Yen Reaches 4 1/2-Year Low Against Dollar; Carry Trades to Rise
Japanese finance companies will market more than 1.5 trillion yen ($12.1 billion) of foreign-currency investment trusts before the end of June, according to data compiled by Bloomberg. The funds are aimed at individual investors who want to seek out assets with higher yields.

``It's an industry issue,'' What are their true prices?
Investors from hedge funds to pension funds and foreign banks have snapped up CDOs, securities backed by pools of assets, as a new way to invest in debt, making it the fastest-growing market and pushing the amount outstanding to more than $1 trillion.

Quick Overview

• U.S. Leading indicators rose 0.3% in May
  

• Retail sales in Canada were up 0.4% MoM and up 4.7 YoY.
  

• The DoE said that underground supplies of natural gas were up 89 billion cubic feet to 2.344 trillion cubic feet.
  

Sakakibara Says Bank of Japan Must Lift Rates to Strengthen Yen
``Japan's interest rates are absurdly low and creating a carry trade bubble, and this is quite dangerous,'' said Sakakibara

Bear Stearns Fund Collapse Sends Shock Through CDOs A sale would give banks, brokerages and investors the one thing they want to avoid: a real price on the bonds in the fund that could serve as a benchmark. The securities are known as collateralized debt obligations, which exceed $1 trillion and comprise the fastest-growing part of the bond market.

Quick Overview

• Leading indicators in Australia rose 6.7% YoY.
  

• Japan's merchandise trade surplus rose 15.1% YoY.
  
  

• The U.S. DoE said that:
  Supplies of crude oil rose 6.9 million barrels to 349.3 million barrels
  Supplies of gasoline rose 1.8 million barrels
  Supplies of heating oil fell 400,000 barrels.
  Gasoline demand was up 1.5% YoY
  Distillate demand was up 2.8% YoY.

Excluding Ron Paul After our call, I got to thinking about this Failor character: what kind of person running a "tax relief" organization would exclude the presidential candidate with – and this is no exaggeration – possibly the best record on taxation in all of American history, someone who favors the abolition of the income tax and the drastic reduction or elimination of nearly all other federal taxes? Should this be the Iowans For a Little Tax Relief, But Not Too Much?

Quick Overview

• U.S. Housing starts were down 2.1% MoM and down 26% YoY. Building permits were up 3% MoM.
  

• China sold $5.8 billion of U.S. T-bonds in April, the biggest monthly sale in seven years.
  

• Canadian CPI rose 2.2% YoY
  

• Investor confidence in Germany dropped from 24 to 20.3 in June, more than expected.
  

• Australia’s wheat crop will total 22.5 tons, down from a previous estimate of 25 tons due to dry conditions.
  

• Liaoning province in northeast China is having its worst drought in 30 years. Some 7% of China's corn and 5% of its wheat come there.
  

Quick Overview

• YoY Swiss industrial production rose 7.3%.
  

• Standard and Poor's raised credit ratings for three large Japanese banks, citing improved balance sheets and an improved economy.
  

• The National Association of Homebuilders sentiment index fell from 30 to 28 in June. The lowest level in more than 16 years.
  

• Brazil, the world's biggest producer of the sweetener and sugarcane-based ethanol, will increase the required blend of the biofuel in domestic gasoline to 25 percent from 23 percent starting July 1.
  
  

• Shanghai is set to overtake Singapore as the world's busiest port in 2008.

Housewives Outmaneuver UBS, Deutsche Bank in Yen Carry Trading
In Japan, individuals have opened 600,000 so-called margin trading accounts at brokerages that lend money for currency bets, 80 percent more than a year ago, according to Yano Research.

• U.S.. Consumer prices rose 0.7% in May and 2.7% YoY.
  

• U.S. Industrial production was unchanged in May.
  

• U.S. Capacity utilization was 81.3%, down from 81.5% MoM.
  

• The New York Federal Reserve's index of manufacturing rose from 8.0 to 25.8 in June, the highest level in a year.
  

• The University of Michigan’s consumer sentiment index dropped from 88.3 to 83.7 in June.
  

• The International Cocoa Organization expects world production to fall short of consumption by 145,000 tons.
  

• The yen dropped to a fifteen year low against the pound and a fresh four-and-a-half-year against the dollar after the Bank of Japan left interest rates on hold at its monthly policy meeting.
  
  
• Concerns about dry weather in the eastern and southeastern U.S. continue to support grain prices. Some weather forecasts increased the moisture in next week's outlook, but traders weren't biting. They've been bitten too many times when similar forecasts dried up.

Quick Overview

• U.S. producer prices rose 0.9% in May and up 4.1% YoY.
  

• U.K. Retail sales rose 0.4% in May and up 3.9% YoY.
  

• Consumer prices in the Euro area rose 1.9%
  

• Retail sales in New Zealand were down 1.2%.
  
  

• China's May industrial production at 18.1% YoY, up from 17.4% in April.
  
  

• The Swiss want to sell 250 tons of gold over the next couple of years.
  
  

The Art of Being Rich
Indians, Russians, Chinese - not to mention Americans and Englishmen - they are all throwing their money around like people who just got rich…and got rich so easily they don't know the value of it. What to make of it?

Turkey is Poised for War against Iraq's Kurds Turkey is dangerously close to launching a full-scale war across its eastern border into northern Iraq. The aim would be to wipe out the bases of the militant Kurdistan Workers Party (PKK), destroy once and for all the party's separatist ambitions, and put an end to cross-border terrorist attacks and hit-and-run raids by the PKK, which have inflamed nationalist opinion in Turkey.

Quick Overview

• U.S. Retail sales were up 1.4% in May, stronger than expected.
  

• U.K.’s Unemployment rate unchanged at 5.5%.
  

• Canada's manufacturing shipments fell 0.6%.
  

• Retail sales in China rose 15.9% YoY.
  

• Japan will get its first nursing home for dogs with round-the-clock monitoring by doctors and a team of puppies to help aging pooches feel younger, a pet products company said Wednesday. Owners pay 98,000 yen ($800) a month.
  
  

• The U.S. DOE said that:
  Supplies of crude oil were up 100,000 barrels to 342.4 million barrels.
  Supplies of gasoline were unchanged.
  Supplies of heating oil were down 2.8 million barrels.
  Gasoline demand was up 1.4% YoY
  Distillate demand was up 2.9% YoY.
  

• Japanese officials announced they will stop 100% inspections of U.S. beef imports Wednesday and instead go to spot-checks.
  

• Las Vegas oddsmakers had Ron Paul at 200 to 1 to win the primaries. Now he is at 7 to 1
  

Quick Overview

• China's CPI rose 3.4% in May, more than expect, and the highest level in over 2 years.
  
  

• For the first eight months of the year, the U.S. federal government deficit is $148.5 billion, down from $227 billion a year ago.
  

• YoY Consumer prices in the U.K. were up 2.5%.
  

• Industrial production was down 0.8% in the Euro zone.
  

• YoY Industrial production in India was up 13.6%.
  

• The People's Bank of China will be issuing commemorative Olympic silver coins.
  
  

Corn, wheat futures shoot higher on supply worries "USDA cut the production estimate for the world by more than six million metric tons," Brugler said. "They cut the ending stocks by another million-and-a-half or so - one of the tightest stocks-to-usage rations since 1960 - and the market's reacting to that."

Quick Overview

• A slowdown in the United States' housing market may have knocked one percentage point off annual growth, but does not seem to have affected consumer demand much, a Federal Reserve official said.
  

• Japan's economy grew at an annual rate of 3.3% in the first quarter of 2007, up from an earlier estimate of 2.4%. YoY GDP rose 2.6%.
  

• YoY Japan's wholesale inflation rose 2.2 percent in May.

• Industrial production in France fell 0.8%.
  

• The USDA estimates 2007-2008 U.S. ending stocks of:
  Corn up from 947 to 997 million bushels.
  Soybeans remained at 320 million bushels.
  Wheat fell from 469 to 443 million bushels.
  Sugar rose from 1.340 to 1.417 million tons.
  Cotton rose from 6.40 to 6.70 million bales.
  

• The USDA estimates 2007-2008 world ending stocks of:
  Corn rose to 92 million tons up from 90 million tons.
  Soybeans at 54 million tons, down from 64.
  Wheat down from 113 to 112 million tons.
  Cotton rose to 51 million tons.
  

• The USDA kept its estimate of Florida's 2006-2007 orange production at 131 million boxes with a juice yield of 1.65 gallons per box.
  

• The USDA estimates 2007-2008 world ending stocks of coffee at 16.8 million bags, the lowest since 1961.
  
  

Updates resume June 10

Quick Overview

• U.S. factory orders rose 0.3% in April, weaker than expected.
  

• YoY Japan's capital spending rose 13.6% in the first quarter.

Half of humanity set to go urban
In 1900, only 14% of humanity lived in cities. By the century's close, 47% of us did so. This change is revealed in the growth of the number of medium-sized cities. In 1950, there were 83 cities with populations exceeding one million; but by 2000, this had risen to 411.

Banks Sell 'Toxic Waste' CDOs to Calpers, Texas Teachers Fund
`Lipstick on a Pig'
Chriss Street, treasurer of Orange County, California, the fifth-most-populous county in the U.S., says no public fund should invest in equity tranches. He says fund managers are ignoring their fiduciary responsibilities by placing even 1 percent of pension assets into the riskiest portion of a CDO.

Quick Overview

• U.S. unemployment rate remained at 4.5%
  

• The Institute of Supply Management's manufacturing index increased from 54.7 to 55.0
  

• The University of Michigan's index of consumer sentiment increased from 87.1 to 88.3
  

• U.S. personal incomes were down 0.1%
  

• U.S. consumer spending was up 0.5%.
  

• YoY a measure of core inflation slowed to a 2.0% gain in April
  

• Manufacturing in the U.K. rose from 54.1 to 54.9
  

• Manufacturing in Australia rose from 51.7 to 55.2
  

• The unemployment rate in the Euro area improved from 7.2% to 7.1%.
  

• YoY GDP in the Euro area rose 3.0% in the first quarter.
  

• India's economy grew at a record 9.4 percent last year - its fastest pace in nearly two decades.
  

• Renewable Fuels Association said that the U.S. produced 384,000 barrels of ethanol per day in March and used 414,000 barrels daily.
  

• The Chicago Board of Trade set an all time record for monthly total trade volume during May 2007

Barred From Testing for Mad Cow, Niche Meatpacker Loses Clients
His staff was trained in testing for mad cow, using a machine that gives results in seven hours, while the carcasses are still in the cooler.
But on April 9, the United States Department of Agriculture forbade Creekstone to test its cattle, saying there was ''no scientific justification'' for testing young steers like those Creekstone sells. Certifying some beef for Japan as disease-free, the department said, might confuse American consumers into thinking that untested beef was not safe.

As pork prices soar, Chinese put brakes on corn for ethanol
Ethanol production has put the Chinese government in an unpleasant bind, as fears rise that the environmentally friendly gasoline additive is also fueling politically dangerous increases in the price of food – particularly pork, a key staple.

Quick Overview

• U.S. GDP growth in the first quarter was 0.6%. YoY GDP was up 1.9%
  

• Chicago purchasing managers index rose from 52.9 to 61.7
  
  

• U.S. Home prices increased 0.5% in the first quarter, the slowest QoQ price gain in 10 years.
  
  

• Canada’s GDP rose 0.3% in March -- up 2.0% YoY
  

• Consumer prices in the Euro area rose 1.9%.
  

• Germany's unemployment rate remained at 9.2%.
  

• YoY GDP in India rose 9.4%.
  
  

• The U.S. DOE said that:
  Supplies of crude oil were down 2.0 million barrels at 342.2 million barrels.
  Supplies of gasoline were up 1.3 million barrels.
  U.S. Gasoline demand was up 1.4% YoY.
  Distillate demand was up 2.9% YoY.
  
  

• The International Cocoa Organization said the global cocoa shortfall this year will be 145,000 tons. Adverse weather hurt crops in the top producing countries. They estimate end of season world cocoa stocks at 1.74 million tons -- 49% of annual use.

Quick Overview

• The Mortgage Bankers' Association’s index of mortgage applications fell 7% as interest rates reached seven-month highs.
  

• Concerns about inflation trumped fears about the slumping housing market last month in the minds of Federal Reserve members.
  

• China hiked its tax on securities transactions to 0.3% from 0.1% in its strongest effort yet to cool a bull run.
  

• Japan's industrial production fell 0.1% in April.
  

• Australia's retail sales rose 0.1% in April.

• Malaysia's economy grew 5.3% YoY.
  
  

• Norway raised rates 0.25 %, the seventh hike since May 06.

All for the fight against global warming. Unless, that is, it drives up the price of his beer.
And that is exactly what is happening to Mr. Erdmann and other German brewers as farmers abandon barley — the raw material for the national beverage — to plant other, subsidized crops for sale as environmentally friendly biofuels.

Quick Overview

• U.S. Consumer confidence increased from 106.3 to 108.0 in May, stronger than expected.
  
  

• South Africa's Chamber of Mines said the nation's gold production was down 7.6% YoY
  

• Japan's Unemployment rate improved from 4.0% to 3.8%.
  Japan’s Household spending was up 1.1% in April.
  Japan’s Retail sales were down 0.6% in April.
  

• Canada kept the interest rate unchanged at 4.25%, but said that another increase may be required.
  

Short Sales Break Record on NYSE; Market Bulls Get More Bullish

May 29 (Bloomberg) -- Short sellers are betting against U.S. stocks like never before as the Standard & Poor's 500 Index approaches an all-time high. That's making some of the biggest bulls even more optimistic.
``What the short seller appears to be doing is doubling down,'' said Kenneth Fisher, who oversees about $40 billion as chairman of Fisher Investments in Woodside, California. ``You love to see it, because if you believe there is a basic driver to the bull market, they're going to get run over.''

Lower gout risk for coffee lovers
Drinking four or more cups of coffee a day may cut the risk of having a painful attack of gout, say Canadian scientists.

Quick Overview

• The National Association of Realtors reports U.S. existing home sales down 2.6% from March's pace and the lowest level in over three years. Current inventories of homes for sale represent an 8.4 month supply, the most in 15 years.

• July lumber rose its $10 daily limit.
  

• GDP in the U.K. rose 0.7% in the first quarter and up 2.9% YoY.
  

• Japans consumer prices were unchanged YoY.
  

• YoY goods shipped by truck in the U.S. fell by 2.7 percent in April.
  

• Container volumes on the Asia — Europe trade rose 20% in the first four months of the year.

Bernanke Warned by Real Estate Analysts:
Housing Collapse Is Much Worse Than You Say

"The housing market has softened much more than is being reported" by the Fed, and the National Association of Realtors (NAR), says JBREC

Quick Overview

• U.S. New home sales were up 16.2% from March's pace and stronger than expected. YoY new home sales are down 20%. New homes for sale in the U.S. are at a 6.5 month supply.
  

• U.S. Durable goods orders were up 0.6% in April, weaker than expected.
  

• U.S. Jobless claims were up 15,000 last week to 311,000.
  

• The USDA estimates 2007-2008 the world sugar production at 163.3 million tons up from 161.3 million tons YoY. World ending stocks are expected to rise 6.1 million tons to 45.1 million tons, or 29% of use.
  
  

• Taiwan GDP was up 4.2% YoY.
  
  

• Pakistan suspended wheat exports.
  

• The DoE said that underground supplies of natural gas were up 104 billion cubic feet last week to 1.946 trillion cubic feet.
  

Indians offer personal maths tuition on the web With private tutors costing £25-£50 an hour in Britain, Indian-based companies are now offering online GCSE maths tuition for just £50 a month for unlimited sessions to anyone with a broadband internet connection.

Quick Overview

• Canada's leading indicators was up 0.4%
  

• Reuters - Former U.S. Federal Reserve Chairman Alan Greenspan said on Wednesday he feared a "dramatic contraction" in Chinese stocks.
  
  

• The DOE said that:
  Supplies of crude oil were up 2.0 million barrels to 344.2 million barrels.
  Supplies of gasoline were up 1.5 million barrels
  Supplies of heating oil were down 900,000 barrels
  Gasoline demand was up 1.2% YoY
  Distillate demand was up 2.6% YoY.
  
  

• USDA estimated Brazil's coffee crop at 36.2 million bags.
  

• More than 60,000 birds have died of an outbreak of bird flu near the capital of Pakistan

1 in 8 Iraqis dies before fifth birthday "Unfortunately, this is becoming common," said Saad Mehdi, 35, a pediatrician at Ibn Al-Baladi.

Quick Overview

• An index of investor confidence in Germany increased from 16.5 to 24.0 in May, the highest score in 11 months.
  

• The U.S. House of Representatives voted to allow the government to sue OPEC for price manipulation -- the White House threatened to veto.
  
  

• The handling capacity of China's ports is expected to hit 8 billion tons and 170 million TEUs (twenty-foot container equivalent units) in 2010. The cargo handling capacity of all China's ports totaled 5.6 billion tons and 93 million TEUs in 2006.

Quick Overview

The Chicago Fed index of national activity rose from -.11 to -.10 in April.

The Foreign Policy of Ron Paul Ron Paul has always believed that foreign and domestic policy should be conducted according to the same principles. Government should be restrained from intervening at home or abroad because its actions fail to achieve their stated aims, create more harm than good, shrink the liberty of the people, and violate rights..
..How unusual, how incredibly strange, that Ron Paul, who has stood for these principles his entire public life, is criticized by some as a radical, outside the mainstream, and influenced by experimental ideas that are marginal at best. And why is he treated this way? Because he takes the ideas of Washington and Jefferson seriously, just as seriously as he takes the idea of freedom itself, and he does so in times when faith in Leviathan remains the dominant political ideology.

Kuwait Drops U.S. Dollar Peg in Blow to Gulf Currency Union
Kuwait unshackled its dinar from the tumbling U.S. dollar on Sunday and switched the exchange rate mechanism to a basket of currencies, throwing plans for currency union with other Gulf Arab oil producers into disarray.

Quick Overview

• The University of Michigan's consumer sentiment index rose from 87.1 to 88.7
  

• The USDA said there were 11.297 million head of cattle on feed in the U.S. on May 1st, down 2.3% YoY. Placements were down 2.8% and marketing’s were up 2.0%.
  

• Canada's retail sales totaled C$34.0 billion in March, up 1.9% MoM and up 5.6% YoY.
  Hong Kong GDP was up 5.6% QoQ.
  

• China raised its one-year lending rate from 6.39% to 6.57%.
  

• China will widen the floating band of yuan against U.S. dollar for daily spot trading on the interbank market from 0.3 percent to 0.5 percent on May 21.
  
  

Quick Overview

• U.S. Jobless claims were down 5,000 last week to 293,000, the lowest in four months.
  

• The Philadelphia Federal Reserve's index of regional manufacturing increased from 0.2 to 4.2 in April, stronger than expected.
  

• U.S. Index of leading indicators was down 0.5% in April with eight of the ten components showing a decrease.
  

• Japan's GDP was up 0.6% in the first quarter of 2007 and up 2.0% YoY.
  

• Canada's consumer price index was up 2.2% YoY, down from a 2.3% gain in March.
  

• The International Copper Study Group is forecasting that world production of copper will exceed use by 270,000 tons this year and by 520,000 tons in 2008.
  

• The DoE said that underground supplies of natural gas were up 95 billion cubic feet at 1.842 trillion cubic feet.
  

• Fed Chairman Bernanke says the central bank is considering tougher rules to crack down on abusive practices by mortgage lenders. But he says the economy should escape without significant harm from the problems in the subprime market.

Ron Paul Said It
Plenty of reasonable people can disagree about foreign policy. What's really strange is when one reasonable position is completely and forcibly excluded from the public debate.

Quick Overview

• U.S. Housing starts were at an annual rate of 1.528 million units in April, up 2.5% MoM and better than expected. For 2007 housing starts are down 26% YoY.
  

• U.S. Industrial production was up 0.7% in April, stronger than expected.
  
  

• U.K.’s Unemployment rate. remained at 5.5% in the first quarter
  

• China's industrial production increased 17.4% YoY.
  

• Greece’s GDP rose 4.6% QoQ
  
  

• The U.S. Department of Energy said that:
  Supplies of crude oil were up 1.0 million barrels last week to 342.2 million barrels.
  Supplies of gasoline were up 1.7 million barrels
  Supplies of heating oil were up 1.6 million barrels.
  Gasoline demand was up 1.0% YoY
  Distillate demand was up 3.1% YoY.
  

U.S. Median Home Price Tumbles to 2-Year Low in Slump

The city with the biggest drop in median home price in the first quarter was Elmira, New York, with a 15 percent decline to $75,300, making it the cheapest housing market in the nation

Quick Overview

• U.S. consumer price index rose 0.4% in April and 2.6% YoY. Excluding food and energy costs, prices were up 0.2% in April and up 2.3% YoY.
  

• New York Federal Reserve's index of manufacturing increased from 3.80 to 8.03 in May.
  

• The National Association of Homebuilders said that its index of homebuilder confidence dropped from 33. to 30 in May, the most pessimistic reading in 15 years.
  
  

• GDP in the Euro area rose 0.6% in the first quarter and 3.1% YoY,
  

• YoY Consumer prices in the U.K. rose 2.8% in April
  

• Japan's machinery orders were down 4.5% in March, weaker than expected.
  

• YoY Indonesia's GDP was up 6.0% in the first quarter
  

• India may consider raising the ethanol content in its gasoline blends to 10% from the current 5%.
  

• Czarnikow expects world sugar production at 162.7 million tons in 2006-2007, exceeding consumption by 6.9 million tons.
  
  

Quick Overview

• Japanese wholesale prices rose 0.8% MoM and climbed 2.2% YoY.
  

• Japan’s current account surplus rose 36.9% -- a record high. On a seasonally adjusted basis the current account surplus rose 63.3% MoM, following a 19.2% monthly decline in February.
  

• Retail sales in New Zealand rose 1.3% MoM.
  

• Producer prices in the U.K. were up 2.5% YoY
  

• The Florida Department of Citrus said there were 78.2 billion gallons of frozen orange juice concentrate in inventory, down 15% YoY.
  

• AAA said U.S. average gasoline prices climbed to a record-high average of $3.073 a gallon.
  

Quick Overview

• U.S. Producer prices rose 0.7% in April and 3.2% YoY. Excluding food energy, prices were unchanged.
  

• U.S. Retail sales in April fell 0.2% MoM and rose 3.0% YoY.
  

• Producer prices in China were up 2.9% in April from a year ago, up from a 2.7% gain the previous month.
  

• Industrial production in India was up 12.9% YoY.

• Canada's unemployment rate unchanged at 6.1% in April.
  
  

• The USDA estimates 2007-2008 ending stocks of:
  Corn at 947 million bushels, up from 937 million bushels in 2006-2007.
  Soybeans at 320 million bushels, down from 610 million bushels in 2006-2007.
  Wheat at 2.216 billion bushels, up from 2.087 billion bushels in 2006-2007.
  Sugar at 1.34 million tons, down from 1.72 million tons in 2006-2007.
  Cotton at 6.4 million bales, down from 9.5 million bales in 2006-2007.

• The USDA's 2007-2008 world ending stocks estimate of:
  Corn is 90 million tons, down from 93 million tons in 2006-2007.
  Wheat is 113 million tons, down from 120 million tons in 2006-2007.
  Cotton at 50 million bales down from 55 million bales in 2006-2007.
  
• Even though US corn ending stocks are estimated to be above last year, the stocks to use ratio is likely to be lower, down to 7.6% from 8.1% for 2006/07.
  
  

• The USDA expects U.S. beef production to for 2008 up 6.7%.
  

• The USDA expects 2008 pork production to be up 0.8%
  

• The USDA estimates the Florida's orange crop at 131 million boxes and juice yield of 1.65 gallons a box at 42.0 degrees Brix.

Quick Overview

• The U.S. trade shortfall rose 10.4 % to $63.9 billion in March.
  

• The Fed’s holdings of Treasury and agency debt kept for overseas central banks rose $8.167 billion in the week ended May 9, to stand at $1.937 trillion.
  

• The European Central Bank met and kept its interest rate unchanged at 3.75%.
  

• New Zealand’s unemployment rate rose from 3.7% to 3.8%.
  

• The Bank of England raised its base rate by 0.25%.

• Australia's unemployment rate fell from 4.5% to 4.4% in April.