Succinct summation of week’s events:


1) Congressional leaders say they had constructive meeting at WH. We’ll get deal but don’t expect a good one in terms of dealing with the real drivers of debt/deficits and incentivizing economic activity.
2) Sept Business Inventories rise .7% vs est of .6% and I/S ratio falls to 1.28 from 1.29. Expect inventory ramp up in the Northeast post hurricane.
3) Oct PPI unexpectedly falls .2% both headline and core.
4) MBA said refi’s rose 13.1% and purchases up by 11%, both to 4 week high as rates hover near record lows.
5) NFIB small business optimism index up a touch to 93.1, a 5 month high but still below high for yr of 94.5.
6) India reports slowest rate of wholesale inflation in 8 months at still high 7.45%.


1) Hurricane Sandy negatively impacts Jobless Claims, Industrial Production and the NY and Philly mfr’g figures.
2) Oct Retail Sales, also impacted by storm, unexpectedly down by .1% at the core.
3) CPI index at new record high with headline up 2.2% y/o/y, highest since Apr. Seems benign but not relative to income growth and its still remaining sticky.
4) Fed hints at QE4. They still don’t get it.
5) Japan’s gov’t calls for new elections where new leader will follow path of printing way to prosperity (though will be good for Japanese stocks).
6) Japan’s GDP in Q3 contracts by 3.5% annualized.
7) Chinese loan growth in Oct totals 505b yuan, 85b less than expected and slowest since Sept ’11, M2 growth slightly below est as new leadership takes over. Shanghai index closes just shy of lowest since Mar ’09.
8) India’s IP falls .4% vs est of up 2.8%.
9) Q3 GDP in Hong Kong up by 1.3% vs est of 1.7%.
10) German ZEW investor confidence in their economy 6 mo’s out falls almost 4 pts to -15.7, below zero for 6th straight month.
11) Euro zone economy contracts .1% m/o/m and hasn’t grown in a yr (modest growth in Germany and France completely offset).
12) Euro zone CPI up 2.5% y/o/y, above 2% ECB target for 23rd straight month.
13) UK jobless claims rise at fastest pace since Sept ’11, CPI up 2.7% to 5 mo high and retail sales weak. BoE Gov King acknowledges stagflation.

Category: Markets

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10 Responses to “Succinct Summation of Week’s Events (11/16/12)”

  1. 4whatitsworth says:

    No more Twinkies, labor and management discover that even very old institutions are fragile. Looks like management did not need the bread and the Bakers union did not need to work. I suspect it will move the needle on non farm payrolls a tad.

  2. DeDude says:

    Jezz, 6 to 13 and half of those positives were lukewarm.

  3. Iamthe50percent says:

    Regarding Hostess bankruptcy, when was the last time you saw an ad for their products? Or saw a store display promoting them? I’d blame Marketing management a lot more than the Union for their demise.

  4. willid3 says:

    then only very few have never head of them
    but you would think they should do some marketing. and usually management is more likely the cause of companies failure than some would accept. cause one executive can make a bad decision. and cost a company billions in fines etc (see BP. or even cause deaths)

  5. judabomber says:

    Chinese loan growth the slowest since Sept 2011 is a bad thing?

    I saw a wire article quoting a Fitch research note stating this was something like the fourth year in a row net new credit (which by their measurement includes shadow banking assets) will exceed one-third of GDP. According to Fitch, at current credit growth rates, by 2013 China’s banking sector assets will have expanded by $14 trillion. Which is basically the same as adding the entire US commercial banking sector in five years. Can you say investment bubble?

  6. With this week’s economic data releases, the Debt Wall model calculates Congress will be handcuffed by its $16.4 Debt Limit on Dec 11th … a date hastened by 26 days from my Oct update.

    The TRI model gauges Nov GDP is on a 1.6% pace … up from its 1.4% assessment for Sept (& BEA 2%). TRI is in watchful-waiting mode to see how much its measure of animal-spirits-plus deteriorates for 2013Q2. Ever since Memorial Day, TRI has been projecting Q2 would be the best performing quarter of the current biz cycle (up to 4.7% GDP). But since the optimism was probably founded on anticipation of a Romney victory, I expected this lofty target will deteriorate in the coming weeks and months along with TRI’s pre-election signal for more positive corporate revenue and guidance and an imminent S&P500 record high.

    With new net monthly jobs consistently exceeding the 100k required to meet labour force growth, the unemployment rate is on a glide path to equilibrium (6%) by 2016Q1. This indicates the FOMC’s discount rate will commence rising in 2014Q2.

    After a 2011 trough, Existing Homes are today selling $16k above this season last year. After a 2009 trough, New Home prices are $21k above last Summer. Both have returned to within a mere 2% of their long-term Price/Income trend lines. The record New Home price ($248k) set in 2007 will finally be surpassed next year.

    the charts:

  7. zenospinoza says:

    The Fed “still don’t get it”? I beg to differ. They totally get it. Been keeping us afloat. No downside anywhere. What could you possibly mean?

  8. Greg0658 says:

    streeteye provides a link in “10 Friday AM Reads” on Nov 16, 2012 10:52 am
    was a great full story background called “Hostess is bankrupt … again”
    by a laborer pencil pusher David A Kaplan and his producer CNN

    left wondering > storage of retirement cash so capital doesn’t have use of .. hense shoot in ones own foot > the provider laborer (future promisee)**

    cash in an account looks so available to abscond with – leverage up and divert – call it value added

    big pic macro .. this mess we are dealing with world round – populations labor’g for commodities .. and what we call labor for a paycheck .. and WHAT* we honor those precious commodities usage for a workday paycheck

    this financial mess is SUCH* a paper push cleanup for a check

    LOL @ USA GDP of “real” requiries to not starve and hense survive in 21st hedonism

    ** employee owned corporations ? … will that even work ? seems nothing can store and increase in value in this OpSys.

  9. Greg0658 says:

    9am I went on the hunt & returned with my favs .. caught this live tv yesterday afternoon .. it was the fun story of the day – NOT
    (date Nov16)
    after a report by Jane from a store run on Hostess product
    Bill and Mandy bookend the L & R or say labor & capital

    its a good verbal smackdown
    jubliee would only be half the story .. promises kept is the other half
    but that isn’t capitalism* is it ..
    “looks like WW3 underneath the xmas tree” (a verse by Timbuk3 c1987)
    (or not | magically diverted again)

    *money has all the power in this version of capitalism we live in – quite magical w/origination 0.25% then upwards to 29% ROI -scratch that- make it ROB (return on borrow)

  10. I would add an additional “negative” in the list, albeit a technical one.

    A new primary bear market was signaled by the Dow Theory on Nov 16.

    The Transports by closing down and violating its 09/14/2012 secondary reaction lows flashed a primary bear market signal.

    While nobody knows the future, and we are merely dealing with odds, it is certainly not a good omen for stocks.

    Here is the relevant chart and commentaries thereto: