Next Update Sunday

Quick Overview

• U.S. GDP grew by 1.3% in Q2, up from 0.4% in Q1
• U.S. unemployment benefits dropped 37,000 to 391,000 in the week ending September 24 and their lowest level since April.

• German Unemployment fell by 26K to 6.9% in September

• Spanish August Retail Sales fell -4.4% YoY

• Bloomberg: Planning Commission of India said that it had recommended that the poverty line be fixed at 965 rupees per capita per month (about $0.65 a day) for people living in urban areas and 781 rupees per capita per month (slightly more than $0.50 a day) for those living in rural areas. Based on this very conservative cut-off point -- itself a figure revised upward after the Supreme Court objected to an earlier projection -- the commission estimated the population in India living below the poverty line at a little more than 407 million people. That is almost one-third of the population.

• New Zealand’s  credit rating was cut one step to AA by Fitch.

Quick Overview

• U.S. consumer confidence rose to 45.4 in September from 45.2 in August

• U.S. home prices rose for the fourth month in a row in July, according to the S&P/Case-Shiller 20-city composite. Prices rose 0.9% MoM, narrowing the YoY loss to 4.1%.

• Oil World warned that the current La Nina weather pattern has put Brazil's soybean crop, the world's second biggest, in jeopardy.

• New U.S. homes sales fell 2.3% in August to an annual rate of 295,000,-- the fourth decline in a row. The average selling price fell 8.7% to $246,000, the lowest level since early 2009. At current sales rates, unsold new homes on the market represented a 6.6 month supply.

• The Bank of Israel unexpectedly lowered its key interest rate by 25 basis points to 3%

• The staff of the Securities and Exchange Commission is considering recommending civil legal action against the Standard & Poor's debt ratings agency over its rating of a 2007 collateralized debt offering

It's the Inequality, Stupid A huge share of the nation's economic growth over the past 30 years has gone to the top one-hundredth of one percent, who now make an average of $27 million per household. The average income for the bottom 90 percent of us? $31,244.

Quick Overview

• The 111% MoM rise in the Swiss monetary base is by far the biggest since 1973.

• The IMF said that the global economy had entered a “new and dangerous phase”

• The Fed said there were "significant downside risks" to the economy.

• Robert Zoellick, the World Bank president, warned "the world is in a danger zone"

• The U.S. Fed announced that it intends to shift $400 billion in its shorter-term debt portfolio holdings to longer-term bonds hoping to stimulate more growth.

• The whole euro currency project is in danger due to member states' runaway spending and subsequent sovereign debt crises, a European Central Bank study said.

• Chinas PMI fell to a two-month low of 49.4 in September from 49.9 in August.

• The MBA said the Market Composite Index of U.S. mortgage applications rose 0.6% in the week ending Sept. 16th

• The IMF expects Indonesia's economy to grow by 6.4% this year.

• S&P lowered ratings on several Italian banks.

• Germany’s PMI fell to 50.3 in September from 51.1 in August.

• MoM French PMI fell to 47.3 from 49.1.

• Foster's rose after getting a sweetened A$5.10-a-share bid from SABMiller (SBMRY)

• HGSI rose on news that the company's new lupus drug Benlysta was selling better than expected.

• Moody cut BoA's (BAC) rating and argued the US government is now less likely to support the bank if needed.

• The latest tar balls that turned up on the US Gulf coast are again from BP’s oil spill, signaling that the area is far from cleaned up

• CERN said that measurements over three years showed  neutrinos moving 60 nanoseconds quicker than light over a distance of 730 km

Quick Overview

• S&P cuts Italy's sovereign-debt rating to A.

• German PPI YoY rose 5.5%

• Swiss exports fell 7% MoM in August

• Construction output in the Eurozone rose by 1.4 MoM

• The Greek economy may contract by 5.5%t this year said the IMF

• YoY Sweden's GDP rose by 4.9% in Q2

• YoY Chinas pork price in August rose 45.5%. Food prices account for about one third of the weighting in Chinas CPI.
• Talks continue about China buying corn… China has decided to release 3.7 Million tonnes from their state reserves… China's domestic Corn shortfall will reach 11 mil tons by 2015, up from 1 mil tons in 2010, a gov. official said…

• (AP) -- U.S. Attorney General Eric Holder says that the Obama administration will do its utmost to close the U.S. prison at Guantanamo Bay ahead of next year's presidential elections despite political opposition.

• The Fed's two day meeting, from which the market is hoping for QE3, starts today.

Can China escape as world's debt crisis reaches Act III?
Whatever the mix: there is simply too much global investment, and too little consumption. The system is out of joint. It does not feel like the 1930s because we are richer in the West, with a better safety net, and emergency stimulus has so far cushioned the effects, but Bertil Ohlin, John Maynard Keynes, and Irving Fisher would find it unnervingly familiar.

Quick Overview

• (FT) European central banks have become net buyers of gold for the first time in more than two decades.

• The bungling execs at UBS, announced that loss from unauthorized trading amounted to $2.3 billion, more than initially reported.

• (Guardian) At the same time, Webster insists, the threat from H5N1 has not gone away. On the contrary, if the latest the scientific data are to be believed, a new "mutant" strain of the virus, codenamed 2.3.2., has already moved from China and Vietnam to central Asia and eastern Europe, spread by migratory waterfowl.

• Without fresh aid, Greece will run out of money by mid-October, the WSJ said.

• Magistrates investigating an alleged prostitution ring in Italy have published wiretaps in which Silvio Berlusconi boasts of spending the night with eight women.

• [AP] - Let the audits begin. As the U.K. tightens its belt during economic uncertainty, a senior government official said Sunday he was hiring more than 2,000 extra tax inspectors to make sure that Britain's wealthiest feel the squeeze.

• A new analysis from shipbrokers Gibson showed this week that just 223 single hull tankers of over 25,000 dwt remain in the fleet, representing about 5% of the total tanker population.

• Ships waiting to load sugar at Brazil’s main ports were less than half those lined up a year earlier as the nation harvests the smallest crop in four years, Cosan SA Industria & Comercio SA’s logistics arm said.

Quick Overview

• U.S. consumer sentiment rose to 57.8 in the preliminary reading for September after tumbling to a nearly three-year low 55.7 in August

• Luxembourg Juncker said “we don’t see any room for maneuver in the euro area which could allow us to launch new fiscal stimulus packages. That will not be possible.”
• The Finnish Finance Minister said it was unlikely that any agreement on collateral would be reached at this meeting…

• There are definitely some ongoing concerns of interbanking markets starting to freeze up at major European banks -- therefore central banks joined forces to provide liquidity. French banks hold €50 billion (£44 billion) of Greek debt. Trichet tells politician’s to get ahead of the curve.

• India’s central bank raised interest rates to 8.25 percent from 8 percent -- the 12th increase since the start of March 2010.

• (AP) -- Wildlife biologists on Friday will evacuate two species of minnows from the shrinking waters of a West Texas river in the first of what could be several rescue operations involving fish affected by the state's worst drought in decades.

Quick Overview

• UBS said a trader of its investment bank unit has caused a loss estimated at USD 2bln  
  

• Moody's cutting the long-term credit rating of Crédit Agricole and Société Générale

• The U.S. EIA reported:
• Oil inventories fell by 6.7 million barrels
• Gasoline supplies rose by 1.9 million barrels,
• Distillates fuel inventories rose by 1.7 million barrels

• Italy cleared a 54-billion-euro emergency budget plan aimed at balancing public finances by 2013

• Eurozone industrial production rose by 1.0% in July.

• Indian inflation rose to 9.78% in August from 9.22 in July.

• The number of U.S. homes that received an initial default notice rose 33 % MoM

Quick Overview

• Greek 10 year yields at 24%. German Chancellor Angela Merkel rejected the idea of a hasty bankruptcy by Greece.

• The dry bulk market kept its upward momentum to reach 1901 a new high for the year.

• In the euro area, the unemployment rate was  unchanged for the second consecutive month at 10.0%. The high unemployment rates are in Ireland, Portugal, the Slovak Republic and Spain which are hovering at 14.5%, 12.3%, 13.4% and 21.2% respectively.

• Australia’s business confidence index dropped 10 points to minus eight in August.

• France's CPI rose by 0.5% in August.

• (AP) James Murdoch is being recalled for another grilling before Britain's Parliament after former News Corp. executives raised serious doubts about his role in the country's tabloid phone hacking scandal.

• [AP] - The largest U.S. banks will be required to show regulators how they would break up and sell off their assets if they are in danger of failing.
  
  
• The ranks of the poor in the U.S.  rose to nearly 1 in 6 people last year. The number of uninsured rose to 49.9 million, the biggest in over two decades.
• Median household income in the U.S. at  $49,445 is down 7.1% adjusted for inflation from 1999 peak.
• Obama Announced a 1 year extension of the trading ban with Cuba.

Quick Overview

• The U.S. National Association for Business Economics (NABE) cut projections for U.S. economic growth in 2011 and 2012 to 1.7%t this year, down from its May prediction of 2.8 percent.

• The IMF releases nearly 4 billion Euros of rescue funding to Portugal.

• The USDA estimates the U.S. Corn crop at 12.497 billion bushels and a yield of 148.1 bushels per acre.

• The USDA estimates soybean production at 3.085 billion bushels and a yield of 41.8 bushels per acre.

• Indian industrial production showed tepid growth of 3.3% in July down from 8.8% MoM.

'We Did Exactly What Al-Qaida Wanted Us to Do'
The Chinese military strategist Sun Tzu said a long time ago: "If you know your enemy and know yourself, you will win a hundred times in a hundred battles." Unfortunately with the war on terror we forgot who we are, but also we didn't know our enemy. Look at al-Qaida. On the eve of 9/11, they had about 400 operatives. They led us into a war longer than World War I and World War II. Not because they are such smart people, but because we did not understand our enemy. Instead, we applied waterboarding and enhanced interrogation techniques. We did exactly what al-Qaida wanted us to do. When you do this, what are you proving to the guy? You're proving that everything he thinks about you is right. But if you come with a cup of tea, he doesn't know how to act.

Quick Overview

• The parrot thinks the short term S&P cycle low should be right about now http://is.gd/VAPqgS

• The M’s are moving right along especially M1, ROC plus 20% -- most since 1975 http://is.gd/MwGAft

• Does the Baltic know something? http://is.gd/3sQ34N

• Is coal starting next leg up? http://is.gd/Z9wfVG

• (FT) New international bank capital rules are “anti-American” and the US should consider pulling out of the Basel group of global regulators, Jamie Dimon, chief executive of JPMorgan Chase, has said.

An Impeccable Disaster
What Mr. Trichet and his colleagues should be doing right now is buying up Spanish and Italian debt — that is, doing what these countries would be doing for themselves if they still had their own currencies. In fact, the E.C.B. started doing just that a few weeks ago, and produced a temporary respite for those nations. But the E.C.B. immediately found itself under severe pressure from the moralizers, who hate the idea of letting countries off the hook for their alleged fiscal sins. And the perception that the moralizers will block any further rescue actions has set off a renewed market panic.

Quick Overview

• Germany Said to Ready Plan to Help Banks If Greece Defaults. The resignation of a key official from the European Central Bank was the latest sign of deepening disagreement over how to solve Europe' economic problems.

• Canada's economy shed jobs for the first time in five months as the country's unemployment rate rose to 7.3% from 7.2% in July.

• YoY France budget deficit narrowed to 86.6 billion Euros (119.51 billion U.S. dollars) from 93.1 billion Euros (128.49 billion U.S. dollars)

• China's industrial value-added output is expected to grow 13.5% YoY
• China's inflation eased to 6.2% in August

Quick Overview

• U.S. Fixed mortgage rates fell this week to the lowest levels in six decades.

• U.S. weekly applications for unemployment benefits rose 2,000 to 414,000

• U.S. Trade deficit fell to $44.8 billion in July, down 13.1 % from June

• P&G says sales will rise by 5 to 9% in the coming year, with double-digit emerging market growth mitigating continued slow growth in the U.S., Europe and Japan.

• Spanish RE sales fell 40.8% YoY.

• Merkel greeted the verdict from the German constitutional court as pivotal in upholding the legitimacy of her government's Eurozone bailouts package, saying it justifies her policies in dealing with the debt crisis.

• Trichet warned there are increasing risks for the euro zone’s waning economic recovery and less chance of inflation.

• HuffPost: Each civilian sent to Afghanistan costs U.S. taxpayers up to $570,000 a year
• The DOE said:
• Crude supplies fell by 4 million barrels, or 1.1 percent, to 353.1 million barrels, which is 1.9% below year-ago levels.
• Gasoline supplies rose by 200,000 barrels, or 0.1 percent, to 208.8 million barrels. That was 7.2% below year-ago levels.
• Demand for gasoline over the four weeks ended Sept. 2 was 2.9% lower than a year earlier.
• U.S. refineries ran at 89 % of capacity.
• Supplies of distillate fuel rose by 700,000 barrels to 156.8 million barrels.
• The Cass Freight Index for U.S. shipments grew 4.4 percent in August over the same month a year ago, the smallest gain in a year-and-a-half and a sign of fragile demand in the American economy.
• Bulk freight shipments on major North American railroads rose 1.4 percent last week to the highest level since April 2, with gains across a wide range of cargoes.

Quick Overview

• (Bloomberg) The Swiss central bank imposed a ceiling on the franc for the first time in more than three decades and pledged to defend the target with the “utmost determination,”

• (Bloomberg)The Conference Board’s Employment Trends Index decreased 0.3 percent to 100.8 from the prior month’s revised reading of 101.0, the New York-based private research group said today. The measure was up 4.1 percent from August 2010.

• The U.S. Institute for Supply Management’s index of non- manufacturing businesses increased to 53.3 last month from 52.7 in July.

• Informa forecasts U.S. corn yield at 151 bu. per acre, down from 158 in Aug. The Corn crop is estimated at 12.7 bbu. Soybeans at 3.06, avg yield of 41.5, one bu/a.
  (They are usually high!!)
• Allendale forecasts U.S. corn production at 12.466 billion bushels and the yield per acre at 147.7 bushels per acre. They estimate this year's U.S. soybean production at 3.007 billion bushels and soybean yield at 40.7 bushels per acre.
• The above figures are below the corn estimate from the USDA of a 12.914bn-bushel harvest, and a yield of 153.0 bushels per acre. Next USDA forecast Monday.
  
  
• YoY Australia’s GDP rose to 1.4% in 2Q
  

  
  
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  Bank of Japan says post-quake recovery intact, keeps policy rate unchanged at 0%-0.1%

Ready for the fall

Euro-zone governments have effectively spent the past year making a departure from the euro zone ever more attractive, and therefore vastly more likely.

• Baltic Dry Index is looking quite positive http://is.gd/3sQ34N

• and so is the Capesize http://is.gd/Ilicqu

• European markets are showed a growing concern that the sovereign debt crisis is worsening.
  
  
  
  

Quick Overview

• The U.S. jobless rate held at 9.1%. Private sector firms added 17,000 jobs while state and local governments continued to shed workers. The average workweek dropped by 0.1 hour, and average earnings also fell by 3 cents. The unemployment rate for black Americans is at 16.7% in August, up from 15.9% the previous month.

• MoM The PPI picked up by 0.5 % in the Eurozone.

• U.S. sues 17 big banks over mortgage-backed securities

• 186 million Americans are currently breathing in unhealthy levels of smog. Caving Obama, citing the nation's struggling economy, asked the Environmental Protection Agency to withdraw a key air-quality standard. 
• The EPA  noted that while compliance with the new rule would cost polluters between $19 billion and $90 billion a year by 2020, the benefits to human health will be worth between $13 billion and $100 billion every year.

• Lanworth estimates corn 143.3 (+/-3bpa) beans 40 (+/- 1.2bpa).

• In 2011, through Aug. 31, some 243 — nearly half of the companies in the S&P 500 — have either increased or initiated a dividend payment.

• British Police have so far arrested more than a dozen people this year as part of the probe into alleged voicemail interception and corrupt payments to police by Rupert Murdoch’s News Corp. James Murdoch says he's turning down $6 million bonus (may take one later, though.) Rupert is keeping his.

• After prison lobbyists and execs donated generously Texas Gov. Perry floated a proposal to privatize the state's prison health care network.

Quick Overview

• The U.S. advance figure for seasonally adjusted initial claims for jobless benefits was 409,000 in the week ending August 27, fell 12,000 from the previous week's figure.

• France's unemployment rate inched down by 0.1% to 9.1 % in Q2 of 2011 .

• Global iron ore production growth needs to be at a rate of at least 100 million tons a year over the next eight years to meet rising demand, the world's mining giant Rio Tinto said on Thursday.

• (FT) U.S. Defense Contractors have wasted or lost to fraud as much as $60 Billion over the past 10 years.

• (MSFT) said its Windows Phone operating system may capture more than 20 percent of the smartphone market over the next two to three years with the help of hardware manufacturers and increased marketing efforts.