Shipping Rates Seen Falling 50% on China, Fleet Size (Update1)
(Bloomberg) -- Just as global trade starts to recover, the shipping market is crashing for the second time in a year as China reduces raw-material imports and record numbers of new vessels set sail.

Quick Overview

• Chicago Purchasing Managers' index rose from 43.4 to 50.0 in August
  

• (WSJ) Fed and Treasury officials are scrambling to prevent the commercial-real-estate sector from delivering a roundhouse punch to the U.S. economy as it struggles to recover.

• Japan's industrial production rose 1.9% in July
  

• Canada’s GDP rose 0.1% in June
  

• Consumer prices in the Euro area fell 0.2% in August
  

• India’s GDP rose 6.1%
  

• China will see its deficit of sugar reach 700,000 metric tons this year, the Shanghai Securities News reported. Sugar consumption in the country will reach 14 million tons this year, while supplies will be 13.2 million to 13.3 million tons, the newspaper said.

• Disney is buying Marvel Entertainment in a deal valued at $4 billion

• (Skilling) It's official!Meteorological Summer 2009 (June-August) finishes the cloudiest in 115 yrs of records: Just 53% its possible sun; normal is 67

Brazil ready to infringe US drug patents
Brazil is preparing to infringe patents on US pharmaceutical products, in retaliation against subsidies for US cotton farmers, according to the Brazilian press.
The World Trade Organisation is expected to rule on Monday that Brazil can contravene the drug patents, say the reports.

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• U.S. personal incomes were unchanged in July
  

• U.S. consumer spending rose 0.2%.
  

• The University of Michigan's consumer sentiment index fell from 66.0 to 65.7 in August
  

• Japan's unemployment rate rose from 5.4% to 5.7% in July.
  

• Japan’s consumer prices fell 2.2% in July

• Japan’s July household spending fell -2.0% (-0.5% expected)

• U.K.'s GDP fell 0.7% in Q2 and 5.5% YoY
  

• EU consumer confidence rose from 76 to 80.6 in August.

• (Bloomberg) -- Sugar-cane output in Brazil is declining after rains this month in parts of the Center South, the world’s biggest producing region, were at their most severe in more than six decades, miller Maurilio Biagi Filho said.

Can the soufflé really rise again?

Quick Overview

• U.S. GDP fell 0.25% in Q2 and 3.9% YoY -- better than expected.
  

• U.S. jobless claims fell 10,000 last week to 570,000 -- better than expected.
  

• (WSJ) The FDIC's insurance fund fell to just $10.4 billion at the end of June, the lowest since the savings and loan crisis, as the banking industry continues to struggle with souring loans.
  

• U.K.'s business investment fell 10% in Q2 and down 18% YoY.
  

• (Farm Futures Bryce Knorr)... the latest two-week American model run shows a dramatic shift, with a major cold front working through the Dakotas and Nebraska as far south as Central Illinois Sept. 10 and 11, which could set up the season's first real frost scare.
  
  

• Shipping Co’s hiking rates:
  Unired Arab Shipping Company announced it is increasing rates from the Far East to Arabian Gulf and Indian subcontinent ports.
  Emirates shipping line has announced rate increases on cargo moving between Far East to the Middle East.
  Maersk hikes rates on full range of intra-America trades. Hapag-Lloyd hikes rates on wide range of secondary trades.
  Mitsui OSK Line is implementing a general rate increase on its Europe-South Africa trade.
  
  

Quick Overview

• U.S. durable goods orders rose 4.9% in July -- best gain in two years.
  

• U.S. new home sales rose 9.6% MoM and fell 13.4% YoY.
  

• Builders had 271,000 houses on the market last month, down 35 percent from July 2008 and the fewest since March 1993. It would take 7.5 months to sell all homes at the current sales pace, the shortest time since April 2007.
  

• YoY Japan's exports fell 36.5% in July.

• Japan’s August Small Business Confidence rose to 41.8 from 41.1 in July

• Germany’s July Import Price Index fell -0.9% MoM

• Business confidence in Germany rose from 87.5 to 90.5 in August
  

• The U.S. Department of Energy said:
  Supplies of crude oil rose 200,000 barrels to 343.8 million barrels.
  Supplies of gasoline fell 1.7 million barrels
  Supplies of heating oil rose 1.1 million barrels.
  Refinery use rose from 84.0% to 84.1% of capacity.
  Gasoline demand fell 0.3% YoY
  Distillate demand fell 7.9% YoY.

• Macquarie estimates Brazilian 2009-10 sugar production at 30.3 million metrictons, down from its previous expectation of between 32 million tons and 33million tons. India's 2009-10 sugar production estimate was revised down to 16million tons from the previous estimate of 17.5 million tons.

The troubling side of Ben Bernanke
Bill White, former chief economist at the Bank for International Settlements, said the error of the central banking fraternity over past 20 years has been to cut real interest rates ever lower to keep the game going. This has lured the world into a debt trap. The effect is to keep drawing prosperity from the future – until the future arrives.

Quick Overview

• U.S. consumer confidence rose from 47.4 to 54.1 in August, better than expected.
  

• U.S. June S&P/CaseShiller Composite-20 Home Price Index rose 1.4% MoM
  

• Switzerland Q2 Employment fell 0.4% YoY.

• (Bloomberg) -- India may have to ban corn exports for a second season to boost local supplies as the crop wilts under the driest monsoon in seven years, a lobby group for U.S. producers said.

• The worldwide cocoa deficit will widen to 73,000 metric tons in the year ending Sept. 30, compared with 62,000 tons a year earlier, the International Cocoa Organization said.

World faces hi-tech crunch as China eyes ban on rare metal exports
“This isn’t about the China holding the world to ransom. They are saying we need these resources to develop our own economy and achieve energy efficiency, so go find your own supplies”, he said.

NASA Satellites Unlock Secret to Northern India's Vanishing Water
Using NASA satellite data, scientists have found that groundwater levels in northern India have been declining by as much as one foot per year over the past decade. Researchers concluded the loss is almost entirely due to human activity.

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• Industrial new orders in the EU fell 0.4% MoM and down 24% YoY
  
  

• Canada’s retail sales rose 1.0% MoM.
  
  

• The USDA said there were 9.644 million head of cattle on feed as of August 1st, down 2.3% YoY
  
  

• The USDA said that there were 60.2 million pounds of frozen pork bellies in storage up 4% YoY
  
  
  

• China's sugar imports in July rose to 132,982 metric tons from 21,910 tons last July.
  
  
  

• China's wheat imports in July up sharply at 85,078 tons versus 373 tons a year ago.
  
  

• China imported 160 mln bu of soybeans in July; up 25% YoY.

• The drought situation in China's northeast appears to be worsening.
  
  

• (TET) The rice yield growth in India at current rate is estimated at 1.18% and needs to be accelerated at 1.75% consistently for a decade, otherwise at 1.18% growth rate, India’s rice production would reach at levels of 108 million tons by 2020 against its projected requirement of 118 million tones.

• Last month, which should have been the height of Mexico’s rainy season, was the second-driest July in at least 68 years, according to the National Water Commission, or Conagua.

China powers ahead as it seizes the green energy crown from Europe
The Chinese trio of Suntech, Trina and Yingling all expect to be below 70 cents per watt by 2012, bringing the magical goal of "grid parity" with fossil fuels into grasp.

Quick Overview

• U.S. existing home sales rose 7.2% MoM -- the most since August of 2007
  

• (WSJ) One in eight U.S. households with mortgages was in foreclosure or late on its mortgage payments in the second quarter.
  

• Bernanke said that while prospects for a near-term return to growth "appear good," he isn't expecting a rapid economic recovery.

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• U.S. jobless rose 15,000 to 576,000
  

• The Philadelphia Fed regional index of manufacturing rose from -7.5 to +4.2 -- the best reading since November of 2007.
  

• U.S. leading indicators rose 0.6% in July
  

• Canada’s wholesale sales rose 0.6% in June
  

• YoY U.K. Retail sales rose 3.3% in July
  

• Switzerland's July Trade Balance out at 2.35B versus 1.50B in June.
  

• Japan's July Convenience Store Sales fell -7.5% YoY versus -2.3% in June

Quick Overview

• U.S. mortgage applications rose 5.6% last week.
  

• Canada’s consumer prices fell 0.9% YoY
  

• Canada’s leading indicators rose 0.4%.
  

• Construction output in the EU fell 3.3% MoM and down 14.1% YoY.
  

• Germany’s July Producer Prices fell -1.5% MoM (-0.2% expected) YoY PP are
  7.8% lower in July, the steepest such fall since records began in 1949

• The U.S. Department of Energy said:
  Supplies of crude oil fell 8.4 million barrels to 343.6 million barrels
  Supplies of gasoline fell 2.1 million barrels
  Supplies of heating oil fell 400,000 barrels.
  Refinery use rose from 83.5% to 84.0%
  Gasoline demand fell 0.1% YoY
  Distillate demand fell 9.1% YoY.

• (Bloomberg) -- Pakistan, Asia’s third-largest user of sugar, needs to import as much as 1 million metric tons by December to meet a shortfall in domestic supplies, a trade body head said.

• (FT) Demand for gold sank to a 5½-year low in the second quarter of 2009 after jewellery consumption dropped by more than one fifth and investment interest slowed as the threat of meltdown in the global financial system receded.

• With development lagging, it's hard to believe that U.S. corn won't suffer losses from a frost, Freese-Notis Weather said.

• (Bloomberg) -- UBS AG, Switzerland’s largest bank, will release information on 4,450 accounts to settle a U.S. lawsuit that sought names of American clients suspected of evading taxes.

• The Commodity Futures Trading Commission said it had withdrawn a no-action letter that allowed a Deutsche Bank index fund to avoid speculative position limits in grain futures.

• (Bloomberg) -- Commercial real estate values in the U.S. fell 27 percent in the year through June

There's no quick fix to the global economy's excess capacity
As a matter of strict fact, two- thirds of the global economy is already in “deflation-lite”. US prices fell 2.1pc in July year-on-year, the steepest drop since 1950. Import prices are down 7.3pc, even after stripping out energy. At almost every stage over the last year, in almost every country (except Britain), deflationary forces have proved stronger than expected.

Elsewhere, the CPI figures are: Ireland (-5.9), Thailand (-4.4), Taiwan (-2.3), Japan (-1.8), China (-1.8), Belgium (-1.7), Spain (-1.4), Malaysia (-1.4), Switzerland (-1.2), France (-0.7), Germany (-0.6), Canada (-0.3).

Quick Overview

• U.S. housing starts fell -1.0% MoM and -46% YoY. But single-family building permits rose 5.8%.
  

• U.S. producer prices fell -0.9% in July and -6.8% YoY
  

• U.K. consumer prices rose 1.8% in July.
  

• Japan's July Nationwide Dept. Store Sales fell -11.7% vs. -8.8% prior
  

• (ToI) With the glaciers on the Qinghai- Tibet Plateau receding at an alarming rate, North India could face the prospect of drought and water levels in major rivers like the Indus originating from Tibet could be hit in the long-run, a leading Chinese meteorologist has warned.

• Standard Chartered said a severe drought in Chinas northern grain-producing regions of Inner Mongolia, Xinjiang, Jilin, Shanxi and Liaoning is potentially Bullish. These five areas account for about 30% of China's autumn grain output, mainly in corn, but also wheat and soy. The autumn crop is around 70% of China's total grain production

• India's summer-sown rice output may fall by 10 millionmetric tons due to deficient monsoon rains, the federal farm minister saidWednesday.

Pension Funds Pare Stocks, Ignoring Economic Rebound (Update2)
Equities appreciated an average 12.91 percent a year from 1900 to 1999, while bonds returned 4.69 percent annually, according to the data from the London Business School and Credit Suisse. Since the start of the new century, bonds gained 6.36 percent, compared with a loss of 2.27 percent for shares.

Quick Overview

• Japan's GDP expanded 3.7% YoY
  

• Hong Kong’s GDP rose 3.3 %
  

• U.S. August Empire Manufacturing rose to 12.08 from -0.55 in July (3.00 expected)
  

• Euro Zone’s June Trade Balance out at 1.0B (1.3B expected) and 1.1B in May
  

• Switzerland’s June Retail Sales rose 0.9% YoY
  

• U.K. August House Prices fell -2.2% MoM.