9/19/09 Lost Jobs
Forty-two states lost jobs last month, up from 29 in July, with the biggest net payroll cuts coming in Texas, Michigan, Georgia and Ohio.
The House will vote Tuesday whether to give unemployed workers in Michigan and other hard-hit states an extra 13 weeks of jobless benefits.
The measure would help states with unemployment rates of at least 8.5 percent. Michigan's unemployment rate is 15.2 percent, and Metro Detroit's rate is 17.3 percent.
Moody’s forecasts that some home prices may not return to their pre-recession levels until 2030. This means that hundreds of thousands of Americans may find it impossible to sell their houses without making payments to their banks to cover underwater home loans.
The Oil Drum: "When times were flush for the natural gas industry (can this be just over a year ago) and in order to ensure supplies for its customers in the West, Russia agreed to a much more beneficial pricing for the Turkmen gas, and was buying some 50 bcm a year. This was all arranged after the Russian Presidency changed hands, and was one of the first items on the new President’s agenda.
Since then things have not really gone well for the relationship as a whole. Turkmenistan has agreed to send natural gas to China, providing it with a second customer, while the price of natural gas has fallen with the recession in demand, around the world. That pipeline is now expected to be in place
by the end of next year, and I saw pipelines being laid in China on my recent visit, as they extend the network. The pipeline is expected to carry some 40 bcm (more than Russia will buy this year).
Turkmenistan has also agreed
to supply Iran with 14 bcm of natural gas with a new pipeline to carry gas down into Iran being planned for the near future.
Gazprom profits, meanwhile
have dropped 62%, as the demand from Europe has dropped dramatically – with Gazprom market share falling to 16%. There was an “accident” to a pipeline between Russia and Turkmenistan, and since then no gas has flowed through the pipelines."
Doug Noland: "Over the past four quarters, Non-Financial Credit expanded $1.959 TN, or 6.1%, to $34.320 TN. This was no small amount of debt growth. Treasury borrowings increased $1.893 TN over the past year to $7.143 TN. And during this period Federal Reserve assets ballooned $1.111 TN, or 117%, to $2.063 TN. It is incredible to watch the emerging Government Finance Bubble take such command of U.S. Credit...It is my view that, at this point, only massive federal deficits and government intrusions will stabilize system incomes at today’s highly inflated levels.....My bet is that this massive government intrusion into mortgage finance eventually backfires. It puts Washington on course for bankrupting the country, while doing little to direct financial and real resources in a manner to spur needed economic restructuring."
LA Times: "Few areas feel the sting of a global recession quicker than Wilmington, a community of 61,000 on the north border of the Port of Los Angeles. The biggest share of its local jobs -- more than 33% -- involves transportation, warehousing and retail and wholesale trade, according to city statistics."It's difficult when so much employment is based on the number of cargo containers. It makes us vulnerable," said Los Angeles City Councilwoman Janice Hahn, who represents the area. She said it was a primary reason for her efforts to broaden the kinds of jobs available in Wilmington.
In October, well before the bottom fell out of the economy and trade levels plummeted, Wilmington already had an unemployment rate of 13.4%. Now, with both ports reporting double-digit cargo declines, it has gotten much worse.
"The unemployment rate there could be pushing 20% by now," said Jack Kyser, an economist at the nonprofit Los Angeles County Economic Development Corp. "People don't understand what it means when you have such a big drop in cargo container volumes. It affects everything, longshoremen, truckers, freight forwarders, warehouses."
In a clear sign that the local economy has a long way to go whether the U.S. recession has ended or not, Wilmington businesses are struggling, work is hard to find and financial institutions are tallying up the pain."
With light Labor Day traffic in the mix, the Association of American Railroads said that volume for the week ending September 12 was down compared to the same week last year—although the same week last year did not include Labor Day.
Carload freight for the week ending September 12, which does not include intermodal data, totaled 263,349 cars, which is down 19.8 percent year-over-year, and is down from the preceding week—for the week ending September 5—which came in at 284,715 cars.
Carloadings in the 18.4 percent and 21.8 percent in the west and east, respectively, according to the AAR.
Weekly intermodal volume was 175,813 trailers or containers, representing a 25.8 percent year-over-year decline, with container volume down 20.9 percent and trailer volume down 43.9 percent. This is down from recent weeks, which have been in the 189,000-200,000 range.
The IMF has disclosed it is selling 403 metric tons of gold, or about one eighth of its total gold holdings.
The House is prepared to vote on a bill that would eliminate the role of private student lenders altogether, bringing all funding under government control, where it can be expanded with ease and targeted politically.
Target plans to hire less seasonal employees than it did last year, and the stores will instead increase their current worker’s hours, cross-training them in multiple departments, spokesperson Brandy Doyle said.
More retailers are also hiring floaters — part-time employees who have already been trained and periodically fill spots for extended periods of time, said Dan Butler, vice president of retail operations for the National Retail Federation.
Saturday, September 19, 2009
Friday, September 18, 2009
Container Traffic
9/18/09 Container Traffic
Investors stepped up withdrawals from money-market funds this week ahead of today's expiry of a federal guarantee to safeguard their money. Investors withdrew $55B on Tuesday and Wednesday, far more than usual, according to fund-watcher Crane Data.
Right now, housing remains on government life support. Treasury-backed entities are guaranteeing about 85% of new mortgages, while the Fed buys 80% of the securities into which these taxpayer-backed mortgages are packaged.
Real average hourly earnings fell 0.2 percent from July to August 2009.
George Ure: "The latest batch of TEU data from the Port of Long Beach just out shows their container traffic is down a whopping 21.7% from last year. What's worse? While imports are down 21.9%, the outbound loaded figure is down a full 26% which means the balance of trade picture is suffering continued asymmetry.
True, the Port of Seattle August container traffic showed a rise of 5.4% in August this year, but the odds of Seattle hitting its all time high of 14-million + metric tons of cargo (set in 2005) this year are somewhere between slim and none. Nor is Seattle's blip a coast-wide phenomena: The Port of Portland's container volume was down 14.5% from 2008 (the previous month it was down 18.5%) but compared with 2007, Portland is down almost 22%.
The Port of Los Angeles showed a 19.32% drop in loaded inbound, while loaded outbound was down only 14.22%. But just so you don't get the wrong idea for your balance of trade musings, keep in mind that even with the lesser decline in exports, Los Angeles still runs only 31.7% export trade; the rest is inbound.
Russia's Prime Minister Vladimir Putin on Friday said other currencies besides the dollar should be used as global reserves to reduce the risks posed by swelling U.S. debt.
Putin, who spoke at an international investment forum in the Black Sea resort of Sochi, chided the United States for "an uncontrolled issue of dollars" and said the American currency's dominance had been "one of the triggers" of the global crisis.
Net borrowing by the British public sector rose to 16.1 billion pounds ($26.6 billion) in August, up from 9.9 billion pounds in the same month last year, the Office for National Statistics reported Friday. Economists had forecast a rise to 12.5 billion pounds. Total current government receipts fell 9.1% from a year ago to 34.1 billion pounds, while total current spending rose to 45.6 billion from 44.3 billion pounds. The figures left the government with a current budget deficit of 12.8 billion pounds, while net debt totaled 804.8 billion pounds, equal to 57.5% of gross domestic product. A year ago, the deficit stood at 7.7 billion pounds and net debt totaled 632.8 billion pounds, or 44% of GDP.
“I think the big run in US Treasurys has ended,” Cramer said. “It’s time for you to sell 10-year and 30-year” bonds.
The trust that controls Hershey Co. has hired a notable banker and a small banking firm to advise on a possible bid for rival candy maker Cadbury to compete with an offer from Kraft Foods Co., according to a published report.
The Wall Street Journal, citing people familiar with the matter, reported Thursday that the trust has hired Byron Trott, a former Goldman Sachs & Co. banker who has worked with Warren Buffett, and boutique banking firm Watch Hill Partners.
Construction starts for projects with five or more units were up 35.3%. Starts for single-family houses, though, were down 3%.
The uptick in housing starts might signal a bottom in the home-building industry, but a return to peak construction levels probably is a long way off.
"We still have about 800,000 too many homes out there," said economist Patrick Newport of the consulting firm IHS Global Insight, referring to the vast supply of unsold new buildings. "We need to get rid of that excess" before home construction returns to historical norms, he said.
“The dollar is the cheapest funding currency bar none and only challenged by the U.K. in terms of the risks from money printing and escalating deficits,” says
Simon Grose-Hodge, a strategist at LGT Group in Singapore.
"Despite the improvement in homeowners' equity share in real estate in the aggregate in the second quarter, we still know many homeowners are severely 'underwater' with large negative equity positions," SMR observes. "As of June, First American CoreLogic estimated that nearly a third of all mortgaged properties were in a negative equity position."
Nomura has secured a six-year rent holiday after signing a 20 year lease in a new office development owned by Oxford Properties Group, a subsidiary of the Ontario Municipal Employees Retirement System (Omers).
Nomura said that the deal is believed to be the largest ever non pre-let leasing transaction in the UK office market.
Prime Minister
Vladimir Putin called for trade concessions, including an end to restrictions on high-tech transfers to Russia, following U.S. President Barack Obama’s decision to abandon a missile shield in Europe.
“I’m counting on other decisions to follow this correct and brave decision, including the complete elimination of restrictions on cooperation with Russia and on transfers of high technology to Russia as well as an intensification of World Trade Organization expansion to include Russia, Belarus and Kazakhstan,” Putin said at a business forum in Sochi today.
The Federal Housing Administration is losing so much money on delinquent mortgage loans that its reserves will drop below the required 2% of loans, FHA Commissioner David Stevens told the Washington Post in a story published Friday. Stevens said the agency would announce steps on Friday to boost the reserves, without asking Congress to bail out the agency. The FHA will ask that banks take responsibility for losses due to fraud, he said. The FHA is now guaranteeing about 23% of new mortgages, up from around 3% in 2006.
Federal Deposit Insurance Corp. Chairman Sheila Bair said the agency may consider tapping its Treasury Department line of credit as it examines “all options” for replenishing a deposit insurance fund being tapped by bank failures.
Potash now expects earnings of $3.25 to $3.75 a share. It previously expected $4 to $5 a share.
Irwin Union Bank and Trust Co. of Columbus, Ind., and Irwin Union Bank, F.S.B., in Louisville, Ky., subsidiaries of Irwin Financial Corp., were closed by regulators Friday, bringing the number of U.S. bank failures this year to 94.
The Dow Jones Industrial Average ended at 9,820.2, up 0.4% for the day and 2.2% higher for the week. The S&P 500 Index climbed 2.81 points, or 0.3%, to 1,068.3, a weekly advance of 2.5%, while the Nasdaq Composite rose 6.11 points, or 0.3%, to 2,132.86, a weekly gain of 2.5%.
Crude oil for October delivery finished down 43 cents, or 0.6%, at $72.04 a barrel. Natural gas, meanwhile, continued its recent surge, with the October contract up 33 cents, or 6%, to $3.78 British thermal units. October natural gas has surged more than 27% this week.
Gold for December delivery finished down $3.20, or 0.3%, at $1,010.30 an ounce on the New York Mercantile Exchange. The September contract finished at $1,009.20 an ounce, down $3.10, or 0.4%. Gold, however, finished the week higher, with the December contracting gaining 0.4% from last Friday.
Investors stepped up withdrawals from money-market funds this week ahead of today's expiry of a federal guarantee to safeguard their money. Investors withdrew $55B on Tuesday and Wednesday, far more than usual, according to fund-watcher Crane Data.
Right now, housing remains on government life support. Treasury-backed entities are guaranteeing about 85% of new mortgages, while the Fed buys 80% of the securities into which these taxpayer-backed mortgages are packaged.
Real average hourly earnings fell 0.2 percent from July to August 2009.
George Ure: "The latest batch of TEU data from the Port of Long Beach just out shows their container traffic is down a whopping 21.7% from last year. What's worse? While imports are down 21.9%, the outbound loaded figure is down a full 26% which means the balance of trade picture is suffering continued asymmetry.
True, the Port of Seattle August container traffic showed a rise of 5.4% in August this year, but the odds of Seattle hitting its all time high of 14-million + metric tons of cargo (set in 2005) this year are somewhere between slim and none. Nor is Seattle's blip a coast-wide phenomena: The Port of Portland's container volume was down 14.5% from 2008 (the previous month it was down 18.5%) but compared with 2007, Portland is down almost 22%.
The Port of Los Angeles showed a 19.32% drop in loaded inbound, while loaded outbound was down only 14.22%. But just so you don't get the wrong idea for your balance of trade musings, keep in mind that even with the lesser decline in exports, Los Angeles still runs only 31.7% export trade; the rest is inbound.
Russia's Prime Minister Vladimir Putin on Friday said other currencies besides the dollar should be used as global reserves to reduce the risks posed by swelling U.S. debt.
Putin, who spoke at an international investment forum in the Black Sea resort of Sochi, chided the United States for "an uncontrolled issue of dollars" and said the American currency's dominance had been "one of the triggers" of the global crisis.
Net borrowing by the British public sector rose to 16.1 billion pounds ($26.6 billion) in August, up from 9.9 billion pounds in the same month last year, the Office for National Statistics reported Friday. Economists had forecast a rise to 12.5 billion pounds. Total current government receipts fell 9.1% from a year ago to 34.1 billion pounds, while total current spending rose to 45.6 billion from 44.3 billion pounds. The figures left the government with a current budget deficit of 12.8 billion pounds, while net debt totaled 804.8 billion pounds, equal to 57.5% of gross domestic product. A year ago, the deficit stood at 7.7 billion pounds and net debt totaled 632.8 billion pounds, or 44% of GDP.
“I think the big run in US Treasurys has ended,” Cramer said. “It’s time for you to sell 10-year and 30-year” bonds.
The trust that controls Hershey Co. has hired a notable banker and a small banking firm to advise on a possible bid for rival candy maker Cadbury to compete with an offer from Kraft Foods Co., according to a published report.
The Wall Street Journal, citing people familiar with the matter, reported Thursday that the trust has hired Byron Trott, a former Goldman Sachs & Co. banker who has worked with Warren Buffett, and boutique banking firm Watch Hill Partners.
Construction starts for projects with five or more units were up 35.3%. Starts for single-family houses, though, were down 3%.
The uptick in housing starts might signal a bottom in the home-building industry, but a return to peak construction levels probably is a long way off.
"We still have about 800,000 too many homes out there," said economist Patrick Newport of the consulting firm IHS Global Insight, referring to the vast supply of unsold new buildings. "We need to get rid of that excess" before home construction returns to historical norms, he said.
“The dollar is the cheapest funding currency bar none and only challenged by the U.K. in terms of the risks from money printing and escalating deficits,” says
Simon Grose-Hodge, a strategist at LGT Group in Singapore.
"Despite the improvement in homeowners' equity share in real estate in the aggregate in the second quarter, we still know many homeowners are severely 'underwater' with large negative equity positions," SMR observes. "As of June, First American CoreLogic estimated that nearly a third of all mortgaged properties were in a negative equity position."
Nomura has secured a six-year rent holiday after signing a 20 year lease in a new office development owned by Oxford Properties Group, a subsidiary of the Ontario Municipal Employees Retirement System (Omers).
Nomura said that the deal is believed to be the largest ever non pre-let leasing transaction in the UK office market.
Prime Minister
Vladimir Putin called for trade concessions, including an end to restrictions on high-tech transfers to Russia, following U.S. President Barack Obama’s decision to abandon a missile shield in Europe.
“I’m counting on other decisions to follow this correct and brave decision, including the complete elimination of restrictions on cooperation with Russia and on transfers of high technology to Russia as well as an intensification of World Trade Organization expansion to include Russia, Belarus and Kazakhstan,” Putin said at a business forum in Sochi today.
The Federal Housing Administration is losing so much money on delinquent mortgage loans that its reserves will drop below the required 2% of loans, FHA Commissioner David Stevens told the Washington Post in a story published Friday. Stevens said the agency would announce steps on Friday to boost the reserves, without asking Congress to bail out the agency. The FHA will ask that banks take responsibility for losses due to fraud, he said. The FHA is now guaranteeing about 23% of new mortgages, up from around 3% in 2006.
Federal Deposit Insurance Corp. Chairman Sheila Bair said the agency may consider tapping its Treasury Department line of credit as it examines “all options” for replenishing a deposit insurance fund being tapped by bank failures.
Potash now expects earnings of $3.25 to $3.75 a share. It previously expected $4 to $5 a share.
Irwin Union Bank and Trust Co. of Columbus, Ind., and Irwin Union Bank, F.S.B., in Louisville, Ky., subsidiaries of Irwin Financial Corp., were closed by regulators Friday, bringing the number of U.S. bank failures this year to 94.
The Dow Jones Industrial Average ended at 9,820.2, up 0.4% for the day and 2.2% higher for the week. The S&P 500 Index climbed 2.81 points, or 0.3%, to 1,068.3, a weekly advance of 2.5%, while the Nasdaq Composite rose 6.11 points, or 0.3%, to 2,132.86, a weekly gain of 2.5%.
Crude oil for October delivery finished down 43 cents, or 0.6%, at $72.04 a barrel. Natural gas, meanwhile, continued its recent surge, with the October contract up 33 cents, or 6%, to $3.78 British thermal units. October natural gas has surged more than 27% this week.
Gold for December delivery finished down $3.20, or 0.3%, at $1,010.30 an ounce on the New York Mercantile Exchange. The September contract finished at $1,009.20 an ounce, down $3.10, or 0.4%. Gold, however, finished the week higher, with the December contracting gaining 0.4% from last Friday.
A Super Stretched Stock Rally
9/17/09 A Super Stretched Stock Rally
Only 8 percent of U.S. adults plan to increase household spending, almost one-third will spend less, and 58 percent expect to “stay the course,” a Bloomberg News poll showed. More than 3 in 4 said they reduced spending in the past year. Respondents were divided over whether the economy will get better or stay the same in the next six months; only 1 in 6 said things will get worse. More than 40 percent of those surveyed said they feel less
financially secure than they did when President Barack Obama took office in January, outnumbering 35 percent who said they feel more secure.
President Barack Obama has decided to scrap plans for a U.S. missile defense shield in the Czech Republic and Poland that had deeply angered Russia, the Czech prime minister confirmed Thursday.
NATO's new chief hailed the move as "a positive step" and a Russian analyst said Obama's decision will increase the chances that Russia will cooperate more closely with the United States in the dispute over Iran's nuclear program.
Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 579,000. This is 2.7 percent (±1.2%) above the revised July rate of 564,000, but is 32.4 percent (±1.3%) below the August 2008 estimate of 857,000. Single-family authorizations in August were at a rate of 462,000; this is 0.2 percent (±1.1%)* below the revised July figure of 463,000. Authorizations of units in buildings with five units or more were at a rate of 98,000 in August.
Privately-owned housing starts in August were at a seasonally adjusted annual rate of 598,000. This is 1.5 percent (±7.9%)* above the revised July estimate of 589,000, but is 29.6 percent (±6.0%) below the August 2008 rate of 849,000. Single-family housing starts in August were at a rate of 479,000; this is 3.0 percent (±5.7%)* below the revised July figure of 494,000. The August rate for units in buildings with five units or more was 115,000.
Privately-owned housing completions in August were at a seasonally adjusted annual rate of 760,000. This is 5.5 percent (±14.0%)* below the revised July estimate of 804,000 and is 25.3 percent (±9.6%) below the August 2008 rate of 1,018,000. Single-family housing completions in August were at a rate of 489,000; this is 1.6 percent (±12.7%)* below the revised July figure of 497,000. The August rate for units in buildings with five units or more was 256,000.
The number of people filing for state unemployment benefits for the first time fell 12,000 to a seasonally adjusted 545,000 last week, the lowest since mid-July, the U.S. Labor Department reported Thursday. Meanwhile, the number of people collecting regular state benefits rose by 129,000 in the week ending Sept. 5 to a seasonally adjusted 6.23 million. The number of people claiming benefits of any kind was 9.53 million, not seasonally adjusted.
French Prime Minister Francois Fillon on Thursday said the country's economy will shrink by 2.25% in 2010, rather than the forecast for a 3% contraction in gross domestic product, AFP reported. Fillon said the economy should return to growth in 2010.
Bank of Japan Gov. Masaaki Shirakawa said Thursday that a stronger yen could boost Japan's economy in the long term, and that stable foreign-exchange movements were desirable. The dollar fell to 90.71 yen, from above 91 yen shortly before Shirakawa spoke after the central bank's regular monthly policy meeting. Policy members held rates steady at 0.1% and upgraded their view of Japan's economy. While Japan's Ministry of Finance, not the central bank, is in charge of making currency policy, Shirakawa's remarks echo recent comments by new Finance Minister Hirohisa Fujii.
Venezuela's President Hugo Chavez has announced that China will invest $16 billion in an oil exploration project in the Orinoco river basin, according to media reports. The news comes only a few days after Venezuela signed a $20 billion joint venture agreement with Russia to drill for oil in the Orinoco, reports said. Chavez, who has a reputation as a firebrand and is a vocal critic of the United States, said the two deals will increase Venezuela's oil production by about 900,000 barrels a day, according to reports. A member of the OPEC oil cartel, Venezuela is one of the world's largest exporters of crude oil.
Rob Hanna: " 57.19% of stocks are now stretched far above their 40-ma’s."
Richard Benson: "In today's world, homeowners motivated by cold hard economics and common sense are not stupid. When you don't have any real equity in your house or are underwater and out of work, it's time to mail the house keys back to the government or the bank! Foreclosures are picking up not only because mortgage holders are walking away, but when many people stop paying their mortgage, they also stop paying their property taxes. Local governments everywhere are strapped for cash and are willing to quickly sell tax liens on properties with delinquent taxes due. The buyer of a tax lien has rights to the property that come before that of the mortgage holder so if the mortgage holder doesn't pay the tax lien, they could be wiped out when the holder of the tax lien files to get clear title of the property.
So how big is the next wave in the housing mortgage disaster? Currently, one out of eight mortgages is in foreclosure or paying late, and with unemployment averaging over 9 percent for 2009 and 2010 and peaking in 2011, it's likely one in five mortgages could ultimately default. Moreover, we have seen that less than 7 percent of those mortgages that are late will get cured and stay out of foreclosure. Over the last six months, notices of home foreclosures have been running about 350,000 a month, which is over 4 million a year. A lot of homes are headed to the auction block with their mortgages headed for the shredder."
China rejected the import of 37.8 tons of frozen orange juice concentrate by
PepsiCo Inc. after the shipment failed quality inspections.
The frozen juice, shipped from Brazil in July, was rejected because its yeast content exceeded approved limits, the General Administration of Quality Supervision, Inspection and Quarantine of China said in a Sept. 15 statement posted on its Web site.
Other products that failed inspections in July included a snack produced by General Mills Inc. because of mold, frozen pigs’ feet supplied by Tyson Foods Inc. after tests found they contained a drug banned in China and baby milk formula produced by Mead Johnson Nutrition Co. for failing to meet China’s protein requirements, the regulator said.
Peter Garnham: "For years, the yen was the currency of choice to fund international carry trades. But is the dollar starting to take its place?
Analysts say negligible US interest rates, its
quantitative easing measures and little sign that the country is set to withdraw from its ultra-loose monetary policy anytime soon leaves it in a similar position to Japan at the start of the decade."
The Philly Fed index rose to 14.1 this month from 4.2 in August. Despite the increase, the employment index remained firmly in negative territory in September, dropping to negative 14.3 from negative 12.9 in August.
The U.S. dollar index slipped to 76.01, its lowest level in a year, in early trading.
Natural gas supplies up 66 bcf in latest week. Platts expected an increase of between 72 and 76 billion cubic feet to natural gas storage inventories for the week that ended Sept. 11. Natural gas also gave back some of the prior session's gains. The October contract fell 8% to finish at $3.46 per British thermal units. It briefly jumped 2% after the Energy Department reported a smaller-than-expected increase of U.S. gas in storage in the week ended Sept.11.
Crude for October delivery finished down 4 cents, or 0.1%, at $72.47 a barrel on the New York Mercantile Exchange. Crude oil earlier rose to a high of $73.16 a barrel and fell to a low of $70.40 a barrel. Gold for December delivery, the most active contract, fell $6.70, or 0.6% to finish at $1,013.50 an ounce.
In the second quarter, household debt fell at a 1.7% annual rate to $13.7 trillion, matching the record percentage decline in the fourth quarter.
The Dow Jones Industrial Average fell 7.79 points, or less than 0.1%, to end at 9,783.92. The S&P 500 Index declined 3.27 points, or 0.3%, to 1,065.49, while the Nasdaq
Only 8 percent of U.S. adults plan to increase household spending, almost one-third will spend less, and 58 percent expect to “stay the course,” a Bloomberg News poll showed. More than 3 in 4 said they reduced spending in the past year. Respondents were divided over whether the economy will get better or stay the same in the next six months; only 1 in 6 said things will get worse. More than 40 percent of those surveyed said they feel less
financially secure than they did when President Barack Obama took office in January, outnumbering 35 percent who said they feel more secure.
President Barack Obama has decided to scrap plans for a U.S. missile defense shield in the Czech Republic and Poland that had deeply angered Russia, the Czech prime minister confirmed Thursday.
NATO's new chief hailed the move as "a positive step" and a Russian analyst said Obama's decision will increase the chances that Russia will cooperate more closely with the United States in the dispute over Iran's nuclear program.
Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 579,000. This is 2.7 percent (±1.2%) above the revised July rate of 564,000, but is 32.4 percent (±1.3%) below the August 2008 estimate of 857,000. Single-family authorizations in August were at a rate of 462,000; this is 0.2 percent (±1.1%)* below the revised July figure of 463,000. Authorizations of units in buildings with five units or more were at a rate of 98,000 in August.
Privately-owned housing starts in August were at a seasonally adjusted annual rate of 598,000. This is 1.5 percent (±7.9%)* above the revised July estimate of 589,000, but is 29.6 percent (±6.0%) below the August 2008 rate of 849,000. Single-family housing starts in August were at a rate of 479,000; this is 3.0 percent (±5.7%)* below the revised July figure of 494,000. The August rate for units in buildings with five units or more was 115,000.
Privately-owned housing completions in August were at a seasonally adjusted annual rate of 760,000. This is 5.5 percent (±14.0%)* below the revised July estimate of 804,000 and is 25.3 percent (±9.6%) below the August 2008 rate of 1,018,000. Single-family housing completions in August were at a rate of 489,000; this is 1.6 percent (±12.7%)* below the revised July figure of 497,000. The August rate for units in buildings with five units or more was 256,000.
The number of people filing for state unemployment benefits for the first time fell 12,000 to a seasonally adjusted 545,000 last week, the lowest since mid-July, the U.S. Labor Department reported Thursday. Meanwhile, the number of people collecting regular state benefits rose by 129,000 in the week ending Sept. 5 to a seasonally adjusted 6.23 million. The number of people claiming benefits of any kind was 9.53 million, not seasonally adjusted.
French Prime Minister Francois Fillon on Thursday said the country's economy will shrink by 2.25% in 2010, rather than the forecast for a 3% contraction in gross domestic product, AFP reported. Fillon said the economy should return to growth in 2010.
Bank of Japan Gov. Masaaki Shirakawa said Thursday that a stronger yen could boost Japan's economy in the long term, and that stable foreign-exchange movements were desirable. The dollar fell to 90.71 yen, from above 91 yen shortly before Shirakawa spoke after the central bank's regular monthly policy meeting. Policy members held rates steady at 0.1% and upgraded their view of Japan's economy. While Japan's Ministry of Finance, not the central bank, is in charge of making currency policy, Shirakawa's remarks echo recent comments by new Finance Minister Hirohisa Fujii.
Venezuela's President Hugo Chavez has announced that China will invest $16 billion in an oil exploration project in the Orinoco river basin, according to media reports. The news comes only a few days after Venezuela signed a $20 billion joint venture agreement with Russia to drill for oil in the Orinoco, reports said. Chavez, who has a reputation as a firebrand and is a vocal critic of the United States, said the two deals will increase Venezuela's oil production by about 900,000 barrels a day, according to reports. A member of the OPEC oil cartel, Venezuela is one of the world's largest exporters of crude oil.
Rob Hanna: " 57.19% of stocks are now stretched far above their 40-ma’s."
Richard Benson: "In today's world, homeowners motivated by cold hard economics and common sense are not stupid. When you don't have any real equity in your house or are underwater and out of work, it's time to mail the house keys back to the government or the bank! Foreclosures are picking up not only because mortgage holders are walking away, but when many people stop paying their mortgage, they also stop paying their property taxes. Local governments everywhere are strapped for cash and are willing to quickly sell tax liens on properties with delinquent taxes due. The buyer of a tax lien has rights to the property that come before that of the mortgage holder so if the mortgage holder doesn't pay the tax lien, they could be wiped out when the holder of the tax lien files to get clear title of the property.
So how big is the next wave in the housing mortgage disaster? Currently, one out of eight mortgages is in foreclosure or paying late, and with unemployment averaging over 9 percent for 2009 and 2010 and peaking in 2011, it's likely one in five mortgages could ultimately default. Moreover, we have seen that less than 7 percent of those mortgages that are late will get cured and stay out of foreclosure. Over the last six months, notices of home foreclosures have been running about 350,000 a month, which is over 4 million a year. A lot of homes are headed to the auction block with their mortgages headed for the shredder."
China rejected the import of 37.8 tons of frozen orange juice concentrate by
PepsiCo Inc. after the shipment failed quality inspections.
The frozen juice, shipped from Brazil in July, was rejected because its yeast content exceeded approved limits, the General Administration of Quality Supervision, Inspection and Quarantine of China said in a Sept. 15 statement posted on its Web site.
Other products that failed inspections in July included a snack produced by General Mills Inc. because of mold, frozen pigs’ feet supplied by Tyson Foods Inc. after tests found they contained a drug banned in China and baby milk formula produced by Mead Johnson Nutrition Co. for failing to meet China’s protein requirements, the regulator said.
Peter Garnham: "For years, the yen was the currency of choice to fund international carry trades. But is the dollar starting to take its place?
Analysts say negligible US interest rates, its
quantitative easing measures and little sign that the country is set to withdraw from its ultra-loose monetary policy anytime soon leaves it in a similar position to Japan at the start of the decade."
The Philly Fed index rose to 14.1 this month from 4.2 in August. Despite the increase, the employment index remained firmly in negative territory in September, dropping to negative 14.3 from negative 12.9 in August.
The U.S. dollar index slipped to 76.01, its lowest level in a year, in early trading.
Natural gas supplies up 66 bcf in latest week. Platts expected an increase of between 72 and 76 billion cubic feet to natural gas storage inventories for the week that ended Sept. 11. Natural gas also gave back some of the prior session's gains. The October contract fell 8% to finish at $3.46 per British thermal units. It briefly jumped 2% after the Energy Department reported a smaller-than-expected increase of U.S. gas in storage in the week ended Sept.11.
Crude for October delivery finished down 4 cents, or 0.1%, at $72.47 a barrel on the New York Mercantile Exchange. Crude oil earlier rose to a high of $73.16 a barrel and fell to a low of $70.40 a barrel. Gold for December delivery, the most active contract, fell $6.70, or 0.6% to finish at $1,013.50 an ounce.
In the second quarter, household debt fell at a 1.7% annual rate to $13.7 trillion, matching the record percentage decline in the fourth quarter.
The Dow Jones Industrial Average fell 7.79 points, or less than 0.1%, to end at 9,783.92. The S&P 500 Index declined 3.27 points, or 0.3%, to 1,065.49, while the Nasdaq
Wednesday, September 16, 2009
The Dollar
9/16/09 News
U.S. dollar index declines to 76.18. Investors turned the most bearish on the
dollar in 18 months as signs of a recovery in the global economy reduced demand for the currency as a refuge, a survey of Bloomberg users showed.
The world’s main reserve currency will fall and Treasury yields will rise over the next six months, according to 1,851 respondents in the Bloomberg Professional Global Confidence Index. Their outlook on the economy improved for a second month, after saying it worsened every month since the index began in November 2007.
The U.S. Dollar Index fell yesterday to the lowest level in a year as a decline in foreign-exchange price swings encouraged investors to borrow the currency at record low interest rates to finance the purchase of assets in countries offering yields as much as 8.1 percentage points higher than deposit rates in America.
“You’ve had a lot of people being in the dollar that are going to exit when it isn’t a necessity as a safe haven,” said
Fabian Eliasson, a survey participant and head of U.S. currency sales at Mizuho Corporate Bank Ltd. in New York. Eliasson said he expects the dollar to weaken.
Sentiment toward the greenback fell to 30.8 in September, from 38.8 in August, according to the survey. The reading is the lowest since it dropped to 30.3 in March 2008, and has tumbled from a high of 68.86 a year ago. The measure is a diffusion index, meaning a reading below 50 indicates Bloomberg users expect the dollar to weaken.
The OECD reports that unemployment among developed nations has reached a post-WWII high. In its latest employment outlook the agency said that the unemployment rate has already reached a post-war record high at 8.5% in the OECD area, corresponding to an increase in more than 15 million in the ranks of the unemployed since the end of 2007. If the recovery fails to gain momentum, the OECD unemployment rate could even approach a new post-war high of 10%,with 57 million people out of work.
Wells Fargo & Co., the nation’s biggest home lender, expects unpaid loans to increase, adding to signs that the U.S. real-estate crunch will squeeze bank profits the rest of this year.
The U.S. current account deficit narrowed to $98.8 billion in the second quarter, or 2.8% of gross domestic product, the Commerce Department reported Wednesday. In percentage terms, this is the smallest deficit since the first quarter of 1991. In dollar terms, the deficit is the lowest since the fourth quarter of 2001. The deficit was $104.5 billion in the first quarter. The narrowing in the deficit was accounted by a reduction in the deficit on goods. Net financial inflows increased to $58.3 billion in the second quarter from $35.4 billion.in the first quarter. Foreign-owned assets in the second quarter increased $16.4 billion in the second quarter after a drop of $67.8 billion in the first quarter.
U.S. consumer prices increased a seasonally adjusted 0.4% in August, pushed higher by a 9.1% increase in gasoline prices, the Labor Department reported Wednesday. In the past 12 months, the consumer price index has fallen 1.5%, largely because energy prices have dropped 23% over that period. Core consumer prices - which exclude food and energy prices to get a better look at underlying inflation - rose 0.1% in August. The core CPI is up 1.4% in the past year, the smallest year-over-year gain since February 2004.
The number of British workers claiming jobless benefits rose by 24,400 in August to a total of 1.61 million, the Office for National Statistics reported Wednesday. The increase exceeded forecasts for a rise of 20,450. The unemployment rate, when calculated according to International Labor Organization standards, rose to 7.9% in the three months to July, up from 7.2% in the previous three months. The unemployment level rose by 210,000 to 2.47 million during the period, the ONS said. Average earning excluding bonuses rose at an annual pace of 2.2% in the three months to July, the lowest rise since comparable records began in 2001. Including bonuses, earnings rose 1.7%.
The December contract for gold futures climbed as high as $1,017.80 an ounce Wednesday in electronic trading on Globex. By late afternoon in Tokyo, it had eased slightly to trade up $9.10, or 0.9%, at $1,015.40.
Blockbuster to close up to 960 stores by end of 2010.
The Bloomberg Professional Global Confidence Index rose to 58.54 this month from 58.12 in August.
Reuters: "Mexican Finance Minister Agustin Carstens urged lawmakers on Tuesday to approve new taxes to offset lower oil revenues, saying the country's struggling energy industry would not recover quickly.
The government of President Felipe Calderon has proposed hiking income and consumption taxes in 2010 to offset lower revenues from crude exports as output from Mexico's state-run oil industry is expected to remain weak.
"This fall (in oil production) is going to last for years ... The future has caught up to us ... we've been living as oil addicts," Carstens said at a congressional hearing on the budget proposals."
The American Petroleum Institute, in a weekly inventory
report, said that crude stocks rose 631,000 barrels in the week
to Sept. 11, against the forecast in a Reuters poll of analysts
for a 2.4-million-barrel drawdown. The industry group said gasoline stocks rose 1.3 million
barrels, more than twice the forecast for a 600,000 barrel
build in the poll. Most stunning for analysts, distillate stocks, which
include heating oil and diesel fuel, jumped 5.2 million
barrels, against the forecast for a 1.3 million barrel rise. "What strikes me the most in the API report is the
incredible build in distillates, even with our current surplus
in supplies already above the five-year average," said Phil
Flynn, analyst at PFGBest Research in Chicago."This is very bearish and tells you that we still have demand issues that probably reflect some of the problems we still have in the economy. Of course, we'll have to wait for
tomorrow's EIA data to see if these industry numbers will
stick," he added.
The Chicago Board Options Exchange Volatility Index on Wednesday traded at its lowest levels in more than a year as U.S. stocks climbed amid thinking the economy is on the mend. Trading lower for a third consecutive session, the VIX, a gauge of investors' willingness to take on risk, recently stood at 23.40, after trading as low as 22.78 earlier on.
The Treasury Department said foreigners sold $97.5 billion in U.S. assets in July, after a $56.8 billion outflow in June that analysts said was higher than previously reported. Also, U.S. industrial production rose 0.8% in August, more than expected. Capacity utilization - a gauge of slack in the economy -- rose to 69.6% in August from a revised 69.0% in July. There were gains across the board in August. Manufacturing expanded 0.6% in August. Excluding autos and auto parts, manufacturing rose 0.4%.
Chicken producer Pilgrim's Pride Corp. confirmed Tuesday that Brazilian beef producer JBS SA will buy a majority stake in the company in a deal that values the company at $2.8 billion. Pilgrim's Pride has agreed to sell 64 percent of stock in the reorganized company to JBS for $800 million in cash. Existing shareholders will receive shares totaling 36 percent of the company.
The S&P hit a new high for the year shortly after the open, and is now up 56 percent from the March 9 low.
Randall W. Forsyth: "The biggest fleet of ships in maritime history sits empty and eerily silent off Singapore, instead of hauling goods and fuel to and from Asia, according to a terrific report from the UK Daily Mail. (Hat tip to Joan McCullough of East Shore Partners for bringing the article to my attention.)
According to the article, this fleet may number close to 500 idle vessels -- bigger than the U.S. and British navies combined. That's equal to about 12% of the world's shipping capacity, which ought to be fully utilized hauling goods to American malls for the Christmas shopping rush."
The NAHB/Wells Fargo Housing Market index climbed to 19 from 18 in August, in line with the forecast in a Reuters survey.
Ferndale, WA start-up Sea 2 Sky Corp. is poised to take its renewable bio-energy business into the big time using a high-heat processs to convert wood and wood fiber into a nonpolluting, high-energy alternative to coal.
The process, known as torrefaction, is a thermo-chemical treatment that incinerates biomass in the 200 to 340 Celsius range (392 to 644 degrees Fahrenheit).
During torrefaction the biomass partly decomposes, but the resulting transformed solid biomass -- in the Sea 2 Sky case called torrefied wood pellets -- has about 30 percent more energy content per unit of mass than its original state, weighs less, is more easily transportable and is virtually pollution-free.
Sea 2 Sky plans to apply this technology to increase the energy output in biomass products and to provide a "coal-like product with significant environmental advantages," it says.
It's "is a scientifically proven method for improving the properties of biomass as a fuel," say Sea 2 Sky officials. The solid product produced retains about 70 percent of its initial weight and 90 percent of the original energy content, but without the harmful emissions of coal.
Natural gas for October delivery also continued its recent surge, gaining 44 cents, or 13%, to finish at $3.76 per million British thermal units.
U.S. crude oil refinery inputs averaged 15.0 million barrels per day during the
week ending September 11, 56 thousand barrels per day below the previous week's
average. Refineries operated at 86.9 percent of their operable capacity last
week. Gasoline production decreased last week, averaging 9.0 million barrels
per day. Distillate fuel production increased last week, averaging 4.2 million
barrels per day.
U.S. crude oil imports averaged 8.9 million barrels per day last week, down 192
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 9.2 million barrels per day, 454 thousand
barrels per day below the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components)
last week averaged 701 thousand barrels per day. Distillate fuel imports
averaged 147 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) decreased by 4.7 million barrels from the previous week. At
332.8 million barrels, U.S. crude oil inventories are above the upper boundary
of the average range for this time of year. Total motor gasoline inventories
increased by 0.5 million barrels last week, and are near the upper limit of the
average range. Both finished gasoline inventories and blending components
inventories increased last week. Distillate fuel inventories increased by 2.2
million barrels, and are above the upper boundary of the average range for
this time of year. Propane/propylene inventories remained unchanged last week
and are above the upper limit of the average range. Total commercial petroleum
inventories decreased by 3.2 million barrels last week, and are above the
upper limit of the average range for this time of year.
Total products supplied over the last four-week period has averaged 19.5
million barrels per day, up by 3.7 percent compared to the similar period last
year. Over the last four weeks, motor gasoline demand has averaged about 9.2
million barrels per day, up by 3.5 percent from the same period last year.
Distillate fuel demand has averaged 3.4 million barrels per day over the last
four weeks, down by 6.8 percent from the same period last year. Jet fuel demand
is 6.1 percent lower over the last four weeks compared to the same four-week
period last year.
At 10:37 today, global debt totaled $35,014,935,027,853.
In early trading Apple rose $5+ to a new 52-week high of $180+.
Dow industrials gain 107.77 points to 9,791.18. S&P 500 Index rises 16.07 points to 1,068.7
The Nasdaq rises 30 points to 2,133.
U.S. dollar index declines to 76.18. Investors turned the most bearish on the
dollar in 18 months as signs of a recovery in the global economy reduced demand for the currency as a refuge, a survey of Bloomberg users showed.
The world’s main reserve currency will fall and Treasury yields will rise over the next six months, according to 1,851 respondents in the Bloomberg Professional Global Confidence Index. Their outlook on the economy improved for a second month, after saying it worsened every month since the index began in November 2007.
The U.S. Dollar Index fell yesterday to the lowest level in a year as a decline in foreign-exchange price swings encouraged investors to borrow the currency at record low interest rates to finance the purchase of assets in countries offering yields as much as 8.1 percentage points higher than deposit rates in America.
“You’ve had a lot of people being in the dollar that are going to exit when it isn’t a necessity as a safe haven,” said
Fabian Eliasson, a survey participant and head of U.S. currency sales at Mizuho Corporate Bank Ltd. in New York. Eliasson said he expects the dollar to weaken.
Sentiment toward the greenback fell to 30.8 in September, from 38.8 in August, according to the survey. The reading is the lowest since it dropped to 30.3 in March 2008, and has tumbled from a high of 68.86 a year ago. The measure is a diffusion index, meaning a reading below 50 indicates Bloomberg users expect the dollar to weaken.
The OECD reports that unemployment among developed nations has reached a post-WWII high. In its latest employment outlook the agency said that the unemployment rate has already reached a post-war record high at 8.5% in the OECD area, corresponding to an increase in more than 15 million in the ranks of the unemployed since the end of 2007. If the recovery fails to gain momentum, the OECD unemployment rate could even approach a new post-war high of 10%,with 57 million people out of work.
Wells Fargo & Co., the nation’s biggest home lender, expects unpaid loans to increase, adding to signs that the U.S. real-estate crunch will squeeze bank profits the rest of this year.
The U.S. current account deficit narrowed to $98.8 billion in the second quarter, or 2.8% of gross domestic product, the Commerce Department reported Wednesday. In percentage terms, this is the smallest deficit since the first quarter of 1991. In dollar terms, the deficit is the lowest since the fourth quarter of 2001. The deficit was $104.5 billion in the first quarter. The narrowing in the deficit was accounted by a reduction in the deficit on goods. Net financial inflows increased to $58.3 billion in the second quarter from $35.4 billion.in the first quarter. Foreign-owned assets in the second quarter increased $16.4 billion in the second quarter after a drop of $67.8 billion in the first quarter.
U.S. consumer prices increased a seasonally adjusted 0.4% in August, pushed higher by a 9.1% increase in gasoline prices, the Labor Department reported Wednesday. In the past 12 months, the consumer price index has fallen 1.5%, largely because energy prices have dropped 23% over that period. Core consumer prices - which exclude food and energy prices to get a better look at underlying inflation - rose 0.1% in August. The core CPI is up 1.4% in the past year, the smallest year-over-year gain since February 2004.
The number of British workers claiming jobless benefits rose by 24,400 in August to a total of 1.61 million, the Office for National Statistics reported Wednesday. The increase exceeded forecasts for a rise of 20,450. The unemployment rate, when calculated according to International Labor Organization standards, rose to 7.9% in the three months to July, up from 7.2% in the previous three months. The unemployment level rose by 210,000 to 2.47 million during the period, the ONS said. Average earning excluding bonuses rose at an annual pace of 2.2% in the three months to July, the lowest rise since comparable records began in 2001. Including bonuses, earnings rose 1.7%.
The December contract for gold futures climbed as high as $1,017.80 an ounce Wednesday in electronic trading on Globex. By late afternoon in Tokyo, it had eased slightly to trade up $9.10, or 0.9%, at $1,015.40.
Blockbuster to close up to 960 stores by end of 2010.
The Bloomberg Professional Global Confidence Index rose to 58.54 this month from 58.12 in August.
Reuters: "Mexican Finance Minister Agustin Carstens urged lawmakers on Tuesday to approve new taxes to offset lower oil revenues, saying the country's struggling energy industry would not recover quickly.
The government of President Felipe Calderon has proposed hiking income and consumption taxes in 2010 to offset lower revenues from crude exports as output from Mexico's state-run oil industry is expected to remain weak.
"This fall (in oil production) is going to last for years ... The future has caught up to us ... we've been living as oil addicts," Carstens said at a congressional hearing on the budget proposals."
The American Petroleum Institute, in a weekly inventory
report, said that crude stocks rose 631,000 barrels in the week
to Sept. 11, against the forecast in a Reuters poll of analysts
for a 2.4-million-barrel drawdown. The industry group said gasoline stocks rose 1.3 million
barrels, more than twice the forecast for a 600,000 barrel
build in the poll. Most stunning for analysts, distillate stocks, which
include heating oil and diesel fuel, jumped 5.2 million
barrels, against the forecast for a 1.3 million barrel rise. "What strikes me the most in the API report is the
incredible build in distillates, even with our current surplus
in supplies already above the five-year average," said Phil
Flynn, analyst at PFGBest Research in Chicago."This is very bearish and tells you that we still have demand issues that probably reflect some of the problems we still have in the economy. Of course, we'll have to wait for
tomorrow's EIA data to see if these industry numbers will
stick," he added.
The Chicago Board Options Exchange Volatility Index on Wednesday traded at its lowest levels in more than a year as U.S. stocks climbed amid thinking the economy is on the mend. Trading lower for a third consecutive session, the VIX, a gauge of investors' willingness to take on risk, recently stood at 23.40, after trading as low as 22.78 earlier on.
The Treasury Department said foreigners sold $97.5 billion in U.S. assets in July, after a $56.8 billion outflow in June that analysts said was higher than previously reported. Also, U.S. industrial production rose 0.8% in August, more than expected. Capacity utilization - a gauge of slack in the economy -- rose to 69.6% in August from a revised 69.0% in July. There were gains across the board in August. Manufacturing expanded 0.6% in August. Excluding autos and auto parts, manufacturing rose 0.4%.
Chicken producer Pilgrim's Pride Corp. confirmed Tuesday that Brazilian beef producer JBS SA will buy a majority stake in the company in a deal that values the company at $2.8 billion. Pilgrim's Pride has agreed to sell 64 percent of stock in the reorganized company to JBS for $800 million in cash. Existing shareholders will receive shares totaling 36 percent of the company.
The S&P hit a new high for the year shortly after the open, and is now up 56 percent from the March 9 low.
Randall W. Forsyth: "The biggest fleet of ships in maritime history sits empty and eerily silent off Singapore, instead of hauling goods and fuel to and from Asia, according to a terrific report from the UK Daily Mail. (Hat tip to Joan McCullough of East Shore Partners for bringing the article to my attention.)
According to the article, this fleet may number close to 500 idle vessels -- bigger than the U.S. and British navies combined. That's equal to about 12% of the world's shipping capacity, which ought to be fully utilized hauling goods to American malls for the Christmas shopping rush."
The NAHB/Wells Fargo Housing Market index climbed to 19 from 18 in August, in line with the forecast in a Reuters survey.
Ferndale, WA start-up Sea 2 Sky Corp. is poised to take its renewable bio-energy business into the big time using a high-heat processs to convert wood and wood fiber into a nonpolluting, high-energy alternative to coal.
The process, known as torrefaction, is a thermo-chemical treatment that incinerates biomass in the 200 to 340 Celsius range (392 to 644 degrees Fahrenheit).
During torrefaction the biomass partly decomposes, but the resulting transformed solid biomass -- in the Sea 2 Sky case called torrefied wood pellets -- has about 30 percent more energy content per unit of mass than its original state, weighs less, is more easily transportable and is virtually pollution-free.
Sea 2 Sky plans to apply this technology to increase the energy output in biomass products and to provide a "coal-like product with significant environmental advantages," it says.
It's "is a scientifically proven method for improving the properties of biomass as a fuel," say Sea 2 Sky officials. The solid product produced retains about 70 percent of its initial weight and 90 percent of the original energy content, but without the harmful emissions of coal.
Natural gas for October delivery also continued its recent surge, gaining 44 cents, or 13%, to finish at $3.76 per million British thermal units.
U.S. crude oil refinery inputs averaged 15.0 million barrels per day during the
week ending September 11, 56 thousand barrels per day below the previous week's
average. Refineries operated at 86.9 percent of their operable capacity last
week. Gasoline production decreased last week, averaging 9.0 million barrels
per day. Distillate fuel production increased last week, averaging 4.2 million
barrels per day.
U.S. crude oil imports averaged 8.9 million barrels per day last week, down 192
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 9.2 million barrels per day, 454 thousand
barrels per day below the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components)
last week averaged 701 thousand barrels per day. Distillate fuel imports
averaged 147 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) decreased by 4.7 million barrels from the previous week. At
332.8 million barrels, U.S. crude oil inventories are above the upper boundary
of the average range for this time of year. Total motor gasoline inventories
increased by 0.5 million barrels last week, and are near the upper limit of the
average range. Both finished gasoline inventories and blending components
inventories increased last week. Distillate fuel inventories increased by 2.2
million barrels, and are above the upper boundary of the average range for
this time of year. Propane/propylene inventories remained unchanged last week
and are above the upper limit of the average range. Total commercial petroleum
inventories decreased by 3.2 million barrels last week, and are above the
upper limit of the average range for this time of year.
Total products supplied over the last four-week period has averaged 19.5
million barrels per day, up by 3.7 percent compared to the similar period last
year. Over the last four weeks, motor gasoline demand has averaged about 9.2
million barrels per day, up by 3.5 percent from the same period last year.
Distillate fuel demand has averaged 3.4 million barrels per day over the last
four weeks, down by 6.8 percent from the same period last year. Jet fuel demand
is 6.1 percent lower over the last four weeks compared to the same four-week
period last year.
At 10:37 today, global debt totaled $35,014,935,027,853.
In early trading Apple rose $5+ to a new 52-week high of $180+.
Dow industrials gain 107.77 points to 9,791.18. S&P 500 Index rises 16.07 points to 1,068.7
The Nasdaq rises 30 points to 2,133.
Tuesday, September 15, 2009
Real Household Income
9/15/09 Real Household Income
Randall W. Forsyth: "The real median income of American households is no higher than in 1973, after inflation, according to Shadow Government Statistics.
"Recent reporting has shown not only that real growth in household income has failed to keep up with inflation, but that consumer debt and net worth are contracting paces previously not seen in the post-World War II era," writes SGS's John Williams.
Indeed, he adds, "the official numbers show households struggling to make ends meet for at least the last decade. Without adequate income growth, consumers met the consumption needs and/or desires through expanded debt...."Such activity was encouraged openly by Federal Reserve Chairman Alan Greenspan, and the bulk of economic growth in recent years, as a result, was due largely to debt expansion, not to healthy growth in consumer income," Williams concludes."
MasterCard Inc.'s chief financial officer on Tuesday said the global economic slowdown continues to prove "challenging" for consumers, MasterCard's bank customers, merchants and the company itself. "We are mindful that while the unemployment figures are a lagging indicator, consumer confidence remains low," said Martina Hund-Mejean at the Barclays Capital Global Financial Services Conference. "There is a correlation, a tight correlation, between the unemployment rate and the write-offs of our bank customers which will continue to impact growth."
U.S. retail sales rose a seasonally adjusted 2.7% in August, the biggest increase in more than three years, boosted by government subsidies for cars, higher gas prices, and busy crowds at the malls, the Commerce Department estimated Tuesday. Sales were stronger than the 2.3% expected by economists surveyed by MarketWatch, largely because of widespread sales gains outside of gas stations and auto lots. Sales were down 5.3% compared with a year earlier. Auto sales surged 10.6% on the back of the government's cash-for-clunkers program. Excluding autos, sales rose 1.1%, the most since February. Gas station sales rose 5.1% on higher prices. Excluding autos and gas, sales rose 0.6%.
Manufacturing activity in the New York improved in September to the highest level since prior to beginning of the recession in late 2007, the New York Federal Reserve Bank said Tuesday. The bank's Empire State Manufacturing index rose to 18.9 in September from 12.1 in August. The new orders index climbed in September, while shipments dipped. The employment index remained in negative territory.
U.S. producer prices rose by 1.7% in August, the Labor Department reported Tuesday, powered by the biggest gain in energy prices since November 2007. Minus volatile energy and food prices, however, the producer price index rose just 0.2%. Economists surveyed by MarketWatch were expecting producer prices to climb by 1.5% in August. They estimated core prices would rise by 0.1%.
"At some point, if you refuse to contain health care costs, you'll go bankrupt," says Andy Xie, a prominent Shanghai-based economist, formerly of Morgan Stanley. "It's widely known among [Chinese] policymakers."
The Kroger Co. says second-quarter profit fell nearly 8 percent, as households cut spending more deeply and food prices fell.
Cincinnati-based Kroger, the nation's largest traditional grocery chain, said sales also fell in the quarter, and it cut its earning guidance for the full year.
Democrats could invoke the reconciliation process on Oct. 15, and that would enable a simple majority to pass the health care bill.
Prime Minister Gordon Brown said Britain’s Labour government will have to cut spending in order to reduce its debts, bowing to pressure from the Bank of England, Standard & Poor’s and opposition politicians.
“I must tell you the tough truth about the hard choices,” Brown said in a speech to union leaders in Liverpool today. “Labour will cut costs, cut inefficiencies, cut unnecessary programs and cut lower priority budgets.”
Stock buybacks among S&P 500 companies have declined to their lowest level since early 1998, Standard & Poor's said on Tuesday. Preliminary results compiled by the index provider found S&P 500 companies spent $24.2 billion on stock repurchases in the second quarter of 2009, a 72% decline from the $87.9 billion spent during the same period last year. "Until sales and profits improve, and for more than one quarter, buybacks will be for the few brave companies that are willing to be separated from their cash security blanket," Howard Silverblatt, senior index analyst at Standard & Poor's, said in an email.
Ca pital One Financial Corp. said Tuesday that delinquencies on its U.S. credit cards rose in August, although defaults slowed, sending its shares tumbling nearly 5 percent.
Trade policies pursued by President Barack Obama and the Democratic-controlled Congress since the start of the year could lead to the loss of 585,800 U.S. jobs, a study said on Tuesday.
The study done for the U.S. Chamber of Commerce attributed almost two-thirds of the potential job losses, or 383,400, to Congress' failure to approve free trade agreements with Colombia and South Korea.
Passing the two agreements and a third pact with Panama should be part of a national plan to double U.S. exports over the next five years, U.S. Chamber of Commerce President Tom Donohue told reporters in a conference call.
"A major surge in exports is our best path out of a recession, out of double-digit unemployment and the exploding deficits we're now experiencing," Donohue said.
The S&P 500 gained 3.3 points, or 0.3%, to 1,052.63 by the close of trading, the highest close since Oct. 6. The Dow Jones Industrial Average rallied 56.6 points, or 0.6%, to 9,683.4 points, also the highest close since Oct. 6. The Nasdaq Composite gained 10.9 points, or 0.5%, to 2,102.6.
Crude oil for October delivery finished up $2.07, or 3%, at $70.93 a barrel.
Randall W. Forsyth: "The real median income of American households is no higher than in 1973, after inflation, according to Shadow Government Statistics.
"Recent reporting has shown not only that real growth in household income has failed to keep up with inflation, but that consumer debt and net worth are contracting paces previously not seen in the post-World War II era," writes SGS's John Williams.
Indeed, he adds, "the official numbers show households struggling to make ends meet for at least the last decade. Without adequate income growth, consumers met the consumption needs and/or desires through expanded debt...."Such activity was encouraged openly by Federal Reserve Chairman Alan Greenspan, and the bulk of economic growth in recent years, as a result, was due largely to debt expansion, not to healthy growth in consumer income," Williams concludes."
MasterCard Inc.'s chief financial officer on Tuesday said the global economic slowdown continues to prove "challenging" for consumers, MasterCard's bank customers, merchants and the company itself. "We are mindful that while the unemployment figures are a lagging indicator, consumer confidence remains low," said Martina Hund-Mejean at the Barclays Capital Global Financial Services Conference. "There is a correlation, a tight correlation, between the unemployment rate and the write-offs of our bank customers which will continue to impact growth."
U.S. retail sales rose a seasonally adjusted 2.7% in August, the biggest increase in more than three years, boosted by government subsidies for cars, higher gas prices, and busy crowds at the malls, the Commerce Department estimated Tuesday. Sales were stronger than the 2.3% expected by economists surveyed by MarketWatch, largely because of widespread sales gains outside of gas stations and auto lots. Sales were down 5.3% compared with a year earlier. Auto sales surged 10.6% on the back of the government's cash-for-clunkers program. Excluding autos, sales rose 1.1%, the most since February. Gas station sales rose 5.1% on higher prices. Excluding autos and gas, sales rose 0.6%.
Manufacturing activity in the New York improved in September to the highest level since prior to beginning of the recession in late 2007, the New York Federal Reserve Bank said Tuesday. The bank's Empire State Manufacturing index rose to 18.9 in September from 12.1 in August. The new orders index climbed in September, while shipments dipped. The employment index remained in negative territory.
U.S. producer prices rose by 1.7% in August, the Labor Department reported Tuesday, powered by the biggest gain in energy prices since November 2007. Minus volatile energy and food prices, however, the producer price index rose just 0.2%. Economists surveyed by MarketWatch were expecting producer prices to climb by 1.5% in August. They estimated core prices would rise by 0.1%.
"At some point, if you refuse to contain health care costs, you'll go bankrupt," says Andy Xie, a prominent Shanghai-based economist, formerly of Morgan Stanley. "It's widely known among [Chinese] policymakers."
The Kroger Co. says second-quarter profit fell nearly 8 percent, as households cut spending more deeply and food prices fell.
Cincinnati-based Kroger, the nation's largest traditional grocery chain, said sales also fell in the quarter, and it cut its earning guidance for the full year.
Democrats could invoke the reconciliation process on Oct. 15, and that would enable a simple majority to pass the health care bill.
Prime Minister Gordon Brown said Britain’s Labour government will have to cut spending in order to reduce its debts, bowing to pressure from the Bank of England, Standard & Poor’s and opposition politicians.
“I must tell you the tough truth about the hard choices,” Brown said in a speech to union leaders in Liverpool today. “Labour will cut costs, cut inefficiencies, cut unnecessary programs and cut lower priority budgets.”
Stock buybacks among S&P 500 companies have declined to their lowest level since early 1998, Standard & Poor's said on Tuesday. Preliminary results compiled by the index provider found S&P 500 companies spent $24.2 billion on stock repurchases in the second quarter of 2009, a 72% decline from the $87.9 billion spent during the same period last year. "Until sales and profits improve, and for more than one quarter, buybacks will be for the few brave companies that are willing to be separated from their cash security blanket," Howard Silverblatt, senior index analyst at Standard & Poor's, said in an email.
Ca pital One Financial Corp. said Tuesday that delinquencies on its U.S. credit cards rose in August, although defaults slowed, sending its shares tumbling nearly 5 percent.
Trade policies pursued by President Barack Obama and the Democratic-controlled Congress since the start of the year could lead to the loss of 585,800 U.S. jobs, a study said on Tuesday.
The study done for the U.S. Chamber of Commerce attributed almost two-thirds of the potential job losses, or 383,400, to Congress' failure to approve free trade agreements with Colombia and South Korea.
Passing the two agreements and a third pact with Panama should be part of a national plan to double U.S. exports over the next five years, U.S. Chamber of Commerce President Tom Donohue told reporters in a conference call.
"A major surge in exports is our best path out of a recession, out of double-digit unemployment and the exploding deficits we're now experiencing," Donohue said.
The S&P 500 gained 3.3 points, or 0.3%, to 1,052.63 by the close of trading, the highest close since Oct. 6. The Dow Jones Industrial Average rallied 56.6 points, or 0.6%, to 9,683.4 points, also the highest close since Oct. 6. The Nasdaq Composite gained 10.9 points, or 0.5%, to 2,102.6.
Crude oil for October delivery finished up $2.07, or 3%, at $70.93 a barrel.
Monday, September 14, 2009
Swimming Naked
9/14/09 Swimming Naked
Adam Brochert: "There will always be fraud in financial markets and government. But it has reached a feverish pitch at this time precisely because the secular credit contraction has begun and is now revealing who has been swimming naked. Unfortunately, the government is rushing to put a towel around the biggest and worst offenders, including itself. These are secular sign posts that indicate a long-term change is now well-entrenched: a lack of trust in "the powers that be."...But our government has gotten so large and all-encompassing that it demands to control everything. If prices go up, ban investment and chastise the speculators. If prices go down, ban and chastise the short sellers. If spending doesn't fix things, spend more then act shocked when the deficit comes in at levels higher than expected and raise taxes. If foreclosures get excessive, ban foreclosures. If industries fail, take them over and pretend you are going to make them stronger. If some firms are succeeding despite all the obstacles presented by our regulatory and taxation system, over-regulate them and increase their taxes to help out the firms that are struggling. And if none of this works, label the groups that annoy you or get in your way as "suspicious" or "unpatriotic" - maybe even throw around the "terror" word a little."
“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview yesterday in Paris. “The problems are worse than they were in 2007 before the crisis.”
Stiglitz’s views echo those of former Federal Reserve Chairman
Paul Volcker, who has advised President Barack Obama’s administration to curtail the size of banks, and Bank of Israel Governor Stanley Fischer, who suggested last month that governments may want to discourage financial institutions from growing “excessively.”
The number of people in work in the 16 countries that use the euro fell by 702,000 in the second quarter.
One year after Wall Street teetered on the brink of collapse, seven out of 10 Americans lack confidence the federal government has taken safeguards to prevent another financial industry meltdown, according to a new Associated Press-GfK poll.
Even more - 80 percent - rate the condition of the economy as poor and a majority worry about their own ability to make ends meet. The pessimistic outlook sets the stage for President Barack Obama as he attempts to portray the financial sector as increasingly confident and stable and presses Congress to act on new banking regulations.
Jo hn Tamny: "It's time to end the buck's role as the world's currency."
"I don't know if the bears have had their final say in the natural gas market, but it takes a lot more courage to be a bear after seeing that we're in September and we had that big pop up back above $3," Phil Flynn concluded.
“By taking this unprecedented action, the Obama administration is now at odds with its own public statements about refraining from increasing tariffs,” Vic DeIorio, executive vice president of GITI Tire in the U.S., said in a statement. “This decision will cost many more American jobs than it will create.”
Venezuela and a group of Russian companies will invest $20 billion to develop the Junin 6 block of heavy crude reserves in the Orinoco Belt, Energy and Oil Minister Rafael Ramirez said. The Russian companies will pay $1 billion for their participation in the oil block that is expected to produce 400,000 to 450,000 barrels per day.
Venezuela President Hugo Chavez said the South American country plans to develop nuclear energy with Russia . Venezuela doesn’t want to develop nuclear weapons, he said.
Russia has agreed to lend Venezuela over $2 billion to purchase tanks and advanced anti-aircraft missiles in deals that show Moscow's commitment to working closely with Washington-foe President Hugo Chavez.
The average price of regular gasoline at U.S. filling stations slipped to $2.5911 a gallon as supplies rose and demand fell with the end of the U.S. summer driving season.
Gasoline lost 5.06 cents in the three weeks ended Sept. 11, according to a survey of 5,000 filling stations nationwide by Trilby Lundberg, an independent gasoline analyst in Camarillo, California.
“Demand is poor,” Lundberg said in an interview today. “The number of those who do not have jobs continues to rise.”
Nouriel Roubini: "The US economy faces a difficult time ahead as consumers stop spending and the fallout escalates from the collapse of the commercial real estate market, economist Nouriel Roubini told CNBC. Additionally, non-government bonds will face pressure, the securitization market is all but dead, the credit markets are still frozen and consumers will continue to save more rather than spend and boost growth.
"It's going to be death by a thousand cuts," said Roubini, chairman of RGE Monitor and economics professor at New York University's Stern School of Business. "The financial system is severely damaged, and it's not just the banks."
Roubini predicted more than 1,000 financial institutions could fail before all is said and done."
The worst of the economic crisis is not over and a currency crisis can happen this year or the next year, because the problem of too much debt in the system has not been solved, legendary investor Jim Rogers told CNBC Monday.
Earthfiles: “During the July 22 total solar eclipse observation, China had discovered
near the sun an unidentified object, it's physical nature remains to be further studied.”
- Ji Haisheng, Dir., Jijinshan Astronomical Observatory, Nanjing, China,
as quoted on September 7, 2009, by U. K. Daily Mail
ZeroHedge: "Currently, the 14 week rate of change of Treasury yields is negative, and as stated previously, this is the first time since the March bottom."
Eli Lilly & Co. said that it plans to reduce its global headcount to 35,000 by the end of 2011.
Goldman Sachs Group Inc. cut its 12-month forecast for U.S. wheat and corn prices, citing higher estimates for inventories of the grains.
Wheat futures traded in Chicago will rise to $5.50 a bushel in the coming year, 12 percent below last week’s forecast of $6.25, Goldman Sachs analysts wrote in a research note dated yesterday. Corn futures will climb to $4.50 a bushel, 14 percent less than a previous prediction of $5.25, they said.
The U.K. housing market slump will resume next year as the squeeze on mortgage lending persists, Ernst & Young LLC’s Item Club said.
Repsol YPF SA, the Spanish oil company that announced one of the world’s largest natural-gas discoveries last week, said the field will take as many as five years to be developed.
David Rosenberg: “The rally in the U.S. equity market has been so pronounced that it is no longer just pricing in the end of the recession. It is pricing in two years of recovery.”
"What (investors) should do is worry about all the debt developing in the US. They should short bonds because that's the next bubble that's building in the US," Jim Rogers said.
"I own basically commodities where the fundamentals are getting better… I own particularly the yen and the Swiss franc. I don't own many stocks, only in China."
"For one of the few times in my life, I don't have any shorts," he said.
Tony Fratto: "Unless President Obama reverses course, he will be remembered as the president who "lost" trade for America, and the only anti-trade president of modern times."
Crude oil for October delivery dropped 43 cents, or 0.7%, to finish at $68.86 a barrel on the New York Mercantile Exchange. Meanwhile, natural gas futures surged 11.5% as traders bet the commodity's year-long slide has ended as fall approaches, and an exchange-traded fund backed by the commodity announced it would issue more shares.
By 2010, eMarketer expects that 15.5% of all U.S. adult Internet users will use Twitter
Gold for September delivery finished down 0.5% at $999.90 an ounce on the Comex division of the New York Mercantile Exchange. The more active December contract ended down 0.5% at $1,001.10 an ounce.
S&P 500 Index rises 6.57 points to 1,049.30. Nasdaq Composite gains 10.88 points to 2,091.78. Dow gains 21.39 to end at 9,626.80.
Adam Brochert: "There will always be fraud in financial markets and government. But it has reached a feverish pitch at this time precisely because the secular credit contraction has begun and is now revealing who has been swimming naked. Unfortunately, the government is rushing to put a towel around the biggest and worst offenders, including itself. These are secular sign posts that indicate a long-term change is now well-entrenched: a lack of trust in "the powers that be."...But our government has gotten so large and all-encompassing that it demands to control everything. If prices go up, ban investment and chastise the speculators. If prices go down, ban and chastise the short sellers. If spending doesn't fix things, spend more then act shocked when the deficit comes in at levels higher than expected and raise taxes. If foreclosures get excessive, ban foreclosures. If industries fail, take them over and pretend you are going to make them stronger. If some firms are succeeding despite all the obstacles presented by our regulatory and taxation system, over-regulate them and increase their taxes to help out the firms that are struggling. And if none of this works, label the groups that annoy you or get in your way as "suspicious" or "unpatriotic" - maybe even throw around the "terror" word a little."
“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview yesterday in Paris. “The problems are worse than they were in 2007 before the crisis.”
Stiglitz’s views echo those of former Federal Reserve Chairman
Paul Volcker, who has advised President Barack Obama’s administration to curtail the size of banks, and Bank of Israel Governor Stanley Fischer, who suggested last month that governments may want to discourage financial institutions from growing “excessively.”
The number of people in work in the 16 countries that use the euro fell by 702,000 in the second quarter.
One year after Wall Street teetered on the brink of collapse, seven out of 10 Americans lack confidence the federal government has taken safeguards to prevent another financial industry meltdown, according to a new Associated Press-GfK poll.
Even more - 80 percent - rate the condition of the economy as poor and a majority worry about their own ability to make ends meet. The pessimistic outlook sets the stage for President Barack Obama as he attempts to portray the financial sector as increasingly confident and stable and presses Congress to act on new banking regulations.
Jo hn Tamny: "It's time to end the buck's role as the world's currency."
"I don't know if the bears have had their final say in the natural gas market, but it takes a lot more courage to be a bear after seeing that we're in September and we had that big pop up back above $3," Phil Flynn concluded.
“By taking this unprecedented action, the Obama administration is now at odds with its own public statements about refraining from increasing tariffs,” Vic DeIorio, executive vice president of GITI Tire in the U.S., said in a statement. “This decision will cost many more American jobs than it will create.”
Venezuela and a group of Russian companies will invest $20 billion to develop the Junin 6 block of heavy crude reserves in the Orinoco Belt, Energy and Oil Minister Rafael Ramirez said. The Russian companies will pay $1 billion for their participation in the oil block that is expected to produce 400,000 to 450,000 barrels per day.
Venezuela President Hugo Chavez said the South American country plans to develop nuclear energy with Russia . Venezuela doesn’t want to develop nuclear weapons, he said.
Russia has agreed to lend Venezuela over $2 billion to purchase tanks and advanced anti-aircraft missiles in deals that show Moscow's commitment to working closely with Washington-foe President Hugo Chavez.
The average price of regular gasoline at U.S. filling stations slipped to $2.5911 a gallon as supplies rose and demand fell with the end of the U.S. summer driving season.
Gasoline lost 5.06 cents in the three weeks ended Sept. 11, according to a survey of 5,000 filling stations nationwide by Trilby Lundberg, an independent gasoline analyst in Camarillo, California.
“Demand is poor,” Lundberg said in an interview today. “The number of those who do not have jobs continues to rise.”
Nouriel Roubini: "The US economy faces a difficult time ahead as consumers stop spending and the fallout escalates from the collapse of the commercial real estate market, economist Nouriel Roubini told CNBC. Additionally, non-government bonds will face pressure, the securitization market is all but dead, the credit markets are still frozen and consumers will continue to save more rather than spend and boost growth.
"It's going to be death by a thousand cuts," said Roubini, chairman of RGE Monitor and economics professor at New York University's Stern School of Business. "The financial system is severely damaged, and it's not just the banks."
Roubini predicted more than 1,000 financial institutions could fail before all is said and done."
The worst of the economic crisis is not over and a currency crisis can happen this year or the next year, because the problem of too much debt in the system has not been solved, legendary investor Jim Rogers told CNBC Monday.
Earthfiles: “During the July 22 total solar eclipse observation, China had discovered
near the sun an unidentified object, it's physical nature remains to be further studied.”
- Ji Haisheng, Dir., Jijinshan Astronomical Observatory, Nanjing, China,
as quoted on September 7, 2009, by U. K. Daily Mail
ZeroHedge: "Currently, the 14 week rate of change of Treasury yields is negative, and as stated previously, this is the first time since the March bottom."
Eli Lilly & Co. said that it plans to reduce its global headcount to 35,000 by the end of 2011.
Goldman Sachs Group Inc. cut its 12-month forecast for U.S. wheat and corn prices, citing higher estimates for inventories of the grains.
Wheat futures traded in Chicago will rise to $5.50 a bushel in the coming year, 12 percent below last week’s forecast of $6.25, Goldman Sachs analysts wrote in a research note dated yesterday. Corn futures will climb to $4.50 a bushel, 14 percent less than a previous prediction of $5.25, they said.
The U.K. housing market slump will resume next year as the squeeze on mortgage lending persists, Ernst & Young LLC’s Item Club said.
Repsol YPF SA, the Spanish oil company that announced one of the world’s largest natural-gas discoveries last week, said the field will take as many as five years to be developed.
David Rosenberg: “The rally in the U.S. equity market has been so pronounced that it is no longer just pricing in the end of the recession. It is pricing in two years of recovery.”
"What (investors) should do is worry about all the debt developing in the US. They should short bonds because that's the next bubble that's building in the US," Jim Rogers said.
"I own basically commodities where the fundamentals are getting better… I own particularly the yen and the Swiss franc. I don't own many stocks, only in China."
"For one of the few times in my life, I don't have any shorts," he said.
Tony Fratto: "Unless President Obama reverses course, he will be remembered as the president who "lost" trade for America, and the only anti-trade president of modern times."
Crude oil for October delivery dropped 43 cents, or 0.7%, to finish at $68.86 a barrel on the New York Mercantile Exchange. Meanwhile, natural gas futures surged 11.5% as traders bet the commodity's year-long slide has ended as fall approaches, and an exchange-traded fund backed by the commodity announced it would issue more shares.
By 2010, eMarketer expects that 15.5% of all U.S. adult Internet users will use Twitter
Gold for September delivery finished down 0.5% at $999.90 an ounce on the Comex division of the New York Mercantile Exchange. The more active December contract ended down 0.5% at $1,001.10 an ounce.
S&P 500 Index rises 6.57 points to 1,049.30. Nasdaq Composite gains 10.88 points to 2,091.78. Dow gains 21.39 to end at 9,626.80.
Sunday, September 13, 2009
Furious Insider Selling
9/13/09 Furious Insider Selling
George Ure: " Not counting ATM's and online banking operations, since the fall of IndyMac last year, we have not seen 3,684 branches closed or reorganized into other operations (mostly the latter) including the 30 branches of the following which are going through reorg this weekend:
Venture Bank
Brickwell Community Bank
Corus Bank, N.A.
In fairness, we're in what passes for 'normal' in this French Revolution of banking: So far this year we have only seen 1,077 branched reorg'ed, but if we don't count the 800-pound gorilla that failed last year (Washington Mutual/2,239 branches) the numbers for last year wouldn't seem so bad, either."
"It's not a very complicated story," said Charles Biderman, who runs market research firm Trim Tabs. "Insiders know better than you and me. If prices are too high, they sell."
Biderman, who says there were $31 worth of insider stock sales in August for every $1 of insider buys, isn't the only one who has taken note. Ben Silverman, director of research at the InsiderScore.com web site that tracks trading action, said insiders are selling at their most aggressive clip since the summer of 2007. According to Trim Tabs, execs at U.S. public companies have been net sellers of $105 billion worth of stock over the last four months.
The Social Security Trust Fund reported an August net deficit of $5.865 Billion. This is the largest monthly deficit in nineteen years.
The Dow closed Friday at 9,605.41. On September 11, 2001, the Dow closed at guess what? 9,605.51.
Obama placed a tariff on Chinese tires. In the Sept. 12 decision, Obama imposed a 3-year tariff on Chinese-made tire imports. In the first year, it will be set at 35%, far below the 55% levy recommended by the U.S. International Trade Commission. The second year it will be 30%, and the final year 25%. The tariffs begin in 15 days. But David Spooner, a lawyer with Squire, Sanders & Dempsey who represents trade associations of China’s tire producers, said in a statement, "These tariffs are unwarranted. It's troubling that the Administration would invoke an import surge safeguard over the objections U.S. industry and in response to falling imports. Not a single U.S. tire company supports’ the tariffs."
After halting new shares (and then trading at up to a 16% premium to net asset value), U.S. Natural Gas Fund (UNG) will reopen to investment Sept. 28. Natural gas is at a 7.5-year low, and Citigroup (C) estimates that UNG has controlled one-quarter to one-third of futures contracts on ICE and NYMEX.
Doug Noland: "Federal government finance (Treasuries, agency debt and GSE MBS) has expanded about $2.0 TN over the past year. I expect it to inflate another $2.0 TN over the coming twelve months. The private sector Credit apparatus is simply not up to the task of generating the necessary $2.5 TN (or so) of total system Credit expansion necessary to sustain the current economic structure. In this post-Wall Street Bubble environment, only government and government-related Credit retains sufficient “moneyness” in the marketplace. Systemic reflation today depends on a massive inflation of this government helicopter “money....Fixated on the notion of sustainable recovery, policymakers will not be Dialing Back from massive borrowing, spending, or market backstopping endeavors. And this gets to the core of the unquantifiable costs of failing to rein in Credit and asset Bubbles during the boom....And at the end of the day inflationism tends toward socialism. And there is only one way to reverse this course; it is anything but painless. The economy must be weaned off of Credit and financial excesses and government intrusions – and allowed to proceed through the arduous task of adjustment and rebalancing. Choosing instead a course of sustaining current financial and economic structures implies a huge and ever-expanding role for the government. Efforts to stoke a quick recovery imply massive government intrusion and inherent fragility. There will be no Dialing Back....Conceptually, somewhere along the line there reaches a tipping point where government intrusions no longer act as a stabilizing force. They become invariably destabilizing, as the quantity of government monetary inflation becomes massive and uncontrollable. This is the nature of inflationism, although this dynamic is nowhere to be found in Keynesian doctrine. It is my view that this tipping point was reached some time back. It is with this analysis in mind that I fear the emerging Government Finance Bubble risks destroying the creditworthiness of our entire economy."
The government monetary inflation process has been destroying the value of the dollar, undermining the purchasing power of all Americans, and jeopardizing the economic well-being of our present and future. This will have an horrific ending.
Peter Schiff: "When individuals choose to accumulate savings in the form of gold rather than interest-bearing paper deposits in government-insured accounts, there is only one reason for doing so: they fear that the interest will not be enough to compensate for their expected loss of purchasing power through inflation. This fear reflects both current inflation and the expectation for future inflation. While there are those who buy gold to speculate on its appreciation, the underlying factor that drives that appreciation in the first place will always be inflation. If governments were not creating inflation, there would be little investment advantage to owning gold."
Daniel Aaronson and Lee Markowitz: "Many people believe that the taxes collected by Social Security are held in some form of a trust fund. As a result, people have been led to think that the issues discussed in the media regarding Social Security's underfunding is the result of the aging American population. In actuality, the problem is that there is no money held by Social Security because the Government spends the surpluses as the Social Security Fund receives it....In other words, all of the surplus money collected since Social Security's inception, which should have been saved for future payments, instead has been lent to the Government in exchange for privately issued Government debt. In fact, the US Treasury does not hold assets against the privately issued Government debt, making social security taxes no different from other federal taxes in that the Treasury uses the money for "general Government purposes".
Even more worrisome is that the cash provided to the Treasury from the Social Security Fund allows the Government to understate its borrowing needs each year, "[b]ecause the OASI and DI Trust Funds and the U.S. Treasury are both part of the Government, these assets and liabilities offset each other for consolidation purposes in the Government-wide financial statements." As Social Security continues to collect more in taxes than it spends for benefits each year, the Government essentially receives a subsidy that shrinks its annual cash requirements.
Another problem is that the special-issue Treasury securities that Social Security owns are no different than IOUs that an individual might issue to himself. Self-issued bonds are not assets because they are an obligation of the same entity. Instead, Social Security should have invested the cash received each year into assets other than Treasury bonds - foreign bonds, corporate bonds, equities or gold. Perhaps, the Government directed Social Security to invest its funds in Treasury IOUs because government leaders believed that the Treasury would run sizable budget surpluses in the future and thus enable it to pay-back the IOUs owed to Social Security (Americans). Clearly, this will never happen....The Government ran out of money long ago. As a result of its insolvency, the Government is tapping any source of cash it can access, such as Social Security's surplus funds. This is not a healthy or sustainable situation. People recognize that Government spending has the US on a crash course, but markets still behave as though the day of reckoning lies so far ahead that there is no need to address it now. However, the Government's attempt at solving the current financial crisis through the assumption of trillions of dollars in additional debt has only moved the day of reckoning closer."
President Obama warned on Saturday that nearly half of all Americans under age 65 could lose their health coverage at some point in the next decade. Scare tactics 101.
Kyle Wingfield: "Can we trust current and future members of Congress to make good on Obama’s pledge not to let new health spending add “one dime to our deficits — either now or in the future”? Can we trust them not to avoid health-related deficits with the same kind of accounting shell games that have put Medicare and Social Security in danger of insolvency?"
Social Security will face a cash shortfall for the first time in decades next
year, according to a little noticed report released late last month by the
Congressional Budget Office (CBO).
As a result, seniors could face benefit cuts in as little as three years.
Congress could instead raise taxes or authorize new borrowing to close the
shortfall, but has never before addressed a Social Security deficit through
long-term borrowing.
"It`s no surprise to seniors that the economy has taken an already crippled
Social Security system and brought it even closer to bankruptcy," said Daniel
O`Connell, chairman of The Senior Citizens League (TSCL). "Seniors are our most
vulnerable citizens and desperately need their benefits to keep up with
inflation."
Almost 70 percent of beneficiaries depend on Social Security for 50 percent
or
more
of
their income. Social Security is the sole source of income for 15
percent of beneficiaries.
The 37 million Americans aged 65 and over who receive a Social Security check
each month are forecast to receive no Cost of Living Adjustment in their Social
Security checks until 2012. Seniors have never failed to receive an annual
increase of less than 1.3 percent since the automatic COLA went into effect in
1975. The Senior Citizens League is calling on Congress and the Administration to
enact major Social Security reforms this year.
With 1.2 million supporters, The Senior Citizens League (www.SeniorsLeague.org)
is one of the nation`s largest nonpartisan seniors groups.
Sept. 18, 2008 Obama:“We, as a nation, can not afford to maintain our present entitlement
contribution and distribution structures. Therefore, in the future,
stay-at-home spouses will have two options as to how they
will
receive
future Social Security benefits. They can either opt to receive 100
percent of their working spouse’s benefit upon the death of said spouse
without contributing any additional funds to FICA, or the working
spouse will have had to contribute an additional 25 percent to FICA in
order for the non-working spouse to receive 50 percent of the retired
spouse’s benefit during the retired spouse’s lifetime.
“However, if the latter option is selected, it will terminate upon the death of the working spouse, and the remaining spouse will then receive the full amount that was being paid to the deceased recipient. This is a much fairer system. We, as a nation, recognize the importance of the stay-at-home spouse, while acknowledging that the majority of families have dual-income earnings. This change will affect only those who are currently 40 years of age or younger.
“The current retirement age will be changed. Those 50 and older will see no change. Those born after 1965 will see their retirement postponed one month for each year, resulting in those born after 2015 reaching retirement age at 70.”
China announced a probe into the alleged dumping of American auto and chicken products, two days after U.S. President Barack Obama imposed tariffs on imports of tires from the Asian nation.
Chinese industries have complained that they’re being hurt by “unfair trade practices,” the nation’s Ministry of Commerce said on its Web site today. The ministry is also looking into subsidies for the products, it said. It didn’t specify the imports’ value.
Mike Burk: "This has been a remarkable rally, no leadership, no new highs and no volume all it does is go up.
I expect the major indices to be higher on Friday September 18 than they were on Friday September 11."
Courtesy of John Mauldin. The Privateer (www.the-privateer.com).
"In 1909, the US federal government had an annual budget of $US 0.8 Billion. With this it governed a population of just over 90 million people. The cost of government was about $9 per capita. In 2009, the US federal government has an annual budget of $US 3,550 Billion. With this it governs a population of just over 300 million people. That's a cost of about $11,675 per capita."
George Ure: " Not counting ATM's and online banking operations, since the fall of IndyMac last year, we have not seen 3,684 branches closed or reorganized into other operations (mostly the latter) including the 30 branches of the following which are going through reorg this weekend:
Venture Bank
Brickwell Community Bank
Corus Bank, N.A.
In fairness, we're in what passes for 'normal' in this French Revolution of banking: So far this year we have only seen 1,077 branched reorg'ed, but if we don't count the 800-pound gorilla that failed last year (Washington Mutual/2,239 branches) the numbers for last year wouldn't seem so bad, either."
"It's not a very complicated story," said Charles Biderman, who runs market research firm Trim Tabs. "Insiders know better than you and me. If prices are too high, they sell."
Biderman, who says there were $31 worth of insider stock sales in August for every $1 of insider buys, isn't the only one who has taken note. Ben Silverman, director of research at the InsiderScore.com web site that tracks trading action, said insiders are selling at their most aggressive clip since the summer of 2007. According to Trim Tabs, execs at U.S. public companies have been net sellers of $105 billion worth of stock over the last four months.
The Social Security Trust Fund reported an August net deficit of $5.865 Billion. This is the largest monthly deficit in nineteen years.
The Dow closed Friday at 9,605.41. On September 11, 2001, the Dow closed at guess what? 9,605.51.
Obama placed a tariff on Chinese tires. In the Sept. 12 decision, Obama imposed a 3-year tariff on Chinese-made tire imports. In the first year, it will be set at 35%, far below the 55% levy recommended by the U.S. International Trade Commission. The second year it will be 30%, and the final year 25%. The tariffs begin in 15 days. But David Spooner, a lawyer with Squire, Sanders & Dempsey who represents trade associations of China’s tire producers, said in a statement, "These tariffs are unwarranted. It's troubling that the Administration would invoke an import surge safeguard over the objections U.S. industry and in response to falling imports. Not a single U.S. tire company supports’ the tariffs."
After halting new shares (and then trading at up to a 16% premium to net asset value), U.S. Natural Gas Fund (UNG) will reopen to investment Sept. 28. Natural gas is at a 7.5-year low, and Citigroup (C) estimates that UNG has controlled one-quarter to one-third of futures contracts on ICE and NYMEX.
Doug Noland: "Federal government finance (Treasuries, agency debt and GSE MBS) has expanded about $2.0 TN over the past year. I expect it to inflate another $2.0 TN over the coming twelve months. The private sector Credit apparatus is simply not up to the task of generating the necessary $2.5 TN (or so) of total system Credit expansion necessary to sustain the current economic structure. In this post-Wall Street Bubble environment, only government and government-related Credit retains sufficient “moneyness” in the marketplace. Systemic reflation today depends on a massive inflation of this government helicopter “money....Fixated on the notion of sustainable recovery, policymakers will not be Dialing Back from massive borrowing, spending, or market backstopping endeavors. And this gets to the core of the unquantifiable costs of failing to rein in Credit and asset Bubbles during the boom....And at the end of the day inflationism tends toward socialism. And there is only one way to reverse this course; it is anything but painless. The economy must be weaned off of Credit and financial excesses and government intrusions – and allowed to proceed through the arduous task of adjustment and rebalancing. Choosing instead a course of sustaining current financial and economic structures implies a huge and ever-expanding role for the government. Efforts to stoke a quick recovery imply massive government intrusion and inherent fragility. There will be no Dialing Back....Conceptually, somewhere along the line there reaches a tipping point where government intrusions no longer act as a stabilizing force. They become invariably destabilizing, as the quantity of government monetary inflation becomes massive and uncontrollable. This is the nature of inflationism, although this dynamic is nowhere to be found in Keynesian doctrine. It is my view that this tipping point was reached some time back. It is with this analysis in mind that I fear the emerging Government Finance Bubble risks destroying the creditworthiness of our entire economy."
The government monetary inflation process has been destroying the value of the dollar, undermining the purchasing power of all Americans, and jeopardizing the economic well-being of our present and future. This will have an horrific ending.
Peter Schiff: "When individuals choose to accumulate savings in the form of gold rather than interest-bearing paper deposits in government-insured accounts, there is only one reason for doing so: they fear that the interest will not be enough to compensate for their expected loss of purchasing power through inflation. This fear reflects both current inflation and the expectation for future inflation. While there are those who buy gold to speculate on its appreciation, the underlying factor that drives that appreciation in the first place will always be inflation. If governments were not creating inflation, there would be little investment advantage to owning gold."
Daniel Aaronson and Lee Markowitz: "Many people believe that the taxes collected by Social Security are held in some form of a trust fund. As a result, people have been led to think that the issues discussed in the media regarding Social Security's underfunding is the result of the aging American population. In actuality, the problem is that there is no money held by Social Security because the Government spends the surpluses as the Social Security Fund receives it....In other words, all of the surplus money collected since Social Security's inception, which should have been saved for future payments, instead has been lent to the Government in exchange for privately issued Government debt. In fact, the US Treasury does not hold assets against the privately issued Government debt, making social security taxes no different from other federal taxes in that the Treasury uses the money for "general Government purposes".
Even more worrisome is that the cash provided to the Treasury from the Social Security Fund allows the Government to understate its borrowing needs each year, "[b]ecause the OASI and DI Trust Funds and the U.S. Treasury are both part of the Government, these assets and liabilities offset each other for consolidation purposes in the Government-wide financial statements." As Social Security continues to collect more in taxes than it spends for benefits each year, the Government essentially receives a subsidy that shrinks its annual cash requirements.
Another problem is that the special-issue Treasury securities that Social Security owns are no different than IOUs that an individual might issue to himself. Self-issued bonds are not assets because they are an obligation of the same entity. Instead, Social Security should have invested the cash received each year into assets other than Treasury bonds - foreign bonds, corporate bonds, equities or gold. Perhaps, the Government directed Social Security to invest its funds in Treasury IOUs because government leaders believed that the Treasury would run sizable budget surpluses in the future and thus enable it to pay-back the IOUs owed to Social Security (Americans). Clearly, this will never happen....The Government ran out of money long ago. As a result of its insolvency, the Government is tapping any source of cash it can access, such as Social Security's surplus funds. This is not a healthy or sustainable situation. People recognize that Government spending has the US on a crash course, but markets still behave as though the day of reckoning lies so far ahead that there is no need to address it now. However, the Government's attempt at solving the current financial crisis through the assumption of trillions of dollars in additional debt has only moved the day of reckoning closer."
President Obama warned on Saturday that nearly half of all Americans under age 65 could lose their health coverage at some point in the next decade. Scare tactics 101.
Kyle Wingfield: "Can we trust current and future members of Congress to make good on Obama’s pledge not to let new health spending add “one dime to our deficits — either now or in the future”? Can we trust them not to avoid health-related deficits with the same kind of accounting shell games that have put Medicare and Social Security in danger of insolvency?"
Social Security will face a cash shortfall for the first time in decades next
year, according to a little noticed report released late last month by the
Congressional Budget Office (CBO).
As a result, seniors could face benefit cuts in as little as three years.
Congress could instead raise taxes or authorize new borrowing to close the
shortfall, but has never before addressed a Social Security deficit through
long-term borrowing.
"It`s no surprise to seniors that the economy has taken an already crippled
Social Security system and brought it even closer to bankruptcy," said Daniel
O`Connell, chairman of The Senior Citizens League (TSCL). "Seniors are our most
vulnerable citizens and desperately need their benefits to keep up with
inflation."
Almost 70 percent of beneficiaries depend on Social Security for 50 percent
or
more
of
their income. Social Security is the sole source of income for 15
percent of beneficiaries.
The 37 million Americans aged 65 and over who receive a Social Security check
each month are forecast to receive no Cost of Living Adjustment in their Social
Security checks until 2012. Seniors have never failed to receive an annual
increase of less than 1.3 percent since the automatic COLA went into effect in
1975. The Senior Citizens League is calling on Congress and the Administration to
enact major Social Security reforms this year.
With 1.2 million supporters, The Senior Citizens League (www.SeniorsLeague.org)
is one of the nation`s largest nonpartisan seniors groups.
Sept. 18, 2008 Obama:“We, as a nation, can not afford to maintain our present entitlement
contribution and distribution structures. Therefore, in the future,
stay-at-home spouses will have two options as to how they
will
receive
future Social Security benefits. They can either opt to receive 100
percent of their working spouse’s benefit upon the death of said spouse
without contributing any additional funds to FICA, or the working
spouse will have had to contribute an additional 25 percent to FICA in
order for the non-working spouse to receive 50 percent of the retired
spouse’s benefit during the retired spouse’s lifetime.
“However, if the latter option is selected, it will terminate upon the death of the working spouse, and the remaining spouse will then receive the full amount that was being paid to the deceased recipient. This is a much fairer system. We, as a nation, recognize the importance of the stay-at-home spouse, while acknowledging that the majority of families have dual-income earnings. This change will affect only those who are currently 40 years of age or younger.
“The current retirement age will be changed. Those 50 and older will see no change. Those born after 1965 will see their retirement postponed one month for each year, resulting in those born after 2015 reaching retirement age at 70.”
China announced a probe into the alleged dumping of American auto and chicken products, two days after U.S. President Barack Obama imposed tariffs on imports of tires from the Asian nation.
Chinese industries have complained that they’re being hurt by “unfair trade practices,” the nation’s Ministry of Commerce said on its Web site today. The ministry is also looking into subsidies for the products, it said. It didn’t specify the imports’ value.
Mike Burk: "This has been a remarkable rally, no leadership, no new highs and no volume all it does is go up.
I expect the major indices to be higher on Friday September 18 than they were on Friday September 11."
Courtesy of John Mauldin. The Privateer (www.the-privateer.com).
"In 1909, the US federal government had an annual budget of $US 0.8 Billion. With this it governed a population of just over 90 million people. The cost of government was about $9 per capita. In 2009, the US federal government has an annual budget of $US 3,550 Billion. With this it governs a population of just over 300 million people. That's a cost of about $11,675 per capita."
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