrong.

Next update Sunday

Quick Overview

• Paper money is made of cotton -- "intrinsic" value anyone?

• The DOE said:
• Supplies of U.S. crude rose by 2.6 million barrels last week
• Supplies of gasoline rose by 6.2 million barrels, due in part to reduced travel resulting from winter weather.
• Supplies off distillates, which include heating oil and diesel, fell by 1.6 million barrels, a larger than anticipated drop.

• Top Wall Street firms are urging the U.S. Treasury to create an ultra-long bond with a maturity of between 40 to 100 years

• Treasury officials said that the government may not hit its $14.3 trillion debt limit until the end of May.

• (Spiegel) The terror attack on Moscow's main airport last week has fuelled the flames of xenophobia in Russia. The Kremlin isn't intervening to halt the trend that could cause deep rifts in the country's multiethnic society.

• Sugar futures rose amid concerns the worst storm to hit Australia in over 80 years would damage  sugar crops.

• Worldwide mobile data traffic will increase 26-fold during 2010 – 2015 reaching 75 exabytes a year by 2015 due to a projected surge in mobile Internet-enabled devices delivering popular video applications and services, according to the Cisco® Visual Networking Index (VNI) Global Mobile Data Traffic Forecast for 2010 to 2015.
  
  

Quick Overview

• The ISM factory index rose to 60.8 exceeding the most optimistic forecasts.

• GM January U.S. sales rose 21.8%
• Ford sales rose 13.3% rise in January.
• Chrysler U.S. sales rose 23% in January

• U.S construction spending fell 2.5% in December.

• A politician in Germany has been sentenced to pay a fine of 1,500 Euros or spend 50 days in jail because he allegedly called Thilo Sarrazin, the author of an incendiary book about Muslim immigrants, an "ass."

• New 30-month high for soybeans, corn and rice.
• New high for copper.
• New high for sugar (July)
• 
  
• Arlan Suderman soybean comments: This year's domestic stocks are estimated to be just 140 million bushels or a 15-day supply; the tightest of the past 40 years.