Quick Overview

• (NYT) Broad areas around the stricken Fukushima Daiichi nuclear plant could soon be declared uninhabitable, perhaps for decades, after a government survey found radioactive contamination that far exceeded safe levels, several major media outlets said Monday.

• Germany now has more renewable energy installed than the USA.

• July U.S. single-family housing starts fell 4.9%; Building permits fell 3.2% in July.

• July U.S. industrial output rose 0.9%, in line with expectations and the biggest gain this year.

• The Conference Board reported that the index of leading economic indicators increased by 0.5% in July, suggesting modest growth ahead.

• The Department of Labor reported that first time claims for unemployment benefits rose by 9,000 to 408,000 in the week ending August 13.

• The Philadelphia Fed region reported this morning that industrial activity weakened sharply this month. The bank's index is reported at a negative 30.7, down from 3.2 in July and the lowest since March 2009.

• The U.S. CPI rose 0.5% in July, increasing inflation concerns once again.

• The Euro-area expanded by only 0.2% according to first estimates.

• YoY India’s industrial output rose by 8.8%.

• A few of Observations:
  
  U.S. Rail Traffic continues strong.
  
  Steel and Iron Ore prices are strong.
  
  Libor and Fed Funds Spread is showing signs of life.
  
  Coal continues strong
  
  Baltic Dry Index producing a P&F buy signal.
  
  M2 is growing at 10% +
  
  M1 growing at 20% +, fastest since 1975
  
  Money Multiplier still below 1 at 0.78
  
  
  
  
  
  

Next Update Sunday 8/21

Don’t look down
The poor like taxing the rich less than you would think One paradoxical consequence of this “last-place aversion” is that some poor people may be vociferously opposed to the kinds of policies that would actually raise their own income a bit but that might also push those who are poorer than them into comparable or higher positions.
..In keeping with the notion of “last-place aversion”, the people who were a spot away from the bottom were the most likely to give the money to the person above them: rewarding the “rich” but ensuring that someone remained poorer than themselves

Quick Overview

• (Bloomberg) Insiders buying stocks are at the Highest Rate since 2009.

• The USDA projected 2011 U.S. soybean yields at 41.4 bushels per acre, 2 bushels below last month's yield projection. The first survey-based forecast of U.S. soybean production is 3.056 billion bushels, 169 million below the July projection, and 273 million below last year's crop.

• The USDA's Corn yield projection of 153 bushels per acre was down sharply from a July estimate of 158.7. The USDA estimates new-crop ending stocks at 714 million bushels, or a 19.8 day supply.

• First time claims for U.S. unemployment benefits fell by 7,000 in the week ending August 6 to 395,000.

• European regulator announces bans on short selling in France, Italy, Spain and Belgium

Richard Koo: The Ratings Agencies May Destroy The Global Economy Once Again  These experiences demonstrate that during a balance sheet recession, when businesses and households are struggling to deleverage, the correct policy—fiscal stimulus—is exactly the opposite of what is needed under normal circumstances. Active application of stimulus will ultimately minimize the fiscal deficit.
Standard & Poor’s does not understand this and says America’s AAA* rating may be restored if the government succeeds in trimming its deficit by $4trn. The adoption of such a policy by the US government today would plunge the economy into another Great Depression.

Quick Overview

• Stiglitz: "We don't know the kinds of exposures to say European [credit default swaps] American banks have," he says. There are rumors that as much as 50% of European sovereign bonds are insured thru CDS by American banks, he notes. "But we don't really know." As was the case in 2008, the lack of knowledge of what's on bank balance sheets poses the risk of banks refusing to lend to other banks, Stiglitz says. "If one of these countries has a real difficulty [interbank lending] markets will freeze up."

• Süddeutsche Zeitung writes: The prospects of these youth in London are as dismal as those of young people in Cairo or Sana'a: They need unemployment benefits, odd jobs, state handouts and perhaps a bit of petty crime to stay afloat. The message to the British underclass couldn't be any clearer: Born poor, you will remain poor and that naturally also applies to your children and grandchildren. Your chances of winning the lottery are greater than breaking out of your class."

• Violence erupted on the streets of Chile's capital and other cities as tens of thousands of students staged another protest demanding changes in public education.Masked demonstrators burned cars and barricades, looted storefronts...

• Australia's consumer confidence fell in August to 89.6, its lowest level since May 2009.

• (Reuters) - Investors pulled the most money out of U.S. mutual funds in the week ended August 3 since the depths of the stock market collapse in March 2009, with net redemptions of $16.9 billion, data from the Investment Company Institute showed on Wednesday.
  
  
  
  
  

Quick Overview

• The Fed promised to keep interest rates near zero for at least two more years and said it would consider further steps to help growth, sparking a rebound in stocks. DJ down 635 yesterday - up 430 today. For once, the worn-out expression about roller coaster stock markets was apt.

• (Bloomberg) China may join Asian nations from South Korea to India in delaying interest-rate increases after the nation’s leaders urged global cooperation to stabilize financial markets.

• World crude oil and liquid fuels consumption will grow by 1.4 million barrels per day in 2011 and by 1.6 million barrels per day in 2012, outpacing average global demand growth of 1.3 million barrels per day from 1998-2007, the U. S. Energy Information Administration (EIA) said.

• Japans consumer confidence rose to 37.0 in July from 35.3 in June.

• Republicans’ No-Tax Stand Unsupported by History or Facts: View

634.76 -- the sixth-worst point decline for the Dow in 112 years

We face recession without shock absorbers as Berlin loses patience with the eurozone

SP should have acted six years ago when the rot was setting in. To do so now is fatuous.

Gwynne Dyer: Food crisis looms as a result of cutbacks in irrigation A lot of those aquifers are “fossil”, meaning that they filled with water long ago and are now cut off from the surface. They will eventually be pumped dry. Others still recharge from surface water that filters down, but they are almost all being pumped at many times their recharge rate, so they will effectively go dry, too. Then the world will have to make do with the one-third of irrigated land that gets its water from the weather. It won’t be enough.
Obviously, the aquifers won’t all go dry at once. Some are bigger than others, and some have been pumped much longer or more heavily than others. But most of them are going to go dry at some point or other in the next 30 years.

Quick Overview

• The subprime and "A" rating for Lehman  expert S&P downgrades US debt to AA+, late on Friday.

• The U.S. unemployment rate edged down to 9.1 percent in July from 9.2% in June. The total number of unemployed stood at 13.9 million. The number of long-term unemployed who have been jobless for at least 27 weeks stood at 6.2 million, accounting for 44.4% of the total unemployed.

• (Bloomberg) China’s annual corn imports may grow to more than 10 million metric tons in five years as the increase in demand outpaces expansion in output, a researcher at South China Grain Trade Center said.

• U.S. Consumer credit grew 7.7% in June.

Quick Overview

• Powerful typhoon Muifa likely to land in east China over the weekend creating -- damage to corn and soy?

• The Fox, Tea, Republican generated sell-off in Wall Street accelerated on Thursday, with the blue-chip Dow plunging more than 500 points, as investors rushed out of equities.
• IT's Dow Theory prediction is now bearish

• The number of U.S. people initially applying for unemployment aid last week declined to 400,000 in the week ending July 30, a decrease of 1,000 from the previous week's. THE BIG Employment NUMBER IN THE MORNING.

The Wrong Worries
But the policy disaster of the past two years wasn’t just the result of G.O.P. obstructionism, which wouldn’t have been so effective if the policy elite — including at least some senior figures in the Obama administration — hadn’t agreed that deficit reduction, not job creation, should be our main priority. Nor should we let Ben Bernanke and his colleagues off the hook: The Fed has by no means done all it could, partly because it was more concerned with hypothetical inflation than with real unemployment, partly because it let itself be intimidated by the Ron Paul types.

Quick Overview

• Arctic sea ice is melting at a near- record pace, opening shipping lanes for cargo traffic between Europe and Asia, Russia’s environmental agency said.

• TEA Republicans have erased $1.07 trillion from American equities in less than two weeks. They are good at this – and hard at work on more.

• U.S. factory orders dropped 0.8% in June.

• The number of planned layoffs at U.S. firms rose to a 16-month high in July

US: Obstacles to progress
Indeed, the US spends only 2.4 per cent of gross domestic product on infrastructure – less than half the average of 5 per cent that prevails in European countries – and half the level of 1960

Quick Overview

• (FT) Investors should remember that national accounts must sum to zero. Falling rich world public deficits lead to lower corporate profits, all else being equal. Something Mr. Market seems to know!!

• Chinas Purchasing Managers’ Index rose from 50.7 in July to 50.9 in June – better than expected.

• (Reuters) - Macau, the world's largest gambling market, blew past expectations to post a 48.4 percent rise in July gambling revenue, underscoring unflagging demand from China's newly minted millionaires and burgeoning middle class.

• WXRISK (the weather site) has a category 4-5 hurricane potentially hitting east central China (Corn / Soy)
  
  
• U.S. personal income rose 0.1% in June, while spending fell 0.2% -- on no confidence.

• The U.S. ISM’s factory index fell to 50.9 last month from 55.3 in June.

• The PPI remained stable in the EU 17 in June, rising by 0.1%

• YoY Japan's monetary base rose 15.0 % in July.

• Brazil’s trade surplus rose 74.4% YoY.

• South Korea said it will expand the zero- tariff quota for refrigerated pork imports without limit by the end of September. Previously, 130,000 tons of fresh and frozen pork were subject to zero-tariff imports.
  
  
• US corn futures climb the one-day 30c limit on increasing concerns about hot weather reducing output.
• The Institute of Energy Economics for Japan (IEEJ) reported that alternative energy imports (Coal  ?) would rise significantly if local authorities kept reactors shut after routine maintenance due to safety concerns after Fukushima.
• The 10 sieverts of radiation detected on Aug. 1 outside reactor buildings was the highest the Geiger counters used were capable of reading, indicating the level could have been higher!

How the Billionaires Broke the System
There are two ways of cutting a deficit: raising taxes or reducing spending. Raising taxes means taking money from the rich. Cutting spending means taking money from the poor. Not in all cases of course: some taxation is regressive; some state spending takes money from ordinary citizens and gives it to banks, arms companies, oil barons and farmers. But in most cases the state transfers wealth from rich to poor, while tax cuts shift it from poor to rich.

Quick Overview

• The U.S. Treasury will give priority to making interest payments to holders of government bonds if the clowns don’t reach an agreement.
• The House canceled a Thursday night vote on Boehner's debt plan.
• U.S. first time claims for unemployment benefits dropped below 400,000. Claims fell 24,000 during the week to 398,000.
• U.S. home sales rose 2.4% in June.

• The economic sentiment indicator (ESI) for the EU 17 fell by 2.2 points to 103.2

• Bloomberg: “I want to get away from this situation where I’m not even allowed to alert children about radiation exposure,” said Shishido, a 48-year-old Japanese teacher.

• China announced this week that it is considering a 4 point reduction in its 13% Value Added Tax

• Japan's jobless rate out at 4.6%, up from May’s 4.5%.
• YoY Japan’s consumer price index rose 0.4 % in June

• (MarketWatch) -- Verizon Wireless said late Thrusday its board approved the distribution of $10 billion in dividends to its owners Verizon Communications Inc. and Vodafone Group . The dividend will be paid Jan. 31 in proportion to their ownership stakes. Verizon owns 55% and Vodafone owns 45% in Verizon Wireless.

• (MarketWatch) -- Starbucks, boosted by rising customer visits to its coffee shops, reported late Thursday profit rose to $279 million, or 36 cents a share, up from $208 million, or 27 cents a share, in the year-ago period. Sales totaled $2.9 billion, up from $2.6 billion, as same-store sales increased 8%. Starbucks topped the consensus analyst targets for a profit of 34 cents and same-store sales of 5.4%, according to FactSet. Starbucks also lifted its fiscal 2011 outlook and laid out plans to accelerate new store openings. Starbucks shares, trading near 52-week highs, closed at $39.98 ahead of the report. The stock is up 60% over the last year.

• Global population will reach seven billion this year.

Quick Overview

• It beggars belief that the zombies from the GOP_tea are willing to risk national default for the sake of antitax bs! Eric Cantor, Paul Ryan Mitch McConnell all voted for the chief drivers of the debt during the past decade: Wars in Afghanistan and Iraq, the 2001 and 2003 Bush tax cuts and Medicare prescription drug benefits. They also voted for TARP!! etc.etc……………………………………………………………………………
• The CME is raising collateral required to trade its Treasury futures  as the U.S. debt stupidity promised to intensify market volatility!
• (Reuters) - The United States will lose its top-notch AAA credit rating from at least one major rating agency, according to a Reuters poll that also found wrangling over the debt ceiling has already damaged the economy.
  
  
  

• Sales of U.S. new single-family homes fell 1.0% in June to an annual rate of 312,000. The median sales price rose 5.8% to $235,000 last month from $222,400 in May. At the current sales pace, there was a 6.3 months supply of new homes.

• The S&P/Case-Shiller index of property values in 20 U.S. cities fell 4.5 % YoY

• U.S Consumer confidence rose to 59.5 in July from a downwardly revised 57.6 in June.

• (AP) -- The U.S wealth gaps between whites and minorities have grown to their widest levels in a quarter-century. The recession and uneven recovery have erased decades of minority gains, leaving whites on average with 20 times the net worth of blacks and 18 times that of Hispanics, according to an analysis of new Census data.

• German consumer confidence for August declined to 5.4 from 5.5 in July.

• Cotton appears to be bouncing at long term support.
• For contemplation: HealthSpring, (HS): is up over 160% YoY. The Company serves Medicare recipients with a network of hospitals and physicians.
• More food for thought: WellCare (WCG) is up over 110% YoY. The Company operates health plans in multiple states.
• The price of crystal sugar in Brazil, the world's largest producer, climbed 20% this month as supplies remain limited, according to Cepea.

Quick Overview

• (Bloomberg) “The markets will be under very real pressure at the open because the assumption will be there is really no resolution to this,” Cooper said. “The breakdown in negotiations has crossed the line from the political posturing of the last few weeks to potentially a very real crisis. “The Tea Party is effectively playing Russian roulette with the bond market and they will, with certainty, lose,” Cooper said.

• Kingsman cut by 35m tonnes to 525m tonnes its forecast for cane output in Brazil's Center South.

• Private forecaster has corn yield at 153.5 and beans at 41.3.

• Goldman Sachs said Friday it reduced its estimate of 2011 U.S. corn yield by three bushels to 156 bushels per acre due to soaring temperatures in the Midwest grain belt.