Wilbur Ross Sees ‘Huge’ Commercial Real Estate Crash
U.S. commercial property sales are forecast to fall to the lowest in almost two decades as the industry endures its worst slump since the savings and loan crisis of the early 1990s, according to property research firm Real Capital Analytics Inc. The Moody’s/REAL Commercial Property Price Indices already have fallen almost 41 percent since October 2007, Moody’s Investors Service said Oct. 19.

Quick Overview

• The University of Michigan index of consumer sentiment fell to 70.6 from 73.5 in Sep.

• U.S. personal incomes fell 0.1% in September, spending fell 0 .5%.
  
  

• Japan's unemployment rate improved from 5.5% to 5.3% in September
  
  

• Canada’s GDP fell 0.1% in August and 4.0% YoY
  
  

• Unemployment rate in the EU rose from 9.1% to 9.2% in September
  
  

• Germany's retail sales fell 0.5% MoM and 3.9% YoY
  
  

• Japan's central bank said it would stop buying corporate debt in December, ending some of the emergency credit measures implemented earlier this year
  
  

• India, typically amongst the world's top three or four rice exporters, Friday issued a tender for import of 10,000 metric tons of rice.
  

Central banks chill asset rally Teun Draaisma, Morgan Stanley's equity strategist, said investors should move with care as central banks awaken. A study of 19 "bear market" rallies over recent decades shows that bourses tend to tip over as the US Federal Reserve starts tightening. Equities fall back 25pc over the next 13 months on average. It is unlikely to be better this time.

Growth and jobs
At this rate, we wouldn’t reach anything that feels like full employment until well into the second Palin administration.

Quick Overview

• U.S. GDP rose 0.9% in Q3, YoY GDP fell 2.3%.
  

• US jobless claims fell 1,000 to 530,000.
  

• The IMF expects 2010 GDP growth of 9% in China and 6.4% in India.
  

• Japan's industrial output rose 1.4% in September
  

• Lumber closed up its $10 maximum daily limit
  

• China agreed to end the ban on imports of U.S. pork.
  

India May Import Rice, Fueling ‘Panic,’ IRRI Says
(Bloomberg) -- India, the world’s second-largest rice grower, may become a net importer for the first time in 21 years in 2010, potentially sparking the kind of “panic” that sent prices to records in 2008, a rice expert said.

Quick Overview

• U.S. durable goods orders rose 1.0% MoM, but fell 24.1% YoY.
  

• U.S. new home sales fell 3.6% MoM and 27% YoY.
  

• Australia's consumer prices rose 1.3% in Q3
  

• YoY Japan's retail sales fell 1.4% in September
  

• Norway raised its interest rate 0.25%.

• The U.S. will need to import as much as 1.2 million tons more sugar than the U.S. Department of Agriculture now plans on allowing into the country in fiscal year 2010, according to the Sweetener Users Association

• India is expected to import up to 3.5 million metric tons of rice in coming months, Dwight Roberts, president and chief executive of the U.S. Rice Producers Association sais

Rice Market ‘On Thin Ice’ as Record Prices May Return (Update1)
(Bloomberg) -- Rice prices may return to record levels as bad weather curbs output in major growers including India, a Philippine minister and the U.S. Rice Producers Association said.

Quick Overview

• U.S. consumer confidence fell from 53.4 to 47.4 in October
  

• The Richmond Federal Reserve's regional index of manufacturing fell from +14 to +7 in October
  

• The Standard and Poor's/Case-Shiller index of U.S. home prices in 20 cities rose 1.2% MoM, but fell 11.3% YoY. This is the fourth consecutive monthly increase.
  

• The eurozone reports the first YoY fall in bank lending to the private sector of 0.3% -- strengthening the case for the ECB to maintain its ultra-loose interest rate policy.

• India will extend the deadline for duty-free imports of the raw sugar by nine months to Dec. 31 2010

• (Bloomberg) -- The Philippines, the world’s biggest rice buyer, plans to bring forward imports for 2010 to beat other nations to the market before prices surge and ensure stockpiles aren’t drained, the National Food Authority said.

• India eliminates 70% import tax on some rice types

• “You can’t find a year in USDA’s data (which goes back to 1972) on corn harvest activity that is as slow as this year [20%complete]. Period. (CME)

Quick Overview

• South Korea’s GDP rose 2.6% in Q3 and 0 .6% YoY
  

• China’s copper imports totaled 282,828 tons in September, up 29%

Food will never be so cheap again
The world's grain stocks have dropped from four to 2.6 months cover since 2000, despite two bumper harvests in North America. China's inventories are at a 30-year low. Asian rice stocks are near danger level.

U.S. Risks Japan-Like ‘Lost Decade’ on Stimulus Exit, Koo Says
“If you learn your lesson from the Japanese experience, you don’t remove your fiscal stimulus until private sector de- leveraging is over,” Koo, 55, chief economist at the research arm of Japan’s biggest brokerage, said in an interview at his Tokyo office last week. “When we see the private sector coming to borrow again, I’ll be the loudest person on earth arguing for fiscal reform. That’s the exit.”

Quick Overview

• The National Association of Realtors said U.S. existing home sales rose 9.4% in September
  

• U.K. GDP fell 0.4% in Q3 and 5.2% YoY
  

• EU industrial orders rose 1.2% MoM, but fell 22.3% YoY.
  

• Amazon and Microsoft reported better-than-expected results
  

• The USDA said pork production rose 1% YoY
  

• The USDA said beef production fell 2% YoY.
  

Quick Overview

• U.S. jobless claims rose 11,000 last week to 531,000, more than expected.
  

• U.S. Index of leading indicators rose 1.0% in September
  

• U.S. home prices fell 0.3% MoM and down 3.6% YoY.
  

• Canada retail sales rose 0.8% MoM but fell 3.8% YoY
  

• U.K. Retail sales were unchanged MoM and up 2.1% YoY.
  

• YoY Japan's exports fell 30.7% in September.
  

• The Swedish central bank kept interest rates at .25%. The bank indicated they would keep rates near zero in the future
  

• U.S. steel exports rose 13.1% MoM
  

• A tape containing the personal data of 51,000 UK customers has been lost by insurance company Zurich, the company confirms
  

Sharia Banking Comes to Germany
The underlying concept of the Islamic banking business is the Prophet Muhammad's prohibition of interest. Like Jesus in the New Testament, Muhammad took action against the usurers of his time, who exploited their contemporaries by charging them exorbitant interest, sometimes well over 100 percent. Muhammad summarily prohibited charging interest unless something was provided in return. Since the 1970s, Islamic banks have sought to satisfy this requirement by offering their customers financial services on the basis of interest-free transactions

Volcker Fails to Sell a Bank Strategy
He wants the nation’s banks to be prohibited from owning and trading risky securities, the very practice that got the biggest ones into deep trouble in 2008. And the administration is saying no, it will not separate commercial banking from investment operations.

Down with the dollar
But if foreign investors are so concerned, why is the dollar’s decline not accompanied by a sharp rise in bond yields? One reason may be that the Federal Reserve has been buying so much of the year’s debt issuance, as part of its quantitative easing programme. That has helped to keep yields down.

Quick Overview

• Australia’s leading indicators rose 1.1% in August.

• YoY Chinas GDP rose 8.9% in Q3
  

• The pound rallies after the Bank of England says its policymakers voted 9-0 not to pump more money into the UK economy.
  

• Wells Fargo earned $2.6 billion in Q3 – a record
  

• Morgan Stanley earned $498 million in Q3
  

• The U.S. DOE said:
  Supplies of crude oil rose 1.3 million barrels last week at 339.1 million barrels.
  Supplies of gasoline fell 2.3 million barrels
  Supplies of heating oil rose 300,000 barrels.
  Refinery use rose from 80.9% to 81.1% of capacity.
  Gasoline demand rose 4.2% YoY
  Distillate demand fell 12.1% YoY.
  

• Demand for coal to generate electricity and make steel in China and India is expected to grow by 7% to 8% annually in the next five years, leaving the world "chronically" short of the fuel, the head of U.S. coal miner Peabody Energy Inc (BTU.N) said.

• Argentine farmers will plant a record 19 million hectares with soybeans this season, up from the previous high mark by 7%, the Buenos Aires Cereals Exchangesaid.
• They forecasts 2009-10 wheat production at 7.5 million metric tons. Down sharply from the five year average of 14.8 million tons

• YoY China's refined sugar production in September fell 57% to 14,000 metric tons, the National Bureau of Statistics said Thursday. From January to September, sugar output fell 13% YoY.

• (Spiegel) The European Union is funding ambitious programs aimed at monitoring human behavior in an effort to identify deviance and pick out potential terrorists. The implications for privacy are myriad.
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Euro at $1.50 is 'disaster' for Europe Korea, Thailand, Taiwan, the Philippines, Indonesia and Russia have all been buying dollars to stem their currencies' rises. The effect is to perpetuate the imbalances that led to the credit bubble from 2004-2007 and ultimately caused the financial crisis. Reserve accumulation fuels asset booms because it creates a wash of liquidity and drives down global bond yields. Asia clearly needs to sharply revalue against the West to right the system.

Quick Overview

• U.S. Housing starts were at an annual rate of 590,000 -- up 0.5% MoM. Less than had been expected

• U.S. producer price index fell 0.6% in December and 4.8% YoY

• Canada kept its interest rate unchanged at 0.25%
  

• Canada’s leading indicators rose 1.1% in September

• To curb the upward climb of its currency, Brazil announced that it would impose a 2% tax on overseas purchases of stocks and bonds

• Construction output in the EU fell 0.5% MoM and 11.1% YoY.
  

• The USDA said 17% of corn and 30% of soybeans were harvested
  

• The global sugar deficit of 8.3 million metric tons in the 2009-10 period should reverse to a surplus in the 2010-11 period, said the general director of Kingsman, a Lausanne, Switzerland-based consultancy.
• Sugar content in cane has fallen to 5-6 percent from the usual 9 percent level in Uttar Pradesh, India's top producing state of the sweetener, according to a PTI story
• India's sugar production is expected to rise to 18 million metric tons (prev. 16-17) in 2009-10, according to an Indian government official inBrazil.
• Mexico's new 2009-10 sugar harvest is forecast to produce 5,168,188 metric tons, up 4.1% of semi-refined standard sugar, the National CaneSugar Growers Union said Tuesday.

• U.S. economist, Joseph Stiglitz, a Nobel laureate, said the risk of deflation is still a concern, despite signs of an economic recovery.

• Illy forecasts 2010-11 world coffee production at 145 million 60-kilgrambags, up from 132 million bags in 2009-10. Consumption in 2010 is pegged at around 135 million bags,leaving a 10 million bag surplus, said Illy.

• Russia harvested 98.8 million tons of grain as of Oct. 20, down 13.4 million tons YoY.

A sterling crash is a godsend

Politically, these countries face what options traders call "time decay". The longer it lasts, the worse it gets.

Quick Overview

• Agriculture production needs to expand by 70% through 2050, as the global population rises to 9.1 billion from 6.7 billion, Jacques Diouf, director-general at the United Nations Food and Agriculture Organization said.
  

• Bernanke said Asian economies are leading the world economic recovery, but should focus on boosting consumption.
  

• Japan's tertiary index of services rose from 96.8 to 97.1 in August -- better than expected.
  

• British same-store sales rose 7.5% in September
  

• CWG - Nearly half of Brazil's wheat suffering major losses due to persistent rains this month. Brazil world's largest wheat importer (Arlan Suderman Farm Futures)
  

• Rain in Brazil is also delaying the harvest of sugarcane. Cazrnikow's director of research, Toby Cohen, said: "There simply will not be enough sugar to meet ongoing levels of demand. "Limits on supply require a forced adjustment of consumption. To this end it is clear that prices will need to move higher to ration demand."

• The USDA said that there were 10.474 million head of cattle on feed as of October 1st, up 0.6% YoY

• RBA: A “very expansionary setting of policy was no longer necessary, and possibly imprudent,” officials said

• Koyodo News reported that crude steel output in Japan in the April to September first half of fiscal 2009 fell by 29.6% YoY to 43.33 million tonnes, marking a 40 year low on a semiannual basis due to a plunge in demand.

• (Bloomberg) -- Burning coal to generate electricity in the U.S. causes about $62 billion a year in “hidden costs” for environmental damage, not including expenses related to global warming, the National Academy of Sciences said.

Quick Overview

• U.S. Industrial production rose 0.7% in September and was revised up 1.2% for August.
  

• The University of Michigan's consumer sentiment index fell from 73.5 to 69.4

• YoY Canada’s consumer prices fell 0.9%
  

• YoY EU exports fell 20% in August

Quick Overview

• U.S. jobless claims fell 10,000 to 514,000 -- the lowest in nine months.
  
  

• U.S. Consumer prices rose 0.2% MoM, but fell 1.3% YoY
  

• Consumer prices in the EU rose0.3% YoY.
  
  

• The New York Federal Reserve's regional index of manufacturing rose from 18.9 to 34.6 in October
  
  

• The Philadelphia Federal Reserve's regional index of manufacturing fell from 14.1 to 11.5 in October
  
  

• U.S. Foreclosure filings fell 4% MoM, but rose 29% YoY.
  

• The U.S. Department of Energy said:
  Supplies of crude oil rose 400,000 barrels to 337.8 million barrels
  Supplies of gasoline fell 5.2 million barrels
  Supplies 0f heating oil fell 200,000 barrels.
  Refinery use fell from 85.0% to 80.9%.
  Gasoline demand rose 5.3% YoY
  Distillate demand fell 10.8% Yoy.

• North American cocoa bean grindings in the third quarter totaled 118,405metric tons, down 586 tons, or 0.49%, from the same period last year, theNational Confectioners Association said Thursday.

Quick Overview

• U.S. retail sales fell 1.5% in September. Excluding autos, sales rose 0.5%, better than expected.
  

• U.K. unemployment rate remained at 7.9%
  

• EU industrial production rose 0.6% in August, but fell 13.5% YoY.
  

• Japan kept its interest rate unchanged at 0.1%
  

• JP Morgan earned $3.6 billion in Q3 -- better than expected.
  

• Intel expects a strong fourth quarter.
  

• The Mortgage Bankers Association said that its index of mortgage applications was down 6.8% YoY.

• China's major ports handled 4.5 billion tons of cargo between January and August, an increase of 4.9 % compared to the same period last year.
  

• World sugar output is forecast to increase to 156.9 million tonnes in 2009/10 from 150.0 million in 2008/09, German analyst F.O. Licht said in its first forecast for sugar production in the new crop year. "As sugarcane needs 12 to 18 months to mature, the cane that has been planted in response to this year's price surge will only be ready for harvesting for the 2010/11 crush." F.O. Licht said.
  

• Europe's cocoa grind fell 1.5% YoY to 343,471 tonnes in Q3 of 2009, the European Cocoa Association said on Wednesday.

• Concerns about supplies in both Asia and the U.S. havesent CBOT rice to its highest price in nine months

Updates resume Oct. 14

Quick Overview

• The U.S. trade gap narrowed in August to $30.7 billion, down 3.6 percent from a revised estimate of $31.9 billion for July
  

• Canada’s unemployment rate improved from 8.7% to 8.4% in September
  

• Japan's machinery orders rose 0.5% in August
  
  

• The USDA's 2009-2010 U.S. ending stocks estimate of:
  Corn was raised from 1.635 to 1.672 billion bushels.
  Soybeans were raised from 220 to 230 million bushels.
  Wheat was raised from 743 to 864 million bushels.
  Sugar was lowered from 844,000 to 836,000 tons.
  Cotton was lowered from 5.6 to 5.4 million bales.
  
  

• The USDA's 2009-2010 world ending stocks estimate of:
  Corn was lowered from 139 to 136 million tons.
  Soybeans were raised from 51 to 55 million tons.
  Wheat unchanged at 187 million tons.
  Cotton unchanged at 56 million tons.
  
  
  

• The USDA estimates the Florida's 2009-2010 orange crop at 136 million boxes, down 16% YoY
  
  

Quick Overview

• U.S. jobless claims fell 33,000 last week to 521,000,
  

• U.S. wholesale sales rose 1.0% MoM, but fell 17.7% YoY
  

• U.S. Inventories fell 1.3% MoM and fell 14.7% YoY
  

• The Bank of England and the European Central Bank kept interest rates unchanged,.

• European cocoa bean grindings in Q3 totaled 406,080 metric tons, up 16.5% YoY

Quick Overview

• Australias jobless rate fell to 5.7% from 5.8%

• U.S mortgage applications rose 16%.
  

• GDP in the EU fell 0.3% QoQ and down 4.9% YoY
  

• Japan's coincident index rose from 89.8 to 91.4 in August
  

• The U.S. Department of Energy said:
  Supplies of crude oil fell 1 million barrels to 337.4 million barrels.
  Supplies of gasoline rose 2.9 million barrels
  Supplies of heating oil rose 400,000 barrels.
  Refinery use rose from 84.6% to 85.0%
  Gasoline demand rose 6.2% YoY
  Distillate demand fell 9.5% YoY.
  

• German cocoa grind rose 11% QoQ

• Conab, the Brazilian version of the USDA, estimates the upcoming bean crop at 62.3-63.3 million tonnes versus 57.1 million last year. They put the corn crop at 50.9-52.2 million tonnes vs 51 million last year. Conab's wheat guess is 5.25 million tonnes versus their September guess of 5.85 million.

• (Bloomberg) Sugar deliveries from Brazil may face delays next year after above-average rains pared cane yields and slowed the harvest, producer Grupo Jose Pessoa SA said. Deliveries originally scheduled for the first half of 2010 may be delayed until later in the year or the first half of 2011.

Quick Overview

• U.K. manufacturing output fell 1.9% in August.

• Arctic air flow may enter IA on Thurs with 3 or 4 nights of frost. Hard freeze (28F) possible Friday night over much of the state. Elvin

Quick Overview

• Australia raised interest rates by 0.25% to 3.25%

• The Institute for Supply Management’s index of non- manufacturing businesses, rose to 50.9 from 48.4 in August -- higher than forecast.
  

• Retail sales in the EU fell 0.3% MoM and 1.8% YoY.
  

• EU manufacturing and services rose from 50.4 to 51.1.
  

• Services in the U.K. rose from 54.1 to 55.3 in September.
  

• FCStone to raise its estimate for a global sugar shortfall in the year ended September to 8 million tons, from 6.1 million tons previously.
  

• Roubini thinks that the piles of money being printed are leading to asset bubbles in stocks and commodities
  

• Norway is rated the best place in the world to live

• (Arlan Suderman) Commodity Weather Group raises risk of hard freeze for NW half of Mdwst by Oct. 13 to 80%. Risk for northern Delta by 14th is 20%.

• Sugar production in India'sKarnataka state is expected to decline for a second year due to flooding

• (DJ) Soybean Rust Making Fast Late-Season Push; No Damage Foreseen

• (FT) Traders are concerned that the cocoa market could face a supply deficit for a fourth year in succession as yields from ageing cocoa trees in the Ivory Coast have been affected by disease.

Quick Overview

• The U.S. unemployment rate rose from 9.7% to 9.8% in September. Non-farm payrolls fell 263,000 – more than expected.
  

• U.S. factory orders fell 0.8% in August.
  

• Japan's unemployment rate improved from 5.7% to 5.5% in August
  

• U.K. house prices rose 0.9% in September.
  

• Canada estimates its 2009 wheat crop at 24.58 million tons, up from 23.61 million tons in July.
  

• The idle container fleet worldwide has climbed to 548 ships, totaling 1.29 million TEU capacity at the end of September. This represents 10% of the total fleet capacity, or 11.6% of the total number of containerships.

Quick Overview

• The IMF said that it expects the world economy to contract 1.1% in 2009 -- but grow 3.1% in 2010
  

• The IMF expects real GDP in the U.S. to fall2.7% in 2009, but up 1.5% in 2010.
  

• U.S. jobless claims rose 17,000 last week to 551,000, more than expected.
  

• U.S. construction spending rose 0.8% MoM, but fell 11.6% YoY.
  

• U.S. personal incomes rose 0.2%
  

• U.S. Consumer spending rose 1.3%
  

• Supply Management reported that its monthly index of U.S. manufacturing activity fell to 52.6 in September from 52.9 in August -- surprisingly weak
  

• The National Association of Realtors said that its index of pending home U.S. sales rose 6.4% MoM and 12.4% YoY
  

• Unemployment in the EU rose from 9.0% to 9.1% MoM
  

• YoY Japan's retail sales fell 1.8% in August
  

• Manufacturing in Australia rose from 51.7 to 52.0 MoM
  

• Manufacturing in India rose from 53.2 to 55.0 MoM