Friday, November 28, 2008


Citigroup says gold could rise above $2,000 next year as world unravels
This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.

Quick Overview

  • Euro area unemployment rate rose from 7.6% to 7.7% in October, the highest in two years.

  • YoY Japan’s consumer prices rose 1.7% in October
    Japan’s industrial production fell 3.1%
    Japans’ household spending fell 3.8% in October.
    Japan’s unemployment rate improved from 4.0% to 3.7% in October

  • NEW YORK (Reuters) - A man working for Wal-Mart was killed on Friday when a throng of shoppers surged into a Long Island, New York, store and physically broke down the doors, a police spokesman said.

  • MOSCOW (Reuters) - Russia's military said on Friday it had intensified efforts to develop new ballistic missiles in response to U.S. plans to deploy an anti-missile system in Europe and Russia's navy test fired a new generation rocket.

Thursday, November 27, 2008


Possible Geopolitical Consequences of the Mumbai Attacks (Stratfor)
It is not clear the degree to which the Pakistani government can control the situation. But the Indians will have no choice but to be assertive, and the United States will move along the same line. Whether it is the current government in India that reacts, or one that succeeds doesn’t matter. Either way, India is under enormous pressure to respond. Therefore the events point to a serious crisis not simply between Pakistan and India, but within Pakistan as well, with the government caught between foreign powers and domestic realities. Given the circumstances, massive destabilization is possible — never a good thing with a nuclear power.

Wednesday, November 26, 2008

Quick Overview

  • U.S. orders for durable goods fell 6.2% in October, weaker than expected. Excluding transportation, orders fell 4.4%.

  • U.S. New home sales fell 5.3% MoM. YoY new home sales are down 37%.

  • The University of Michigan's consumer sentiment index fell from 57.6 to 55.3.

  • U.S. personal incomes rose 0.3% in October

  • U.S. Consumer spending fell 1.0%.

  • The Chicago index of purchasing managers fell from 37.8 to 33.8 in November.

  • The European Union is plotting a 200 billion euro stimulus plan.

  • Australia's construction activity rose 4.4% in September

  • China cut its interest rate from 6.66% to 5.58%,

  • Ports in China registered a 6% per YoY volume growth in October.

  • The World Bank expects China's economy to expand 7.5% in 2009 - down from its earlier forecast of 9.2%

  • The U.S. Department of Energy said:
    Supplies of crude oil rose 7.3 million barrels to 320.8 million barrels.
    Supplies of gasoline rose 1.9 million barrels
    Supplies of heating oil fell 400,000 barrels.
    Refinery use rose from 84.9% to 86.2% of capacity last week.
    Gasoline demand fell 2.8% YoY
    Distillate demand fell 2.2% YoY.

Tuesday, November 25, 2008


Is Britain going bankrupt?
Today they reached 86 basis points, near Portuguese debt in the league table. For good reason. Alistair Darling has had to admit that the British economy faces the most sudden economic collapse since World War Two, and the worst budget deficit of any major country in the world.
Ok, this is a lot lower than Iceland, Ukraine, Hungary, and other clients of the IMF, but is significantly higher than Germany (35), USA (43), and France (49).

Quick Overview

  • Helicopter Ben is working hard. The Fed threw a massive $800 billion life-line to consumers with two new programs aimed at making it easier for them to obtain loans for homes, cars and on credit cards.

  • U.S. GDP shrunk at an annual rate of -0.5% in the third quarter, down from the previous estimate of -0.3%.

  • The U.S. GDP price index rose 2.7%.

  • YoY U.S. Corporate profits fell 9.0%.

  • The Conference Board's consumer confidence index rose from 38.8 to 44.9 in November,

  • YoY S&P/Case-Shiller national index fell 17% in September.

  • The World Bank predicted real GDP in China will be up 7.5% in 2009,

  • Canada’s retail sales rose 1.1% in September.

  • BHP Billiton scrapped its hostile bid for Rio Tinto because of slumping commodity prices.

Monday, November 24, 2008

Quick Overview

  • The U.S. Government agreed to stabilize Citigroup by guaranteeing $306 billion in troublesome assets. It also gave Citi $20 billion in exchange for preferred stock.

  • The National Association of Realtors said Home resale’s fell to a 4.98 million annual rate, a 3.1% decrease from September's revised figure.
    The median-sales price declined to $183,300.

  • Industrial new orders in the Euro area fell 3.9% in September. YoY orders fell 1.1%.

  • Consumer confidence in Canada dropped further in November to a fresh 26-year low, the Conference Board of Canada said.

  • Hungarian central bank cut its base rate by 50 bps to 11%

  • The USDA said there were 10.97 million head of cattle on feed as of November 1st, down 6.8% YoY.

  • The USDA said frozen pork supplies at the end of October were up 4% YoY

  • The terminal operator of China's Cosco Group, said throughput increased 14.1 % in October, but fell 8.5 % at its Cosco-HIT facility in Hong Kong.

  • In the latest issue of The New Yorker magazine, Bernanke has recognized he was wrong to believe there would be limited fallout to financial markets from the US housing market's collapse.

Sunday, November 23, 2008

Recession’s Grip Forces U.S. to Flood World With More Dollars
Investors, shell-shocked by the turmoil, are piling into super-safe Treasury securities, even as the U.S. government ships more supply out the door. Three-month bill rates dropped last week to 0.01 percent, the lowest since at least January 1940, and yields on Treasuries maturing in two through 30 years all fell to the least since the government began regular sales of the securities.

Saturday, November 22, 2008


Geithner could slow bank-stock assault
But even analysts who have long been skeptical of Citi says its recent trading price understates the firm's true worth. "We believe that there is fundamental value at Citigroup that justifies a $9 price target," Deutsche Bank analyst Mike Mayo wrote Friday

Friday, November 21, 2008

Quick Overview

  • Asian markets defied the big U.S. slump overnight and ended higher. Japan's Nikkei rose 2.7%, South Korea's Kospi rose 5.8%.

  • Japan kept the interest rate at 0.30%
    Japan's Finance Minister said he may consider intervention to bring the yen down from "undesirable" levels.

  • Manufacturing and services index in the Euro area dropped from 43.6 to 39.7

  • YoY Canada’s consumer prices rose 2.6%

  • Consumer spending in France fell 0.4% in October.

  • The World Gold Council said world gold demand was 1,133 tons in the third quarter of 2008, up 18% YoY.

  • The International Copper Study Group said that world copper production exceeded use by 125,000 tons in August.

Thursday, November 20, 2008


Markets wary of Irish debt as fresh rescue looms
This is a disturbing pattern across Europe as the global credit crisis drags on, with extreme cases in Iceland, Ukraine, Russia, Hungary and Latvia. There are fears that investors could start to shun sovereign debt in Western states where banks have outgrown the underlying economy.

Quick Overview

  • Citigroup began weighing the possibility of auctioning off pieces of the company or even selling itself outright. Shares fell a further 26%.

  • U.S. Jobless claims rose 27,000 last week to 542,000, the most in 16 years. The Senate is voting today on extending unemployment benefits by at least seven weeks. Bush is for it.

  • The Philadelphia Feds regional index of manufacturing dropped from -37.5 to -39.3 in November,

  • The Conference Board's index of leading indicators fell 0.8% in October.

  • U.K. retail sales fell 0.1% in October.

  • Canada’s wholesale trade rose 1.5% in September

  • Fifteen CEOs of large home-building and financial-services firms each earned more than $100 million during the past five years.

Wednesday, November 19, 2008


Bank fears over home loan aid Under the plans, which could be a model for other efforts, homeowners are eligible for help if they are behind on payments for 90 days and pay more than 38 per cent of their income on mortgage payments.

Quick Overview

  • U.S. housing starts were at an annual rate of 791,000 in October, down 4.5% MoM, and down 31% YoY.

  • Canada’s index of leading indicators fell 0.4% in October

  • Construction output in the Euro area fell 1.3% in September.

  • The U.S. Department of Energy said:
    Supplies of crude oil rose 1.6 million barrels last week to 313.5 million barrels.
    Supplies of gasoline rose 500,000 barrels
    Supplies of heating oil supplies were up 400,000 barrels
    Refinery use rose from 84.6% to 84.9%
    Gasoline demand fell 2.2% YoY.
    Distillate demand fell 3.3% YoY.

  • The USDA said that world ending stocks of sugar will be 24% in 2008-2009

Tuesday, November 18, 2008

Quick Overview

  • U.S. producer price index fell 2.8% in October, the biggest monthly decline on record.

  • U.K. consumer prices rose 4.5% in October.

  • Asia's two largest economies offered financial aid to needy nations: Japan promised $100 billion in loans to the IMF; China offered Pakistan a $500 million aid package.

  • YoY the median price of a U.S. home fell 9%, the Chicago- based National Association of Realtors said today.

Monday, November 17, 2008


When It's a Clear Day and You Can't See GM
Generally, when countries acquire more debt than they can service, they inflate away the debt. If foreign creditors do not save the Obama administration, the Treasury will print bonds and give them to the Federal Reserve, which will issue money.

Japan's `Least Ugly' Economy May Beat U.S., Europe in Crisis
Even after a 10 percent drop in wages since 1997, Japan's households still managed to save about 3 percent of their incomes last year, according to OECD figures. In the U.S., where falling sales sent electronics-retailer Circuit City Stores Inc. into bankruptcy this month, the savings rate is 0.4 percent.

Quick Overview

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

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

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

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

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

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

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

Saturday, November 15, 2008


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

Friday, November 14, 2008

Quick Overview

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

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

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

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

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

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