Archive - Jul 31, 2009

VWAP reversion in T minus 5...4...3...

And speaking of the Fed's balance sheet (and not the public side but the $9 trillion in off-balance sheet voodoo), here is some good reading, especially with certain politicians hell bent to prevent HR1207 from occurring despite the 280 or so congressmen in support of the proposal (a very self-destructive apathy that Zero Hedge will speak more on in a few days).

It is no secret that China's economic numbers are so cooked and unreliable, that they make the constantly changing and optimistically biased economic data out of the U.S. (especially lately) have the credibility equivalent of a Harvard Ph.D. thesis. University of Texas professor James Galbraith discusses one aspect of China's "booming" economy, specifically the question of China's Trade Surplus, which as he notes has been drastically inflated since 2002 due to Chinese companies over-reporting profits on exports in order to disguise various investments by foreigners into China, so as to beat capital control restrictions.

The Fed's monetization of securities accelerates on declining Foreign purchases and an imperative to keep mortgage rates at artificially low levels

• Advance GDP: -1.0%, and here is why - Federal Spending up 11%, Q1 number revised significantly lower to -6.4% (BEA, and Bloomberg)
• Europe: widespread deflation and spiking unemployment (Bloomberg)
• Japan: widespread deflation and spiking unemployment (Bloomberg)
• Pearlstein: Wall Street is at it again (WaPo)
• Cash for clunkers done? AutoNation will be pissed by the lack of this subsidy (WSJ)

• Initial jobless claims in US increase; total rolls unexpectedly decline.
• US Treasuries fell, heading for a 4th monthly loss on speculation GDP improving.
• Japan's unemployment rate rises to a 6-yr high in June; Consumer prices fell at a record pace.
• Asian stocks rise on profit reports; MSCI Index set for fifth monthly gain.
• AK Steel announces price increase of $40/tonne for its carbon steel products.