Quick Overview

• U.S. industrial production rose 1.3% in October, up from a revised 3.7% decline in September.
  

• The New York Feds regional index of manufacturing fell from -24.6 to -25.4
  

• Japan’s GDP fell 0.1% in the third quarter.
  

• (Reuters) - Japan became the latest major economy to fall into recession on Monday and Citigroup said it would cut 52,000 jobs, one of the largest layoffs in history.
  

• Australia's retail sales fell 0.1% in the third quarter
  

• OPEC's Monthly Oil Report said they expect world oil demand to average 86.2 million barrels per day in 2008 and 86.7 in 2009.
  

• Hong Kong Marine Department said the port handled 2.001 million TEU in October, down 2.9% YoY.
  YoY Singapore's Maritime and Port Authority reported a 4.9% increase in October.

G-20 Calls for Action on Growth, Regulatory Changes (Update2)
The leaders endorsed the use of clearinghouses for financial derivatives to back trades and absorb losses in case of a dealer failure. The first central clearinghouse for the $33 trillion credit-default swap market should be in operation by year-end in the U.S., under an agreement signed yesterday by three U.S. financial regulators.

Quick Overview

• U.S retail sales fell 2.8% in October --the largest monthly drop on record. Excluding autos, sales fell 2.2%.
  

• The University of Michigan's consumer sentiment index rose from 57.6 to 57.9, stronger than expected.
  

• GDP in the Euro area fell 0.2% in the third quarter of 2008, but rose 0.7% YoY
  YoY Consumer prices in the Euro area rose 3.2% in October.
  

• Canada manufacturing sales rose 0.1% in September.
  
• China posted its first decline in monthly electricity output in four years
  

• Russia's central bank increases its key interest rate to 12% from 11% in an attempt to reduce an outflow of capital.
  

• Bernanke said central bankers around the world were ready to do more to ease severe credit market strains and support faltering economic growth.
  

Quick Overview

• U.S. jobless claims rose 32,000 to 516,000, the most in seven years.
  

• U.S. Exports fell from $165.3 to $155.4 billion in September while imports fell from $224.4 to $211.9 billion – resulting in $56.5 billion of net imports.
  

• Canada’s exports fell 1.0% to C$42.5 billion in September while imports rose 1.9% to C$38.0 billion
  

• The U.S. Department of Energy said:
  Supplies of crude oil are unchanged at 311.9 million barrels.
  Supplies of gasoline rose 2.0 million barrels
  Supplies of heating oil rose 1.3 million barrels.
  Refinery use fell from 85.3% to 84.6%
  YoY gasoline demand fell 1.9%
  YoY distillate demand fell 4.6%
  

• The International Energy Agency lowered its forecast of 2009 world oil demand by 670,000 barrels per day to 86.5 million barrels per day.

• Recession confirmed in Germany Q3 GDP contracts by -0.5% after -0.4% in Q2

Abandon all hope once you enter deflation
The curse of deflation is that it increases the burden of debts. Incomes fall: debts stay the same. This way lies suffocation. It was bad enough in the early 1930s when US farmers faced a Sisyphean Task trying to meet mortgage payments on their land as crop prices kept sliding. They suffered mass foreclosure and fled West, as recounted in John Steinbeck's Grapes of Wrath.

Quick Overview

• The U.K.'s unemployment rate rose to 5.8%, up from 5.7% MoM.
  
  
• Industrial production in the Euro area fell 1.6% in September.
  
  

• (Reuters) - Home values in the United States posted their seventh consecutive quarterly decline, with nearly one-third of Americans who sold in the past year losing money, real estate website Zillow.com said on Wednesday.
  

• (Bloomberg) -- U.S. Treasury Secretary Henry Paulson plans to use the second half of the $700 billion financial rescue program to help relieve pressures on consumer credit, scrapping an effort to buy devalued mortgage assets.

Quick Overview

• Economic sentiment in Germany increased from a record low -63.0 to -53.5

Quick Overview

• China approved stimulus plan worth nearly $600 billion through 2010 to boost domestic demand.
  

• Japan's machinery orders rose 5.5% in September.
  

• U.K.'s producer prices fell 1.0% in October
  

• Canada's new home starts fell 3% MoM.
  

• The USDA's 2008-2009 U.S. ending stocks estimate for:
  Corn was increased from 1.088 to 1.124 billion bushels.
  Soybeans unchanged at 205 million bushels.
  Wheat was increased from 601 to 603 million bushels.
  Sugar was increased from 656,000 to 907,000 tons.
  Cotton unchanged at 6.20 million bales.
  

• The USDA's 2008-2009 world ending stocks estimate for:
  Corn was increased from 106 to 110 million tons.
  Soybeans were reduced, from 54.3 to 54.1 million tons.
  Wheat was increased from 144 to 145 million tons.
  Cotton was increased from 55 to 57 million tons.
  

• The USDA estimates Brazil’s and Argentina's soybean production up 3%, down from last month's estimate of up 5%.
  

Bottom months away: Greenspan
It was only when global demand for U.S. mortgage-backed instruments began to boom in 2005 did the quality of mortgage products begin to deteriorate, he said.
“We hadn't the slightest inclination at the time that the securitization problems would become so large,” he said.

Barack Obama will bring step-change to US economic policy Mr Obama inherits an almighty mess. It is the result of pushing US domestic debt from 130pc of GDP to over 220pc in a half a century of rising leverage. This game has run its course. There will be a slow, painful purge over coming years.

Quick Overview

• U.S. unemployment rate rose from 6.1% to 6.5% in October -- the highest rate in 14 years. Non-farm payrolls declined 240,000. The Labor Department also revised September's numbers from minus 159,000 to minus 284,000.
  

• Canada’s unemployment rate rose from 6.1% to 6.2%.

• U.S. wholesale sales were down 1.5% in September ,inventories were fell 0.1%.
  

• The National Association of Realtors said U.S. pending home sales fell 4.6%
  

• Korea reduced its interest rate from 4.25% to 4.00%.
  

• General Motors used $6.9 billion in cash in Q3 and may fall below the minimum it needs to operate before the end of this year.
  

• Ford burns $7.7 billion in the quarter.
  

Quick Overview

• U.S. Non-farm productivity rose an annual rate of 1.1% in the third quarter, down from plus 3.6% in the second quarter.
  

• (AP) The Labor Department reported Thursday the number of people continuing to draw unemployment benefits jumped by 122,000 to 3.84 million in late October. It was the highest level since late February 1983..
  

• The BoE lowered rates from 4.50% to 3.00%.
  

• The European Central Bank cut its rate from 3.75% to 3.25%
  

• Australia's unemployment rate was unchanged in October at 4.3%,.
  

• Canada’s building permitsrose 13.4%.
  

• Inflation in India rose to 10.72 %
  

• The USDA said that, as of last week, 2008-2009 exports of:
  Corn fell from down 30% to down 34% YoY.
  Soybeans improved from down 18% to down 3% YoY.
  Wheat fell from down 11% to down 13% YoY.
  Cotton improved from down 10% to down 9% YoY.
  

• Brazil's Ag Ministry dropped their projection for their 2008/09 (Oct/Sept) soybean crop to 58.4-59.3 million tonness from October's forecast of 60.10-61.27 million tonnes.
  

• F.O. Licht lowered their projection for Argentina's 2008/09 wheat crop to 11.5 mmt from 15.4. This compares with their September forecast of 13.0 mmt.
  

• F.O. Licht raised their estimate of Russia’s wheat crop to 62.5 million tonnes from 56.0 mmt forecast previously and 49.2 million harvested last year.
  Ukraine's harvest is estimated at 24.5 million tonnes up from last year's 13.7 million tonnes.

America's companies reconquer the world
The oil group Exxon Mobil is once again the global leader with a market value of $390bn. PetroChina briefly had a theoretical paper value of over $1,000bn at the height of the Shanghai bubble but has since crashed to $299bn.
Wal-Mart ($222bn), Microsoft ($207bn). and General Electric ($206) have moved briskly up the ladder, claiming the third, fourth, and fifth slots, with Procter & Gamble, Johnson & Johnson, and Warren Buffett's Berkshire Hathaway close behind.

Quick Overview

• Barack Obama has been elected the 44th President of the United States. Good Luck, Barack!
  

• The Institute of Supply Managements' index of services fell from 50.2 to 44.4 -- a record low.
  

• Retail sales volume in the Euro area fell 0.2% MoM and down 1.6% YoY.
  

• U.K.'s factory output fell 0.8% in September.
  

• An index of services in the U.K. fell from 46.0 to 42.4 in October.
  

• An index of services in the Euro zone fell from 48.4 to 45.6 in October.
  
  

• The U.S. Department of Energy said:
  Supplies of crude oil unchanged last week at 311.9 million barrels.
  Supplies of gasoline rose 1.1 million barrels.
  Supplies of heating oil rose 1.7 million barrels.
  Refinery use remained at 85.3% .
  Gasoline demand fell 2.3% YoY.
  Distillate demand fell 4.8% YoY.
  

• The Florida Department of Citrus said there were 100.19 million gallons of frozen orange juice concentrate in inventory in October, up 104% YoY.
  

• Australia reduced its estimated wheat crop from 22.5 to 19.9 million tons.
  

Quick Overview

• U.S. factory orders fell 2.5% in September, weaker than expected.
  

• YoY producer prices in the Euro area rose 7.9% in September.
  

• China’s Manufacturers Purchasing Managers Index (PMI) showed that factory activity fell to 45.2 from 47.7. (50 and below indicates contraction)
  

• Spain’s unemployment rate reached a 12-year high of 11.3%, the worst in the EU.
  

• The USDA said 55% of the corn crop was harvested, down from the five-year average of 79%.
  86% of the soybean crop was harvested, at its regular pace.

• The cost of production for Brazilian soybeans, produced in Mato Grosso, is estimates in a range of $8.27 to 9.19 with transportation costs adding $2.50-3.25 per bushel. This means farmers will need to see a board price north of $11.00 per bushel in the May 09 forward futures in order to lock in a positive return.
  

Recession hits Europe as Club Med debt worries grow
The Spanish government said yesterday it would step in directly to pay half the mortgage costs for those who lose their jobs in order to pre-empt a self-feeding spiral of defaults. The package covers mortgages up to €170,000 for the next two years.

Quick Overview

• The Institute of Supply Managements' index of manufacturing fell from 43.5 to 38.9 in October -- the lowest in 26 years.
  

• U.S. construction spending was at an annual rate of $1.0601 trillion in September, down 0.3% MoM
  

• Euro zone manufacturing fell from 45.0 to 41.1 in October.
  

• U.K. Manufacturing increased from 41.2 to 41.5 in October
  

• Australia's retail sales fell 1.1% in October.
• Australia cuts key interest rate by 0.75 %
  

• The largest ethanol producer in the U.S., Verasun, filed for Chapter 11 bankruptcy.
  

• Ford Motor reported a 30% drop in U.S. vehicle sales for October, while Toyota's fell 23%. Car companies from Japan to Italy to Detroit said October sales were the weakest in about 20 years.
  

• World container trade is expected to grow 4.5% in 2008 compared to 9.5% in 2007, said a Global Insight Report. In 2009, US container imports are projected to grow marginally at a rate of 1.6 per cent.

Deflation Now…Inflation Later
Our Trade of the Decade was meant to capture the early stages of this - but only a bit of it: the relationship between gold and stock prices. In 1982, briefly, you could have bought every one of the stocks in the Dow index for a single ounce of gold. But by the time the stock market finished its epic rise, in January 2000, (while gold was doing an epic fall!) you would have needed 44 ounces of gold to buy the Dow. Now, that ratio has come down considerably. You only need about 13 ounces of gold to buy the Dow. And as stocks come down, the ratio is likely to fall below 5…and eventually back to 1 to 1 (at which time, remember, it will be time to sell gold and buy shares).

Quick Overview

• U.S. personal incomes rose 0.2% in September and consumer spending fell 0.3%.
  
  

• U.S. employment cost index rose 0.7% in the third quarter.
  
  

• YoY the core rate of personal consumption expenditures rose 2.4% in September.
  

• The University of Michigan's consumer sentiment index rose to 57.6 from 57.5
  

• Canada’s GDP fell 0.3% in August rose 0.6% YoY.
  

• Unemployment rate in the Euro area remained at 7.5% in September.
  

• Japan reduced its interest rate from 0.50% to 0.30%
  Japan’s consumer prices rose 2.1% YoY.
  Japan’s unemployment rate improved from 4.2% to 4.0%.
  

• F.O. Licht estimates world sugar consumption up 1.8% in 2008-2009 outpacing production by 472,300 tons.
  

• Fortis Bank estimates world coco production to exceed consumption by 52,000 tons in 2008-2009.
  

Quick Overview

• U.S. GDP shrank 0.3% in the third quarter.
  

• U.S. jobless claims were unchanged last week.
  

• China lowered interest rates from 6.93% to 6.66%.
  

• Canada's industrial prices fell 1.2% in September, but rose 8.0% YoY.
  

• Japan proposed a new stimulus package by giving $600 to every family household.
  

• Unemployment in Germany fell under the 3m, the lowest in 16 years.
  

• (Reuters) - U.S. state leaders, trade groups and economists descended on the House of Representatives on Wednesday to help work out a second economic stimulus bill that one influential Congressional member said would be introduced on November 17.