Wednesday, August 27, 2008

Updates resume September 7 or 8

Media Blackout: The Armada in the Gulf
Here is the basic story. Two aircraft carrier task forces, the Abraham Lincoln and the Peleliu, are already in the Persian Gulf. This is verifiable on the Websites of the carriers. A third task force, the Iwo Jima, was dispatched to the Gulf on August 22. This has been verified by a naval source. Two more – the Theodore Roosevelt and the Ronald Reagan – are said to be sailing to the Gulf, but I was unable to verify this from official sources. The Jerusalem Post reported this, as did at least one Egyptian newspaper cited by the Post. The Arab world is aware of all this. Western audiences are not.

Tuesday, August 26, 2008

Of Moose and Pit Bulls

To countries competing with the US, as for example Japan, the American military budget is a godsend, the equivalent of a golf handicap on a rival, because it represents money the US cannot spend to become more competitive. Fortunately for Asia, American military expenditure cannot readily be cut back. Too many jobs, military towns, and corporate profits depend on it. Consequently China builds infrastructure while the US builds fighter planes.

Computer containing deets of 1 million bank customers sold on eBay
This time, an unsuspecting IT manager, had found details for one million bank customers on the hard drive of a computer he bought on eBay for just £35.

Andrew Chapman from Oxford found information including the bank account numbers, phone numbers, mothers' maiden names and signatures of one million customers of American Express, NatWest and the Royal Bank of Scotland.

Quick Overview

  • The S&P/Case-Shiller index of U.S. home prices in twenty cities fell 0.5% in June. YoY home prices fell 15.9%.

  • The U.S. Census Bureau said U.S. new home sales were at an annual rate of 515,000 units in July, up 2.4% from June. YoY new home sales are down 36%.

  • The Conference Board's index of U.S. consumer confidence improved from 51.9 to 56.9.

  • Business confidence in Germany fell from 97.5 to 94.8 in August -- causing the Euro to fall to a six-month low against the dollar.

  • YoY British mortgage approvals in July fell 65%.

Monday, August 25, 2008

Quick Overview

The National Association of Realtors said that U.S. existing home sales were at an annual rate of 5.00 million units in July, up 3.1% MoM.

The USDA said:
64% of the corn crop was rated good to excellent, down from 67% last week.
61% of the soybean crop was rated good to excellent, down from 61% last week.
48% of the cotton crop was rated good to excellent -- same as a week ago.
55% of the spring wheat crop was rated good to excellent.

Saturday, August 23, 2008

Quick Overview

  • Industrial new orders for the Euro area fell 0.3% in June.

  • Canada anticipates wheat production will rise 27% this year to 25.4 million tons. They also estimated that soybean production will be up 17%, but corn production will fall 15%.

  • The USDA said there were 9.869 million head of cattle on feed as of August 1st, down 4.2% YoY. July placements were up 2.4% YoY and marketing’s were up 1.1%.

  • The USDA said there were 492.2 million pounds of frozen pork in storage on July 31st, up 8% YoY. Frozen pork bellies totaled 59.2 million pounds, up 87% YoY.

  • The USDA said there were 1.42 billion pounds of frozen orange juice in storage, up 68% YoY.

  • Indonesia, the world's biggest exporter of tin, has confirmed plans to limit production of the commodity in a bid to support prices and sustain the local industry

Friday, August 22, 2008

U.S. Mint Suspends Sales of American Eagle Gold Coins
It is the first time in two decades that the Mint halted sales of the coins, which are made of 22-carat gold from domestic mines. The coins also contain small amounts of alloy for hardening.

Thursday, August 21, 2008

Quick Overview

  • U.S. jobless claims were down 13,000 last week to 432,000.
  • U.S. leading indicators fell 0.7% in July.

  • The Philadelphia Feds regional index of manufacturing rose from -16.3 to -12.7 in August

  • U.K.'s retail sales volume rose 0.8% in July

  • YoY Canada’s consumer prices rose 3.4% in July.

  • The International Cocoa Organization said 2007-2008 world cocoa production will be short of consumption by 88,000 tons, more than the 41,000 tons projected earlier.

  • (WSJ) Fannie Mae and Freddie Mac need to refinance $225 billion of debt by the end of September. Investor interest may hinge on the details of any potential government bailout.
The Golden Value of Reliable Numbskulls
Gold is the "the epitome of human stupidity," said an opinion in the Telegraph newspaper. "A metal that is dug out of the ground at great cost to be reinterred in bank vaults as a protection against the same stupidity as caused it to be dug up in the first place."

Wednesday, August 20, 2008

Japan's Exports Rebound, China Becomes No. 1 Customer (Update2)
(Bloomberg) -- Japan's exports rebounded in July as China replaced the U.S. as the nation's largest customer.

Quick Overview

  • Canada’s sales rose 0.5% from May, and up 4.0% YoY

  • Shanghai equities made their biggest daily gain in four months as optimism rose the Chinese authorities would implement a stimulus plan.

  • The U.S. DOE said:
    Supplies of crude oil rose 9.4 million barrels to 305.9 million barrels -- more than expected. Supplies of gasoline fell 6.2 million barrels
    Supplies of heating oil supplies rose 600,000 barrels.
    Refinery use dropped from 85.9% to 85.7% of capacity.
    Gasoline demand fell 1.6% YoY
    Distillate demand rose 3.3% YoY.

  • The World Meteorological Organization said the world was cooler than at least the 5 previous years during the first half of 2008.

  • Pirates hijacked a Malaysian oil tanker carrying palm oil in the waters off Somalia. It joins ships from Japan and Thailand that have been seized recently.

  • Goldman Sachs reasserted a forecast that oil prices could hit a record $149 a barrel by the end of the year as supply struggles to meet rising demand in Asia.
Proportion and Distortion
Russia and Georgia

Rice: Military power is "not the way to deal in the 21st century"
The idea that the U.S. can, should and must be, more or less, in a state of permanent war, and can start wars in a whole host of circumstances having nothing to do with defending the country from an attack or imminent attack, is as close to an unchallengeable, bipartisan article of faith as it gets. We're a country that fights wars and uses military force in far more places and for far broader reasons than any other country in the world, by far. Again, regardless of one's views about whether our wars are really Good and Just -- even if one believes that what we drop on other countries are Good and Loving Freedom Bombs -- it's still just a fact that no country views military action as a more appropriate response in more situations than the U.S. does.

Tuesday, August 19, 2008

Quick Overview

  • U.S. Labor producer price index rose 1.2% in July, and up 9.8% YoY
  • U.S. housing starts were at an annual rate of 965,000 units in July, down 11% from June's pace, and down 30% YoY.

  • Japan kept the interest rate unchanged at 0.50%.

Monday, August 18, 2008

George, Stay Out of Georgia
by William S. Lind

It almost passes belief to think that the Bush administration, bogged down in two wars and planning a third (with Iran), might move toward a confrontation with Russia. Yet that is what the White House appears to be doing.

Quick Overview

  • The USDA said:
    67% of the corn crop was rated good to excellent, the same as last week.
    62% of the soybean crop was rated good to excellent, down from 63% last week.
    56% of the spring wheat crop was rated good to excellent.
    48% of the cotton crop was rated good to excellent, up from 45% last week.

  • Canada confirmed mad cow disease in a six-year-old beef cow from Alberta.

Sunday, August 17, 2008

Dollar surge will not stop America feeling the effects of a global crunch US exports have risen 22pc over the past year, outstripping Chinese growth. The US non-oil trade deficit has shrunk by two fifths since 2002. It is now running at $300bn a year. This is 2.1pc of GDP.

Friday, August 15, 2008

Quick Overview

  • U.S. industrial production rose 0.2% in July, better than expected

  • The New York Federal Reserve's regional index of manufacturing rose from -4.92 to +2.77, better than expected.

  • The University of Michigan's index of consumer sentiment rose from 61.2 to 61.7

  • Canada’s manufacturing sales rose 2.1%.

  • YoY China's vehicle sales rose 6.8% in July

Blowback From Bear-Baiting by Patrick J. Buchanan
Is not Western hypocrisy astonishing?

Thursday, August 14, 2008

Quick Overview

  • The National Association of Realtors said YoY the prices of single family homes fell 7.6% in the second quarter.

  • GDP in the Euro area fell 0.2% in the second quarter.
    YoY Consumer prices in the Euro area rose 4.0% in July.

  • YoY China's industrial production rose 14.7% in July

Wednesday, August 13, 2008

Quick Overview

  • U.S. retail sales fell 0.1% in July, but rose 2.6% YoY.

  • U.S. business sales rose 1.7% in June

  • U.S. inventories rose 0.7%.

  • Japan's GDP fell 0.6% in the second quarter.

  • U.K.'s unemployment rate rose to 5.4%, up from 5.2% last month.

  • YoY China’s retail sales rose 23.3% in July.

  • The U.S. Department of Energy said:
    Supplies of crude oil fell 400,00 barrels to 296.5 million barrels.
    Supplies of gasoline fell 6.4 million barrels
    Supplies of heating oil rose 1.0 million barrels.
    Refinery use fell from 87.0% to 85.9% of capacity last week.
    Gasoline demand fell 1.9% YoY
    Distillate demand rose 4.3%.

Tuesday, August 12, 2008

Quick Overview

  • U.S. Exports rose $6.4 billion to $164.4 billion in June - imports rose $4.0 billion to $221.2 billion. The result was $56.8 billion of net imports - narrowing the trade deficit unexpectedly.

  • The Philadelphia Federal Reserve expects GDP to be up an annual rate of 1.2% in the third quarter, less than previously thought.

  • Canada’s exports rose 3.1% in June - imports rose 2.0%.

  • U.K.'s consumer prices rose 4.4% YoY .

  • Japan's wholesale prices rose 7.1% YoY.

  • The USDA's 2008-2009 U.S. ending stocks guess for:
    Corn was raised from 833 to 1,133 million bushels, more than expected. (Take notice when a bearish report fails to produce its expected results)
    Soybeans were reduced from 140 to 135 million bushels.
    Wheat was increased from 537 to 574 million bushels.
    Sugar was increased from 607,000 to 767,000 short tons.
    Cotton was reduced from 5.30 to 4.60 million bales.

  • The USDA's 2008-2009 world ending stocks guess for:
    Corn was raised from 105 to 112 million tons.
    Soybeans were increased slightly from 48.9 to 49.3 million tons.
    Wheat was increased from 133 to 136 million tons.
    Cotton was reduced from 53 to 51 million bales.

  • The USDA increased its beef production guess for 2008 from 26.6 to 26.7 billion pounds.

  • The USDA increased the pork production guess for 2008 from 23.5 to 23.6 billion pounds.
The Russo-Georgian War and the Balance of Power By George Friedman

..Moscow did not have to concern itself with the potential response of the United States or Europe; hence, the invasion did not shift the balance of power. The balance of power had already shifted, and it was up to the Russians when to make this public. They did that Aug. 8.

Monday, August 11, 2008

Georgia: Vladimir Putin sends emphatic message of global importance
Mr Putin has demonstrated that the Kremlin will use force to protect the 25 million Russians who inhabit the Soviet Union's successor states, well beyond the mother country's borders.

Quick Overview

  • YoY the U.K.'s producer prices rose 10.2% in July

  • The USDA said:
    67% of the corn crop was rated good to excellent, up from 66% last week.
    63% of the soybean crop was rated good to excellent, the same as last week.
    53% of the spring wheat crop was rated good to excellent, down from 56% last week.
    45% of the cotton crop was rated good to excellent, down from 47% last week.

Sunday, August 10, 2008

US dollar rallies as extent of worldwide recession becomes clearer
Arguably, the US is now super-competitive. Airbus and Volkswagen are shifting production plant across the Atlantic. US furniture and textile companies have stopped outsourcing to China, and are coming home.

The International Monetary Fund says the dollar has fallen 25pc to 30pc on a global basis, just as it did in the late 1980s. There was no shortage of dollar doomsters at that time, warning that America was finished - left behind by Japan and Germany. Events played out otherwise. America was on the cusp of a recovery.

Friday, August 08, 2008

Quick Overview

  • U.S. worker productivity rose 2.2% in the second quarter.
  • U.S. wholesale sales rose 2.8%
  • U.S. Inventories rose 1.1%.

  • Canada’s unemployment rate improved from 6.2% to 6.1%

  • GDP in Italy fell 0.3%.

  • Chile's state-run copper company said output fell 11.6 percent in the first half of the year amid heavy rains and labor strikes.

  • The U.S. dollar had its highest close in five months.

Thursday, August 07, 2008

Governments caused the credit crisis, but capitalism gets the blame
Greenspan now says the world faces a "once or twice in a century event". Faith in the financial system has been called into question. Taxpayers will have to rescue more banks. Missing is any hint of apology for his role in incubating this crisis as monetary overlord for 20 years.
Rice on possible IDF Iran strike: U.S. has no veto over Israeli military ops
"We don't say yes or no to Israeli military operations. Israel is a sovereign country," Rice said in an interview with Yahoo! News.

Quick Overview

  • U.S. pending home sales rose 5.3% in June, better than expected. YoY pending home sales are down 12.3%.

  • U.S. jobless claims rose 7,000 last week to 455,000, more than expected

  • The Bank of England kept its interest rate unchanged at 5.0%.

  • The European Central Bank kept its interest rate unchanged at 4.25%

  • Japan’s machinery orders fell 2.6% in June.

  • YoY South Africa gold production fell 12.3% in June.

  • The U.S. Environmental Protection Agency denied the request from Texas to reduce the Renewable Fuels Standard this year, saying that they found no evidence that the mandate was causing "severe harm" to the economy.
U.S. June Consumer Credit Up $14.3 Billion, More Than Forecast
Consumers are using credit cards and loans to cover expenses as falling home values cause banks to restrict access to home- equity lines.

Wednesday, August 06, 2008

Hank the Great? Paulson Copies Frederick With Covered-Bond Plan
(Bloomberg) -- In 1769, short of funds to rebuild Prussia after attacks by Russia, Sweden and Austria, Frederick the Great let aristocrats, churches and monasteries raise money by pledging their estates as security to investors.

Quick Overview

  • Consumer confidence in the U.K. fell from 62 to 51 in July.

  • German factory orders fell 6.1% in June.

  • The U.S. DOE said:
  • Supplies of crude oil rose 1.7 million barrels to 296.9 million barrels
    Supplies of gasoline fell 4.4 million barrels
    Supplies of heating oil rose 1.1 million barrels.
    Refinery use fell from 87.2% to 87.0% of capacity last week.
    Gasoline demand fell 2.3% YoY
    Distillate demand rose 3.5% YoY.

  • The port of Dalian, which is the largest in northeast China, saw its container throughput rise 23.8% YoY.

Tuesday, August 05, 2008

Quick Overview

  • The Fed met and kept rates unchanged at 2.0%, as expected.

  • The Institute of Supply Management's index of services increased from 48.2 to 49.5

  • U.K.'s manufacturing output fell 0.5% in June.
    U.K.’s index of services rose from 47.1 to 47.4

  • Retail sales volume in the Euro area fell 0.6% in June.

  • Australia kept rates unchanged at 7.25%, as expected.

  • (JoC) A national container fee may be the most equitable means available to raise the billions of dollars needed to build freight infrastructure, a congressional hearing is told.

  • Between January and May, China exported 3.39 billion pairs of shoes, down 3.6% YoY.

Monday, August 04, 2008

Quick Overview

  • YoY U.S. Consumer prices rose 4.1% in June, up from 3.5% in May, for the biggest annual gain since May 1991.

  • U.S. personal incomes rose 0.1% in June. Adjusting for inflation, spending fell 0.2%.

  • U.S. factory orders rose 1.7% in June, more than expected.

  • The USDA said:
    66% of the corn crop is rated good to excellent.
    63% of the soybean crop is rated good to excellent, up from 62% last week.
    56% of the spring wheat crop is rated good to excellent, down from 60% last week.
    86% of the winter wheat crop is harvested.
    47% of the cotton crop is rated good to excellent.

Deutsche calls the top of the commodity cycle
Deutsche Bank has called the top of the commodity cycle. The uber-bulls of the oil, food and metals boom have advised clients to take profits before the downturn engulfing most of the global economy works its inevitable effects.