Quick Overview

• Ukraine raised its forecast for exports of grains by 1 million metric tons to 25 million tons

• The amount of cargo handled at the port of Maputo between January and July of 2011 totaled 6.4 million tons, which was a YoY rise of 1.6 million tons or 33%.

• India's crude oil imports in July rose 2.6% YoY to 13.58 million metric tons, or 3.21 million barrels a day.

• YoY the S&P/Case-Shiller index of property values in 20 cities fell 4.5%, after a 4.6% YoY drop in May.

• U.S. Consumer confidence fell to 44.5 in August -- the lowest reading since April 2009.

• U.S. road freight growth has exceeded truck driver volume in the year so far and is likely to inflate salaries by as much as 30 per cent by 2014.The three-year deficit of drivers, which number 300,000 full-time posts, matches 2004 vacancies that remained unfilled for a year, said freight transport consultancy FTR Associates head Noel Perry.

Attention Governor Perry: Evolution is a fact
The population of the United States is more than 300 million and it includes some of the best and brightest that the human species has to offer, probably more so than any other country in the world. There is surely something wrong with a system for choosing a leader when, given a pool of such talent and a process that occupies more than a year and consumes billions of dollars, what rises to the top of the heap is George W Bush. Or when the likes of Rick Perry or Michele Bachmann or Sarah Palin can be mentioned as even remote possibilities.

Graphics Gallery: The Most Important Facts about the Global Debt Crisis

Quick Overview

• (WSJ) Widely grown corn plants that Monsanto Co. genetically modified to thwart a voracious bug are falling prey to that very pest in a few Iowa fields, the first time a major Midwest scourge has developed resistance to a genetically modified crop.

• U.S. Rough rice stocks in all positions on August 1, 2011 rose 37% YoY

• Bloomberg: Chinese industrial companies’ profits rose 28.3 percent in the first seven months from a year earlier, helping to support the expansion of the world’s fastest-growing major economy.

• German Finance Minister Wolfgang Schaeuble said that the world risks a 7-year recession due to slowdown and debt troubles in America, Europe and Japan, urging debt-ridden countries resort to drastic austerity.

• The Russian Ministry of Economic Development expects Russia's 2011 GDP to grow by 4.1, lower than a previous forecast of 4.2%.

• Spain's economy grew 0.2% QoQ

• JOHN Fredriksen’s flagship tanker operator Frontline is urging other owners in the very large crude carrier market to take a $500m gamble and scrap 50 older double-hull vessels to help ease oversupply.

Quick Overview

• Betting on a bailout again? Buffett is investing $5 billion in B of A -- and plans to hold a Sept. 30 fundraiser in New York City to benefit President Barack Obama’s re-election bid. (See Matt Taibbi below)

• Investors are betting Germany will ban short selling.

• China was the third highest filer of patents in 2010, just behind the U.S., which registered 326,945 and Japan with 337,497.

• Thailand intends to pay farmers Bt 15,000 a tonne for unmilled paddy rice, over 50 % more than the current rate.

• South Korea's consumer confidence fell to a 5-month low of 99 in August, down 3 points MoM.

• German business confidence fell from 112.9 in July to 108.7 in August.

• Rabobank lowered its estimate for the world sugar inventories in 2011-12 by 300,000 tonnes to 9.5m tonnes.

• CME raises COMEX gold margins by 27%.

• England: people aged 16 to 24 not in Education, Employment or Training number 16.2% in 2009.

• U.S. Delinquency rates on one-to-four-unit properties are currently at 8.4%.

• Japan's July CPI rose 0.1% vs. forecasts for 0.1% drop

Obama Goes All Out For Dirty Banker Deal
Why? My theory is that the Obama administration is trying to secure its 2012 campaign war chest with this settlement deal. If Barry can make this foreclosure thing go away for the banks, you can bet he’ll win the contributions battle against the Republicans next summer.
Which is good for him, I guess. But it seems to me that it might be time to wonder if is this the most disappointing president we’ve ever had.

Obama Administration Pressures Prosecutors To Drop Criminal Investigations Of Banks Over Mortgage Fraud Various organizations have denounced the actions of the Obama Administration as caving into this powerful lobby — as it has caved into the oil/gas lobby on offshore drilling, pharmaceutical lobby on health care legislation, and telecom lobby on immunity from privacy lawsuits.

Quick Overview

• YoY U.S. Truck tonnage rose 3.9% in July American Trucking Associations said.

• U.S. new home sales fell 0.7% in July -- near expectations.

• Moody's downgraded Japanese Government Debt to AA3 from AA2

• China passed the US as the largest market for personal computers in Q2

• Japan creates $100 billion credit line as a step to cope with yen's recent spike

• Austrian woman Gerlinde Kaltenbrunner became the1st woman to conquer all 14 8,000-metre summits without oxygen http://is.gd/Y8wQ2i

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• Early warning sign: GLD overtakes SPY (S&P) as world’s largest ETF.

• U.S. feedlots placement at 2.15m cattle last month is up 22% YoY.

Torture in Bahrain Aided by Nokia Siemens The toolbox allows more than the interception of phone calls, e-mails, text messages and Voice Over Internet Protocol calls such as those made using Skype. Some products can also secretly activate laptop webcams or microphones on mobile devices. They can change the contents of written communications in mid-transmission, use voice recognition to scan phone networks, and pinpoint people’s locations through their mobile phones. The monitoring systems can scan communications for key words or recognize voices and then feed the data and recordings to operators at government agencies.

E-mails Suggest Bear Stearns Cheated Clients Out of Billions

Wall Street Aristocracy Got $1.2 Trillion in Secret Fed Loans

..as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, ..

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• (NYT) Broad areas around the stricken Fukushima Daiichi nuclear plant could soon be declared uninhabitable, perhaps for decades, after a government survey found radioactive contamination that far exceeded safe levels, several major media outlets said Monday.

• Germany now has more renewable energy installed than the USA.

• July U.S. single-family housing starts fell 4.9%; Building permits fell 3.2% in July.

• July U.S. industrial output rose 0.9%, in line with expectations and the biggest gain this year.

• The Conference Board reported that the index of leading economic indicators increased by 0.5% in July, suggesting modest growth ahead.

• The Department of Labor reported that first time claims for unemployment benefits rose by 9,000 to 408,000 in the week ending August 13.

• The Philadelphia Fed region reported this morning that industrial activity weakened sharply this month. The bank's index is reported at a negative 30.7, down from 3.2 in July and the lowest since March 2009.

• The U.S. CPI rose 0.5% in July, increasing inflation concerns once again.

• The Euro-area expanded by only 0.2% according to first estimates.

• YoY India’s industrial output rose by 8.8%.

• A few of Observations:
  
  U.S. Rail Traffic continues strong.
  
  Steel and Iron Ore prices are strong.
  
  Libor and Fed Funds Spread is showing signs of life.
  
  Coal continues strong
  
  Baltic Dry Index producing a P&F buy signal.
  
  M2 is growing at 10% +
  
  M1 growing at 20% +, fastest since 1975
  
  Money Multiplier still below 1 at 0.78
  
  
  
  
  
  

Next Update Sunday 8/21

Don’t look down
The poor like taxing the rich less than you would think One paradoxical consequence of this “last-place aversion” is that some poor people may be vociferously opposed to the kinds of policies that would actually raise their own income a bit but that might also push those who are poorer than them into comparable or higher positions.
..In keeping with the notion of “last-place aversion”, the people who were a spot away from the bottom were the most likely to give the money to the person above them: rewarding the “rich” but ensuring that someone remained poorer than themselves

Quick Overview

• (Bloomberg) Insiders buying stocks are at the Highest Rate since 2009.

• The USDA projected 2011 U.S. soybean yields at 41.4 bushels per acre, 2 bushels below last month's yield projection. The first survey-based forecast of U.S. soybean production is 3.056 billion bushels, 169 million below the July projection, and 273 million below last year's crop.

• The USDA's Corn yield projection of 153 bushels per acre was down sharply from a July estimate of 158.7. The USDA estimates new-crop ending stocks at 714 million bushels, or a 19.8 day supply.

• First time claims for U.S. unemployment benefits fell by 7,000 in the week ending August 6 to 395,000.

• European regulator announces bans on short selling in France, Italy, Spain and Belgium

Richard Koo: The Ratings Agencies May Destroy The Global Economy Once Again  These experiences demonstrate that during a balance sheet recession, when businesses and households are struggling to deleverage, the correct policy—fiscal stimulus—is exactly the opposite of what is needed under normal circumstances. Active application of stimulus will ultimately minimize the fiscal deficit.
Standard & Poor’s does not understand this and says America’s AAA* rating may be restored if the government succeeds in trimming its deficit by $4trn. The adoption of such a policy by the US government today would plunge the economy into another Great Depression.

Quick Overview

• Stiglitz: "We don't know the kinds of exposures to say European [credit default swaps] American banks have," he says. There are rumors that as much as 50% of European sovereign bonds are insured thru CDS by American banks, he notes. "But we don't really know." As was the case in 2008, the lack of knowledge of what's on bank balance sheets poses the risk of banks refusing to lend to other banks, Stiglitz says. "If one of these countries has a real difficulty [interbank lending] markets will freeze up."

• Süddeutsche Zeitung writes: The prospects of these youth in London are as dismal as those of young people in Cairo or Sana'a: They need unemployment benefits, odd jobs, state handouts and perhaps a bit of petty crime to stay afloat. The message to the British underclass couldn't be any clearer: Born poor, you will remain poor and that naturally also applies to your children and grandchildren. Your chances of winning the lottery are greater than breaking out of your class."

• Violence erupted on the streets of Chile's capital and other cities as tens of thousands of students staged another protest demanding changes in public education.Masked demonstrators burned cars and barricades, looted storefronts...

• Australia's consumer confidence fell in August to 89.6, its lowest level since May 2009.

• (Reuters) - Investors pulled the most money out of U.S. mutual funds in the week ended August 3 since the depths of the stock market collapse in March 2009, with net redemptions of $16.9 billion, data from the Investment Company Institute showed on Wednesday.
  
  
  
  
  

Quick Overview

• The Fed promised to keep interest rates near zero for at least two more years and said it would consider further steps to help growth, sparking a rebound in stocks. DJ down 635 yesterday - up 430 today. For once, the worn-out expression about roller coaster stock markets was apt.

• (Bloomberg) China may join Asian nations from South Korea to India in delaying interest-rate increases after the nation’s leaders urged global cooperation to stabilize financial markets.

• World crude oil and liquid fuels consumption will grow by 1.4 million barrels per day in 2011 and by 1.6 million barrels per day in 2012, outpacing average global demand growth of 1.3 million barrels per day from 1998-2007, the U. S. Energy Information Administration (EIA) said.

• Japans consumer confidence rose to 37.0 in July from 35.3 in June.

• Republicans’ No-Tax Stand Unsupported by History or Facts: View

634.76 -- the sixth-worst point decline for the Dow in 112 years

We face recession without shock absorbers as Berlin loses patience with the eurozone

SP should have acted six years ago when the rot was setting in. To do so now is fatuous.

Gwynne Dyer: Food crisis looms as a result of cutbacks in irrigation A lot of those aquifers are “fossil”, meaning that they filled with water long ago and are now cut off from the surface. They will eventually be pumped dry. Others still recharge from surface water that filters down, but they are almost all being pumped at many times their recharge rate, so they will effectively go dry, too. Then the world will have to make do with the one-third of irrigated land that gets its water from the weather. It won’t be enough.
Obviously, the aquifers won’t all go dry at once. Some are bigger than others, and some have been pumped much longer or more heavily than others. But most of them are going to go dry at some point or other in the next 30 years.

Quick Overview

• The subprime and "A" rating for Lehman  expert S&P downgrades US debt to AA+, late on Friday.

• The U.S. unemployment rate edged down to 9.1 percent in July from 9.2% in June. The total number of unemployed stood at 13.9 million. The number of long-term unemployed who have been jobless for at least 27 weeks stood at 6.2 million, accounting for 44.4% of the total unemployed.

• (Bloomberg) China’s annual corn imports may grow to more than 10 million metric tons in five years as the increase in demand outpaces expansion in output, a researcher at South China Grain Trade Center said.

• U.S. Consumer credit grew 7.7% in June.

Quick Overview

• Powerful typhoon Muifa likely to land in east China over the weekend creating -- damage to corn and soy?

• The Fox, Tea, Republican generated sell-off in Wall Street accelerated on Thursday, with the blue-chip Dow plunging more than 500 points, as investors rushed out of equities.
• IT's Dow Theory prediction is now bearish

• The number of U.S. people initially applying for unemployment aid last week declined to 400,000 in the week ending July 30, a decrease of 1,000 from the previous week's. THE BIG Employment NUMBER IN THE MORNING.

The Wrong Worries
But the policy disaster of the past two years wasn’t just the result of G.O.P. obstructionism, which wouldn’t have been so effective if the policy elite — including at least some senior figures in the Obama administration — hadn’t agreed that deficit reduction, not job creation, should be our main priority. Nor should we let Ben Bernanke and his colleagues off the hook: The Fed has by no means done all it could, partly because it was more concerned with hypothetical inflation than with real unemployment, partly because it let itself be intimidated by the Ron Paul types.

Quick Overview

• Arctic sea ice is melting at a near- record pace, opening shipping lanes for cargo traffic between Europe and Asia, Russia’s environmental agency said.

• TEA Republicans have erased $1.07 trillion from American equities in less than two weeks. They are good at this – and hard at work on more.

• U.S. factory orders dropped 0.8% in June.

• The number of planned layoffs at U.S. firms rose to a 16-month high in July

US: Obstacles to progress
Indeed, the US spends only 2.4 per cent of gross domestic product on infrastructure – less than half the average of 5 per cent that prevails in European countries – and half the level of 1960

Quick Overview

• (FT) Investors should remember that national accounts must sum to zero. Falling rich world public deficits lead to lower corporate profits, all else being equal. Something Mr. Market seems to know!!

• Chinas Purchasing Managers’ Index rose from 50.7 in July to 50.9 in June – better than expected.

• (Reuters) - Macau, the world's largest gambling market, blew past expectations to post a 48.4 percent rise in July gambling revenue, underscoring unflagging demand from China's newly minted millionaires and burgeoning middle class.

• WXRISK (the weather site) has a category 4-5 hurricane potentially hitting east central China (Corn / Soy)
  
  
• U.S. personal income rose 0.1% in June, while spending fell 0.2% -- on no confidence.

• The U.S. ISM’s factory index fell to 50.9 last month from 55.3 in June.

• The PPI remained stable in the EU 17 in June, rising by 0.1%

• YoY Japan's monetary base rose 15.0 % in July.

• Brazil’s trade surplus rose 74.4% YoY.

• South Korea said it will expand the zero- tariff quota for refrigerated pork imports without limit by the end of September. Previously, 130,000 tons of fresh and frozen pork were subject to zero-tariff imports.
  
  
• US corn futures climb the one-day 30c limit on increasing concerns about hot weather reducing output.
• The Institute of Energy Economics for Japan (IEEJ) reported that alternative energy imports (Coal  ?) would rise significantly if local authorities kept reactors shut after routine maintenance due to safety concerns after Fukushima.
• The 10 sieverts of radiation detected on Aug. 1 outside reactor buildings was the highest the Geiger counters used were capable of reading, indicating the level could have been higher!

How the Billionaires Broke the System
There are two ways of cutting a deficit: raising taxes or reducing spending. Raising taxes means taking money from the rich. Cutting spending means taking money from the poor. Not in all cases of course: some taxation is regressive; some state spending takes money from ordinary citizens and gives it to banks, arms companies, oil barons and farmers. But in most cases the state transfers wealth from rich to poor, while tax cuts shift it from poor to rich.