Succinct summation of week’s events:

Positives:

1) Following another sharp rally in US Treasuries and the FOMC announcement of buying more MBS, Bankrate.com says the avg 30 yr mortgage rate falls 18 bps on the week to 4.0% but will it matter? Likely only for refi’s

2) Aug Existing Home Sales at 5.03mm annualized were 280k more than expected, in part due to closings that were delayed in prior months

3) Housing start permits rise in both single family and multi, single family we don’t need more, multi we do

4) German ZEW investor confidence in their economy falls to lowest since ’98 but was a bit better than feared.

Negatives:

1) Confusion reigns with what happens next for Greece, and thus with the rest of the region

2) Italy gets unexpected credit downgrade from S&P

3) Euro basis swap reverses late last week’s fall after ECB/central bank swap line move

4) Euro zone mfr’g and services composite index falls to lowest since July ’09

5) FOMC continues its almost religious mission of suppressing the cost of money, still hoping for a different result. Albert Einstein is smiling

6) China’s preliminary HSBC mfr’g index fell to 49.4 from 49.9

7) Initial Jobless Claims totaled 423k, 3k more than expected and prior week revised up by 4k

8) MBA said refi’s rose just 2.2% while purchases fell to 7 month low.

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

25 Responses to “Succinct summation of week’s events (09/23/11)”

  1. And in case you think you have it hard sitting behind a desk thinking about electronic blips on your screen, take a few moments to see what some people have to do to survive:

    Race against the tide, risking death under huge blocks of ice –

    The people of Kangiqsujuaq in Canada go to great lengths to add variety to their diet of seal meat, venturing under the sea ice during the extreme low tides of the spring equinox to gather mussels.

    It’s a race against time. They have less than half an hour to search these temporary caverns before the tide rushes back in. A look-out keeps watch for the returning tide, but warning shouts can’t be too loud in case the echoes bring down the ice.

    http://lifeinthekeyofc.waterforlife.ws/index.php/archives/1779

  2. Petey Wheatstraw says:

    How the Common Man Sees It:

    Just a coincidence, but I recently had the best blenderized seal meat and mussel casserole (with condensed cream of baloney soup and velveeta cheese food). Mmmmmm . . .

  3. MorticiaA says:

    Barry:

    I think someone should run a regression analysis on the ratio of your weeklypositives over negatives vs. broad equity indices.

    I just don’t think it should be me.

  4. rktbrkr says:

    how long has Greece been twisting in the wind?

    they’re dead, cut them down

  5. franklin411 says:

    Peter left out a negative:

    9. “GOP to Disaster Victims–Drop Dead!”

  6. louis says:

    Neg- Holy Shit have you seen the price of cheese lately?

    Keeping on the food theme.

  7. Bob A says:

    Negatives: 9) GOP period

  8. Petey Wheatstraw says:

    GOP and cheese . . . hmmmm . . .

    . . . are they not one and the same?

  9. Petey Wheatstraw says:

    Putting the cheese in macheesemo, since 1980.

    Sorry. Slow Friday night.

  10. M says:

    10) Turophobia?

  11. Clay says:

    Just looked at the NYSE composite and it has incurred a drop of 22.34% from the April 29th close of 8671.41 to around 6726.62 at the Sept. 22nd close. Hmmmm.

  12. louis says:

    Dairy Product Production – July 2011 July 10 July 11 % Change YTD 2010 YTD 20112 % Change
    Cheese
    American types1 367,664 351,989 -4.3 2,504,322 2,499,098 -0.2
    Cheddar 275,476 260,689 -5.4 1,918,611 1,863,704 -2.9
    Other American 92,188 91,300 -1.0 585,711 635,394 8.5
    Swiss 28,319 27,176 -4.0 193,460 169,939 -12.2
    Brick & Muenster 10,283 11,733 14.1 70,129 79,590 13.5
    Cream & Neufchatel 59,611 57,982 -2.7 415,365 399,568 -3.8
    Hispanic 17,505 16,868 -3.6 124,198 129,570 4.3
    Italian types 365,329 363,959 -0.4 2,537,938 2,663,464 4.9
    Mozzarella 290,868 290,019 -0.3 2,006,351 2,089,739 4.2
    Parmesan 18,151 22,199 22.3 141,016 164,286 16.5
    Provolone 31,587 28,406 -10.1 206,645 202,556 -2.0
    Ricotta 17,729 15,789 -10.9 137,398 143,360 4.3
    Romano 2,715 2,555 -5.9 19,103 28,034 46.8
    Other Italian 4,279 4,991 16.6 27,425 35,489 29.4
    All other types 28,528 29,758 4.3 174,199 194,164 11.5

    Thank God I went long Romano and shorted Swiss, Slow Friday indeed.

  13. Unmitigated Audacity says:

    Louis and Petey – thanks for the laughs

    Slow Friday? Might be the prelude to the end of the world as we know it. Or not. WTF knows?

    The ECB’s new European Systemic Risk Board (chaired by ECB head Jean-Claude Trichet) yesterday issued an alarmed report warning of a “rapidly rising risk of significant contagion [which] threatens financial stability in the EU as a whole.” The ESRB demanded that “decisive and swift action is required from all authorities…to safeguard financial stability”.

    Mohamed el Erian, the head of Pimco (the world’s largest bond trader), stated that what the ECB has done so far is not enough, and that “You need a lot more firepower in order to be a circuit breaker” — a point echoed by U.S. Treasury Secretary Timothy Geithner in an interview calling for a “broader firewall” in Europe. El Erian specified that “all the signs of panic of institutional investors towards French banks are there,” and that if something isn’t done, all of “Europe would be plunged into an open banking crisis.”

  14. jaymaster says:

    Interesting times. For the first time in 25 years of investing, or at least as long as we’ve been able to track stocks on the internets, I watched my own trade parade across the ticker, and drive the price of a stock!

    I stuck a toe back in with a purchase of an extremely small cap stock today. So small, I’m not going to mention its name.

    I’ve been in and out of it a few times over the last ten years, and it hit my “screaming buy” trigger yesterday. So around lunch time today, with zero trades posted all day, I decided to pull the trigger.

    Buy 200 shares, and BOOM! I drove the price up 1.8%!

    I watched my 200 share purchase sit there the rest of the day, with no other trades until 3:58, when someone sniped 100 shares at a bit less than I paid.

    Wow, totally new experience.

  15. bman says:

    9) GOP to disaster victims, “I don’t thing you’re tea baggers, you can hang…”

  16. Mr. Wonderful says:

    It´s a balance sheet depression.

    In the U.S., total debt, both public and private combined, more than doubled from 2000 to 2008, going from $26 trillion to $53 trillion, a stunning 300% ratio to GDP. This ratio is currently being rolled back and should reach a manageable level of 100-130% in ten years, give or take. It has already declined to about 270%.

    The decline in debt/GDP from this level is a signal that we are headed for an extended period of apprehension about investing, borrowing and the markets Extended periods of apprehension, disinvestment and caution lead to deflation. Consumers, investors hoard cash in anticipation of falling prices. You can see this process unfolding at an accelerating rate. It´ll be the mommy of all corrections.

  17. Mr. Wonderful says:

    Correction. I´ve been just told that my assessment is way too optimistic since in fact total debt to GDP ratio reached not a stunning 300% by 2008-9 but a monumental 370%. It has declined by about a tenth since.

    You can view the alarming long-term chart here:

    http://www.dailymarkets.com/economy/2010/07/21/the-total-us-debt-to-gdp-ratio-is-now-worse-than-in-the-great-depression/

    ~~~

    BR: A errors with that article: Social Security is fine; its medicare/medicaid that is in real trouble.

    As to the chart, its total debt — govt, business,and individual. It lacks some context, like most of the non financial business debt is to AA companies at very low rates.

    You an see just the govt debt around the world here:
    http://www.ritholtz.com/blog/2009/03/the-us-deficit-in-global-perspective/

  18. Greg0658 says:

    NASA: Satellite HAS fallen to Earth
    http://www.usatoday.com/tech/science/space/story/2011-09-23/nasa-satellite-falling-to-earth/50529388/1

    seems we would have sent a garbage truck after it (if we still had one) .. hope everyone is ok come morning light

  19. Mr. Wonderful says:

    Total Credit Market Debt Outstanding 1952-2011

    http://www.economagic.com/em-cgi/data.exe/frbz1/FL894104005

    Total Credit Market Debt as a Percent of GDP 1952-2011

    http://www.economagic.com/em-cgi/data.exe/var/togdp-totalcreditdebt

  20. rktbrkr says:

    I have 3 friends in banking in metro NYC, all TBTF size banks, one was in mortgage production she lost her job during the last meltdown, about 50 and gave up looking for a real job and is self employed now with no real income, probably not counted as unemployed but the self employed is just eyewash.

    #2 was in backoffice for UBS, he just got axed to leave after the $2B embezzlement in London,CPA, early 40s, really tough situation.

    #3 works for BAC affiliate and she was sweating bullets a couple years ago, time to resume sweating.

    We never really came out of the drecession and even the special treatment for the TBTF is running out of steam.

  21. BusSchDean says:

    Wished I had gone long on Manchego a few years back…that cheese has really come into its own.

    I find that the higher up in banking the more positive view I get from alumni. Hmmm….

  22. VennData says:

    Where did the GOP media machine come up with the “job creators” branding for billionaires again?

    http://www.mediaite.com/tv/maddow-draws-contrast-between-kochs-record-revenue-and-kochs-declining-work-force/

    This marketing gimmick should get the Double Speak award for 2011

    http://en.wikipedia.org/wiki/Doublespeak

  23. AHodge says:

    audacity is right
    europe and its banks is a huge deal—for globe, and US, and markets
    their bank balance sheets larger and worse than the US
    always hard to tell when the kimono gets ripped off, the tide goes out
    but it looks like now…
    as for the future you can see it almost every day in Geithnerspeak, properly translated. from today at the IMF Bank/Fund

    “I am very confident (Europe is) going to move in the direction of expanding their BAILOUT capacity.
    They are trying to figure out how to get there WHOS POCKET TO PICK in a way that is politically attractive

    CAPS my clarifications.
    trading without looking here would be flying completely blind
    for now they are still fiddlin w bank liquidity support for a some banks solvency situation,
    somewhat like US in late 2007–early 2008

    greece portugal ireland are significant and the apparent trigger, But their sovereign loss threats are modest, even a piddle compared to the total European bad bank assets needing writedowns. Even El Erian, just now admitted its a bank problem. he did not mention he and bill gross are waiting for their Italian CDS writing and other PIMCO portfolio bets on bailout to get paid out.

  24. Adding in this week’s economic data releases, the TRENDLines Recession Indicator gauges Q3 GDP @ 2.3%, a growth rate trough of 1.6% in May 2012 and a business cycle crest of 3.8% in 2014Q4 … en route to a soft landing in 2017Q4.

    TRI chart: http://trendlines.ca/free/economics/RecessionIndicatorUSA/USA-TRI.htm