Archive - Aug 31, 2010

nsumer confidence comes in at 53.5 in August versus 51.0 in July: somehow the fact that the economy officially double dipped in the month was lost on the 6 or 7 top CEO respondents in the Conference Board rolodex. Just one word can explain this one: Lol. At least the idiots at the CoCo retardo institute made their tail wags dog shell game seem just a little credible by declining the read on the job plentiful from 4.3 to 3.8, and there was even a decline in the jobs hard to get category from 45.8 to 45.7... but somehow confidence was higher. Enjoy your bizarro day trading.

The Chicago August PMI just came out at a new 2010 low of 56.7, missing expectations of 57.0, and a plunge from the prior read 62.3. The decline was across all key subindices, with Employment (55.5), New Orders (55.0), Prices Paid (57.2), and Production (57.6) all coming in below the prior prints. And yes, this was a miss, which makes it a little odd and embarrassing trying to explain to dramatic surge in the AUDJPY (and its derivative, stocks) the second this number hit the tape: almost as if someone will do anything in their power to prevent a plunge in the market on this day of ongoing weak data, especially since the NY ISM came in at a one year low earlier, confirming the double death of the economy.

The two month delayed Case Shiller index came in at 4.4% for Q2, after having fallen 2.8% in the first quarter. Nationally, home prices are 3.6% above their year-earlier levels. In June the Y/Y change for the Composite 20 portion of the index was 4.23% on expectations of 3.6%, with the previous 4.61% revised to 4.64%. Again, as this index shows how the economy performed almost a quarter ago, this can and should be completely ignored. Furthermore, the non-seasonally adjusted index came in at a far more somber 2.3% increase, but this number too is irrelevant. Obviously, nobody has explained the definition of lagging indicators to the computers trading the SPOOs, so this headline was enough to push futures a few handles higher, even though we have much more coincident data that show just how bad housing has been in July already. But who cares. Just give Atari an excuse to do its positive feedback loop thing.

CRE porn (about as sexy as the industry gets): Mrs. High End Condotel cum Condo Market is reintroduced to Mr. Gravity and their swinging partners, Mr. Supply and Mrs. Demand!

Note for you imaginative guys: A Latin or English linking word, which can be either the preposition with or a conjunction meaning when, because, or although.

A quick review of how accurate we were in our highly contrarian calls (don't call me a Permabear) for the year 2010.

• Waldo spotted: secondary accounts of Zhou's whereabouts come streaming in as a panicked China can not put enough pictures of him on the PBoC site, Japan can not confirm his existance loudly enough (Bloomberg), Stratfor now reports defection has been refuted (Stratfor), and Washington Post confirms no sightings of Zhou in downtown D.C. (WaPo)
• Gold Rallying to $1,500 as Soros's Bubble Inflates (Bloomberg)
• Steve Keen - Bernanke's blind spot (Business Spectator)
• Ireland Seeks to Wean Banks Off State Guarantee (FT)
• China should act if property market defies cooling  (Reuters)
• Japan Defends Economic Policy Steps as Yen Strengthens Anew, Stocks Slide (Bloomberg)
• US Housing woes compound job fears (FT)
• Bernanke's song & dance act in Jackson Hole (Post)
• The Paradox of the Zero Bound (Hussman)
• Bank of Japan takes fresh stimulus steps (except for actually taking any real steps, the SNB can do that) (FT)

Research in Motion's flagship product was obsolete upon launch and is getting discounted by 50% two weeks after release while competing handsets can't stay on the shelves at FULL price. RIM needed a home run with this product, and instead it struck out. This portends very bad things for the share price in the medium to long term, sans a buyout/takeover.

Here are the highlights of today's economic data release schedule: Case-Shiller, Chicago purchasing managers, Conference Board confidence, FOMC minutes, ABC consumer poll.

The firm, whose calls so far in 2010 on the EURUSD have been a reactionary disaster and cost clients millions, once again contemplates its navel, after the EURUSD has been trending increasingly away from its latest mid-term 1.35 target (but directly toward its 3 month target of 1.22). That said, it appears the Goldman FX guys are about to drop their 6 and 12 month forecasts on the pair once again, now that the EURUSD has tumbled almost 700 pips from recent 1.33+ highs, at the peak of Europe's artificial and so very temporary, export-driven economic golden age. Goldman's Mark Tan explains why.

• Asian stocks fall as US data fuels economic growth concern; Sony drops.
• Australia's current-account deficit totalled $5.05B in Q2, down 66% from Q1 levels.
• BOJ is 'too little, too late' in tackling Yen, Nakahara says. Nikkei finishes down 3.6%.
• Eurozone Confidence rose for the third straight month, to 101.8.
• Eurozone inflation rate eases in August to 1.6%.
• Fed purchased $360M in inflation-indexed Treasury debt
• US Treasury to sell $25B cash management bills.
• India's GDP grew 8.8% in April-June qtr, driven by the manufacturing sector.

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 31/08/10

In the brave new world of behavioral targeting, your PC may know more about you than you want. Sharing your personal data with a few “buddies” like Facebook, Google, and MySpace. Worried about privacy? Privacy, shmivacy. I bet the IRS would like to know.