Thursday, December 29, 2005

Quick Overview

  • U.S. Jobless claims increased 3,000 last week to 322,000.

  • Home resales fell to a 6.97 million seasonally adjusted annual rate last month, a 1.7% decline from October's unrevised 7.09 million, the National Association of Realtors said Thursday. Sales dropped by 2.7% in October. The National Association of Realtors said there are 2.90 million homes for sale in the U.S. -- a five-month supply.

  • The National Association of Purchasing Management's Chicago index dropped from 61.7 to 61.5 in December, stronger than expected.

  • Argentina's central bank forecast on Thursday that Latin America's third-largest economy will expand by 6.2 percent next year, slowing from this year's estimated 8.7 percent growth.

  • An index of consumer confidence in the U.K. dropped from -8 to -9 in December.

  • The unemployment rate in France improved from 9.7% to 9.6% in November.

  • Venezuela's Central Bank on Thursday said it had approved currency transactions in Euros in a move that expands the country's strict foreign exchange controls away from U.S. dollars.

  • The DOE said that:
    Supplies of crude oil were up 100,000 barrels to 322.6 million barrels.
    Supplies of unleaded gasoline were down 1.2 million barrels.
    Supplies of heating oil supplies were down 1.2 million barrels.
    Supplies of underground natural gas were down 162 billion cubic feet to 2.640 trillion cubic feet. YoY supplies are down 8%.

  • London inventories of copper increased 7,150 tons to 87,750.

Wednesday, December 28, 2005

Quick Overview

  • The Conference Board's consumer confidence index increased from 98.3 to 103.6 in December, its highest level since Hurricane Katrina.

  • The USDA said there were 61.197 million head of hogs and pigs in U.S. inventory on December 1st, up 0.4% YoY.

  • The USDA said that YoY U.S. beef production was up 7% in November.

  • The USDA said that YoY pork production was up 2% in November.

  • The Dow-Jones Newswires credits a fungus in Brazil and too much rain in Vietnam as two recent supporting reasons for Coffee.

  • Consumer confidence in Germany increased from 3.4 to 3.8 in December, the highest in six months.

  • YoY Japan's industrial production was up 1.4% in November.

Tuesday, December 27, 2005

Quick Overview

  • ABC News and the Washington Post said their Consumer Comfort Index rose to -10 in the week ending Dec. 25 from -11 the prior week.

  • The Chicago Federal Reserve's regional index of manufacturing was down by 0.6% in November.

  • Japan's unemployment rate increased from 4.5% to 4.6% in November, Household spending was down 0.7% Japan's consumer price index was down 0.3% in November -- down 0.8% YoY.

  • Overall for-hire trucking freight volumes surged 1.9% in November from a month earlier, American Trucking Associations said Tuesday.

Friday, December 23, 2005

Quick Overview

  • U.S. Durable goods orders were up 4.4% in November, stronger than expected. Excluding transport, orders were down 0.6%.

  • The University of Michigan's consumer sentiment index increased from 81.6 to 91.5 in December.

  • Sales of new homes dropped in November by the largest amount in nearly 12 years. U.S. new home sales were at an annual rate of 1.245 million units, down 11.3% from October's pace, the largest monthly drop since 1994. So far in 2005, new home sales are up 7% from a year ago.

  • The European Commission announced that they are ending their policy of giving rebates (subsidies) to beef exporters.

  • The U.S. Department of Energy said that ethanol production reached 269,000 barrels a day in October, a new record high in the U.S.

  • Germany's inflation rate averaged 2 percent in 2005, its highest level in four years, according to a government estimate released Friday.

  • Canada's GDP was up 0.2% in October and up 3.1% YoY.

  • China's car production in November grew 52.1 percent from the same month last year to a record 291,900 units, breaking the previous record set in June of 275,100 units, according to data released by the National Bureau of Statistics Friday.

Thursday, December 22, 2005

Quick Overview

  • Chief executives are optimistic about the direction of the U.S. economy despite high energy prices and rising interest rates, a monthly survey found.

  • The Conference Board's U.S. index of leading indicators increased 0.5% in November, to 138.8.

  • U.S. jobless claims were down 13,000 last week to 318,000.

  • The U.S. Commerce Department said that personal incomes were up 0 .3% in November and consumer spending was up 0.3%. YoY the core rate of personal consumption expenditures index was up 1.9% in November .

  • The U.S. Department of Energy said that underground natural gas supplies were down 162 billion cubic feet last week to 2.802 trillion cubic feet.

  • The U.S. Census Bureau said that 151.5 million bushels of soybeans were crushed in November

  • Mexican consumer prices rose 0.42 percent in the first half of December.

  • YoY New Zealand's GDP was up 2.7% in the third quarter .

  • YoY the U.K.'s Office for National Statistics kept its GDP growth estimate unchanged at 1.7% in the third quarter .

Wednesday, December 21, 2005

Quick Overview

  • The U.S. economy grew at a 4.1% annual rate in the third quarter, lower than the 4.3% rate initially reported in November, the Commerce Department said Wednesday.

  • The core personal consumption expenditures price index increased at an annual rate of 1.4% in the third quarter, down from 1.7% in the second quarter.

  • The DoE said that :
    Supplies of crude oil were up 1.3 million barrels to 322.5 million barrels
  • Supplies of unleaded gasoline were down 300,000 barrels
    Supplies of heating oil were down 1.5 million barrels.

  • The USDA said that there were 28.7 million pounds of frozen pork bellies in storage as of November 30th, down 16% YoY. Frozen pork totaled 433.6 million pounds, down 1% YoY

  • The USDA said that, there were 1.03 billion pounds of frozen orange juice in U.S. storage, down 30% YoY..

  • London inventories of copper increased 3,550 tons to 80,600 tons.

  • Consumer spending in France increased 1.1% in November and 3.2% YoY.

  • Canada's retail sales were up 0.6% in October and up 4.5% YoY .

Tuesday, December 20, 2005

Quick Overview

  • U.S. Consumer confidence, improved last week, ABC News and the Washington Post said on Tuesday.

  • The U.S. producer price index fell 0.7% in November, the biggest drop since April 2003, as energy prices fell, the Labor Department said Tuesday.

  • U.S. New housing starts rose 5.3% in November, the Commerce Department said Tuesday.

  • The average retail prices of diesel and gasoline each rose for a second straight week by 2.6 cents, with diesel climbing to $2.462 and gasoline to $2.211 a gallon, the Department of Energy reported.

  • U.S. Sales of Class 8 trucks jumped 16.6% in November as truck buyers took delivery in a market where freight rates remained strong and truck production showed no signs of letting up, manufacturers said.

  • The Australian Cotton Industry Council estimates the upcoming cotton crop at 2.5 million bales, down from 2.9 million bales this year.

  • Consumer prices in Canada were down 0.2% in November and up 2.0% YoY.

  • The Chinese government discovered $280 billion of national income to add to its 2004 GDP figures. The 2004 growth rate is now 16.5%, higher than previously reported.

  • Today's news on inflation sent June gold down $9.10

Monday, December 19, 2005

JibJabs Year-End Round-Up !
The Symbiosis Trap
Stephen Roach

Quick Overview

  • The Conference Board's leading economic indicator for Mexico was unchanged in October following four months of gains, the U.S.-based private business research group said on Monday.

  • Canada's sales at large retailers were down 1.0% in October, but up 5.9% YoY. Wholesale sales were up 2.2%.

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

  • The Japanese government expects GDP to increase 2.7% in 2005-2006 and 1.9% in 2006-2007.

Friday, December 16, 2005

Quick Overview

  • YoY consumer prices in the Euro zone were up 2.3% in November.

  • Statistics Canada reported that the government debt is half of Canada's GDP, the lowest in twenty years.

  • YoY industrial production in Argentina rose 8.9 percent in November.

  • German business morale jumping to its highest level in nearly five and a half years.

Thursday, December 15, 2005

Quick Overview

  • U.S. industrial production was up 0.7% in November and up 2.8% YoY, more than expected. Capacity utilization rate increased from 79.8% to 80.2% last month.

  • A record drop in energy costs pushed consumer prices down at the fastest pace in 56 years. The CPI was down 0.6% in November but up 3.5% YoY. Excluding food and energy costs, prices were up 0.2% in November and up 2.1% YoY.

  • A softening U.S. housing market poses the greatest risk to economic growth next year as fallout from a housing slowdown would hurt consumer spending, Merrill Lynch said in its U.S. economic and financial markets forecast for 2006.

  • The U.S. Treasury said that foreigners purchased U.S. securities totaling $110.3 billion in October

  • Manufacturing growth in New York state rose at the fastest pace in 17 months as factories paid less for materials and demand rose, according to a monthly survey by the Federal Reserve Bank of New York released Thursday.

  • The DoE said that underground supplies of natural gas were down 202 billion cubic feet to 2.964 trillion cubic feet. Supplies are down 6% YoY.

  • The rate of fatalities last year in crashes involving large trucks fell to its lowest level since the Department of Transportation began keeping records in 1975, according to DOT figures.

  • The Green Coffee Association said that U.S. coffee stocks dropped 292,512 bags in November to 4.875 million bags.

  • Retail sales in the U.K. were up 0.7% in November, the best gain in five months.

  • The Swiss National Bank increased its key interest rate from 0.75% to 1.0%, the first change in over a year.

Wednesday, December 14, 2005

Quick Overview

  • The U.S. trade deficit grew to a record $68.9 billion in October, as crude oil prices surged and exports dropped by the most in four years. U.S. exports were up 1.6% in October to $107.5 billion and imports were up 2.7% to $176.4 billion.

  • The Business Roundtable's Economic Outlook Index improved to 101.4, up from Septembers 88.2

  • The U.S. Department of Energy said that:
    Supplies of crude oil were up 900,000 barrels to 321.2 million barrels.
    Supplies of unleaded gasoline were up 1.8 million barrels
    Supplies of heating oil supplies were down 400,000 barrels..

  • Japan's Tankan index, a confidence index of large manufacturers, increased from 19 to 21 in the fourth quarter, the highest in twelve month.

  • Delinquencies on U.S. home mortgages rose in the third quarter due to the displacement of people by Hurricane Katrina but they fell from a year earlier as the economy improved, an industry group said on Wednesday.

Tuesday, December 13, 2005

Chart of the day

The price of corn adjusted by the CPI (Consumer Price Index)

Quick Overview

  • Blue-chips jumped and the broader market inched higher after the Fed boosted the Fed Funds rate as expected, while hinting that an end to the rate-hiking campaign could be in the works. The Fed dropped a reference to “accommodation” in a statement that followed the 13th straight increase in their target rate to 4.25%. The change suggested that central bankers see rates as high enough to avoid spurring inflation.

  • YoY, U.K.’s consumer prices were up 2.1% in November, down from a 2.3% gain in October.

  • Canada's composite index of leading indicators was up 0.3% in November.

  • The International Energy Agency predicted that world oil demand will increase by 1.9 million barrels per day through 2010.

  • The International Coffee Organization predicted that the world 2006-2007 coffee crop will total 120 million (60 kg) bags. They estimate consumption at 118 million bags.

  • J.P. Morgan said there continues to be a bull case for silver and it deserves to trade on a different outlook. All thanks to a growing number of industrial applications such as biocides, solar power, electronics and a potential ETF launch.

Monday, December 12, 2005

Quick Overview

  • The federal government's budget deficit rose sharply in November as spending raced ahead of tax receipts. The Treasury Department reported Monday that the deficit totaled $83.1 billion, the highest imbalance ever recorded in November.

  • The Federal Reserve is widely expected to raise official interest rates again at its next policy meeting on Dec. 13, which would be the 13th straight increase.

  • Mexico cut its economic growth estimate for 2005 to about 3 percent from 3.5 percent, hurt by weakness in the manufacturing sector.

  • Japan's current account surplus widened by 2.6% to 1.38 trillion ten ($11.4 Billion) in October.

  • India's industry grew in October at 8.5% the fastest pace in four months as rising incomes and consumer borrowing spurred sales.

Friday, December 09, 2005

Quick Overview

  • The University of Michigan's index of consumer sentiment increased from 81.6 to 88.7 in December, more than expected.

  • The USDA's 2005-2006 U.S. ending stocks estimate for:
    Corn was increased from 2.319 to 2.419 billion bushels.
    Soybeans were increased from 350 to 405 million bushels.
    Wheat was unchanged at 530 million bushels.
    Sugar was increased from 667,000 to 1.395 million tons.
    Cotton was increased from 6.50 to 6.90 million bales.

  • The USDA's 2005-2006 world ending stocks estimate for:
    Corn was increased from 114 to 119 million tons.
    Soybeans were increased from 47 to 48 million tons.
    Wheat was increased from 140 to 143 million tons.
    Cotton was increased from 50 to 51 million tons.

  • The USDA estimates the 2005-2006 Florida orange crop at 162 million boxes, down from last month's estimate of 190 million boxes. The projected juice yield was lowered from 1.58 to 1.55 gallons a box.
    The Brazilian government estimated its 2006-2007 coffee crop at 42.0 million bags, up from 36 million bags this year

  • Canada's labor productivity was up 0.8% in the third quarter and up 1.3% YoY.

  • Japan's GDP was up 0.2% in the latest quarter, down from an earlier estimate of 0.4%.

  • Brazil inflation eased in November, official data showed on Friday, reinforcing bets the central bank will cut interest rates next week.

  • Industrial production in France was down 2.5% in October, the biggest monthly drop in six years.

  • Mexico's central bank, with inflation at record lows, cut a key interest rate by 50 basis points.

Thursday, December 08, 2005

Jim Rogers likes commodities

JIM ROGERS: If you look at most agricultural commodities - nobody has been planning new acreage or new plantations in many years. Wheat hectares have been declining for 30 years, and that’s true of everything. As the world gets more prosperous people consume more - it’s the natural state of the world, and that’s going to continue for the next several years until somebody brings on some new supplies. You can’t just snap your finger and bring on a lot of new supply - I would point out that we haven’t had any big droughts anywhere in the world for over five years. We used to have droughts all the time - they may start coming back. I’m not investing in commodities because of weather - that would be an absurd thing to do - but it’s another reason that you’re going to see higher prices for agricultural commodities.

Quick Overview

  • U.S. jobless claims were up 6,000 last week to 327,000.

  • The U.S. Department of Energy said that underground natural gas supplies were down 59 billion cubic feet last week to 3.166 trillion cubic feet. Supplies are now down 2% from a year ago.

  • The unemployment rate in Australia dropped from 5.2% to 5.1% in November

  • Industrial production in Germany increased 1.1% in October

  • Japan's machinery orders rose 4.8% in October, providing more evidence of firms' strong desire to invest as they enjoy brisk profits and benefit from a steady recovery in the economy.

  • In the most recent quarter South Africa's gold production was down 3.4%.

  • Twelve-month inflation in Mexico fell to a historic low in November, and below the central bank's target for the first time ever.

Wednesday, December 07, 2005

Quick Overview

  • The U.S. House of Representatives on Wednesday approved legislation to make sure that millions of Americans will not be forced to pay the alternative minimum tax next year.

  • The Federal Reserve said that total consumer debt fell by $7.20 billion in October to $2.157 trillion, a record decline for the month.

  • The U.S. Department of Energy said that:
    Supplies of crude oil were up 2.7 million barrels to 320.3 million barrels.
    Supplies of unleaded gasoline were up 2.7 million barrels
    Supplies of heating oil were up 700,000 barrels.

  • Australia's GDP grew 0.2 percent in the third quarter, the slowest pace in a year.

  • Japan's Cabinet Office said that its index of leading indicators jumped from 41.7 to 80.0 in October, a sign of optimism for the economy.

  • Canada's 05/06 wheat crop totaled 26.8 million tons, up 3.5% YoY

Cheers! It's party time as Japan economy recovers
Some 63 percent of Japanese workers in a survey plan to let their hair down at traditional year-end parties with their colleagues this year, up from 49 percent last year, an indication that if not exactly rolling, the good times may be back

Tuesday, December 06, 2005

Housing Bubble Bursts in the Market for U.S. Mortgage Bonds
Bonds backed by home loans to the riskiest borrowers, the fastest growing part of the $7.6 trillion mortgage market, have lost about 2.5 percent since September on concern an 18-month rise in interest rates may force more than 150,000 consumers to default.

Quick Overview

  • The Labor Department said that business productivity was up an annual rate of 4.7% in the third quarter, the best quarterly gain in two years. The U.S. productivity growth is surging, but the wage increases that typically come with such gains have eluded American workers.

  • U.S. factory orders were up 2.2% in October. Excluding transportation, orders were up 0.6% on the month.

  • Industrial production in the U.K. was down 1% in November. YoY retail sales were p 4.6% in November.

  • The Bank of Canada increased its overnight rate from 3.00% to 3.25%.

Monday, December 05, 2005

Five Risks
Stephen Roach

The annual year-end forecasting ritual has begun. For us, it is always sparked by the extension of our forecast horizon to another year -- in this case, our first official glimpse at 2007. We also take an in-depth look at our calls for the year nearly completed (2005) as well as for the 12 months lurking just ahead (2006). It is as close to soul searching as the heartless macro prognosticator ever gets.

Quick Overview

  • The Institute for Supply Management's services index fell to 58.5 in November from 60.0 in October, below forecast of 59.0

  • President Bush called on American businesses on Monday to live up to their pension promises.

  • FedEx Corp. announced it will raise the standard rates for FedEx Ground services next year by an average of 3.9%.

  • Gasoline pump prices continued to drop in the two weeks ended Friday, falling 11 cents to an average $2.16 a gallon for all grades, analyst Trilby Lundberg reported in her latest survey of filling stations.

  • A European index of services increased from 54.9 to 55.2 in November, the best reading in over a year.

  • Gold finished near a 23-year high on Monday spurred by worries over inflation.
Is Mankind a Mistake?
When we are functioning as individuals – whether at work, in the marketplace, among friends, or driving on the freeways – our behavior toward one another tends to be peaceful and respectful. Few of us would be willing to personally inflict, even upon strangers, the brutalities that so many eagerly cheer on when performed by agents of the state with which we identify ourselves. We would quickly find ourselves without friends were we to behave toward them in ways that emulate Dick Cheney’s or Donald Rumsfeld’s recommended treatment of Iraqis. How welcome would a Madeleine Albright be in your community were she to announce that the brutal deaths of neighborhood children was a price she was willing to pay for the advancement of her career? How long would you continue working for an employer who hired Lynndie England as your immediate supervisor?

Saturday, December 03, 2005

The Greatest Debt-Beat President in History
In a letter to James Madison, Thomas Jefferson asked how, "one generation of men has a right to bind another." He concluded by saying, "No generation can contract debts greater than may be paid during the course of its own existence."

Friday, December 02, 2005

G-7 Central Bankers Pledge Not to Hurt Growth
Dec. 2 (Bloomberg) -- Central bankers from the world's richest nations sought to defuse criticism from finance ministers that they risk imperiling economic growth by raising interest rates.

Quick Overview

  • The U.S. job market rebounded last month from a hurricane-induced slowdown as nonfarm employers added 215,000 workers.

  • The unemployment rate in the Euro-zone was 8.3% in October. The unemployment rate for the EU-25 was 8.5%.

  • Current exchange rates between the dollar and yen are in line with economic fundamentals, Japanese Finance Minister Sadakazu Tanigaki said on Friday.

  • Canada's unemployment rate improved from 6.6% to 6.4% in November.

  • The USDA increased its estimate of world coffee ending stocks for 2005-2006 from 14.9 to 20.3 million bags. The production estimate was unchanged at 113.2 million bags -- world consumption was lowered from 119.4 to 116.6 million bags.

Thursday, December 01, 2005

Alarm over dramatic weakening of Gulf Stream
Researchers on a scientific expedition in the Atlantic Ocean measured the strength of the current between Africa and the east coast of America and found that the circulation has slowed by 30% since a previous expedition 12 years ago.
China worries local doctors can't spot bird flu
"I am not worried about governments at various levels covering up an epidemic," Gao told a news conference. "But I am worried about the inability of our medical and quarantine personnel at the local level to diagnose and discover epidemics in a timely fashion due to their low abilities and relatively backward equipment."
The little yellow god
The dull truth is much less bullish for gold. Investors have put money into a wide range of metals, and precious metals' prices, including gold's, have risen with the base. Meanwhile, gold remains fundamentally unattractive. It yields nothing and central banks are sitting on vault fuls of the stuff that they want eventually to sell.

Good Old Economist Mag. Bullish on War -- Bearish on Gold
Asian central banks likely to increase gold reserves
It is only a question of time for Asian central banks to follow and buy in gold: they hold 2.6 trillion US dollars in foreign exchange reserves, and able to change more of them into gold as a hedge against US dollar falls.
The US dollar will inevitably slip further. Some budget deficits of the seven major industrial countries are at a record level, and central banks are "printing banknotes" to devalue their currencies. Huge amount of budget deficits and debts in Europe, America and Japan will finally force them to increase real interest rates in an effort to drag economies back to the right track

Quick Overview

  • The U.S. Commerce Department said that personal incomes rose 0.4% in October and consumer spending went up by 0.2%.

  • YoY the core rate of personal consumption expenditures, was up just 1.8% in October, the smallest gain in six months.

  • U.S. jobless claims were down by 17,000 last week to 320,000.

  • An index of U.S. manufacturing fell from 59.1 to 58.1 in November following the two fastest-growing months of the year, the Institute for Supply Management reported Thursday

  • Construction spending rose 0.7% to an annual rate of 1.13 trillion in October for a fourth straight month, the Commerce Department reported Thursday.

  • Sugar closed at the highest level in nine years – an other production deficit is forecast for 2006 and 2007

  • Gold closed at the highest level (above $500) for 1st time since 1987

  • The DoE said that natural gas supplies were down 49 billion cubic feet to 3.225 trillion cubic feet. YoY supplies are down 2%.

  • London inventories of copper now are at 72,600 tons,

  • The Bank of Japan needs to not only make sure the economy does not fall back into deflation but should conduct monetary policy in a way that ensures a steady rise in prices, a government report said on Friday.

  • The European Central Bank increased its interest rate, from 2.00% to 2.25%, for the first time in five years.