Succinct summation of week’s events:

Positives:

1) Markets hang in on belief EU officials will come to some sort of an agreement to force Greek bondholders to mark to reality, provide some debt relief to Greece and buy time and refinancing backstop for Italy and Spain

2) Initial Claims, while higher than expected, has 4 week avg at lowest since April

3) Philly mfr’g surprises to upside at +8.7 vs est of -9.4 and -17.5 in Sept

4) Multi family starts a bright spot for construction industry, reach highest since Oct ’08

5) NAHB home builder survey rises 4 pts to best since May ’10 at 18

6) Fed members Turullo, Rosengren and Evans want to do even more, only good for asset prices and nothing else.

Negatives:

1) Just as the Police Academy movies should have ended after the 1st instead of making 7, the Fed should have stopped a while ago and Turullo comments proves Fed policy is off the rails

2) CPI in Canada 3.2% y/o/y, CPI in Hong Kong 5.8%, CPI in Malaysia 3.4%, CPI in the US 3.9% and last week saw euro zone CPI at 3%. Inflation is a growing problem

3) Months supply of existing homes ticks up to 8.5 from 8.4

4) Operation Twist this, refi’s fall 16.6% and purchases drop 8.8%

5) NY mfr’g at -8.5 vs expectations of -4.0

6) German IFO business confidence lowest since June ’10, French business confidence weakest since July ’10

7) Moody’s downgrades Spain’s credit rating to one notch below S&P and Fitch

8) China’s Q3 GDP rises 9.1%, touch below estimates and Shanghai index down 4 straight days to lowest since Mar ’09.

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.

12 Responses to “Succinct summation of week’s events (10/21/2011)”

  1. rktbrkr says:

    My impression is that Euroland is whistling in the dark about a Greek/PIIGs fix, a magic solution that brings the French and Germans back into alignment, offers the Greeks and the banks that will be forced to write down their debt just enough pain, not too much and finds enough pixie dust to recapitalize the euro banks without dilution and shores up the many weak soverigns without downgrades. Le mission impossible!

  2. mathman says:

    Hope everyone’s week was smashing.

    http://news.yahoo.com/feds-gang-membership-crime-alliances-grow-180417395.html
    ..WASHINGTON (AP) — The gang problem in the United States is growing and there are an estimated 1.4 million members in some 33,000 gangs, the federal government said Friday.

    Gangs are collaborating with transnational drug trafficking organizations to make more money and are expanding the range of their illicit activities, engaging in mortgage fraud and counterfeiting as well as trafficking in guns and drugs, according to the national gang threat assessment for 2011.

    Gang membership “continues to flourish” and gang leaders are striking new alliances with other criminal organizations for profit, FBI agent Jayne Challman told reporters during a briefing at FBI headquarters.

    The gang member estimate of 1.4 million was up from 1 million two years ago, a 40 percent increase, but the report attributed the rise in part to improved reporting by law enforcement agencies.

    White-collar crime is an increasing focus for gangs. The report cited the arrest of a member in a Los Angeles gang called Florencia 13 for operating a lab that manufactured pirated video games.

    A member of the East Coast Crips in Los Angeles co-owned a clothing store, using it to sell counterfeit goods and traffic in drugs, and members of the Bloods in San Diego were charged with racketeering and mortgage fraud, said the report by the National Gang Intelligence Center, a multiagency effort led by the FBI.

    In an example of an alliance, the Nine Trey Gangster Bloods worked with the Lucchese organized crime family in New Jersey to smuggle drugs and cell phones into a prison.

    On the West Coast, law enforcement officials in the state of Washington suspect that some Asian gangs are involved with Asian organized crime and marijuana cultivating groups.

    In southern California, 99 members of the Armenian Power gang suspected of ties to crime figures in Armenia, Russia and the nation of Georgia were charged with kidnapping, extortion, bank fraud and drug trafficking.

    Gang membership is increasing most significantly in the Northeast and Southeast regions of the country and many communities are experiencing an increase in ethnic-based gangs such as African, Asian and Caribbean gangs, said the report, which is based on federal, state and local law enforcement data.

    next up:
    How A 22nd Century Textbook Will Describe The Collapse Of America
    http://www.businessinsider.com/heres-how-a-22nd-century-textbook-will-describe-the-collapse-of-america-2011-10

    don’t look now, but volcanic activity is up lately:
    http://news.yahoo.com/7-6-earthquake-hits-south-pacific-182746738.html

    and lastly, something the kids are listening to (take you home music for the commute):
    http://www.youtube.com/watch?v=b0vCkNcTmTs

  3. MaxMax says:

    I agree, rktbrkr. I was planning a trip to Italy, but I think I’ll wait until next year when the rioting has quietened down.

  4. econimonium says:

    Inflation a growing problem??? Wake me when it hits 5% until then, inflationistas are just whistling in the dark as much as those on the street who think there will be some sort of agreement on Greece that won’t have a credit event happen.

    Fasten your seatbelts if you’re on a European flight, the ride is only going to get bumpier.

  5. dad29 says:

    From the field: I suspect that ‘months’ supply’ of housing is understated, probably VERY measurably, by the logjam of REO/Foreclosures which have not yet hit the market.

  6. mohamssut says:

    dad29 Says:
    October 21st, 2011 at 6:12 pm
    From the field: I suspect that ‘months’ supply’ of housing is understated, probably VERY measurably, by the logjam of REO/Foreclosures which have not yet hit the market.

    ^^no doubt. i don’t have the figures in front of me *but* i heard maybe a year’s backlog? idk. i am at least as concerned, knowing what little i do, with the Bloomberg story about BAC’s transfer of suspect Merrill derivatives to BofA and thus FDIC protection. not to mention i am skeptical about the role Gallagher and Wetjen will play in the SEC. Wetjen has the full backing of the US Chamber, so that seems to indicate what we can expect from him.

    Barry, any good wine rec’s for the weekend? time to drown the doubt/fear with alcohol and bob dylan…

  7. machinehead says:

    Negative #9: ECRI’s Weekly Leading Index falls for the 11th week in a row, to -10.1:

    http://advisorperspectives.com/dshort/updates/ECRI-Weekly-Leading-Index.php

    ECRI says the US economy definitely is in recession.

  8. Futuredome says:

    LOL, Chindia hasn’t slowed down at all, I mean at all. People then wonder why commodity prices refuse to buckle. Amazing how those capital owning idiots continue to pump up those idiots at the expense of their homeland. Chindia should be forced to contract and reduce their economy in size. If they don’t, we should force them through brute force.

    The months supply of housing has already been understated. The oversupply is gone.

  9. The economic releases were again mixed this week. Conversion by the TRENDLines Recession Indicator of short-term data infers 2.1% Q3 (up from last week) & 1.5% Q4 GDP (down). Medium-term data projects the approach of a o.4% trough in June 2012. Long-term data translates to a 3.9% cresting of the current business cycle in 2014Q4. In short, no contracting months on the horizon. And the 2012Q3 rejuvenation may be revealing some anticipation of regime change…

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

  10. Finster says:

    MaxMax, as a German who has been to various places in Italy I can assure you that you will be perfectly safe. Just don’t take a walk outside the palazo Farnese or Parliament while clashes go on. Don’t rely on public transport (that’s a given regardless of time of year or politics) and enjoy the countryside. Anger in Italy is focussed at the government and political factions, but never on foreigners. In fact it’s one of the most hospitable places on earth if you know how to talk to the locals (with hand and feet and a few lines of Italian if necessary).

  11. rktbrkr says:

    ECRI says the US economy definitely is in recession.

    ECRI cheats, they wait until a recession has started before they predict it.

    PS, Euro political riots are different than the opportunistic riots you get in the US, London and Paris (or the police riots we’re getting in NYC)

  12. rktbrkr says:

    Yellen for QEIII. Clinton appointee concerned about unemployment. Didn’t think anyone on the Fed had unemployment on their radar, QEs to date haven’t had much impact on unemployment and didn’t seem to really target unemployment, I wouldn’t expect much different this time. There seems to be a growing consensus to target mortgages to try and revive the housing market before walkaways by underwater homeowers hurt the banksters (more)

    http://www.bloomberg.com/news/2011-10-21/fed-s-yellen-says-qe3-may-be-warranted-if-more-easing-needed-for-stimulus.html