Updates resume July 15

QUICK OVERVIEW

• The net worth of the median U.S. family — one with an equal number of families richer and poorer — fell to $77,300 in 2010 from $126,400 three years earlier (down 40%), after adjusting for inflation, the Federal Reserve said in a new report. (FT) Several US banks want to tap the value of ‘intangible’ assets such as intellectual property held by their borrowers as a way of meeting higher capital requirements.

• The FT reports the unnamed banks “seek deals in which an insurer agrees to buy a borrower’s intellectual property – anything from a mobile phone patent to a logo or recipe – for a fixed price in case of default.” The banks and insurers are haggling over the prices; banks believe they should be lower than that of CDS. However one deal is close to being submitted to the Fed for approval.

• US current account trade deficit grew to $137.3 billion in first quarter, largest since 2008.

• In April, overall foreign holdings of U.S. long-term securities reached 5.16 trillion U.S. dollars, up 21 billion dollars, or 0.4% MoM. It was the fourth consecutive monthly increase.

• Singapore's jobless rate edges up to 2.1% in Q1 The unemployment rate in the Philippines fell to 6.9 % in April

• The Japanese central bank kept key interest rate unchanged at zero to 0.1%

• The Annual inflation in the Eurozone dropped to 2.4% in May, down from 2.6% in the previous month

QUICK OVERVIEW

• With the close on 6/4/12 of Transports at 4847.43, and Industrials at 12101.46, IT’s opinion of Dow Theory is now bearish.

• AIG’s Robert Benmosche: The Europe debt crisis shows that governments worldwide must accept that people will have to work up to ages 70 or 80.

• (FT) Luxury market set to hit $1.5tn: The market for luxury, such as yachts, frocks and safaris, is set to hit $1.5tn this year, roughly matching the entire economic output of Spain or Australia, as the income inequality gap widens across the globe.

• The Commerce Department said that the U.S. trade deficit narrowed 4.9% in April to $50.1 billion.

• Goldman lowered US GDP forecast for 2012 to 1.8% from 2%.

• The EU issued a statement in support of Spain's request for financial assistance for its troubled banks. It added that it expects the loans to total about 100 billion euros ($125 billion).
• Geithner said that Spain's request for a bank rescue and Europe's willingness to prop up the country with as much as $125 billion in aid was welcome actions.
• German Finance Minister Schaeuble said that Spanish banks are not at all a danger for the stability of the euro and added that they will now be getting the capital they need.

• China's economic growth will likely moderate to around 8 % this year amid downward risks caused by the ongoing crisis in Europe, the IMF said.
• YoY China’s CPI slowed to 3.0 percent in May
• China's foreign trade rose 14.1% YoY to 343.58 billion U.S. dollars in May, rebounding from the 2.7% growth registered in April.
• China has cut interest rates by 25 basis points, its strongest move yet to prop up the economy as growth weakens. The benchmark one-year lending rate is now 6.31%, while the one-year deposit rate is 3.25%.

• YoY Japans current account surplus declined 21.2% in April
• Japans index of leading indicator dropped 1.3 points to 95.1

• French unemployment rate rose to 9.6% in Q1

• Australia's unemployment rate rose to 5.1 % in May

QUICK OVERVIEW

• U,S. nonfarm employment # rose just 69,000 in May, the least in a year. The Unemployment # rose to 8.2.
• U.S. pending home resale’s fell 5.5% following a revised 3.8% gain the prior month. YoY the index rose 14.7 %.
• U.S. economic growth slowed to an annualized rate of 1.9% in Q1 of the year. U.S. personal income rose 0.2% in April, after a 0. 4% in March
• U.S. personal consumption expenditures rose 0.3% in April, following a revised increase of 0.2% in March.
• The U.S. savings rate, or personal saving as a percentage of disposable personal income, edged down to 3.4 percent in April, slightly lower than 3.5 percent in March but still well above the 2.1-percent average rate for all of 2007 before the financial crisis.

• The Economist‏: In China, coffee consumption will grow by an average rate of almost 40% a year from 2011 to 2015.
• China's factory activity contracted for a seventh straight month in May, It fell to 48.4 from April's 49.3.
• China's house prices fell to a 16-month low in May.

• Japan and China will begin direct yen- yuan trading on June 1, Japanese Finance Minister Jun Azumi said Tuesday, abandoning the existing system that determines yen-yuan rates via their U.S.dollar values.

• Japan's industrial production rose 0.2 % in April.

• Capital flight from Spain hits record $66bn..
• The IMF is looking at possible plans for a rescue loan to Spain if that country can't find the cash to bail out its third-largest bank – No wait! The IMF says it has not been asked by Spain for a bailout and has not begun preparing one, IMF spokesman Gerry Rice. Spain yields at 6.576, and the 2-year Schatz now has a negative yield.
• Spain's 17 autonomous communities recorded balanced budgets in Q1 of this year New York

• Mayor Michael Bloomberg is set to propose a ban on the sale of some large-size soft drinks in many locations in the city as part of his drive to fight expanding waistlines in the Big Apple.

• The Chancellor should abandon his cast-iron debt reduction targets and inject up to £6bn into the economy to revive the flagging recovery, according to the the British Chambers of Commerce.

• The Philippine economy bounced back from a lackluster performance last year and grew by an unexpected 6.4 % in Q1 of this year.

• Mexico's economy will grow 3.72 percent in 2012, a slight increase from the 3.62 percent estimated in the previous month, results of a survey by the Mexican Central Bank.

• Italy's unemployment rate hit 10.2% in April, its highest level since January 2004.

• Southern Europe's debtor states must pledge their gold reserves and national treasure as collateral under a €2.3 trillion stabilization plan gaining momentum in Germany.

QUICK OVERVIEW

• Radiation from cell phones can possibly cause cancer, according to the World Health Organization. The agency now lists mobile phone use in the same "carcinogenic hazard" category as lead, engine exhaust and chloroform.

• The U.S. consumer sentiment index rose to 79.3, the ninth straight increase, from 76.4 the prior month. 77.8 was expected

• (FT) Unexpected rise in sentiment from France and Germany helps Eurofirst 300 to weekly gain of 1.5% but Spanish markets hit by Bankia share suspension.

• Germany will not "pour money into a bottomless pit" and patience with Greece is growing thin ahead of a new election next month, according to a member of Angela Merkel's cabinet.

• Spanish Bank Bankia will reportedly ask the state for more than €15bn to bail it out when its new management team presents a restructuring plan.
• Barclays says Spain's housing collapse is only half way through. RE prices will have to fall another 20% to clear an overhang of one million excess properties.

• Bluefin tuna that spans off the coast of Japan is found with levels of radioactive cesium 10 times higher than the amount measured in tuna off the California coast in previous years.

• Standard & Poor estimates that companies in Europe, the US and Asia require a combination of refinancing and new money to fund growth over the next four years of between $43 trillion and $46 trillion.

Next Update Sunday

QUICK OVERVIEW

• (Telegraph) Germany's largest industrial union secures biggest pay rise for members in two decades in what is seen as a major breakthrough in dealing with the euro zone’s chronic imbalances.
• At least 20,000 demonstrators marched through Frankfurt on Saturday in a peaceful protest against austerity measures.
• Obama pressed Europe to shift toward a more pro-growth policy and away from austerity to tackle a crisis that threatens to push Greece out of the euro zone and send economic shockwaves worldwide.

• Half of world platinum producers are facing losses at the current price.

• Brazil’s wealthy are set to double in the next 11 years.

• China, the world's second-largest economy, which produces more carbon dioxide emissions than any other country, plans to start seven pilot trading schemes.

• (FT) Concerns over the past few weeks about limited rainfall in southern Russia push US benchmark prices for the grain to an eight-month high.
• WXRISK.COM ‏SUMMER FORECAST UPDATE- new CFS plots show El Nino develops LATE- SEPT /OCT so current pattern /trends may last into ALL of JULY- early AUG.
• WXRISK.COM ‏SUMMER FORECAST#2 -- NEW CFS model plots for JUNE & JULY look MUCH Hotter & MUCH drier for Plains/ Midwest. Huge change from late APRIL

Next Update Sunday

QUICK OVERVIEW

• Intel approved a 7% increase in the quarterly cash dividend to 22.5 cents per share, 90 cents per share on an annual basis.

• Walt Disney (DIS) quarterly earnings beat Wall Street expectations as profit rose 21%.

• Poland raised rates to 4.75%

• Brazil’s CPI rose 5.1% YoY

• Modern Banker JPMorgan, celebrated for its “controls”, said it lost $2 Billion “in six weeks” because of poor controls – quite the feat - more to disclose? Mr. Dimon recently responded to a question about too big to fail as “infantile” and “nonfactual.” (If only Glass-Steagall were still around!)
• The U.S. has made "considerable progress" in restoring its banking system since the financial crisis, said  Bernanke. (If only Glass-Steagall were still around!)
• S&P cuts outlook on J.P. Morgan Chase to negative, citing risk management  (If only Glass-Steagall were still around!)

• China's consumer price index (CPI) rose 3.4% YoY in April
• China’s consumer confidence stood at 86.65 in April, down 0.12% points from March.
• China will lower the bank reserve requirement ratio by 0.5% starting May 18. The cut, the second of its kind this year, this will drop the RRR for the country's large financial institutions to 20% and the medium- and small-sized financial institutions to 16.5%.

• Gasoline stocks fell2.6 million barrels.
• Distillate stocks decreased 3.3 million barrels
• Ethanol stocks fell to 21.4 million barrels, down from 22.2 million the previous week

• USDA estimates soybean stocks to use at 4.4%. This is equivalent to two weeks' worth of use, and the lowest stocks-to-use figure since 1965-66.

• Home Inns (HMIN) revenues rose 66.0% YoY

• FDA advisers recommended approval of Arena’s (ARNA) lorcaserin -- could be first new weight loss drug in a decade.

• Spain's annual inflation rose to 2% in April, up from 1.8% in the previous month
• At least 100,000 Spaniards angered by grim economic prospects and the political handling of the international financial crisis turned out for street demonstrations. 
• Spanish banks have been given 15 days to submit plans to meet an obligatory €30bn recapitalisation, or face nationalisation.

• The top U.S. grain groups on Thursday called for federal regulators to delay the start of 22-hour grains trading at CME Group and rival (ICE) Intercontinental Exchange.

• (TEF) Telefonica posted a net profit of EUR748 million in Q1, down 54% from EUR1.62 billion in the same period a year earlier, missing forecasts of EUR1.31 billion.

• The U.S. producer price index fell 0.2% in April

• China’s gold output in the first three months of the year reached 80.8 tonnes, up 10% YoY.

• The U.S. consumer sentiment index rose to a new post-recession high of 77.8

• Chinese ratings provider Dagong Global Credit Rating Co. said Friday that it upgraded the local and foreign currency sovereign credit rating of Greece from D to CC with a negative outlook.

Next Update Saturday May 12

QUICK OVERVIEW

• Berkshire Hathaway Warren Buffett's company said Friday its first-quarter profit more than doubled.

• Euro-zone unemployment rose to a new 15-year high of 10.9% U.S. factory orders fell 1.5% in March

• Steve Wozniak, a co-founder of Apple, describes the Nokia Lumia screen as "much more beautiful" than that of the iPhone and Android phones.   ( Comparison )

• Australia cuts interest rate by larger-than-expected half-point to 3.75%

• Indonesia’s Inflation Accelerates to Seven-Month High of 4.5%

• U.S Crude oil stocks rose 2.8 million barrels in the week ending April 27.
• Gasoline stocks fell 2.0 million barrels.
• Distillate stocks fell 1.9 million barrels.

• Bloomberg: The U.S. homeownership rate fell to the lowest level in 15 years in the first quarter as borrowers lost homes to foreclosure and tighter inventory and credit kept buyers off the market. The rate dropped to 65.4 percent from 66 percent in the fourth quarter and fell a full percentage point from a year earlier, the Census Bureau said in a report . That is the lowest level since the first quarter of 1997, and down from a record 69.2 percent in June 2004.

• The CME announced, that beginning May 13 for trade date May 14, customers will have expanded access to CBOT corn, soybeans, wheat, soybean meal and soybean oil futures and options on CME. Globex as follows: •Sunday to Monday, 5:00 p.m. to 4:00 p.m. CT •Monday to Friday, 6:00 p.m. to 4:00 p.m. CT. (Hell, they could lose 5 cents to the ICE) Change in plans (CME f/u) will be delayed by one week to May 21.

• “The Scream" sells for record $119.9 million at Sotheby's auction, far exceeding $80 million estimate. ( Somebody is smiling )

• In reference to Mr. Obama’s remarks regarding speculators. "People need to study their facts before criticizing speculators," said Mr. Duffy, whose Chicago Company is the largest futures exchange, said in an interview. He pointed out “correctly” that speculators provide vital liquidity to a host of markets.

• AIG net income rose to $3.2 billion, or $1.71 a share, in the three months that ended March 31.

• (Guardian) seven in ten Americans now believe that "global warming is affecting the weather." 35 % of the respondents reported that extreme weather had affected them personally in 2011.

• Japan's last active reactor has shut down, leaving the country without nuclear energy for the first time since 1970. All 50 commercial reactors in the country are now offline. LNG Heading for Asia?

Next Update Sunday May 6

Hollande's 'Growth Bloc' spells end of German hegemony in Europe  Ambrose Evans-Pritchard

For two years Germany has had its way in Europe, treating historic nations much as Bismarck treated Bavaria – sovereign only in name.

QUICK OVERVIEW

• U.S. economic expansion eased to 2.2% in Q1
• U.S. consumer sentiment levels off; it only rose to 76.4 from 76.2 in March
• U.S. first time claims for unemployment benefits decreased 1,000 to 388,000. 24.4 % of

• Spanish workforce are unemployed BOJ announces additional 62 bln USD monetary easing program

• The growth of China's inflation rate is expected to ease to 3.3%in April from the previous month with the slowing of food price rises, according to a report released by the Bank of Communications.

• EQIX revenues rose 25% YoY.

• UN (Unilever) announced sales growth of 8.4% with emerging markets up 11.9% and developed markets up 4.2%.

• BAYRY (Bayer) Earnings rose 14% to EUR1.59 billion

• HGSI’s loss narrowed to $93.5 million (loss of 47 cents per diluted share) from $131 million (loss of 69 cents per share) YoY. Revenue rose 77.4% to $47.1 million from the year-earlier quarter.

• (NYT) Upward mobile consumers from much poorer countries are about to surpass Americans in their share of the world economy. Living standards in the developing world are improving so quickly that those countries are now beginning to drive global economic growth.

• The National Association of Realtors reports that pending home sales increased 4.1% in March to a new 23-month high.

• Starbucks announced that for the quarter ended April 1, profit was $309.9 million, or 40 cents a share, up from $261.6 million or 34 cents a share in the same 2011 period. Revenue climbed 15% to $3.2 billion.

• Titanic director James Cameron is backing a company with Google billionaires Larry Page and Eric Schmidt to mine asteroids in space, called Planetary Resources.

Big Changes in Ocean Salinity Intensifying Water Cycle
"Changes to the global water cycle and the corresponding redistribution of rainfall will affect food availability, stability, access, and utilization," says lead author Paul Durack at the University of Tasmania and the Lawrence Livermore National Laboratory.

QUICK OVERVIEW

• ATT reported Q1 earnings of $0,60 per share, expected $0.57. Revenues rose 1.8 % YoY. U.S.

• New home sales fell 7.1% in Feb. The Midwest is down 20% and 27% in the West. The rest saw modest gains. Inventory dropped from 146,000 in Feb to 144,000 in March – a new low. The Median sales price rose 6.3% to $234,500. Pulte Homes rose 5%, after the U.S. Commerce Department said new homes sold at an annual rate of 328,000 last month.

• (Spiegel) The collapse of the Dutch government, the prospect of Socialist François Hollande as next French president and the surging popularity of far-right parties shows that budget discipline is out of fashion in Europe. Chancellor Angela Merkel is looking increasingly lonely in her fight to save the euro through painful austerity measures, write German commentators.

• Mexico added 16.8 metric tons of gold valued at about $906.4 million to its reserves in March as nations including Turkey, Russia and Kazakhstan increased their holdings of the metal, International Monetary Fund data show.

• A dairy cow in California tested positive for bovine spongiform encephalopathy (Mad Cow),USDA announced.

• Oil World reduced estimates of Argentina’s soy crop to 42.5 mmt, down from the USDA’s 45 mmt and down 1.5 mmt from its previous estimate.

• Apple’s profit rose 94% to $12.30 a share. iPhone sales rose 88% YoY -- beating the most optimistic forecast.

IMF encourages Europe's economic suicide
Ambrose Evans-Pritchard

“Rather than admit that they’ve been wrong, European leaders seem determined to drive their economy — and their society — off a cliff,” said Professor Krugman.

QUICK OVERVIEW

• (WSJ) Yum earned $458 million, or 96 cents a share,, up from $264 million, or 54 cents a share, in the same quarter a year ago. Excluding items, the company would have earned 76 cents a share. Revenue hit $2.74 billion, a 13% gain.

• (WSJ) Qualcomm reported a profit of $2.23 billion, or $1.28 a share, up from $999 million, or 59 cents a share, a year earlier. Excluding 41-cents per-share earnings from the Qualcomm Strategic Initiatives segment, stock-based compensation and other items, per-share earnings rose to $1.01 from 86 cents. Revenue improved 28% to $4.94 billion.

• U. S. Crude oil stocks increased 3.9 million barrels, gasoline stocks decreased by 3.7 million. Distillate stocks decreased 2.9 million barrels. Ethanol stocks rose 0.2 million to 22.0 million barrels.

• Human Genome Sciences (HGSI) announced that it has received an unsolicited proposal from GlaxoSmithKline (GSK) to acquire HGS for $13.00 per share in cash.

• E-Trade Financial reported Thursday its Q1 profit rose to $62.6 million, or 22 cents a share. Up from 16 cents a share YoY.

• China’s media reports that the province of Heilongjang, which is its largest soybean producer, is suffering through its worst drought in a decade.
• A Friday rumor on the soybean floor that Brazil is cutting off exports produced a good rally. Soy meal is making new highs.

• EBAY reported that revenue for Q1 rose 29% to $3.3 billion, compared to the same period of 2011.

• Microsoft Corp. reported Q3 profit of $5.11 billion, or 60 cents a share, on $17.41 billion in revenue.

• The Federal Reserve says banks will have two years to comply with a rule that would ban them from trading for their own profit. The so-called Volcker rule is expected to take effect this summer. But the Fed clarified that it won’t enforce it until July 2014.

• Yum (YUM) reported Q1 earnings increased of 21% YoY

• AIA (AAGIY) Group first quarter new business value rose 27%

• Japan's trade deficit in the past fiscal year ending in March stood at 4.41 trillion yen (about 54. 19 billion U.S. dollars), marking the worst ever reading for the country.

• Brazil cut the basic interest rate from 9.75% to 9%.

• A prominent Chinese think tank issued a forecast saying China's grain output is likely to grow for the ninth consecutive year in 2012. (Good thing the weather doesn’t have a memory, or the odds of that happening would be slim)

• Wal-Mart Stores Inc (WMT), the world's largest retailer, squelched an internal investigation into allegations of bribery at its Mexican subsidiary instead of broadening the probe, the New York Times reported

Next Update Sunday

QUICK OVERVIEW

• Fullerene C60 administration doubles rat lifespan with no toxicity.

• JP Morgan’s Copper ETF getting closer.

• U.S. Housing starts fell 5.8% last month to an annual rate of 654,000 from a slightly revised 694,000 in February. Permits rose 4.5% to 747,000 in March from a revised 715,000 in February.

• KO reported a 3% rise in profit to 89 cents per share, topping estimates by 2 cents. Sales grew 6% to $11.14 billion, over estimates of $10.82 billion. That reflects higher volumes and a 3% increase in pricing.