Archive - Oct 30, 2009

Because we all need one sooner or later.

Yesterday, the market moved on what was the double whammy of the government's own rather fluid favorable interpretation of what was essentially the government's very own stimulus. Yet others can play, and unwind, the number fudging game too. According to David Rosenberg, absent the now declining impact of the massive governmental stimulus, GDP would have been flat if not negative. So much for bickering over whether GDP was 2.7% or 3.5%: at the end of the day, on a normalized, non-stimulus inflated basis, GDP was flat, and if the equity market cared about isolating non-recurring items such as excess government spending driving a collapsing economy, the stock market reaction would have been quite the opposite.

CNNMoney published a story how stimulus spending has created or saved some 650,000 jobs- a figure reported by the White House today. But as I read the story, and the reasons/excuses for its complex claims of job creation/preservation- can someone please stand-up if your job was created by stimulus spending?

These are some, of the more important, headlines coming from Europe

Give me a G... Goldman Sachs announced today that it plans to cut the rescue loan arranged for CIT Group by $875 million, to just $2.125 billion.

Even as liquidity swaps and CPFF hit a new all time low since inception at $33 and $32 billion, respectively, the Fed's accelerating purchases of securities, mostly MBS and agencies, keep the Fed's balance sheet flat week over week.

• Expect major dark pool, ECN, ATS backlash: NYSE Euronext net profit down 28% in Q3 (AP)
• Fed supervision backlash picks up as regional Fed directors threaten with MAD: Per Lyle Gramley: "If Congress interferes with the Fed’s ability to do what
  has to be done, it could have major negative effects on the
  economy through its impact on inflation. The threat to central bank autonomy looks to be the worst that I can recall in my lifetime." (Bloomberg)
• Eurozone jobless at 9.7%, highest since 1999 (BBC)
• Deflation in Europe: Euro consumer prices still down (AP)
• Deflation in Japan: 2.3% drop in Japan CPI (Forbes)
• Bankers expect rising bonus pay, courtesy of massive government subsidies, to break record in global poll (Bloomberg)

• Asian Stocks rise as earnings, Japan jobless data, stoke growth optimism.
• Bank of Japan keeps benchmark rate at 0.1%, stops buying corporate debt.
• Dollar falls for fourth month against Euro, US growth aids risk demand.
• Japan central bank forecasts 3 years of deflation as it ends emergency credit steps.
• Oil poised for biggest monthly gain since May on optimism over US demand.
• U.S. Economy expands for the first time (+3.5%) in more than a year amid stimulus.
• U.S. Home vacancies increase to 18.8M as lenders seize properties.

When it comes to the pension pie, the insurance industry wants a big piece of the action. Notice how the editorial sounds a lot like those fear-mongering campaigns from U.S. health insurance companies, warning us of the "dire fiscal consequences in the future". The only thing missing was "we don't want a public option for pensions".