Succinct summation of week’s events:

Positives:

1) UoM confidence in Oct rises to 5 yr high led by the Outlook component and inflation expectations recede.
2) Initial Jobless Claims, even with reporting issue, likely to be revised to still below 370k for 3rd straight week.
3) MBA said purchase apps rose 2.4% with historically low rates but that for now have stopped falling post FOMC news.
4) Core PPI in Sept was flat m/o/m vs est of up .2%.
5) Aug IP in the Euro zone rises .6% m/o/m vs est of a drop of .4%.
6) After week holiday, Shanghai index closes up almost 1% on week to near one month high after PBOC pumps large amount of yuan into money markets. 7) Chinese HSBC PMI services index rises 2.3 pts to 54.3.
8) Australian job gains are 3 times expectations in Sept.
9) India’s IP up 2.7% y/o/y in Aug vs est of up 1.1%.
10) South Korea and Brazil both cut interest rates with both having flexibility with positive REAL rates.

Negatives:

1) Chinese loan growth in Sept up 623b yuan, below est of 700b.
2) While now just in line with Moody’s, S&P downgrades Spain to BBB- putting 2 of 3 agencies on the cusp of putting Spain into junk territory, thus possibly shrinking the pool of potential buyers of their debt.
3) Sept PPI up 1.1% m/o/m vs est of up .8% led by 4.7% increase in energy prices. Pipeline inflation higher.
4) Sept Import Prices also up 1.1% led by energy (up just .2% without) .
5) Job openings in Aug fall to 4 month low.
6) MBA said refi’s fell 2% but after 20% gain in prior week.
7) Aug Trade Deficit in line with forecast but exports fall for 2nd straight month, 8) NFIB small business optimism index unexpectedly falls a touch from Aug.

Category: Markets

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8 Responses to “Succinct Summation of Week’s Events (10/12/12)”

  1. Robert M says:

    I saw this chart late, http://www.ritholtz.com/blog/wp-content/uploads/2012/10/chart1.jpg. The idea that there are three people for one job raises questions. One, what is the methodology, specifically is this a body or are there three skilled seekers for the one job? If there are three skilled persons is the problem they can’t sell their home to move to the job? If there is only one skilled person and the other two don’t have the skills what is to be done for those without skills?
    I realize this isn’t Michelangelo’s time. We don’t take 10 yr apprenticeships when jobs can disappear so fast. Yet we have to figure out what to do w/ people w/o skills.
    Any answers?

  2. Back on Memorial Day, the TRI short-term outlook suggested GDP would dwindle to 0.3% by the Election. With less than 4 weeks ’til Americans go to the polls, this projection still holds. Adding to the fray, my Debt Wall model projects Congress will again be handcuffed by its $16.4 trillion Debt Limit on Jan 8 2013.

    Today’s TRI projection infers BEA will be announcing Q3 GDP of -0.1% eleven days before the Election. Four days prior to voting day, BLS is likely to announce an 7.7% Unemployment Rate. General job creation is finally exceeding the 99k required to offset the monthly rise of the labour force via graduation and immigration. When the UR dips below 7% (2018Q2), the FOMC will commence to normalize its discount rates.

    TRI’s June warning of a horde of revenue misses and slashing of guidance remains remains intact. This environment will continue thru ’til mid-February.

    Despite the TRENDLines Recession Indicator being at its worst level since the Great Recession, the mainly left-dominated media appears to have purged “double dip” from its on-air rhetorics albeit they took pleasure in those dire ad nauseum warnings thru 2009, 2010, 2011 & early 2012. It is indeed apparent they’re avoiding to report the collapsing numbers in order to protect “the chosen one”.

    But there may be at least some good news ahead. The Nov13 – Dec14 lame-duck session will most probably see introduction of the Senate’s gang-of-8 draft legislation addressing the source of the uncertainty causing this GDP pause: Sequester, Bush-era tax cuts, payroll holiday, increasing Debt Limit & paring of entitlements. If they don’t just kick-the-can, the S&P will see a new record high in the ensuing days! If Romney wins, we’ll see it earlier…

    Debt Wall & TRI charts: http://trendlines.ca/free/economics

  3. RW says:

    Major negative (ongoing): Still no sign of (re)commitment to transparency and active regulation as a foundational principle of sustainable capitalism.

    The Best Way to Rob a Bank is still to Own One: a Postscript by William K. Black

    The economic professions’ continued refusal to discuss control fraud or read the criminology literature on the frauds that drive our recurrent, intensifying financial crises speaks poorly of the field …

    The ongoing global crisis did not have to occur. We know how to identify accounting control frauds, we know to prevent creating deeply criminogenic environments, we know how to counter an epidemic of accounting control fraud, we know how to burst a bubble that is being hyper-inflated by fraud epidemics, and we know how to prosecute control frauds. …

    Theoclassical economists’ dogmatic hate for regulation and its insistence on ignoring control frauds poses a grave danger to the world. Their ideological creeds and perverse econometric anti-facts lead them to push the policies that create strongly criminogenic environments. …They create self-fulfilling prophecies of regulatory failure by appointing anti-regulators to head the key agencies.

  4. Iamthe50percent says:

    To Robert M re three unemployed for each job.

    First, obviously only one can get the job.
    Second, employer doesn’t want anyone over 30
    Third, employer doesn’t want anyone without 12 years experience in that precise job
    Fourth, employer only wants employee with H1-B visa willing to work many unlogged hours

  5. slowkarma says:

    Freddy Hutter said,

    “If they don’t just kick the can…”

    I’d like to see a 538 projection on Congress kicking the can. It appears almost certain that the House will remain strongly Republican, with perhaps the loss of a few seats, but those seats will be lost on the “moderate” end of the House spectrum. Control of the Senate is more or less a coin flip, at this point, and Obama will probably be re-elected. The country would do better with a grand compromise, but I don’t see how specific Republican congressmen would; any Republican who votes for a compromise that involves tax increases is going to be harshly attacked from the right, and could very well lose a primary. In any game of chicken, the craziest guy wins, and the House is crazier than the Senate. If the House Republicans dominate a “compromise,” it seems very likely that Obama would feel obliged to veto that bill, and allow the country to fall off the cliff. Which might not be the worst that could happen…

  6. mathman says:

    Wow, with all that good news we should celebrate with a nice tilapia dinner!
    http://www.bloomberg.com/news/2012-10-11/asian-seafood-raised-on-pig-feces-approved-for-u-s-consumers.html

    in our Chinese drywalled house, while the wife is feeding the newborn that cheap Chinese baby formula with the “special ingredient.”

  7. ilsm says:

    @mathman,

    US military stationed in east Asia are aware how feces from all sources is used in farming etc.

  8. EdDunkle says:

    I know you guys work fast, but for better readability, I would encourage you to use fewer abbreviations. Thank you.