Posts filed under “Think Tank”

Morning stuff

The July Trade Deficit totaled $32b, almost $5b more than expected and is up from an upwardly revised $27.5b in June. It’s the highest since Jan and was due to a bigger than expected rise in imports which were up 4.7% while exports were up just 2.2%. Imports were in part boosted by a 7.6% rise in crude oil reflecting the rise in price but even ex petroleum, the deficit widened by almost $4b from June. As a result of the higher than expected trade deficit, Q3 GDP estimates will be trimmed by possibly .4-.5 of a % all else being constant due to the math of a larger gain in imports than exports. The lower deficit over the past year has been a boost to GDP as imports had fallen at a greater pace than exports did.

Initial Jobless Claims totaled 550k, 10k less than expected but the prior week was revised up by 6k to 576k. It is the lowest level since mid July when we saw distortions with the summer auto plant seaonsals and outside of that, its the lowest since early Jan. Continuing Claims were 112k less than estimated and fell by 159k from last week and it sent the insured unemployment rate lower by .1% to 4.6%. Evidence though still remains that the drop in continuing claims has more to do with those not finding new jobs and exhausting their benefits because the Emergency Unemployment Compensation total rose another 73k to a new high of 3.1mm, up from 1.16mm one year ago. Those that are receiving extended benefits past the EUC fell by 19k and total 438k. Bottom line though, its clear that the pace of firings continue to moderate with the pace of hirings still in question.

The Euro is higher for a 5th straight day even though ECB officials reiterated that monetary policy will remain easy until economic growth is on a firm sustainable path and that time is not yet. We heard the same from Fed Pres Evans yesterday with respect to Fed policy. The BoE left rates unchanged as expected and made no changes on the size of their asset purchases. The Bank of Korea left rates unchanged as expected and said they will maintain their accommodative stance. At around 5ish am, Chinese Premier Wen said “China’s economic rebound is unstable, unbalanced and not yet solid” and European stocks quickly traded lower but comes after 4 straight days of gains. Wen did say that the stimulus plan will remain on track. Chinese stocks broke a 7 day winning streak but the rest of Asia traded well even though Japanese machinery orders and Australian jobs data were weaker than consensus.

Category: MacroNotes

Questions For Us All

Good Evening: Despite some mid day misgivings, U.S. stocks rose a fourth straight day on Wednesday. Mirroring the back and forth nature of the day, both the corporate and economic news was mixed, with the Fed’s Beige Book release garnering most of the attention. The dollar, too, was behind some of the volatility, since the…Read More

Category: Markets, Think Tank

The New Auto Industry Breakdown

Nice Mint chart, via Jess Backman of WallStats: > click for 3X larger graphic

Category: Bailouts, Think Tank

Fed’s Beige Book

The Beige Book describes economic activity as stabilizing and an uptick from the July report that called ‘economic weakness moderating.’ With respect to overall activity, 5 districts saw signs of improvement, Dallas said activity has ‘firmed’, while 5 said things are stable or showing signs of stabilization. St. Louis said the pace of decline appeared…Read More

Category: MacroNotes

The S&P’s in non US$ terms

Yesterday I quantified the S&P 500 results going back to Sept ’98 in gold terms and its 70% decline. Let’s look at the S&P’s over the same time frame for overseas investors who have currency exposure. In US$’s, the S&P 500 over the past 11 years is up 3% in total (not including dividends) but…Read More

Category: MacroNotes

Evans on inflation

Unfortunately the Federal Reserve Bank of Chicago’s website hasn’t posted Evans speech titled the “Great Inflation Debate” even though he’s already given it this morning but I’ll rely on newswire quotes to give you a gist of what he said. In response to the predominant inflation concern resulting from a doubling of the monetary base…Read More

Category: MacroNotes

Five Reasons to Avoid the Gold Rush

Vitaliy N. Katsenelson presents the counterpoint for the gold argument: ~~~ The reasons why one should sell the cat, pawn the mother-in-law, and use the proceeds to buy gold are well known: the Fed is printing money faster than you can read this, which will result in inflation; the government is borrowing like a drunken…Read More

Category: Think Tank

“The Great Inflation Debate” and other stuff

Interestingly, the day after gold traded over $1000 and the US$ index fell to a one year low, Fed Pres Evans gives a speech at 8am titled “The Great Inflation Debate.” In the inflation data we still have disinflationary trends but the question is whether the Fed has laid the groundwork for eventual inflation as…Read More

Category: MacroNotes

“New Normal” Means Central Banks Won’t Soon Exit

Good Evening: U.S. stocks rose for a third straight session, recouping almost all of last week’s losses in the process. That these gains were recorded in spite of dour employment figures, a massive drop in consumer credit, and a fresh round of warnings from folks like Nouriel Roubini, Mohamed El-Erian, and Bill Gross is at…Read More

Category: Markets, Think Tank

89 Bank Closures in 2009

> click for ginormous chart > Source: Bank closures hit 89 for 2009 Charlie Carter Financial Services Technology, 09/09/07

Category: Bailouts, Credit, Think Tank