Succinct Summation Of Week’s Events (01/27/12)

By Peter Boockvar - January 27th, 2012, 3:30PM

Succinct summation of week’s events:

Positives:

1) Italian and Spanish bond yields continue lower, 10 yr in Italy below 6%, Spain’s below 5%
2) German IFO business confidence rises to 8 month high
3) German consumer confidence at best since April
4) Euro zone mfr’g and services composite index unexpectedly moves back above 50, led by Germany
5) US Durable Goods orders in Dec surprise to upside but how much was pulled forward from 2012 due to 12/31 expiration of full depreciation expensing?
6) Jan UoM confidence rises to best since Feb ’11
7) Richmond and KC mfr’g survey’s both rise
8) Bank of Thailand cuts rates, Reserve Bank of India cuts reserve requirements

Negatives:

1)Portuguese yields spike, 5 yr CDS up 150 bps on week to new high
2) Spanish unemployment for Q4 rises to 22.9%
3) Italian consumer confidence holds at lowest since at least ’96 when survey began
4) Q4 US GDP rises 2.8%, a touch below expectations but nominal GDP gains just 3.2%, the weakest since Q3 ’09. If deflator was in line with expectations, Real GDP would have been up just 1.3%. Real final sales up just .8% vs 3.2% in Q3
5) Initial Jobless Claims normalize at 377k after holiday distorted 356k last week
6) Inflation expectations within UoM rise to 3.3%, the most since Sept and remains above the 20 yr avg of 3.0%. Expectations also rise to multi month highs in TIPS market
7) New Home Sales remain anemic, prices fall 12.8% y/o/y
8) FOMC stretches out zero rates until late 2014, US$ resumes downward trend against everything. Fed destroying the price mechanism as if interest rates are artificially priced, what are assets really worth? If we don’t know what assets are really worth, how can capital be efficiently allocated? And, if ZIRP was effective, Japan’s economy would have boomed over the past 10 yrs.

PERMALINK
Category: Markets.

Comments

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

7 Responses to “Succinct Summation Of Week’s Events (01/27/12)”

NoKidding Says:
January 27th, 2012 at 4:09 pm
“8) FOMC stretches out zero rates until late 2014, US$ resumes downward trend against everything. Fed destroying the price mechanism as if interest rates are artificially priced, what are assets really worth? If we don’t know what assets are really worth, how can capital be efficiently allocated? And, if ZIRP was effective, Japan’s economy would have boomed over the past 10 yrs.”

Succinct? Looks like the opening salvo of a v-long rant.
willid3 Says:
January 27th, 2012 at 6:35 pm
taxes and more taxes?

http://www.thefiscaltimes.com/Articles/2012/01/26/Bartlett-Why-the-Flat-Tax-Will-Never-Fly.aspx#page1

Romney actually paid more taxes than he should have because of an error by the folks creating his tax return
http://www.nytimes.com/2012/01/27/business/economy/mitt-romney-paid-more-taxes-than-he-owed-high-low-finance.html
willid3 Says:
January 27th, 2012 at 6:37 pm
the human costs of the Chinese miracle?
http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html
willid3 Says:
January 27th, 2012 at 6:41 pm
new wave of mortgage fraud, now those who are seeking help to avoid foreclosure, are being scammed by companies promising to help, only to defraud them of even more money
end game Says:
January 28th, 2012 at 12:14 am
Barry, please tell me what Japan would look like if they had a 7% short term interest for the last 20 years instead of zero. How do you know? What other examples can you cite of an economy in a deflationary liquidity trap that was helped by central bank tightening?

“And, if ZIRP was effective, Japan’s economy would have boomed over the past 10 yrs.” Huh??

Normally your logic is quite good, so what happened with that statement? If chemo-radiation was effective there would be no cancer. If exercise was effective, everyone would be 90 pounds. Really, can you not think of any conditions that are so severe that they overwhelm the best prescription?
mathman Says:
January 28th, 2012 at 7:59 am
http://www.financialarmageddon.com/2012/01/already-there.html
Five more reasons why America is on the road to Banana Republicville (or are we already there?):

1. Those in charge don’t feel constrained by the rules that apply to everyone else

2. Those in charge increasingly censor and harass the media

3. Those in charge feel free to use public funds for private gain

4. Those in charge favor policies that benefit the few at the expense of the many

5. Those in charge seek to keep greater tabs on what the masses are doing
Freddy Hutter - TrendLines Research Says:
January 28th, 2012 at 1:26 pm
TRI quantification of last week’s forward-looking data suggests GDP is on a trajectory rising from a o.9% pace in March (Q1) to 2.9% in September, the latter being the final BEA announcement in the days prior to the Nov 6th Election. This is opportune for the incumbent celebrity President as the model presently projects a secular decline in GDP for the balance of the business cycle … perhaps signalling resignation as to the likelihood of his re-election. GDP wanes to 1.8% by 2017Q4.

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