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Frontrunning: September 10, 2010

Submitted by Tyler Durden on 09/10/2010 09:31 -0400

Japan Alarm Over China’s JGB Purchases (FT)
Japan Finalizes 10.9 Bln-Dollar Stimulus to Counter Strong Yen (Xinhua)
Geithner Says China Needs to Let Market Drive Up Yuan (Bloomberg)
What Can Be Done to Slow High-Frequency Trading? (FT)
German Push to Delay Basel Capital Rules Meets U.S. Opposition (Bloomberg)
Weaning Banks Off ECB's Emergency Lending Will `Take Time' (Bloomberg)
Regulators Agree 7% Capital Ratio for Banks (BBC)
UK Unions to Flex Muscles Ahead of Government Cuts (Reuters)
U.S. Pressures I.M.F. to Expand Role of Growing Economies. (NYT)
Goolsbee Said to Be Picked to Head White House Economic Panel (Bloomberg)
Government stat keepers mince words on jobs (Post)

Economic Data:

France Manufacturing Production for July 1.4% m/m 5.5% y/y –higher than expected. Consensus 0.7% m/m 4.4% y/y. Previous -1.2% m/m 4.8% y/y.
France Industrial Production for July 0.9% m/m 5.5% y/y–higher than expected. Consensus 0.7% m/m 5.0% y/y. Previous -1.7% m/m 5.4% y/y.
Greece Unemployment Rate for June 11.6% m/m – lower than expected. Consensus 11.9% m/m. Previous 12.0% m/m.
Italy Industrial Production sa for July 0.1% m/m 4.8% y/y – lower than expected. Consensus 0.5% m/m 5.7% y/y. previous 0.5% m/m 8.1% y/y.
Italy GDP sa and wda for Q2 0.5% q/q 1.3% y/y – higher than expected. Consensus 0.4% q/q 1.1% y/y. Previous 0.4% q/q 1.1% y/y.
Italy Private Consumption for Q2 0.0% - lower than expected. Consensus 0.1%. Previous 0.1%.
Italy Government Spending for Q2 0.4% - higher than expected. Consensus 0.3%. Previous -0.5%.
Italy Total investments for Q2 1.3% - higher than expected. Consensus 0.7%. Previous 1.4%.
Italy Exports for Q2 3.3% - higher than expected. Consensus 3.0%. Previous 3.0%.
Italy Imports for Q2 0.8% - lower than expected. Consensus 1.8%. Previous 2.7%.
Norway CPI for August -0.2% m/m 1.9% y/y - higher than expected. Consensus -0.2% m/m 1.4% y/y. Previous -0.6% m/m 1.3% y/y.
Norway Producer Prices incl.Oil for July 0.3% m/m 12.9% y/y - lower than expected. Consensus 0.5% m/m. Previous 0.0% m/m 18.1% y/y.
Norway CPI Underlying for August -0.2% m/m 1.4% y/y - lower than expected. Consensus -0.1% m/m 1.4% y/y. Previous -0.6% m/m 1.3% y/y.
Sweden Industrial Prod. for July 2.9% m/m 14.4% y/y - higher than expected. Consensus 0.7% m/m 10.4% y/y. Previous 1.3% m/m 12.4% y/y.
Sweden Industrial Orders for July 5.6% m/m 12.3% y/y. Previous -2.7% m/m 15.3% y/y.
UK PPI Input NSA for August -0.5% m/m 8.1% y/y - lower than expected. Consensus 0.1% m/m 8.9% y/y. Previous -1.0% m/m 10.8% y/y.
UK PPI Output n.s.a. for August 0.0% m/m 4.7% y/y -lower than expected. Consensus 0.1% m/m 4.8% y/y. Previous 0.1% m/m 5.0% y/y.
UK PPI Output Core NSA for August 0.1% m/m 4.6% y/y – in line with expectations. Consensus 0.1% m/m 4.6% y/y. Previous 0.2% m/m 4.7% y/y.
Australia Foreign Reserves 42.1B.Previous 47.5B.
Japan Consumer Confidence 42.5. Previous 43.4.
Japan Consumer Confidence Households 42.4 – lower than expected. Consensus 43.6. Previous 43.3.
Japan Machine Tool Orders 170.0% y/y.Previous 144.9%.
Japan GDP 0.40% q/q 1.50% y/y – in line with expectations. Consensus 0.40% q/q 1.50% y/y. Previous 0.10% q/q 0.40% y/y.
Japan Nominal GDP -0.60% - in line with expectations. Consensus -0.60% q/q. Previous -0.90% q/q.
Japan GDP Deflator -1.70% y/y – higher than expectations. Consensus -1.80% y/y. Previous -1.80% y/y.
Japan Domestic CGPI 0.00% m/m 0.00% y/y – higher than expectations.Consensus -0.10% m/m -0.20% y/y. Previous -0.10% m/m -0.10% y/y.

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Fri, 09/10/2010 - 09:34 | 573881 hedgeless_horseman

Goolsbee Said to Be Picked to Head White House Economic Panel (Bloomberg)

Gomez and Morticia are quoted as being, "...very proud."

Fri, 09/10/2010 - 09:34 | 573882 Earl of Chiswick

Jim O'Neill Named Chairman of Goldman Sachs Asset Management

the salient point of this announcement is that he shall remain in Chiswick, but alas the weekly bullmissives will sadly disappear.

NEW YORK, Sep 10, 2010 (BUSINESS WIRE) -- Goldman Sachs Asset Management (GSAM) announced today that Jim O'Neill has been named Chairman of the business. Most recently, Mr. O'Neill was Head of Global Economics, Commodities and Strategy Research for Goldman, Sachs & Co., where he managed the firm's economics, strategy and commodity research teams.

"Jim brings broad experience across asset classes, a track record of identifying important investment trends and strong relationships with clients around the world," said Ed Forst and Tim O'Neill, Global Co-Heads of the Investment Management Division of Goldman Sachs, which includes Goldman Sachs Asset Management. "His powerful voice in the global investment community will help us continue to demonstrate the value we add for our clients."

Mr. O'Neill will remain based in London (Chiswick)

http://www.marketwatch.com/story/jim-oneill-named-chairman-of-goldman-sa...

Fri, 09/10/2010 - 09:44 | 573896 Dismal Scientist

I thought it was Erik Nielsen, European economist, who was based in Chiswick ? Perhaps I'm wrong, you are the Earl after all.

Fri, 09/10/2010 - 09:35 | 573883 nedwardkelly

"What Can Be Done to Slow High-Frequency Trading?"

Set minimum holding durations.

Fri, 09/10/2010 - 09:38 | 573885 Steak

morning bitchez!

so this will be my last friday playlist for y'all. it is a best-of not just of my previous playlists but some of marla's favorite tracks as well :)

freshy fresh (a playlist): http://www.youtube.com/view_play_list?p=B64086D4A6EDA49C

And since I bring marla up, if you have a hankering for more electronic bliss, do check out the radiozero's page and load up some of our dear DJ's hottest sessions (but trust not even the tip of the iceburg).

http://radio.cl.zerohedge.com/

Fri, 09/10/2010 - 11:38 | 574158 Ruth

Marla's causing Anxiety, Bitchez! http://www.youtube.com/watch?v=RtwjZkrDdGc

But we'll take it! Give It Up For Our zhMC's!!

Fri, 09/10/2010 - 19:01 | 575169 kathy.chamberli...

well, it has been a pleasure getting to know you via your playlists. i haven't been using you, you know, just for your music. your really cute too. and you were cheeks friend, so maybe a little jealous. well i bought a bunch of wonderful books. i got a picture book of greek myth. damn those guyz were the coolest gods and goddesses. WOW and the love making and beautiful woman and the woman that cute off their right breast so they could carry long spears are my hero's. WOWzeeWOW wow.

i bet these playlists take up a lot of your time to make, and really really enjoy them so very much. thank you, i would of collapsed like CHINA might or greece.

friday's sweeping time.

Sat, 09/11/2010 - 09:28 | 575641 Steak

i don't want any naked pictures velo

Sat, 09/11/2010 - 14:24 | 575779 kathy.chamberli...

i know, i know, they were forced upon thou†

Fri, 09/10/2010 - 09:44 | 573893 Battleaxe

Will there be any bank failures tonight? There haven't been any for the past couple of weeks. See chart of weekly failures:

http://www.ritholtz.com/blog/2010/08/fdic-bank-failures-5/

They've been averaging about 4 per week for the last year. Word is that the FDIC is running out of willing buyers for the failed banks, which may have something to do with the lack of bank closures the last couple of weeks. They need to have healthy banks to buyout the failed banks so the takeovers can happen over the weekend and reopen with business as usual on Monday morning. See WSJ article from yesterday about the decreasing appeal of additional failed banks to potential buyers:

http://online.wsj.com/article/SB10001424052748704323704575461681180655898.html

Fri, 09/10/2010 - 10:03 | 573936 Pining for the ...

We were discussing this topic last night on a small part of the epic "conscious capitalism" thread, and the potential implications of FDIC failing to find buy buyers as appears increasingly to be the case. Then I clicked over and read FOFOA's latest missive on the nature and causes of hyperinflation (fofoa.blogspot.com) and the tumbler clicked into place (with a shoutout to Gonzalo Lira).

FOFOA essentially argues that in the teeth of a deflationary spiral, debt- all unpayable debt, both public and private - will be monetized through the printing press in one form or another. TPTB have no other choice, as the value of assets denominated in FRN's drops so low as to nullify all external debt obligations, and viola! Hyperinflation. Between the (private sector) pension shortfalls and bank failures you discuss and the public sector debts (federal and municipal- see Harrisburg, PA), all of the ingredients are in place for a great big tasty stew of currency collapse. Yummy!

Fri, 09/10/2010 - 09:44 | 573897 HelluvaEngineer

yawn - even the computers are on vacation today

Fri, 09/10/2010 - 09:51 | 573909 A Man without Q...

Interesting news out of Hungary. Buried in the DJ article is the fact that the mortgage claims will be capped at the value of the property. This has a massive implications for the seller of the mortgage, i.e Austrian banks, Swiss and German banks. I think this is why the IMF has been trying to put so much pressure on Hungary and avoids the Iceland scenario. Keep an eye on this space...

Other measures include forbidding banks from claiming more money in repayment than the actual value of a property

Hungarian Mortgage Aid Plan Will Depress Lending - Report

BUDAPEST (Dow Jones)--The Hungarian ruling party's plans to aid mortgage holders will end up depressing mortgage lending levels, an industry body executive told state news agency MTI Friday.

"Certain proposals of the package are nonsense," Tamas Erdei, president of the Banking Association said. "There was no prior consultations with us, the proposals came out of the blue," he added.

Most Hungarian households hold mortgages based on the Swiss franc, which hit a record high against the forint earlier this week. The Swiss franc peaked above HUF226 Tuesday, from around HUF180 in January, increasing the monthly mortgage payments for many households and small enterprises.

The proposals from the ruling center-right Fidesz, requires banks to use the mid point between buy and sell rates when calculating mortgage repayments. Additionally, it wants banks to lengthen mortgages by five years.

Other measures include forbidding banks from claiming more money in repayment than the actual value of a property; prohibiting unilateral contract changes which would adversely affect borrowers and prohibiting extra fees and interests in the case of nonpayment.

Fidesz plans to submit the proposals to parliament later this month, before Oct. 3 municipal elections where latest opinion polls suggest a landslide win.

-By Veronika Gulyas, Dow Jones Newswires; +361-267-0623; veronika.gulyas@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=%2FOKpsxFevlp29qfbSoj4lQ%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

September 10, 2010 09:42 ET (13:42 GMT)

Fri, 09/10/2010 - 09:57 | 573925 hedgeless_horseman

If this spreads, then in 10 years real estate will be a cash business. This is a very, very, deflationary precedent.

Fri, 09/10/2010 - 10:12 | 573955 A Man without Q...

To be honest, I don't really care. I would like to see all foreign currency mortgages switched back into local currency at the prevalent rate when the contract was signed. I have nothing but contempt for banks that peddle this sort of crap.

Currently there are several million mortgage holders simply not paying in the US, others walking away and then buying another place. But if they Hungarians try and protect their citizens, they are evil and anti-capitalist. As I have said, you need to keep this mortgage crisis in mind when you hear the disagreements between Hungary and the IMF. The IMF is always protecting the interests of the Western banks...

Fri, 09/10/2010 - 11:30 | 574133 NotApplicable

Nah, by then fedgov (via its subsidiaries) will own virtually all property for sale, making it a political business.

Fri, 09/10/2010 - 10:36 | 573992 redrob25

7% capital ratio. I feel safer now.

Fri, 09/10/2010 - 16:46 | 574999 Mentaliusanything

Yes such a safe amount to have when inflation protects your ass(ets)

Deflation on the other hand can never be permitted. It is the destroyer of Fiat (ass)umptions

and that's the Bottom line - anally speaking

Fri, 09/10/2010 - 15:50 | 574836 sbenard

Since when has Geithner, his boss, the Fed, or any other authority in power permitted the "market" to decide something without their manipulations and machinations?

Is HYPOCRISY his middle name?

Tue, 09/28/2010 - 03:13 | 609314 Herry12

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Frontrunning: September 10, 2010

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