Updates resume August 3 or 4

Quick Overview

• The White House expects the federal budget deficit to hit a new record high of $490 billion in 2008-2009,
  

• Consumer confidence in Germany fell from 3.6 to 2.1 in July, the lowest in five years.
  

• Australia’s index of business confidence expectations for the July to September quarter fell from -4 to -8.
  

Quick Overview

• U.S. new home sales fell 0.6% in June. So far in 2008, new home sales are down 35% YoY.
  
  

• U.S. durable goods orders rose 0.8% in June. Excluding defense, orders rose 0.1%.
  

• Japan's consumer prices rose 0.5% in June and 1.9% YoY.
  

• YoY heavy-duty U.S. retail truck sales rose 9.5% in June. This ends a streak of 17 consecutive months of contraction.
  

Quick Overview

• U.S. existing home sales fell 2.6% on the month.
  

• U.S. jobless claims rose 34,000 last week to 406,000.
  

• U.K. retail sales fell 3.9% in June
  

• Germany's business confidence fell from 101.2 to 97.5 in July
  

• YoY Japan's exports fell 1.7% in June.
  

• YoY the USDA estimates U.S. production of orange juice in 2007- 8 up 24%. They estimate ending stocks at 41%.
  
  
  
  

Quick Overview

• (Reuters) - The United States faced increasing inflationary pressures in recent weeks amid slowing economic growth, the Federal Reserve said on Wednesday, as it described conditions in some areas as "grim," "morose" or "bleak."
  

• Canada’s consumer prices rose 3.1% YoY
  

• Australia's consumer prices rose 4.5%
  

• Industrial orders for the Euro area fell 3.5% in May and down 4.4% YoY.
  

• The U.S. DOE said:
  Supplies of crude oil fell 1.6 million barrels to 295.3 million barrels
  Supplies of gasoline rose 2.9 million barrels
  Supplies of heating oil rose 1.2 million barrels.
  Refinery use fell from 89.5% to 87.1% of capacity last week.
  Gasoline demand fell 2.4% YoY
  Distillate demand rose 3.6%.

Quick Overview

• Richmond Federal Reserve regional index of manufacturing fell from -12 to -16 in July
  

• Canada’s retail sales rose 0.4% in May
  

• The USDA said there were 75.4 million pounds of frozen bellies in storage in June - up 60% YoY. Frozen pork rose 11% YoY.
  

• USDA said there were 1.515 billion pounds of frozen orange juice in inventory - up 67% YoY.
  

• (Reuters) - Wachovia Corp and Washington Mutual Inc led several large U.S. banks in posting weak second-quarter results on Tuesday, hurt by soaring losses from mortgages and other debt.
  
  

On War #267: Running the Narrows
By William S. Lind

More, the money is about to run out. We seem to have forgotten that no activity the state can undertake is more expensive than war. If a tanking economy cuts off the money flow, what comes next? The Sunday, July 12 Cleveland Plain Dealer quotes a local investment advisor saying, “A year ago, I would have discounted the scenario of the next depression. After what I’ve seen this year, I don’t discount anything anymore.” The Fed is trying to head off a full-scale financial panic by turning itself into a pawnshop, but no one knows how long that trick will work. The whole Ponzi scheme that is the current US economy still depends on an inflow of $2 billion in foreign, money daily. What happens if, or when, that flow ceases?

Quick Overview

• U.S. leading indicators fell 0.1% in June
  


• The Chicago Federal Reserve's index of national activity rose from -1.06 to -0.60 in June
  


• The USDA said:
  65% of the corn crop was rated good to excellent, up from 64% a week ago.
  61% of the soybean crop was rated good to excellent, up from 59% a week ago.
  63% of the spring wheat crop was rated good to excellent, up from 61% a week ago.
  45% of the cotton crop was rated good to excellent, down from 46% a week ago.
  71% of the winter wheat crop was harvested.
  


• Dolly may become a hurricane. It is heading toward the Mexico and Texas border.
  


• China’s Ministry of Railways has imposed a 75% full railcar rate increase as of July.
  

Quick Overview

• Canada’s leading indicator reported unchanged for June.
  
• Canada’s wholesale sales rose 1.6% MoM and 2.9% YoY.
  

• The U.K. reported a budget deficit of 24.4 billion pounds for the April to June quarter -- the largest quarterly deficit since 1946.
  

• U.S. cocoa grind totaled 80,415 tons in the second quarter, down 16% YoY.
  

• Argentina “officially “revoked its export tax increase for grain exports.
  

• (AP) Freddie Mac Chairman and Chief Executive Richard Syron pocketed nearly $19.8 million in compensation last year.

Quick Overview

• U.S. housing starts were at an annual rate of 1.066 million units, up 9.1% MoM, but down 26.9% YoY.
  

• U.S. jobless claims rose 18,000 last week to 366,000.
  

• The Philadelphia Federal Reserve's regional manufacturing index improved from -17.1 to -16.3
  

• China's GDP rose 10.1% QoQ.
  

Quick Overview

• U.S. consumer prices rose 1.1% in June and 5.0% YoY, the biggest yearly jump since 1991. Excluding food and energy, prices rose 0.3% in June and 2.4% YoY.
  

• U.S. industrial production rose 0.5% in June.
  

• YoY consumer prices in the Euro area rose 4.0% in June
  

• Canada’s manufacturing sales rose 2.7% in May.
  

• U.K. unemployment rate improved to 5.2% from 5.3% last month
  
  

• The U.S. Department of Energy said:
  Supplies of crude oil rose 3.0 million barrels to 296.9 million barrels
  Supplies of gasoline rose 2.4 million barrels
  Suplies of and heating oil rose 1.3 million barrels.
  Refinery use increased from 89.2% to 89.5% of capacity
  Gasoline demand fell 2.1% YoY
  Distillate demand rose 2.5% YoY.
  
  

Quick Overview

• The SEC said it plans to curb traders' ability to short sell some of the largest banks and brokerage firms.
  

• U.S. producer prices rose 1.8% in June and up 9.2% YoY. Excluding food and energy prices rose 0.2% in June and 3.0% YoY.
  

• U.S. retail sales rose 0.1% in June. Excluding autos, sales rose 0.8%.
  The Federal Reserve of New York's regional index of manufacturing improved from -8.7 to -4.92.
  

• YoY U.K. consumer prices rose 3.8% in June.
  

• Japan reduced its forecast for GDP in 2008-2009 from 1.5% to 1.2%.
  

• YoY China's copper imports fell 19% in June

Recession looms as Spain crumbles
The eurozone is tipping into a deeper downturn than America itself despite the tremors in the US mortgage industry, and may already be in full recession for the first time since the launch of the single currency.

Quick Overview

• China's foreign-exchange reserves rose 35.7% YoY, to a record $1.81 trillion.
  

• Industrial production in the Euro area fell 1.9% in May and down 0.6% YoY
  

• YoY U.K. producer prices rose 10% in June.
  

• The USDA said:
  64% of the corn crop was rated good to excellent, up from 62% a week ago.
  59% of the soybean crop was rated good to excellent, the same as a week ago.
  61% of the spring wheat crop was rated good to excellent, down from 69% a week ago.
  46% of the cotton crop was rated good to excellent, up from 45% a week ago.
  

Paulson Seeks Authority to Shore Up Fannie, Freddie (Update2)
The plan would give Paulson power to buy an unspecified amount of stock in Fannie Mae and Freddie Mac, the official said. He also said he didn't recall any time in the past when the government has taken an equity stake in either company.

Monetarists warn of crunch across Atlantic economies
Paul Kasriel, chief economist at Northern Trust, says lending by US commercial banks contracted at an annual rate of 9.14pc in the 13 weeks to June 18, the most violent reversal since the data series began in 1973. M2 money fell at a rate of 0.37pc.

"The money supply is crumbling in the US. There was a very sharp lending contraction in the second quarter lending. If the Federal Reserve is forced to raise rates now to defend the dollar, it would be checkmate for the US economy," he said.

Quick Overview

• Thanks to the declining dollar, U.S. Trade deficit shrank to $59.8 billion from $60.5.
  

• (Bloomberg) -- Fannie Mae and Freddie Mac, the biggest providers of financing for U.S. home loans, tumbled for a third day as concern escalated that the government may be forced to start a rescue of the companies.
  

• The USDA estimates 2008-2009 U.S. ending stocks of:
  Corn was raised from 673 to 833 million bushels.
  Soybeans were reduced from 175 to 140 million bushels.
  Wheat was raised from 487 to 537 million bushels.
  Sugar was lowered from 1,273,000 to 607,000 tons.
  Cotton was reduced from 5.40 to 5.30 million bales.
  
  

• The USDA estimates 2008-2009 world ending stocks of:
  Corn was raised from 103 to 105 million tons.
  Soybeans were lowered from 50 to 49 million tons.
  Wheat was raised from 132 to 133 million tons.
  Cotton was lowered from 54 to 53 million bales.
  
  

• The USDA lowered its estimate of 2008 beef production from 26.83 to 26.57 billion pounds
  
  

• The USDA raised its estimate of 2008 pork production from 23.37 to 23.47 billion pounds.
  
  

• The USDA raised its estimate of the 2007-2008 Florida orange crop from 169 to 170 million boxes with a record high juice yield of 1.67 gallons per box.
  

Quick Overview

• YoY U.S. foreclosure filings rose 53%.
  

• U.S. jobless claims were down 58,000 last week to 346,000
  

• Australia's unemployment rate improved from 4.3% to 4.2% in June
  

Senate Backs Wiretap Bill to Shield Phone Companies

Obama voted for the plan.

Quick Overview

• GDP in the Euro area rose 0.7% QoQ and 2.1% YoY
  

• Canada’s Housing starts fell 4.3% from May's pace.
  

• Japan's core machinery orders rose 10.4% -- much faster than forecast
  

• The U.S. DOE said:
  Supplies of crude oil were down 5.9 million barrels to 293.9 million barrels.
  Supplies of gasoline were up 900,000 barrels
  Supplies of heating oil supplies were up 1.0 million barrels.
  Refinery use remained at 89.2%.
  Gasoline demand fell 2.1% YoY
  Distillate demand rose 1.3% YoY.
  
  
  
  
• Bill Bonner figures that currently, the U.S. money supply – as measured by M3 – is increasing at an annual rate of about 18%.
  

Quick Overview

• U.S. pending home sales fell 4.7% in May and down 14% YoY.
  
  

• Services in the U.K. fell from +17 to -2 QoQ, the lowest since 1992.
  

Quick Overview

• U.K. manufacturing output fell 0.5% in May.
  

• Germany’s industrial production fell 2.4% in May.
  
  

• The USDA said:
• 62% of the corn crop was rated good to excellent -- up 1% WoW.
  59% of the soybean crop was rated good to excellent -- up 1% WoW.
  69% of the spring wheat crop was rated good to excellent -- down 5% WoW.
  45% of the cotton crop was rated good to excellent -- unchanged.

Quick Overview

• India may increase edible oil imports by more than 80 % in the four months to October.
  

• Argentina's House approved the president's sliding-scale grain and soybean export tax plan Saturday, sending the bill to the Senate for a vote. However, farm groups have warned that a Congressional endorsement of the tax may lead them to go back on strike.
  

Insurer Allianz raises pressure on G8 for climate action A climate consultancy, Ecofys, carried out the study on behalf of environmental organization WWF and — interestingly — the insurance company Allianz.
Insurers like Allianz are particularly exposed to the consequences of climate change in the rich world where most of their clients are based. Increasingly violent weather could make it too expensive for them to sell policies to cover business and homes in areas that are particularly to hurricanes and flooding.

Quick Overview

• U.S. unemployment rate remained at 5.5% in June.
  
  

• U.S. jobless claims were up 16,000 to 404,000.
  
  

• The Institute of Supply Managements' index of services fell from 51.7 to 48.2 in June,
  
  
  

• The European Central Bank increased its interest rate from 4.00% to 4.25%, as expected.
  
  

• Retail sales in the Euro area rose 1.2% in May.
  
  

• Services index in the U.K. fell from 49.8 to 47.1 in June.
  
  

• India banned all export of corn to protect domestic supplies.
  
  

• China Customs data show that during the first five months of this year, China's foreign trade value rose 26.2% over the same period last year to US$1.01 trillion. India was the fastest growing among its trading partners. Trade with India rose 70.3% to $24.2 billion, making it Chinas eighth largest trading partner.
  
  

• Forecasters generally reduced the extreme hot temperatures that had been predicted in the Midwest next week.
  
  

• A new Israeli study on rats, using red wine with red meat, has shown that red wine works against some of the harmful substances produced by red meat.
  
  

Quick Overview

• U.S. factory orders rose 0.6% in May.
  

• Producer prices in the Euro area rose 1.2% in May and up 7.1% YoY.
  

• Australia’s retail sales rose 0.7% in May.
  

• The U.S. DOE said:
  Supplies of crude oil fell 2.0 million barrels to 299.8 million barrels.
  Supplies of gasoline rose 2.1 million barrels
  Supplies of heating oil supplies rose 1.2 million barrels.
  Refinery use improved from 88.6% to 89.2%.
  Gasoline demand fell 1.7% YoY
  Distillate demand fell 0.5% YoY.
  
  

• Rising fuel costs prompt Maersk to cut 2,000 FEU from its Asia-Europe capacity in early July.
  

• Dave Tolleris of WXRisk.com said temperatures in Des Moines, Iowa, will top 90 degrees Fahrenheit (32 degrees Celsius) for at least 12 days from July 6 to July 20 with little rain.

Quick Overview

• The Institute of Supply Management's manufacturing index rose from 49.6 to 50.2 in June, stronger than expected.
  

• U.S. construction spending fell 0.4% from April's pace and down 6.0% YoY
  

• YoY U.S. auto sales in June were down 28%
  

• Manufacturing in the Euro area fell from 50.6 to 49.2 in June, the lowest in three years
  

• Unemployment in the Euro area stayed at 7.2% in May.
  

• Australias manufacturing fell from 51.2 to 47.0 in June.
  

• Japan's Tankan Index fell from +11 to +5 in the second quarter.
  

• Manufacturing in the U.K. fell from 49.5 to 45.8 in June.
  

• Australia kept the interest rate unchanged at 7.25%.
  

• The International Energy Agency said oil supplies may not keep up with demand through 2013 and ABC News reported Israel is increasingly likely to attack Iran this year.
  

• Soybeans rose above $16 on speculation the worst Midwest flooding in 15 years will limit gains in U.S. production.
  

• The IMF said high oil and food prices have pushed some developing nations to the "tipping point."
  

• Legg Mason said it will incur further losses to support the net asset value of its money-market funds.
  

• Sugar hit a four months high after a report said that Brazil is converting more cane into ethanol.