Monday, December 22, 2008

Friday, December 19, 2008

Quick Overview

  • Bush threw auto makers a $13.4 billion lifeline from the U.S. bank-bailout program.

  • YoY Canada’s consumer prices rose 2.0% in November.

Thursday, December 18, 2008


London Banker: “The market has failed, and officialdom is perpetuating that failure
The problem isn’t just money either, but how quickly the money is turned over.

Consumers Get Important New Credit Card Protections While praising the new protections, Consumers Union criticized the 18 month delay before consumers finally get relief.

Quick Overview

  • U.S. jobless claims were down 21,000 to 554,000 last week

  • The Philadelphia Federal Reserve's index of manufacturing improved from -39.3 to -32.9

  • U.S. leading indicators fell 0.4% in November

  • U.K. retail sales rose 0.3% MoM and 1.5% YoY

  • (Bloomberg) -- The Bank of Japan cut its benchmark interest rate to 0.1 percent and introduced new ways of pumping money into the banking system to bolster the ailing economy.

  • German business confidence (IFO) fell to its lowest level ever in December amid concerns of a prolonged recession.

  • Canada’s retail sales fell 0.9% in October.
    Canada’s leading indicators fell 0.7% in November.

  • (Bloomberg) -- General Electric Co.’s debt ratings outlook and those of its GE Capital finance arm were changed to negative from stable by Standard & Poor’s, reflecting concern earnings could deteriorate further than previously thought.

  • Bush is looking at "orderly" bankruptcy as a way to deal with the U.S. auto industry.

Wednesday, December 17, 2008


South African central bank gold sales dry up .. Demby also pointed out that demand for gold coins and bullion now exceeded supply by a huge margin as investors were seeking a safe haven from the prospective fallout in the wake of mammoth money supply creation by the United States government.

Quick Overview

  • U.K. unemployment rate was 6.0, up from 5.8% MoM.

  • Construction output in the Euro area rose 0.1% in October, but down 4.0 YoY
  • YoY Consumer prices in the Euro area rose 2.1%

  • Canada wholesale sales fell 1.8% in October

  • Norway cut its interest rate from 4.75% to 3.00%

  • OPEC will be cutting oil production by 2.2 million barrels a day as of January 1.

  • The U.S. Department of Energy said:
    Supplies of crude oil rose 500,000 barrels to 321.3 million barrels.
    Supplies of gasoline rose 1.3 million barrels
    Supplies of heating oil supplies rose 600,000 barrels.
    Refinery use dropped from 87.4% to 84.1% of capacity
    Gasoline demand fell 2.7%
    Distillate demand fell 4.5%.

  • Russia's central bank allowed the ruble to slide for the second time this week, speeding up the gradual depreciation policy

  • French antitrust authorities ruled that Apple must allow other operators other than France Telecom to sell its iPhone, saying the exclusive deal was unfair for competition.

  • Morgan Stanley reported a wider-than-expected $2.2 billion quarterly loss.

Tuesday, December 16, 2008

Quick Overview


  • The Fed cut the fed funds rate from 1.00% to .125%, and signaled they will keep rates "exceptionally low" for some time amid rapidly waning price pressures.

  • U.S. housing starts were at a record (since 1959) low annual rate of 625,000 in November, down 18.9% MoM.
    Building permits fell 15.6% MoM.

  • The U.S. consumer price index fell 1.7% in November rose 1.1% YoY

  • YoY U.K. consumer prices rose 4.1% in November

  • Manufacturing and services index in the Euro area fell from 38.9 to 38.3

  • China’s November steel output fell by 12.4% YoY

Monday, December 15, 2008

Bush Shoe Tosser Signed By The Seattle Mariners SEATTLE, Washington - The Seattle Mariners who in 2008, had the worst record in the American League (61-101) have just signed Muntazer al-Zaidi to a three year, $3 million pitching contract.

Our Updated Take on Gold Prices
The last era of any significant period of deflation was in the 1930s. Although gold was fixed for a long time at $20.67 per ounce, in 1934 a massive devaluation of the U.S. dollar saw its fixed price jump to $35 per ounce. During this period of entrenched deflation, and in spite of the fixed price of the metal, gold proxies saw a dramatic rise in price. The NYSE-listed shares of Homestake Mining Company rose from about $4 to $500 from 1929 to 1935; the company operated for some 120 years until its flagship Homestake mine in Lead, S.D., ran out of economic reserves a few years ago and the company ceased to exist.

Quick Overview

  • U.S. industrial production fell 0.6% in November and 5.5% YoY

  • Japan's Tankan fell from -3 to -24

  • China's industrial output rose 5.4% YoY
    China’s November iron ore imports rose 6% MoM

  • The Supreme Court ruled that cigarette companies can be sued by smokers who claim they were deceived by advertisements promoting “light” cigarettes.
Madoff and the Global Economy
The big unanswered question, for years, was why this money flow persisted. Why the heck were foreign investors willing to lend the U.S. such large amounts of money on such good terms? Economists and journalists spun out hypothesis after hypothesis (we'll see more below), but there was no agreement on why.
At Last, A Date
Around 2020. That casts the issue in quite a different light. Mr Birol’s date, if correct, gives us about 11 years to prepare. If the Hirsch report is right, we have already missed the boat. Birol says we need a “global energy revolution” to avoid an oil crunch, including (disastrously for the environment) a massive global drive to exploit unconventional oils, such as the Canadian tar sands. But nothing on this scale has yet happened, and Hirsch suggests that even if it began today, the necessary investments and infrastructure changes could not be made in time. Fatih Birol told me “I think time is not on our side here.”

Shipping charter rates soar One of the world’s key shipping markets has begun to recover from a slump, with a revival in Chinese demand for iron ore and coal pushing some average charter prices up almost threefold in the past week.

Saturday, December 13, 2008

Fear triggers gold shortage, drives US treasury yields below zero
The investor search for a safe places to store wealth as the financial crisis shakes faith in the system has caused extraordinary moves in global markets over recent days, driving the yield on 3-month US Treasuries below zero and causing a rush for physical holdings of gold

Friday, December 12, 2008


Capitalist Fools by Prof. Joseph E. Stiglitz
Behind the debate over remaking U.S. financial policy will be a debate over who’s to blame. It’s crucial to get the history right, writes a Nobel-laureate economist, identifying five key mistakes—under Reagan, Clinton, and Bush II—and one national delusion.

Quick Overview

  • U.S. retail sales fell 1.8% in November

  • U.S. producer price index fell 2.2% in November and up 0.4% YoY

  • The University of Michigan's index of consumer sentiment rose from 55.3 to 59.1

  • Industrial output in the Euro area fell 1.2% in October and 5.3% YoY

  • The EU will spend 200 billion Euros, 1.5% of GDP, to help the economy.

  • Japan will spend 23 trillion yen ($255 billion) to help the economy.

  • Bush dropped his opposition to using the $700 billion bank bailout to provide help for U.S. automakers.

Thursday, December 11, 2008

Quick Overview

  • (Bloomberg) -- Senate negotiations for a U.S. automaker bailout plan collapsed, in a blow to General Motors Corp. and Chrysler LLC, which may run out of cash early next year.
    “It’s over with,” Majority Leader Harry Reid said.

  • U.S. jobless claims rose 58,000 last week to 573,000, the most in 26 years.

  • The U.S. trade deficit widened in October 1.1 % to $57.2 billion from a revised $56.6 billion in September

  • Switzerland lowered its interest rate target from 1.00% to .50%.

  • Korea reduced its interest rate from 4.0% to a record low 3.0%

  • Australia's unemployment rate increased from 4.3% to 4.4%

  • The USDA's 2008-2009 U.S. ending stocks estimate for:
    Corn was raised from 1.124 to 1.474 million bushels, more than expected.
    Soybeans unchanged at 205 million bushels.
    Wheat was raised from 603 to 623 million bushels.
    Sugar was raised from 907,000 to 961,000 tons.
    Cotton was raised from 6.2 to 7.1 million bales.

  • The USDA's 2008-2009 world ending stocks estimate for:
    Corn was raised from 110 to 124 million tons.
    Soybeans unchanged at 54 million tons.
    Wheat was raised from 145 to 147 million tons.
    Cotton was raised from 57 to 59 million tons.

  • USDA lowered its estimate of the 2008-2009 Florida orange juice crop from 166 to 165 million boxes. The projected juice yield was also reduced, from 1.59 to 1.58 gallons per box.

  • India said war is no solution to stop Pakistan based militants from launching anti-India attacks.

Foreclosure Storm Will Hit U.S. in 2009 as Loan Changes Fail
Rising unemployment, expiring foreclosure moratoriums and state efforts that “run out of steam” will push monthly filings toward the record of more than 303,000 set in August, Sharga said. The number of homes that revert to lenders, the last stage of foreclosure and known as “real estate owned” or REO properties, will increase to 1 million from as many as 880,000 this year, he said.

Wednesday, December 10, 2008


Commodity crash tests faith in supercycle
There is no such thing as consensus in the commodity world, but most experts still think that the economic arrival of two billion people in Asia is a "game-changer" that will underpin prices for years to come..