Apocalypse Nigh? The essentials of the long-term crisis are simple. For a generation now, the only essential plank for any Republican candidate is a pledge not to raise taxes and to roll back even the modest sums that the rich and corporations are supposed to send to the US Treasury each year. The second plank is an equally vehement pledge, proclaimed by both parties to keep America strong by throwing money at the Pentagon. Right now the total military/security budget is in the vicinity of $1.1-$1.2 trillion, or 70 -75 per cent of the federal budget deficit.

Barack Obama: The Democrats’ Richard Nixon? Here are a few examples of Obama's effective conservatism:
His stimulus bill was half the size that his advisers thought necessary;
He continued Bush’s war and national security policies without change and even retained Bush’s defense secretary;
He put forward a health plan almost identical to those that had been supported by Republicans such as Mitt Romney in the recent past, pointedly rejecting the single-payer option favored by liberals;
He caved to conservative demands that the Bush tax cuts be extended without getting any quid pro quo whatsoever;
And in the past few weeks he has supported deficit reductions that go far beyond those offered by Republicans.

Further evidence can be found in the writings of outspoken liberals such as New York Times columnist Paul Krugman, who has condemned Obama’s conservatism ever since he took office

Quick Overview

• S&P says there's a 50-50 chance of the U.S. credit rating being downgraded.

• Brazil's raised rates, the 5th consecutive increase, from 12.25 to 12.5%

• YoY Japans exports fell 1.6 % in June.

• U.S. homes sales unexpectedly fell 0.8 % in June to a seven-month low.
• Bloomberg: The U.S. Treasury Department is exploring a plan that could help 1 million or more homeowners avoid foreclosure, according to housing market executives.

Quick Overview

• If the US government defaults it would go into default not because it can't pay its bills – like Greece – but because it won't.

• U.S. housing starts in June rose nearly 15%.

• IBM's Q2 revenue rose 12 % to $26.7 billion. That topped $25.4 billion, the average estimate of analysts.

• (FT) As Riyadh increasingly becomes a hungry oil consumer, supply from the world’s biggest producer will ease.

• KO reported earnings of $1.17 for Q2, ahead of estimates -- new high on the move.  
• Romanians recover 64 stolen missile warheads.
• U of I specialists say a state average corn yield in the mid-to-low 150's might be expected this year, compared to last year's 168.7 yield.
• Construction output in the euro zone dropped by 1.1 percent in May
• The IMF urged policy makers to take further actions to contain the sovereign debt crisis in the euro area, warning that a spread to the core euro countries could cause "major global consequence." (Too Obvious)
• I know of tops, double tops, triple tops, but very very few quadruple tops. Probably taken out.
• Chinese leading indicator  rose 0.5 % to 155 in May.

Quick Overview

• In case you missed it --- Obama eliminates Elisabeth Warren as director of the new Consumer Financial Protection Bureau

• U.S. consumer sentiment fell to 63.8 in early July, reaching the lowest level since March of 2009, from 71.5 in June.

• U.S. wholesale prices fall 0.4% in June

• Unica, Brazils cane industry association, lowered its forecast for sugar output from the key centre-south region from an original estimate of 34.6m tonnes to just 32.4m tonnes now – down 3.3 % YoYr and the first drop in Brazilian production in more than five years.

• CME will be delisting frozen pork bellies futures and options” effective Monday 7/17/2011.( Rest in peace PB, you’ll be remembered fondly for some excellent trades over the last 40 years).

• July 2011 Chicago temperatures 13th warmest of past 141 years.

Return of the Gold Standard as world order unravels
Mr Bernanke himself was grilled by Congress this week on the role of gold. Why do people by gold? "As protection against of what we call tail risks: really, really bad outcomes," he replied.

Quick Overview

• The Labor Department said that the advance figure for seasonally adjusted initial claims for jobless benefits was 405,000 in the week ending July 9, a decrease of 22,000 from the prior week.

• As heat wave looms this month, 39% of projected U.S. corn production has received less than an inch of rain.
• Arlan Suderman: High overnight lows contributed greatly to 2010 low corn yields; If 4casts verify, 2011 will set record high July lows in Des Moines

• (MarketWatch) -- The U.S. dollar got a slight boost on Thursday after Federal Reserve Chairman Ben Bernanke rejected the possibility of immediate action by the central bank to revive the economy.

• Paul Volcker dismissed the possibility of a return to the gold standard, saying that, among other things, "I don't think there's enough gold in the world."

• (Spiegel) Germans want to end nuclear power and turn to renewable energy, but they keep buying SUVs. Global carbon emissions and oil consumption have risen sharply over the last two environmentally conscious decades -- and the trends will continue, as long as Westerners keep discovering new "needs."

• The end of Belarusian dictator Alexander Lukashenko's era appears to be approaching, as thousands take to the streets in Minsk to protest against the country's economic crisis.

• Indian inflation rose to 9.44 % in June.

• Chinas fiscal revenue rose 31.2% YoY to 5.69 trillion yuan (875.5 billion U.S. dollars) in the first half of this year.

• U.S. PPI shows  wholesale prices down 0.4% in June

• Central banks have bought more gold in the first half of this year than in all of 2010 as a long-anticipated reversal in so-called "official sector" sales gathers pace, the World Gold Council said.

• Brazil's National Institute for Space Research  (INPE) released satellite images indicating that Amazon deforestation increased from 103 km² in March and April 2010 to 593 km² in the same period of 2011, a sixfold increase from a year ago.

• S&P warns of downgrade if no debt deal reached

• Google profits rose 36%

Quick Overview

• Christine Lagarde, the IMF's new boss, announced that "nothing should be taken for granted on Greece”. (Brilliant I tell you BRILLIANT)

• The Bank of Japan maintained its interest-rate, as widely expected, and is more upbeat in its overall economic assessment.
• YoY Japan's wholesale prices rose 2.5% in June
• Japanese consumer confidence improved for a second straight month in June. The index of sentiment among households made up of two or more people, rose to 35.3 in June, from 34.2 in May

• Today’s USDA report shows new crop stocks to use for corn at only 6.4%...second lowest in history.

• (Spiegel) The European Commission, estimates that 75 percent of fish stocks in the region are overexploited, and that 30 to 40 percent of Europe's fishing fleet of 80,000 registered vessels will be financially unsustainable in the longer term. The EU has the world's third-largest fisheries sector after Peru and China.

• Russian Prime Minister Vladimir Putin criticized the U.S. monetary policy on Monday, calling it "hooliganism".  (He should know!)

• Chinas FX reserves rose $197bn in Q1, and rose another $153bn in Q2

•  Moody's cuts Ireland's rating to junk

• Heat is expanding out of the South into the Midwest and Northeast

• Temperatures in eastern Japan, including Tokyo, were 3.8 degrees higher than the 30-year average in the last 10 days of June.

• (FT) Its latest 10-K statement showed that although the corporate tax rate in the US is 35 per cent, News Corp’s effective tax rate last year was 20 per cent. The company earned $2.5bn in profits and still managed to receive a tax benefit.

• Rice new high this evening!

• YoY China's crude oil imports fell 11.5 % in June to a eight-month low of 19.70 million tons, or 4.82 million barrels a day (bpd), the latest government data showed.
  
  

Quick Overview

• The US added just 18,000 jobs in June -- unemployment rose to 9.2%

• House passed $649 billion defense bill, boosts Pentagon spending by $17 billion.

• Canada’s jobless rate held steady at 7.4%.

• (FT) Central banks have pulled 635 tonnes of gold from the Bank for International Settlements in the past year, the largest withdrawal in more than a decade.

• Global Rubber consumption (Includes both natural and synthetic rubber) is likely to hit 25.7 million tons this year, according to International Rubber Study Group (IRSG).
• In its World Rubber Industry Outlook, ISRG said natural rubber consumption alone will hit 11.2 million tons in 2011, tracking last year’s rapid recovery and growth.

• Parts of the Midwest appear to be getting a bit too hot and dry for  corn pollination.

Who owns what? China's murky ownership rules highlight the perils of investing where the law is unclear There are signs, however, that the Chinese government has begun to frown on VIEs.

Quick Overview

• A heat dome appears in the forecast 10 days out – supporting corn/beans

• ECB raises interest rates to 1.5%.

• US private sector jobs rose by 157,000.

• Pork prices are at a seven year high in China and are probably stimulating expansion -- need for soy meal and corn?

• Australia's jobless rate remains at 4.9 % in June for a second month in a row

• A unit of Goldman Sachs took the biggest, $15 billion, single loan from a Federal Reserve lending program whose details have been secret until now.

• (Bloomberg) Lehman Brothers Holdings Inc. (LEHMQ)’s brokerage borrowed as much as $18 billion in four separate loans from a previously secret program of the U.S. Federal Reserve in June 2008, three months before its parent filed the biggest bankruptcy in U.S. history.

• Source: IT world — Jun 28, 2011
• Once upon a time, the United States led the world in science, inventions, research and development, and technology. Here’s how the U.S. went from world leader to world loser, according to IT World writer Carla Schroder:
• Patents: When you can’t innovate, litigate. Software patents are a drag on progress.
• Education: The U.S. ranks 14th out of 34 OECD countries for reading skills, 17th for science, and a below-average 25th for mathematics.
• Obesity: The U.S. holds the world title for most obesity, at 30.6% of the population.
• Sad “Green” Technology Policies: Our elected persons are doing a fine job at blocking any sort of actual forward movement in modern green tech, and the rest of the world is cleaning our clocks.
• Investing in Prisons, Domestic Spying, and Bombs: The U.S. has the highest percentage of citizens in prison of any country on the planet.
• However, the U.S. can compete by increasing R&D funding by private industry and by taking more effective advantage of the Internet for access to information, easy sharing, easy distribution, and distributed projects, she suggests.
  
  
• The World Trade Organization ruled that China's curbs on exports of raw materials are illegal, upholding a complaint lodged by the United States, the European Union and Mexico.

Please note the new update schedule

Quick Overview

• The Koch brothers corporate facade group Americans for Prosperity (AFP) filed a lawsuit in New York’s State Supreme Court seeking to reverse a core piece of state action on climate change.

• I think the USDA will be caught with their pants down on old crop corn stocks later this summer.

• NASDAQ reports that YoY Macao gambling revenue rose 52% in June

• (Economist) TEPCO’s liabilities range between Yen 4 trillion and Yen 25 trillion. The firm also owes 7.8 trillion Yen to bondholder and banks. If TEPCO goes bankrupt, banks and bondholders take precedence over those affect by the disaster.

• London’s first gold dispensing ATM was installed last week.

• (NYT) The median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009.

• Brazil may import 204 mi gallons of ethanol this year, vs 120 last year.

• (Spiegel) With the reintroduction of border controls, the Danes are calling into question one of the EU's greatest achievements. Unfortunately, there has been little protest in Brussels and other European capitals. There is growing fatigue regarding European integration -- and that is a bitterly disappointing trend.

• UN's World Economic and Social Survey, says global food production need to jump by 70-100% by 2050 to feed an anticipated 9 billion people.

• Moody's has cut Portugal's credit rating by four notches to Ba2.

Next Update 7/5

Quick Overview

• The total cost of wars in Iraq, Afghanistan and Pakistan to the U.S. Treasury will run at least $3.7 trillion and could reach as high as $4.4 trillion, according to the research project "Costs of War" by Brown University's Watson Institute for International Studies.

• U.S Pending home sales rose 8.2% in May.
• U.S. mortgage applications decreased 2.7% in the week ending June 24, 2011.

• Greek parliament votes in favor of fresh sweeping austerity measures.

• MoM industrial production in Japan rose 5.7 % in May.

• Chinas pork prices kept their bull run in the week ended June 26 with an increase of 4.5% WoW

• (MarketWatch)The DOE reported a decline of 4.4 million barrels in crude inventories for the week ended June 24. Analysts polled by Platts had expected a decline around 1.7 million barrels. The EIA reported gasoline stocks down 1.4 million barrels, against expectations of an increase of 700,000 barrels. Supplies of distillates, which include heating oil and diesel, increased 300,000 barrels, the EIA said. The analysts surveyed had seen an addition of 1.8 million barrels.

• Imports of nickel ores and concentrate by China climbed to a record in May as nickel pig iron producers ramped up output to meet demand from stainless steel makers.

• China exported 175,400 tonnes of stainless steel flat products, up by 21.7% MoM.

• Chinese premier Wen Jiabao pledged China's support for the embattled euro, saying that China will buy Hungarian government bonds and "consistently" support the euro as Europe attempts to fight its way out of a sovereign debt crisis, reported London's Daily Telegraph.

• The economic sentiment indicator for the EU 17 fell by 0.4 points to 105.1.

• The New Jersey Senate voted 33-1 today to ban hydraulic fracturing (fracking), in a move to protect the Delaware River from potential contamination from the risky unconventional gas drilling practice. The Delaware River supplies drinking water for 15 million people in four states. 

• (Barrons 6/29/2011) China has 446 million hogs—more than the next 43 pork-producing countries combined—and consumes 50% of the world's pork supply each year.

Next Update Wednesday

Next Update Sunday 26

PIMCO Founder To Deficit-Obsessed Congress: Get Back To Reality In a prospectus for clients, Bill Gross, a co-founder of investment management giant PIMCO, says members' of Congress incessant focus on deficit -- and in particular, the manner in which they obsess about deficits -- is foolhardy, and a recipe for disaster. What the country needs, Gross said, is real stimulus now, and a measured return toward fiscal balance in the years ahead.

Quick Overview

• Bank JPMorgan charged with misleading investors in mortgage-related security, settles SEC charges for $153m

• U.S Existing Home Sales fell by 3.8% in May, at an annual pace of 4.81 million, down 15.3% from last year’s mark of 5.68 million by the same point in the year.
• The National Average Commitment Rate to a 30 year fixed rate was 4.64%
• The national median home price was $166,500, down over 4.6% YoY
• Total housing inventory at the end of May fell 1% to 3.72 million existing homes for sale
• Distressed homes accounted for 31% of all sales in the month of May, a 6% drop off from last month, and sold at an average of 20% below the median price.

• Corn / Beans turnaround Tuesday is linked to hot and dry US Midwest forecast late next week & uncertainty over what USDA will say June 30 about US 2011 acres.

• (FT) Greek citizens are emptying savings accounts and buying gold.

• Swift Beef Co. agreed to pay a $1.3 million fine to settle allegations the company violated the federal Clean Water Act by dumping pollutants into rivers near its Grand Island, Neb., processing plant.
  
  
• A continuing probe by the Associated Press finds tritium (a radioactive form of hydrogen) has leaked from nearly three-quarters of U.S. nuclear power facilities, including two in New Jersey.

No update today