Succinct summation of week’s events:

Positives:

1) AAA says avg gallon of gasoline falls for 22nd straight day to lowest since Jan at $3.29, perfect timing during holiday spending season.
2) Nov core Retail Sales rise .5% vs est of up .3%.
3) Initial Claims fall to 343k, 26k less than expected but Labor Dept uncertain on seasonal adjustment impact.
4) With record low mortgage rates, refi’s rise 8% to 8 week high while purchases up just .1% but to 1 yr high.
5) CPI, PPI and Import Prices all benign led by drop in energy prices.
6) Shanghai index gets off its arse and rallies 4.3% on the week to 4 month high.
7) Chinese HSBC initial mfr’g PMI up slightly to 50.9 from 50.5. IP and Retail Sales rise at fastest pace since Mar.
8) India’s wholesale inflation moderates to lowest since Jan giving room to RBI to cut rates.
9) German ZEW investor 6 month confidence rises to +6.9 from -15.7. Current conditions up a more slight .3 pts to 5.7.
10) Euro zone mfr’g and services composite index rises to 47.8 from 46.7 and better than est of 47. Still below 50 for 11th straight month but best in 5 mo’s.
11) Euro zone CPI falls to 2.2% y/o/y from 2.5%, a 2 yr low.
12) Greece lives another financially bailed out day as they finally get next tranche.
13) Rush finally gets inducted into Rock ‘n’ Roll Hall of Fame!

Negatives:

1) Little progress seen in DC.
2) The FOMC sinks themselves ever deeper into a policy that clear to many except them not only hasn’t economically worked but I argue is doing damage. I don’t look forward to the ‘Exit’ chapter of this book that is getting scarier to me by the page.
3) NFIB small business optimism index not optimistic as it falls to 87.5 from 93.1, the lowest since Mar ’10 where those that Expect a Better Economy falls to -35% from +2%.
4) Oct Exports fall 3.6% m/o/m off record high to lowest since Feb, Imports down 2.1% to weakest since Apr ’11.
5) Business Inventories rise .4% to slowest since June, would be good after Q3 buildup but I/S ratio rises to match most since Dec ’09 as sales fall .4%.
6) China’s trade data and bank loan total both less than expected..
7) China proxy Australia sees business confidence fall to lowest since Apr ’09
8) Japanese Tankan mfr’g index for Q4 falls to -12 from -3, the weakest since Q1 ’10.
9) European IP in Oct falls 1.4% m/o/m vs est of flat.
10) The horrific school tragedy in CT.

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.

14 Responses to “Succinct Summation of Week’s Events (12/14/12)”

  1. With this week’s economic data releases, the Debt Wall model projects the Treasury Dept’s ability to float new bonds will be handcuffed by its $16.394 Debt Limit on Dec 24th. CBO says Treasury Dept can engage in about ten weeks of creative bookkeeping before shuttering measures are necessitated.

    The TRI model gauges Q4 GDP is on a 1.1% pace in Canada & 8.9% in China. The pace is 1.2% in the USA but TRI’s measure of animal-spirits-plus indicates a deterioration of the former robust 2013H1 outlook continues.

    the charts: http://trendlines.ca/free/economics

  2. rd says:

    Here is a very interesting article looking at the very disrupted pricing of oil across North America due to the lack of pipeline capacity connecting users and producers.

    http://www.mining.com/oil-sands-players-now-get-only-45-a-barrel-vs-global-price-of-109-54211/

  3. LizSunValley says:

    You are right to acknowledge today’s horrific school shooting. No national news–economic or otherwise– can be more horrifically negative than that.

  4. MikeNY says:

    Days like today, and what happened in CT — or, more precisely, the frequency of days like today — make me ashamed for this country.

  5. PeterR says:

    Welcome to The Star Chamber! NY Fed scrubs its minutes clean about the 2007/2008 financial crisis.

    You can’t make this stuff up!

    http://blogs.marketwatch.com/thetell/2012/12/14/new-york-fed-slams-window-into-key-crisis-era-deliberations/

    Have a good weekend, because now there is no bad news upon which to dwell !!!

  6. Joe Friday says:

    AAA says avg gallon of gasoline falls for 22nd straight day to lowest since Jan at $3.29

    Gee, remember the “theory” that previous QEs was causing a rise in gasoline prices ? Well, the Fed has been layin’ down the QE like a MOFO and yet the price of gas keeps falling.

  7. Chad says:

    This is a heads up for all the tried and true Republicans on this board who are adamant gun advocates. You need to encourage your party and the NRA to put a decent gun control bill together. I’m suggesting you start this, because if you don’t you will probably lose way more than you want or that is necessary. A few more events like Connecticut and everyone that wants to completely eliminate them will have all the support they need. If you don’t get out ahead of this it will take away your guns.

    Keep in mind this is coming from someone who grew up on a farm in the middle of Pennsylvania, shot guns as early as I can remember, went hunting at 10, have actually killed numerous animals, took my guns to school with no issues to go hunting after, etc. I state this so you know this isn’t coming from someone who grew up in the middle of a city and has never used a gun for a valid purpose.

    I bring all of this up because I abandoned the Republican party that abandoned me a long time ago, which means me writing or advocating anything to the Republican party will be looked at as “unpatriotic”….because, you know, anyone not a Republican hates America….and guns.

    Ignore me at your own peril.

  8. slowkarma says:

    I suspect the only way to get realistic gun control in this country (which I think is necessary) is to pass term-limitation laws, which would mean that Congress would no longer be a lifetime job; in fact, it wouldn’t even be a long-term job. I think that people who could see a sharp limitation to their time in Congress might be more willing to pass laws that are both necessary and unpopular with certain special interests like the NRA, AARP, AFSCME, and so on. Virtually everybody knows that we have to raise some taxes, more on the rich, but probably some on everybody; virtually everybody knows that we have to find a way to get a handle on entitlements, deal with illegal immigration, do something realistic about handguns, and about drug control (whatever that may be), and about runaway election costs, and yet nothing gets done, because the politicians worry more about their jobs than anything else.

    IMHO.

  9. algernon says:

    It is encouraging that someone appreciates that the Fed’s money creation actually does damage. You don’t specify, but I would hope you refer to the massive distortion of relative prices, preventing efficient allocation of resources.

  10. Stuart says:

    This week just sucked.

  11. algernon, much as I like free markets, fiscal and monetary policy play a role in damping the amplitudes of the business cycles and the larger credit cycles. Politicians have marries themselves to safety nets and mitigation and your two year election cycle worsens the issue. The USA’s Structural GDP is -5.6% today and your country is in a Structural Depression. The massive trillion dollar federal Deficits and actions by the FOMC are providing Americans with an illusion of everything being “almost ok”.

  12. MikeNY says:

    The problem is, Freddy Hutter, that we’ve had a one-way Fed since Greenspan. It NEVER tightens policy; it only loosens. We’re not allowed to have recessions anymore… so we go from bubble to Bubble to BUBBLE… and when the one in treasuries bursts, probably when the dollar falls out of bed, it’s going to be catastrophic.

    And Algernon is right: the GMO just did a great piece on financial repression — you can get it on their site. Retirees and pension funds are getting crushed, which offsets any benefit to homeowners.

    Alas, there are no easy answers for the economic pickle we’re in. Raising taxes on the wealthy, nationalizing healthcare, cutting defense in half, and investing a few trillion in infrastructure is what needs to be done.

    As if!

  13. VennData says:

    Teacher Put Herself Between ‘Kids and Gunman’s Bullets’

    http://online.wsj.com/article/SB10001424127887324481204578181244231543014.html

    Next time you meet a teacher, thank them.

  14. algernon says:

    Freddy, all you have to do is look at how those same policies have worked out in Japan.

    You are right that an illusion is what is created. The entire world suffers the illusion of being wealthier than it is because central banks have enabled people & govts to borrow hugely more money than they can ever pay back.