US undermined by leaks

Quick Overview

• Yields on German short-term debt fell below zero last week, meaning investors accept a negative return for debt from Deutschland, after S&P confirmed downgrades for France and Austria to double-A-plus. S&P also lowered Italy and Spain two notches, to triple-B-plus and single-A, respectively.
• Could the euro zone’s bailout fund, EFSF, now lose its AAA rating, after France, the fund's second-largest guarantor, lost its top-notch rating.
  
  
  
  

• Fed: The decline in U.S. house prices has wiped out $7 trillion in home equity. 1 in 5 U.S. homeowners is still under water.

• Alan Krueger: "The increase in the share of income going to the top one percent people from 1979 to 2007 exceeds the total amount received by the bottom 44 percent households," he noted, adding that "as the consequence of the shift, the middle class has shrunk".

• Bloomberg: Companies in the S&P 500 will raise dividends by 11.5% on average this year.

• Bloomberg: Earnings for the S&P 500 are forecast to climb 10.7% to 105 in 2012.

• Ernst & Young slashed Britain’s 2012 GDP growth forecast from 1.5% to just 0.2%.

• Spain’s Consumer prices rose by 2.4% YoY in December.

• Mainland China imported almost 102.8 metric tons of Gold in November, valued at about $5.4 billion.
• The opulent, gold-garnished menu concocted for guests at the Golden Globes awards ceremony in Beverly Hills today (NZT) has already prompted some observers to choke.

The Perils of 2012Joseph E. Stiglitz
The good news is that addressing these long-term problems would actually help to solve the short-term problems. Increased investment to retrofit the economy for global warming would help to stimulate economic activity, growth, and job creation. More progressive taxation, in effect redistributing income from the top to the middle and bottom, would simultaneously reduce inequality and increase employment by boosting total demand. Higher taxes at the top could generate revenues to finance needed public investment, and to provide some social protection for those at the bottom, including the unemployed.

Quick Overview

• The USDA put corn ending stocks at 846 million bushels, down 2 million from the month prior and 282 million under a year ago. U.S. corn stocks are very small at 24.4 days' supply. That's historically very, very low. Globally corn stocks are at 53.9-day supply, down 1.5 days from last year and a 38-year low. The U.S. stocks-to-use ratio remained unchanged from last month at 6.7% while global stocks-to-use ratio only increased slightly to 14.8%.
• (Bloomberg) Corn crops in Brazil and Argentina, which produce 30 percent of the world’s exports, will lose 11 million metric tons of output after a drought caused “irreversible” damage, forecaster Agroconsult said.

• Obama asked Congress Thursday to raise the debt ceiling to $16.4 trillion.

• California has slipped behind Brazil to become the ninth-largest economy in the world.

• U.S. Retail sales increased a less-than-expected 0.1%, despite continued strength in autos.

• French CPI rose 0.4 % in December

• (Bloomberg) a proposed European Union embargo of Iranian oil imports was said likely to be delayed for six months
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• The dry bulk market has been in freefall, reminding ship owners just how fragile the market is.

Quick Overview

• La Nina, the weather event, that dried up crops in Argentina and Brazil and flooded plantations in Thailand and Malaysia may be weakening, said Telvent DTN Inc.

• U.S. regulators have halted shipments of imported orange juice from all countries, and plan to destroy or ban products if tests find even low levels from a prohibited fungicide. Initial test results are due this week.

• PG declared another quarterly dividend of $0.525 per share. P&G has been paying a dividend for 121 consecutive years since its incorporation in 1890 and has increased its dividend for 55 consecutive years at an annual compound average rate of approximately 9.5%.

• An Iranian nuclear scientist was killed in a Tehran bomb explosion, in at least the third assassination targeting the nation’s atomic program that the U.S. and Israel have vowed to halt.

• The Nevada November gambling revenue statewide rose 7.1% to $880.1 million. On the Las Vegas Strip, which accounts for more than half the total, the take was up 9% to $495.3 million. Tourist traffic rose 3.2% in November to 3.03 million visitors.

• The DoE said that crude oil stocks rose by 5 million barrels, gasoline stocks increased by 3.6 million barrels, and distillate stocks, which includes diesel, increased by 4 million barrels.

• Japan's current-account surplus shrank in November, falling 85.5% as exports dropped amid slowing global demand and energy imports rose.

• The Fed Beige Book said U.S. economic activity increased "at a modest to moderate pace."

• Texas, leadin U.S States, generated 294 million metric tons of greenhouse gases in 2010, followed by Pennsylvania, with 129 million metric tons emitted.

• The German economy shrugged off the impact of Eurozone debt crisis and grew by 3% in 2011

Quick Overview

• Orange juice futures went limit up for a second day after a warning by food watchdogs of finding Carbendazimin in imports from Brazil. This is compounded by supply fears provoked by cold weather in Florida.

• (FT)The central banks of Greece, Spain, Portugal and Italy between them hold 3,200 tonnes of gold

• U.S. Insurance companies spent millions of dollars trying to defeat the U.S. health care overhaul, saying it would raise costs and disrupt coverage. Instead, profit margins at the companies widened to levels not seen since before the recession, a Bloomberg Government study shows.

• The U.S. should declare a moratorium on hydraulic fracturing for natural gas in populated areas until the health effects are better understood, doctors said.

• France's industrial production rose by 1.1 percent in November.

• China's online gaming market raked in $6.79 billion in 2011, up 32.4% YoY.

• (Bloomberg) Rubber plantations from Indonesia to Ivory Coast will tap a global crop this year that will create the biggest glut since at least 2004, cutting costs for Bridgestone Corp., Michelin & Cie. and other tire makers.

• Chinas December copper imports rose 47.7% YoY.

• (Reuters) - Organized crime has tightened its grip on the Italian economy during the economic crisis, making the Mafia the country's biggest "bank" and squeezing the life out of thousands of small firms, according to a report on Tuesday.

Quick Overview

• The U.S. economy created 200,000 non-farm payroll jobs last month -- unemployment fell to 8.5%.

• S. Korea's producer prices rose 0.2% in Dec.

• Central bankers and regulators in the EU, U.S and Japan have agreed to face 'detailed' peer reviews over how well they are implementing new international bank capital rules.

• David Cameron suggested on Sunday that legislation to curb excessive executive pay, including giving shareholders new voting powers, could begin in the spring. The High Pay Commission conducted an inquiry that found that the pay of top executives at FTSE companies had risen by more than 4,000 per cent on average in the last 30 years.

• Brazil's inflation rose to 6.5% in 2011, up from 5.91% in 2010

• The unemployment rate in the Eurozone stayed at 10.3 % in November, unchanged from October.

• Canada's unemployment rate rose to 7.5% in December

• Swiss inflation rate fell to 0.2% in 2011.

• Insurance companies in China collected $226.4 billion of premiums last year, up 10.4% YoY

• David Cameron has said he would veto a European-wide financial transaction tax unless it was imposed globally, deepening a confrontation with France and Germany.

Quick Overview

• The U.S. ISM rose in December to 52.6% from November's 52.0%, a reading that nonetheless was below the 53.3% expected.

• The DOE said in the week ended Dec. 30:
• Oil supplies rose 2.2 million barrels
• Gasoline inventories rose 2.5 million,
• Distillates supplies rose 3.2 million barrels.

• YoY BMW U.S. sales rose 17.9%

• It is hot in Australia and they’re running low on soft-drinks (The decade to 2011 was the hottest on record)

• The number of Americans claiming weekly unemployment benefits fell 15,000 to 372,000 last week, the lowest level since the summer of 2008.

• Spanish banks will need to find an extra €50bn to cover potential losses from property loans, the Financial Times reported

Quick Overview

• According to Dow Trend Earnings (aka Fed model) the Dow should be trading at $45,769

• "Trust me" is not enough of a safeguard, says Amnesty International, as Obama signs the NDAA into law.

• Hot, dry weather in South America continues to raise concerns about potential yield losses.

• US Manufacturing improves to 53.9 in December vs 52.7 in November.

• The Chinese purchasing managers index (PMI), rose to 50.3 in December from 49 in November, indicating a slight expansion in business activity in China's vast factory sector.

• New polling data from Lawrence Hamilton, of the Carsey Institute at the University of New Hampshire, suggests that the “anti-science” epithet really does apply to many U.S. Republicans—at least on environmental issues.

Happy Holidays
(Updates resume Jan. 3)

Happy Birthday, Bill [of Rights]: Obama Breaks Promise To Veto Bill Allowing Indefinite Detention of Americans I am not sure which is worse: the loss of core civil liberties or the almost mocking post hoc rationalization for abandoning principle. The Congress and the President have now completed a law that would have horrified the Framers. Indefinite detention of citizens is something that the Framers were intimately familiar with and expressly sought to bar in the Bill of Rights. While the Framers would have likely expected citizens in the streets defending their freedoms, this measure was greeted with a shrug and a yawn by most citizens and reporters. Instead, we are captivated by whether a $10,000 bet by Romney was real or pretend in the last debate.

Quick Overview

• Having vetoed his way into isolation at last week's European Union summit, Cameron is now looking for allies.
  
• Spain’s ten-year yields fall 25 basis points to 5.43%

• (LAT) American CEOs raked in fat paychecks last year, as head honchos netted a median 27% increase in compensation in fiscal year 2010. Top executives from the S&P 500 scored a median 36.5% bump in realized compensation.

• U.S. current account trade deficit fell to 110.3 billion U.S. dollars in Q3, 11.5 percent lower than the previous quarter.

• Merkel calmly told parliament that a solution would take years and German central bank head Jens Weidmann compared demands for ECB intervention to an alcoholic grabbing for the bottle.

• Amazon said that it has sold more than 1 million units of its Kindle e-reader and Fire tablet each week for the last three weeks.

• In the Ukraine, the government is allowed to sell or use cars that have been stolen in other countries. The law creates the perfect conditions for organized gangs who steal luxury cars to order in Western Europe. “Perhaps this helped” Ukraine's GD which grew 5.3% in the first 11 months of this year.

• The yield on Germany's 30-year debt hit an all-time low of 2.36%.

• Fitch unexpectedly raised Indonesia's sovereign debt status to investment grade.

• U.S. Industrial production declined 0.2% in November

• The number of U.S. people applying for jobless benefits fell last week to 366000, the fewest since May 2008.

• The US seems determined to punish Bradley Manning -- the military proceedings against him, which begin Friday, are likely to end in a guilty verdict.

• (Spiegel) The murders of African street vendors by a right-wing extremist in Florence have shocked Italy. Questions are now emerging about whether the gunman acted alone. But one thing seems certain, he was close to a right-wing radical group that has a pop culture appeal admired even by Germany's neo-Nazis.

• Japans Tankan survey, the large manufacturer index of sentiment fell to minus 4 in December from plus 2 in September, marking the first decline in two quarters and retreating more than consensus market forecasts.

• FedEx (FDX) profits rose to $497 million, or $1.57 per share, from $283 million, or $0.89 per share, over last year’s second quarter.

Quick Overview

• Steve Freed analyst with ADM is expecting a bullish Jan. corn report saying that yield should be cut 1.5 bushels an acre = tight carryout.
• Reuters: The La Nina weather phenomenon is expected to reduce rainfall in Argentina main crop belt until at least mid January.

• Inventories at U.S. businesses rose 0.8% in October
• U.S. retail sales rose 0.2% for November

• German investor confidence showed a surprise rise of 1.4 points.

• The International Coffee Organization raised by 1.2m bags to 128.6m bags its forecast for world coffee production in 2011-12.

• MF Global, Enron, Arthur Anderson, Refco, Lehman, Countrywide, Bear Stearns, Madoff, Health South, Subprime etc. etc. Regulators get paid for what exactly?

Quick Overview

• Say goodbye to Xe. The company formerly known as Blackwater — the world’s most infamous private security corporation — has also jettisoned that name and now wants to be known as “Academi.” Business however will continue unchanged……………..

• Obama: After nearly 9 years our war in Iraq ends this month.

• Fitch Ratings said on Monday that a comprehensive solution to the sovereign debt crisis in the euro zone "is not on offer"

• Intel (INTC) cut its Q4 revenue forecast, citing the hard-disk drive shortage.

• U.S. Ethanol exports 2nd highest on record in October

• Reuters is reporting the German govt. is in talks with Commerzbank to prop them up.

• November s the seventh month investors withdrew money from stock funds.

• India's industrial production fell 5.1 % in October

Quick Overview

• Every European nation except for Britain (Cameron is trying to “protect bankers from regulation") agreed to consider forging closer economic ties in hopes of preventing another debt crisis.

• GE hikes quarterly dividend by 2c to 17c a share.

• U.S. consumer sentiment rose to a six month high 0f 67.7 vs 64.1 in November.

• Nevada’s Gambling revenue rose 8.1% in October. The Las Vegas Strip, which accounts for more than half the total, led the growth, with a gain of 13.3%.

• The USDA estimates 848 million bushels of corn on hand at the end of next summer -- up less than 1% from last month's forecast. This is a supply of less than 25 days. A 30 day supply is considered healthy.
• The USDA estimates the soybean surplus to be up 18% from last month. Ending stocks are expected to be 230 million bushel. That's about a 28 day supply.

• The U.S. trade deficit narrowed by 1.6% in October to $43.5 billion

• Waste Management said it would increase its quarterly dividend by 4.4% to 35.5 cents
  
  
• MagnetU is a $24 device that broadcasts your social media profile to other “nodes” (people) around you, Technology Review Mims’s Bits reports. If anyone else with a MagnetU has a profile that matches yours sufficiently, the device will alert both of you via text and/or an app. It also links to Facebook, Linkedin, Twitter…..
• Capesize rates rose to 21-month highs on Chinese iron ore demand that is estimated to grow 20% by 2015.

Quick Overview

• U.S. wholesale inventories roe 1.6% in October.

• U.S. initial jobless claims in the week ending Dec. 3 fell 23,000 to 381,000.

• ECB cut lending rate to 1% from 1.25%.

• Jon Corzine, the former chief of bankrupt MF Global - the eighth largest bankruptcy filing in U.S. history -- has no idea where the missing money is.

• JPMorgan’s CEO doesn’t know what tax rate he pays

• The Bank of England held interest rates at 0.5% and decided against more easing for the economy but more quantitative easing is expected in 2012.

• Indonesia’s held interest rates at 6%

• Six members of the Walton family, heirs to the (WMT) Walmart fortune, possess wealth equal to that of the entire bottom 30 % of Americans. This according to a new analysis by Sylvia Allegretto, a labor economist at the University of California at Berkeley.
  

  
  
• YoY Chinese consumer inflation fell  to 4.2%  in November from 5.5% in October and well below the three year peak it reached in July.

Quick Overview

• The DoE increased crude oil stocks by 1.3 million barrels in the week ending December 2, gasoline stocks rose by 5.1 million barrels, and distillate stocks rose by 2.5 million barrels.

• Australia's unemployment rate rose 0.1 % to 5.3% in November.

• Japan machinery orders dropped 6.9% in October.

• U.S. consumers increased their debt by 7.6 billion or at a 3.7% annual rate in October

• Dagong downgraded the credit rating of France from AA- to A+ with a negative outlook

• Dagong downgraded Italy’s debt by one level to BBB from the previous A- with "negative" outlook.

• South Korea's left rates unchanged at 3.25%.

• New Zealand left rates unchanged at 2.5 percent.

• A Chinese government think tank predicted China's economy to grow 9.2 percent this year before gliding to 8.9 t in 2012.

Occupied Washington Americans are not opposed to the rich getting richer—as John Steinbeck is said to have noted, "Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires." But this prospect only satisfies so long as people believe that with luck and hard work, their ship, or at least their kids' ship, may some day come in. In a system overrun by piracy—a system in which the pirates also, sorry to stretch the metaphor, run the Navy—the dream becomes hard to sustain.

Quick Overview

• Martell Crop Projections, warned that "intense heat and moisture stress has developed in a swathe of South America of the past month", citing Bolivia and northern Paraguay, but most notably Brazil's top soybean-producing state of Mato Grosso.

• WTF is the definition of “SEGREGATED” Accounts??........The CFTC is aiming to find the missing account money from MF Global "very shortly,"……………….Bill Clinton was allegedly collecting $50,000 per month from Corzine’s MF Global via his Teneo advisory firm in the months before the brokerage careened towards its Halloween filing for Chapter 11 bankruptcy, reports Human Events…….. Corzine earned some $14 million in total compensation in 2010.

• The selectively attentive Standard & Poor's has warned that it could downgrade the AAA rating of the Eurozone debt rescue fund, a day after nearly all governments of the monetary union were given a similar notice.

• The survival of Commerzbank, Germany's second-largest bank is at stake, and Berlin is considering a full nationalization of the bank if necessary.
  
  
• The Nokia Lumina 800 appears to have surpassed iPhone 4 sales with KPN the Netherlands largest operator. (NOK, MSFT, QCOM) v (AAPL, GOOG etc.)

Quick Overview

• U.S. factory orders fell by 0.4% in October after falling a downwardly revised 0.1% in September

• Cargill is firing 2,000 people due to “continued weak global economy”.

• The Institute for Supply Management said its non-manufacturing index slowed from 52.9% in October to a reading of 52.0% in November, its lowest level since Jan. 2010.

• S&P may downgrade the triple-A ratings of six European nations including Germany, according to the Financial Times.
  (Telegraph) If only S&P had been such attentive party poopers at the height of the credit bubble  we wouldn't be in the mess we are  in now.

• (Reuters) - The U.S. Postal Service moved forward with plans to end next-day delivery of letters. Also, in a notice filed with its regulator, it sought approval to close more than half of its 461 processing facilities that have been critical for next-day delivery service. The agency expects to eliminate about 28,000 jobs as part of the processing facilities plan.

• Bloomberg: Carmakers will use a record $7 billion of platinum in catalytic converters next year, diminishing a glut just as mine production declines for the first time since 2008

Quick Overview

• The U.S. unemployment rate fell to 8.6% in November, the lowest level in more than two and a half years.

• (FT) Globally, wireless capacity must double about every 30 month.

• Goldman Sachs predicted on Friday a recession would hit the Spanish economy in 2012 and last until 2013.

• YoY World manufacturing production increased by 5.5 % in Q3 of 2011, said a report released Thursday by the United Nations Industrial Development Organization (UNIDO).

• Jobless rate in France rose by 2% to 9.3 percent in Q3.

• MoM the industrial producer prices index rose by 0.1 % in the Eurozone in October.

• The Chinese leadership's law-and-order chief is warning that China is ill-prepared for social unrest generated by changes in the economy, in the latest sign that the government is worried about the consequences of flagging growth.

Raise Taxes on Rich to Reward True Job Creators: Nick Hanauer
I’m a very rich person. As an entrepreneur and venture capitalist, I’ve started or helped get off the ground dozens of companies in industries including manufacturing, retail, medical services, the Internet and software. I founded the Internet media company aQuantive Inc., which was acquired by Microsoft Corp. (MSFT) in 2007 for $6.4 billion. I was also the first non-family investor in Amazon.com Inc. (AMZN)

Even so, I’ve never been a “job creator.” I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.

That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.

Quick Overview

• US jobless claims back above 400,000 again.
• U.S. construction spending rose 0.8% in October
• The ISM said its manufacturing index in November rose to 52.7% from 50.8% in October -- the 28th month of expansion
• General Motors reports a 6.9% jump in November U.S. sales, led by bigger trucks and smaller gas sippers.

• China reported its manufacturing Purchasing Managers’ Index fell to 49.0 on a 100 point scale, below the previous month’s 50.4 reading -- therefore China’s central bank said on Wednesday that it will lower the reserve requirement ratio of banks by 0.5 % points – first lowering in 3 years.

• Central bankers in the United States, Eurozone, Japan, Switzerland and Canada have launched co-ordinated global action to ease the growing credit crisis among Eurozone banks by lowering the price on existing dollar swaps.
• There is no quick fix to Europe's debt woes that threaten to escalate into a more widespread credit crunch, Bank of Japan Deputy Governor Kiyohiko Nishimura warned on Wednesday
• The unemployment rate in the Eurozone hit a record high of 10.3% in October

• Fed's Beige Book: Economy moving forward at snail’s pace.
• The November reading of the Chicago PMI rose to 62.6% from 58.4% in October, which is a seven-month high.
• YoY Canada's GDP grew 3.5% in the third quarter

• U.S. Pending home sales rose 10.4% in Octoer."We hope this indicates more buyers are taking advantage of the excellent affordability conditions," said Lawrence Yun, NAR's chief economist, in a statement.

• Vienna has the best living standard in the world - and Baghdad the worst, according to an annual survey.

• (FT) US faces pension bill for AMR restructure: State body warns taxpayers could pay higher premiums.

• (Economist) The FTC’s investigation finds that Facebook has been making information public that it had pledged to keep private.

• Walt Disney (DIS) raised its annual dividend by 50% to 60 cents a share.

• Goldman: The combination of a record cotton crop and falling consumption will expand global stockpiles by the most since 2005, driving further declines in the price.

• The DoE said: Crude oil stocks rose by 3.9 million barrels in the week ending November 25. Gasoline stocks rose by 0.2 million barrels. Distillate stocks rose by 5.5 million barrels. Ethanol stocks fell by 0.5 million to 17.0 million barrels

MUST READ

The Debunking Handbook

Quick Overview

• U.S. consumer confidence rose 15 points to 56 in November – the largest gain since 2003.

• Standard & Poor's lower ratings on 37 banks and their subsidiaries. Among U.S. banks, Wells Fargo & Co. had its rating lowered to A+ from AA, J.P. Morgan Chase & Co. and Goldman Sachs Group Inc. both had their A+ ratings cut to A, and Citigroup Inc. and Bank of America Corp. both had their A ratings cut to A-.
  
  
  
  
  

• According to S&P/Case-Shiller U.S. home prices fell 0.6% in September. YoY the home price slide was 3.6%.

• No recovery in sight for U.S. housing, says Yale's economist Shiller.

• Hungary’s raised its base rate by half of a percentage point to 6.5%.

• All measures of the money supply in the Eurozone contracted in October with drastic falls across parts of southern Europe, raising the risk of severe recession over coming months.

• American Airlines and its parent company are filing for bankruptcy protection.

• Weak growth, continuing Eurozone woes and an absence of safe havens will ensure a tough year for investors in 2012, according to a new report from Merrill Lynch

• YoY Sweden's GDP rose by 4.6% in Q3.

• Japan's unemployment rate stood at a 4.5% in October
• According to the OECD's twice-yearly Economic Outlook report, despite planned tax hikes and spending cuts, Japan will see government debt rise to 230 % of GDP in 2013, meaning the nation's public finances, already the worst in the industrialized world, are set to worsen further.

Quick Overview

• (Reuters) - German Chancellor Angela Merkel and French President Nicolas Sarkozy are planning more drastic means - including a quick new Stability Pact - to fight the euro zone sovereign debt crisis, Welt am Sonntag reported on Sunday.

• Italian bond yields rose above 8%.

• Hungary’s credit rating is cut to junk status.

• China's domestic rating agency downgraded Portugal's rating from BBB+ to BB+ with a negative outlook.

• A poorly received German 10-year-bond auction forced the Bundesbank to pick up the slack to bring the sale to a planned €6 billion.

• (FT) A number of large institutional investors have threatened to stop buying bonds issued by Santander after Spain’s biggest bank offered to exchange some of its existing debt into new instruments at what they consider punitive terms.

• (MW) U.S. “defense” spending (in 2011 dollars): Vietnam War $526 billion, Pearl Harbor $352 billion...this year $695 billion

• Former US president George Bush and his former counterpart Tony Blair were found guilty of war crimes by The Kuala Lumpur War Crimes Tribunal which held a four day hearing in Malaysia. The five panel tribunal unanimously decided that Bush and Blair committed genocide and crimes against peace and humanity when they invaded Iraq in 2003 in blatant violation of international law.

• HSBC’s preliminary China manufacturing survey dropped to a 32-month low in November -- adding to growth worries in Europe and the U.S.

• Australia proposed a marine reserve in the Coral Sea that covers a total area of around 990,000 square kilometers off the north-east coast of Australia.

• India is opening up its retail market to foreign direct investment

• (FT) The US is refusing to sign off on a flagship global climate fund, as already fraught negotiations intensify ahead of next week’s UN climate summit and carbon prices plummet to an all-time low.

• Germanys Ifo institute said its business confidence index rose to 106.6 points this month from 106.4 points in October.

• Food inflation in India fell to 9.01% for the week ended Nov. 12, compared with 10.63 % the previous week.

 

It is not inevitable that the EU – or democracy – will survive this mess  Pessimism always has the best tunes, and I remain instinctively an optimist. I still cheer when I see democracy's shrivelled hordes assert themselves in the street. My brain may be with technocracy, but my heart is with the majority, hoping that the two can resume consummation. But we should remember Schumpeter's warning, of capitalism's tendency to self-destruction and socialism's to fascism. Both, he said, were history's "jokes of questionable taste".

Quick Overview

• Poll: Fox News Viewers Are Less Informed Than Those Watching No News.

• Why has no one at MF Global nor Corzine been charged by powers that be with any crime? More than $1.2 billion of customers' funds have so far gone missing from “supposedly” segregated accounts.
• And this about the CME’s position transfer: They didn't seem to understand what short/long option value means and how you net them out. We couldn't believe it," said one senior executive with a major futures commission merchant. "Criticism is starting to surface of the CME leaders. It's really hurting the credibility of the exchange."
• Reuters: JP Morgan to buy $MF Global stake in LME (Where is Glass Steagall?)
  
  

• U.S. Q3  GDP growth cut to 2.0% from 2.5%

• In October, U.S.  employers took 1,353 mass layoff actions involving 118,689 workers. Mass layoff events decreased by 142 from September, and associated initial claims decreased by 34,540

• The supercommittee appears ready to throw in the towel on getting debt-deal done.

• Spain’s private Banco de Valencia, bank #3, is taken over by the state because of RE problems.
• Spain’s unemployment rate is 22.6% and 46% for youth.

• The National Association of Realtors on Monday said sales rose 1.4% to a seasonally adjusted annual rate of 4.97 million from 4.9 million in September.

• (NZH) Steven J. Baum P.C., a foreclosure law firm that was criticized for a Halloween party that mocked the homeless and people in danger of losing their homes says it will lay off at least one-third of its employees.

• (Bloomberg) Dismissed as a “nobody” by Japan's nuclear industry, seismologist Katsuhiko Ishibashi spent two decades watching his predictions of disaster come true: First in the 1995 Kobe earthquake and then at Fukushima. He says the government still doesn’t get it.

• Egypt’s death toll reaches 35 on third day of violent protest crackdown.

• Monbiot: The Corporate Welfare State. Despite the crisis, it’s still socialism for the 1%, capitalism for the rest.

Self-serving myths of Europe’s neo-Calvinists

The hallmark of fiscal integration is mutualisation – a greater pooling of budgetary resources, joint debt issuance, a common backstop to the banking system, and so on. Tighter rules are not so much a path to mutualisation, as an attempt to prevent it from happening.

This course of action is more likely to precipitate the euro’s disintegration than its survival.

You may want to examine the Euro Dollar and Libor Fed Funds Spread charts.

Quick Overview

• U.S. leading indicators rose 0.9%, the most since February

• (SBMRY) SabMiller the brewer reported that fiscal first-half net income rose 23% on 12% higher revenue.

• Moody's downgraded the ratings on debt and deposit of 10 German public-sector banks

• Ed Hansberry: Microsoft's license agreements cover 53% of Android's share. Getting somewhere between $5 and $15 for each handset sold, Microsoft is making a ton of money off of Google's platform.

• U.S. crude oil stocks decreased by 1.1 million barrels in the week ending November 11, gasoline stocks declined by 1.0 million and distillate stocks decreased by 2.1 million barrels. Ethanol production rose by 5 million to 916 million barrels. Stocks rose 0.7 million to 17.1 million barrels

• U.S. consumer price index fell by 0.1% in October.

• (BBC) Radioactive cesium found in Japans rice.

• U.S. new housing starts fell 0.3% in October -- YoY Housing starts are up 16.5%

• Women with attractive eyes may be forced to cover them up under Saudi Arabia's latest tyrannical measures.

• YoY Malaysia's GDP rose 5.8% in Q3

• S&P upgrades Brazil's sovereign credit rating from BBB- to triple B

• YoY New Zealand's GDP rose by 4.2 %.

• The new Greek coalition government submitted the 2012 draft budget, forecasting an ambitious budget deficit cut to 5.4 % of GDP next year from this year's 9.0 %

• Central Bank gold buying of 148.4 tonnes is a 40 year high.

Otherwise engaged... next update Saturday.

Quick Overview

• MoM U.S. October Retail Sales rose 0.5%;
• MoM U.S. PPI fell 0.3% in October and 5.9% YoY

• Canada: Manufacturing Shipments rose 2.6% in September

• Japan back to growth as GDP rises 1.5%.

• NY Police evict OccupyWallStreet protesters. With his action Bloomberg is making OWS stronger!

• (Bloomberg) -- China’s imports of corn and wheat may rise as state reserves boost stockpiles and expanding livestock production spurs use of feed grain, a state-owned market forecaster said.

• Texans allowed to show gun permits but not student ID’s at voting booth.

• Can Cain find Libya on a map?

A limitless power source for the indefinite future

Some background: By 2030–40, the projected annual electrical energy consumption will be a staggering 220 trillion kiloWatt hours, double the consumption in 2010 — and four times more by 2090–2100

Quick Overview

• Pritchard: The ECB is under intense pressure to step up purchases of Italian bonds after premier Silvio Berlusconi finally relinquished power, clearing the way for Mario Monti to form an emergency government of technocrats.
• Pritchard: Italy's gentle saviour is tougher than he looks. Mario Monti is a free-marketeer who disguises Thatcherite views and a steel will behind a cloak of unflappable good manners.
• Pritchard: Europe's scorched-earth policies have begun in earnest. The inherent flaws of monetary union have created a crisis of such gravity that EU leaders now feel authorized to topple two elected governments.

• (WSJ) Telefonica's (TEF) third-quarter revenue rose 3.7% to EUR15.79 billion, even though sales in the Spanish unit fell 8.8% in the period. This was mainly offset by a 18% rise in Latin American sales, where Telefonica now gets almost half of its revenue.
• The Spanish economy experienced zero growth in Q3

• California’s unfunded pension liabilities have been estimated at between $240 billion and $500 billion.

• With bond market vigilantes beating the drum for ever-more belt tightening, much of the developed world is charging ahead with austerity plans that will drag on the world economy.

• Asia-Europe rates fell last week by 6.5 % to US$573 per TEU, the single biggest week-to-week decline this year, according to the latest Shanghai Containerised Freight Index.

• Hong Kong's 10% quarterly export decline blamed on Euro debt crisis

• YoY India's industrial production slowed down to 1.9% in September on monetary tightening

• MoM Japan's Industrial Production fell -3.3%.

• Japan’s September Capacity Utilization down -3.6%

• Arlan Suderman: global Corn stocks as a percent of annual usage continue to trend lower; currently sitting at 38-year lows.

Dispelling An Enduring Myth With One Image

If the Earth’s temperature was the same year after year, then the effects of increasing greenhouse gases would be very easy to spot. Unfortunately, Mother Nature rarely makes things that easy to figure out. Besides the daily and seasonal cycles, we also have decadal temperature swings caused by the sunspot cycle and ocean/atmospheric oscillations. This tends to confuse non scientists, and fools many into believing claims that global warming has stopped. The Heartland Int. in Chicago (political think tank) has long been a major purveyor of this silliness.

Quick Overview

• YoY U.S. intermodal traffic rose 3.5% for the week ended Saturday

• The Greek Unemployment rate in August 2011 was 18.4% compared to 12.2% in August 2010

• The EU is now projected to stagnate until 2012. Growth for 2012 is forecast at ½%. By 2013, a return to slow growth of about 1½% is projected.

• YoY German CPI rose 2.5% in October

• Korea held its policy interest rate at 3.25%

• MoM U.S. Foreclosure activity rose 7% in October

• MoM Italian Industrial Production fell 4.8% in September
• 10-Year Italian government bond yields at 7.3% on Thursday

• China's trade surplus less than expected at $17.0 billion

• MoM Japan's core machinery orders fell 8.2% in September

• (BBC) Mr. Murdoch, I think you must be the first mafia boss in history who didn't know he was running a criminal enterprise' - Tom Watson MP

• Nvidia (NVDA) YoY Q3 profit at 29 cents a share, compared to 15 cents a share

• Walt Disney (DIS) Q4 profit rose 30%

• The latest bond sale went well in Italy

• U.S.unemployment benefits dropped by 10,000 to 390,000 in the week ending November 5

Quick Overview

• Bonuses were paid to MF Global ‘s UK staff just hours before the company filed for bankruptcy protection in New York.

• (Bloomberg) A kilogram of polysilicon, the basic material in solar panels, dropped from $475 in February 2008 to less than $35 Oct. 31... Great for the environment.

• Qualcomm (QCOM) announced that it has acquired substantially all of the technology and other assets of HaloIPT, a provider of wireless charging technology for electric vehicles.

• U.S. consumer credit increased at an annual rate of 3.5 percent in September, offering some positive sign to the weak recovery.

• MoM Germany's industrial output slumped 2.7% in September

• Japan's benchmark coincident composite index fell 1.4 points in September.

• L.M. Ericsson (ERIC) is forecasting a tenfold increase in mobile data traffic over the next five years, mainly driven by video.

• Vodafone declared an interim dividend of 3.05 pence, up 7% YoY, and said it would pay a special dividend of 4 pence following its recent deal with Verizon. VOD reported a 11% fall in first-half net profit due to higher cost of sales and a bigger tax bill than a year earlier, but raised its annual operating profit guidance.

• China imported a record 56.9 tonnes of Gold in September, a six fold increase from 2010

• Credit Suisse will hand over details of wealthy Americans with hidden Swiss accounts to the Swiss government, bringing U.S. authorities one step closer to obtaining names of alleged tax cheats.

• German reinsurer Munich Re says its net profits more than halved in the third quarter because of exchange rate volatility and the fallen value of Greek government bonds.

• Herman Cain “I’ve never acted inappropriately with anyone --- ever --- period” Really? No kidding? WOW!!

Quick Overview

• (Washington Post) Wall Street firms — either independent companies or the high-flying trading arms of banks — are doing even better. They’ve made more profit in the first 21 / 2 years of the Obama administration than they did during the entire Bush administration, industry data show.

• You now can download one Kindle book a month, with no due dates, free, if you’re an Amazon Prime ($79) member and a Kindle owner. This in addition to free 2 day shipping and thousands of free movies -- WHOA

• CME Group said it was changing its margin requirements for customers of collapsed brokerage MF Global, cutting the size of any margin calls when positions are transferred to another brokerage.

• German chemicals and pharmaceuticals giant Bayer (BAYRY) said Sunday it has boosted its cash reserves five-fold to some 3.8 billion Euros as insurance against any unexpected downturn in the economy

• "Ten years ago we had Johnny Cash, Bob Hope and Steve Jobs," runs a sour joke that has been doing the rounds since Silicon Valley lost its most famous son. "Now there's no cash, no hope and no jobs."

• The death toll from Thailand's floods rose above 500 as the seemingly unstoppable waters crept deeper into Bangkok.

• Papandreou said he will step down once agreement is reached on new coalition

Quick Overview

• Mario Draghi made his debut as head of the ECB with a surprise interest rate cut from 1.5% to 1.25%.
• Mario Gabelli: Greece has about as much impact as Maryland

• Qualcomm’s (QCOM) Net income rose 22% YoY

• Kraft (KFT) net revenues for Q3 rose 11.5%

• Intercontinental Exchange (ICE) reported futures volume in October rose 21%
• The CBOE Futures Exchange (CFE) said that October 2011 total trading volume and average daily volume rose 88%.

• Molson Coors Brewing Co.'s Q3 profit fell 23%

• Wiki Leaks founder Julian Assange lost his appeal against extradition to Sweden to answer sex crime allegations, but said overnight he would consider whether to take his protracted fight to Britain's highest court

• MasterCard's Q3 profit rose 38 %

• A rare case of people being infected with both swine and seasonal flu has been documented in Cambodia.

• Lenovo reported a nearly 88 % YoY surge in Q3 net profit

• A string of earnings reports showed that global coal demand is stronger than analysts anticipated.

• New census data shows nearly one in 15 Americans—more than 20 million people—are now so poor they live at least 50 percent below the official poverty level. The figure is the highest ever recorded. Forty states and the District of Columbia have had increases in the poorest of the poor since 2007. The District of Columbia ranked highest, followed by Mississippi and New Mexico.
  

Revenge of the Sovereign Nation When the history books are written, I think scholarship will be very harsh on the handful of men running EMU monetary policy over the last three to four years. They are not as bad as the Chicago Fed of 1930 to 1932, but not much better.

Quick Overview

• Greece’s referendum is dead. But the governments future is in doubt.

• Tokyo Electric Power Co. detected signs of nuclear fission at its crippled Fukushima atomic power plant in northern Japan, raising the risk of more radiation leaks. The situation is under control, officials said. (Of course!)
  
   

• (Reuters) MF Global violated requirements that it keep clients’ collateral separate from its own accounts.
• MF Global filed for bankruptcy protection Monday -- more problems for the largely invisible network of ties among institutions around the world? 

• The planet's population has now passed 7 billion.

• The U.S. says its cutting off funding for UNESCO because of the Palestinian membership vote.(Reuters) Israel’s Netanyahu decides to speed up settlement construction in parts of West Bank.

• Taiwan Smartphone maker HTC says its Q3 earnings grew 68% YoY, with shipments reaching 13 million handsets.

• YoY AIA Group’s new business rose 53%

• Britain’s GDP grew 0.5% in Q3 of 2011

• CME's Q3 earnings rose 29 %.

• Bullish reversal on corn.Goldman Sachs To Be Tried By People's Court in Zuccotti Park
  
• Goldman Sachs will be tried this Thursday, November 3, for crimes against the American public. Cornel West, noted civil rights activist, and Chris Hedges, Pulitzer Prize winner, will be among those presiding, and testimony for the prosecution will include individuals who have been directly affected and harmed by the actions of Goldman Sachs. The trial is open to the public, and if you can't make it? Tune in to WBAI (99.5 FM in New York) or online at www.wbai.org this Thursday, from 10 AM to 12 noon, where it will be broadcast live. If the government won't do it? We'll take it into our own hands.
  
  
  

Quick Overview

• Angela Merkel's approach -- to decelerate rather than succumb to panic -- is starting to pay off. Euro-zone agreed to reduce Greece's debt burden by half. In addition, the euro backstop fund will be boosted to over a trillion Euros.
• Soros thinks the EZ rescue deal is going to last between 1 day and 3 months
  
  
  
  

• US economic growth accelerated to 2.5% in Q3
• U.S. pending home sales fell 4.6% to 84.5 in September
• U.S. Census chiefs warn bureau cuts will leave nation flying blind in bad economy.

• (FT) FTSE 100 directors saw their total earnings rise by 49 per cent in the past financial year, taking the average to just under £2.7m, according to research by Incomes Data Services, the pay monitoring group.

• World power swings back to America – Pritchard/Telegraph http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8844646/World-power-swings-back-to-America.html

• IBM adds 7 billion to its stock repurchase program bringing the total to $12.2 billion, as IBM had $5.2 billion remaining of its previous repurchase authorization

• U.S. consumer-confidence fell to 39.8 in October from a September level of 46.4

• The U.S. House voted Monday to exclude U.S. airlines from an emissions cap-and-trade program that the European Union plans to impose on all airlines flying to and from the continent beginning next year.

• (Reuters) - A U.S. federal appeals court has revived a lawsuit accusing Rio Tinto Plc of human rights violations related to Papua New Guinea.

• (MW) The S&P/Case-Shiller 20-city composite index rose 0.2% in August, as 10 of 20 cities saw gains. That's the fifth straight month of gains, S&P said Tuesday. On a year-on-year basis, prices are down 3.8%. The 20-city composite is down 30.8% from its peak.

• Vietnam has lost its fight to save its rare Javan rhinoceros population after poachers apparently killed the country's last animal for its horn.

• Rick Perry suggested in a recent interview that Trump still harbored doubts about Obama's birth...

• As the U.S. economy suffers, cattle thefts rise to new highs. An estimated 4,500 cattle have been reported missing or stolen this year in Texas and Oklahoma alone.

• Ford's ranking fell 10 spots in Consumer Reports' annual auto reliability survey -- it now ranks 20th out of 28 major brands.

• CME Floor traders said the proposed tax break makes them nervous, because trading is already migrating away from open outcry and to the computer screen. If electronic trades get a tax break, they said, exchanges will have even less of a reason to promote face-to-face trading.

• (FT) Banks sign up to 'ethical' code: The UK's five biggest lenders have agreed to improve the way they do business..

• (FT) Chinese steel mills have started to cut their production as tighter credit conditions and a cooling real estate market bite in the world’s biggest steel market, pushing the cost of iron ore to a 15-month low.

• The wealthiest 1% of Americans saw their net (AFTER TAX) incomes skyrocket by 275% in the three decades to 2007, substantially more than all other segments of the population, the Congressional Budget Office said.

• The Zetas—a Mexican drug cartel believed to be responsible for numerous beheadings, murders, and acts of mayhem—got on the wrong side of the hacker collective Anonymous after allegedly kidnapping one of their members in Veracruz. Now Anonymous has issued an ultimatum: Release our man by November 5, or we'll expose your identities, addresses, and allies.

Next Update Sunday

Quick Overview

• IT's view of Dow Theory is back to bullish
  http://is.gd/U7MWjQ
• Big banks found themselves under pressure in Europe's debt crisis Saturday, with finance chiefs pushing them to raise billions of Euros in capital and accept huge losses on Greek bonds they hold.

• For the global sugar marketing year that began this month output will exceed demand by 6 million tons so UBS estimates. Macquarie anticipates a 5.32 million-ton glut, and Kingsman a surplus of 8.4 million tons. Barclays Capital estimated 4.5 million tons surplus, and the London-based International Sugar Organization anticipates a surplus of 4.2 million tons.

• U.S. unemployment rates dropped in 25 states, rose in 14 and stayed the same in 11. That is an improvement from August, when unemployment rose in 26 states. Nevada (13.4 %) reported the highest unemployment rate for the 16th straight month. California, with unemployment rate falling from 12.1% to 11.9 %, ranked number two. Michigan had the third-highest rate, at 11.1%.

• Eurozone government deficit rose to 572.5 billion Euros in 2010 from 571.5 billion in 2009, but the deficit-to-GDP ratio dropped to 6.2% from 6.4%.

• More than 170 countries have agreed to speed up adoption of a global ban on the export of hazardous waste.

• IBM ranks first in U.S. and second in world as World's Greenest Company. We've focused on green for 20+ years.

Quick Overview

• Senate GOP kills Obama plan for  hiring 400,000  teachers and first responders.

• (FT)The European banking crisis is spilling over into commodities trading with French banks, the main financiers of trading houses, reining in their lending.

• Microsoft (MSFT) sales rose 7.3 %. Net income rose 6.1% to 68 cents a share from 62 cents a year earlier.
• Nokia (NOK) +5.55% reported a loss but better-than-expected unit volume.

• The end of the world is nigh. Again! The Oakland-based Family Radio International that stirred a global frenzy when it predicted the rapture would take 200 million Christians to heaven on May 21, now says the cataclysmic event will destroy the globe on Friday.

• Greek politicians have  passed a tough austerity package while the country has been paralyzed by a 48-hour general strike.

• Western Digital Corporation, the world's leading manufacturer of hard disk drives, said global supply may be constrained for several quarters because of flooding in Thailand. Thai floods have affected 14,254 factories and businesses in 20 provinces, according to the Labor Ministry.

• Brazil lowered interest rates by 50 basis points to 11.5 per cent, the second such cut in six weeks.

• 18,000 of U.S. busiest bridges are structurally deficient.

• (FT) Dexia, the stricken Franco-Belgian lender that has been at the centre of recent market turmoil, loaned €1.5bn of fresh capital to its two largest institutional shareholders which then used the cash to buy Dexia shares before 2008, the Financial Times has learnt.

Quick Overview

• U.S. wholesale prices rose 6.9% YoY.

• Human Genome (HGSI) rose on Tuesday following a report in the U.K.'s Daily Mail that GlaxoSmithKline PLC could be preparing a bid of $25 a share.

• The National Association of Home Builders/Wells Fargo housing market index rose by four points to 18, the biggest one-month gain since April 2010

• China's Q3 GDP rose 9.1% against forecast of 9.2%

• Total foreign holdings of U.S. long-term debt in August reached 4.57 trillion U.S. dollars, up from 4.48 trillion in July.

• China's CPI rose 6.1% YoY in September from 6.2% in August and 6.5% in July, which was a 37-month high. Inflation remains above the target of 4% for 2011.

• Chinas business climate index for the real estate sector also fell for the four consecutive month to 100.41 in September.

• Boston, San Francisco Bay Area, Paris, New York, Vienna, Amsterdam, Munich, Lyon, Copenhagen, Toronto are the top 10 innovative cities listed in the annual index for 2011.

• Global deliveries of new containerships have surpassed one million TEU since the beginning of 2011 with 154 vessels delivered and 280,000 TEU more to come by the end of the year, says Alphaliner

• Apple reported a net income of 6.62 billion U.S. dollars or 7.05 dollars per share, compared with 4.31 billion dollars, or 4.64 dollars per share a year ago.

• Coca-Cola said it had sold more drinks in each region around the world in Q3

• The CFTC reestablishes position limits. The rule limits traders to 25% of deliverable supply in the spot month. The spot-month limits apply separately to physically settled and cash-settled contracts. The CFTC will determine deliverable supply in conjunction with the exchanges.

• Intel posts 17% higher profit and issues strong outlook. It also authorized a further $10bn to buy back shares.

• GM sold 2 mln vehicles in China for second straight year

Quick Overview

• OWS Sign: "I'll believe corporations are people when Texas executes one"

• Bloomberg: European leaders have one week to settle differences and flesh out a strategy to terminate their sovereign debt crisis as global finance chiefs warn failure to do so would endanger the world economy.

• The U.S. federal government registered a 1.299 trillion U.S. dollars budget deficit for the 2011 fiscal year ending September.

• The Eurozone trade deficit stood at 3.4 billion Euros (4.7 billion U.S. dollars) in August.
• Annual inflation in the Eurozone stood at 3.0% in September.

Rabbit-Hole Economics
The Great Recession should have been a huge wake-up call. Nothing like this was supposed to be possible in the modern world. Everyone, and I mean everyone, should be engaged in serious soul-searching, asking how much of what he or she thought was true actually isn’t.

Quick Overview

• While some warn of an imminent recession transports seem to point the other way. http://is.gd/5w3qPd         http://is.gd/ikXlcm

• (FT) Chinese copper inventories stood at 1.9m tonnes at the end of 2010, more than the US consumes in a year. The estimate is significantly higher than the 1.0m-1.5m tonnes range foreign executives had assumed and may indicate lower demand than thought.

• Western Europe's cocoa grind rose 14.0% YoY

• The USDA raised its world wheat stock estimated to 202.4m tonnes -- the highest for 10 years.

• Google's earnings rose 29%.

• Thai authorities are battling to keep the country's worst floods in decades from inundating Bangkok, urging the city's 12 million residents not to panic after a dyke burst in the northern suburb.

• The U.S. Labor Department said that the advance figure for seasonally adjusted initial claims for jobless benefits was 404,000 in the week ending Oct. 8, a decrease of 1,000 from the previous week.

• Australia's unemployment rate fell to 5.2% in September, down from a 10-month high of 5.3% in August

• U.K. unemployment rate in the June-August period stood at a depressing 8.1%, the highest in 15 years.

• MoM the Eurozone industrial production rose by 1.2%, and 5.3% YoY.

• North American railcar owners pulled 11,087 more units out of storage