Archive - Oct 14, 2010 - Story

The chart pretty much speaks for itself. Voodoo economics at its best. Speaking of, where's Krugman?

Today's economic data avalance is a trifecta of horror: the August trade balance came at - $46.3 billion (deficit, duh), on expectations of $-44.0 billion, with the previous revised to ($42.6) billion. This is the second highest trade deficit in years. This also means the Q3 GDP will be revised lower again. Oh yes, and Schumer is currently frothing in the mouth as the trade deficit with China was at a record $28 billion, as expected based on the reverse lookup from yesterday's China trade surplus (which dropped). Elsewhere, PPI came in at 0.4%, on expectations of 0.1%: congratulation Ben, you have your inflation, as the bulk of the increase was in food and gas. PPI ex Food and Energy was 0.1%, in line with expectations. Lastly, jobless claims surge from 445K to 462K, with the prior number revised higher for the 24 out of 25 times. And speaking of revisions, the prior week Continuing Claims number was revised from 4,462K to 4,511K: yes stunning, we know. Those on Extended and EUC claims plunge by 340,000 for the week ended September 25, taking away a few more pips from GDP. All in all, this further cements the economic suicide that is QE2.

• The Fed itself says QE2 would have little/no effect (St Louis Fed) - then again this is not FRBNY, but the ultra hawkish St Louis Fed. Trench warfare within Fed is intensifying
• Dollar Slide Causes Fresh Scramble for Risk (FT)
• U.S. is currency war's "tomb maker": China economist (Reuters)
• This will make China happy: Germany Warns of Trade War Over Yuan (WSJ)
• The Next Bubble (NYT)
• Fed's Lacker Says Making Jobs an `Imperative' Risks Inflation (Bloomberg)
• The Fed seeks to boost jobs, but it could have bad side effects for consumers (Barrons)
• Yuan Bond Sales Climb to Record Led by Railways: China Credit (Business Week)
• China's Leaders Prepare to Meet as Elders Slam Censorship of Wen (Bloomberg)
• Spain's Santander Funds at Higher Rate to Inferior Banks (Bloomberg)
• LVMH Sales Rise 23% Confirming Luxury Recovery (WSJ)

The heavy flow of data begins with the trade balance and producer prices in addition to unemployment claims. Later in the day, we hear again from the Fed…

• Gold hits fresh highs, taps $1,388.10 on Globex.
• API shows surprise oil inventory decrease of 4 million barrels for the wk ended Oct. 8.
• Asian stocks advance as economic, earnings reports boost recovery optimism.
• Bank of Korea leaves benchmark interest rate unchanged at 2.25%.
• China’s foreign reserves rise by $194B, adding pressure on value of renminbi.
• Dollar was quoted at 81.23 yen- 15-year-low against yen.
• Dubai’s worst office buildings will be empty forever, CBRE says.
• Fed to buy $32B in Treasury debt in next month.
• Foreclosure filings up 3% in September over last month.

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 14/10/10