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Frontrunning: September 22

Tyler Durden's picture





 
  • FTMFW: Europe Debt Crisis Is Over, Declares Spanish Leader (WSJ)... he also murmured that the ECB bailouts will continue until zombification penetration rates improve
  • Hilarious: We should clone the robo-trader rather than revile him (HFT)
  • Liberal Democrat Conference: 'Oil price could double in return to 1970s style shocks' (Telegraph)
  • Ally Financial legal issue with foreclosures may affect other mortgage companies (WaPo)
  • Moves to Weaken Yen Not Over, Says Kan (FT)
  • Sakakibara Says Yen to Hit Record Despite BOJ Sales (Bloomberg)
  • China Shouldn't Fear Floating Exchange Rate, Official Says (WSJ)
  • Recovery Evident Mainly to Statisticians (Barrons)
  • China Won't Let Yuan Rise Soon in Poll Signaling No. 1 Economy (Bloomberg)
  • BOE Signals Moving Closer to More Stimulus as Growth Slows (Bloomberg)
  • Basel III Rules Mustn't Be `Chipped Away,' BOE's Bailey Says (Bloomberg)
  • Obama Loses U.S. Investor in Global Poll With Approval Abroad (Bloomberg)
  • Fed's Concern Over Inflation Broadens Rationale for More Easing (Bloomberg)
  • The Long View of China’s Currency (NYT)

Economic Highlights:

  • Euro-Zone Industrial New Orders SA for July -2.4% m/m 11.2% y/y - lower than expected. Consensus -1.4% m/m 16.2% y/y. Previous 2.4% m/m 22.7% y/y.
  • Norway Unemployment rate (AKU) for July 3.3% - lower than expected. Consensus 3.5%. Previous 3.5%.
  • Norway Deposit Rates for September. Consensus 2.0%.Previous 2.0%.
  • UK Bank of England MPC 8-1 Vote to Maintain Rates for September
  • Australia Westpac Leading Index 0.4% m/m. Previous -0.1% m/m.
  • Japan Coincident Index CI for July 103.Previous 101.8.
  • Japan Leading Index CI for July 100.Previous 98.2.
  • Japan Machine Tool Orders for August 170% y/y.Previous 170% y/y.
  • Japan All Industry Activity Index 1.0% - in line with expectations. Consensus 1.0%. Previous 0.2%.
  • Japan Supermarket Sales -1.1% y/y. Previous -1.2% y/y.
  • Japan Convenience Store Sales 1.0% y/y. Previous 0.5% y/y.
 


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Wed, 09/22/2010 - 08:54 | Link to Comment Mongo
Mongo's picture

This is fun. Damn you for making me laugh at this collapse! ;-)

Wed, 09/22/2010 - 09:07 | Link to Comment Anarchist
Anarchist's picture

The US has thrown Japan under the bus in playing it's games with China. If I were the Japanese I would not be sitting on the sidelines biting my tongue while my economy is driven into the ground. There is no way Japan can passively sit back while the dollar is devalued versus the Remimbi. Every devaluation has caused the Yen to rise. 

A stronger Yen or Remimbi means that commodity prices in dollars will be higher and commodity prices in Yen or Remimbi will be lower. This is the fallacy in US policy to devalue the dollar. The US will not be able to export more since our imports of raw materials and sub-components required to manufacture products will go up. The Japanese and Germans were able to offset the devaluation of the Plaza accord this way.

I suspect the real reason for the devaluation is to in effect inflate away all the debt we owe. We will be paying our debt off with devalued dollars.

Wed, 09/22/2010 - 09:09 | Link to Comment FranSix
FranSix's picture

It could very well be that what we're seeing in the Yen has already played out in Iceland.  Not much reporting on Japanese lending practises to Pacific Rim real estate markets and currency purchases (leading to wildly appreciating currencies in the past) while attempting to control the rise of the Yen.

It looks for all intensive purposes as if the Yen will engage in a final (5) wave melt-up, while the dollar will probably see its final (E) downwave.

Monthly Chart ¥/$ since 1980

http://stockcharts.com/h-sc/ui?s=$XJY:$USD&p=M&st=1980-01-01&en=(today)&id=p26579836264&a=181133547&listNum=2

Wed, 09/22/2010 - 08:57 | Link to Comment Sudden Debt
Sudden Debt's picture

I don't think we'll see oil above 90$ for a long time to come.

Wed, 09/22/2010 - 09:21 | Link to Comment Silverhog
Silverhog's picture

Japan Convenience Store Sales are up, do they sell liquor?

Wed, 09/22/2010 - 09:43 | Link to Comment Anarchist
Anarchist's picture

There are vending macines on the street selling beer

Wed, 09/22/2010 - 09:36 | Link to Comment chistletoe
chistletoe's picture

Oil is achilles heel here and

(to mix metaphors) Obama is throwing gasoline on the fire.

http://www.financialpost.com/news/stall+Enbridge+Alberta+warns/3552643/s...

Enbridge is happy to build a different pipeline to Vancouver

so that the number #1 supplier of crude to the US can sell it all to China instead.

 

Meanwhile back home, when the prices at the pump

cruise past $3.00 on their way to $10.00,

you can anticipate that all the Tea Party geniuses

will break out their heavy artillery and

start robbing gast stations in order to fil their Hummers.

 

At that point, civilized markets will cease to function...

 

 

Wed, 09/22/2010 - 10:01 | Link to Comment citizens_of_the...
citizens_of_the_world's picture

Instead of cloning the robo-trader, We should clone RobotTrader (so we can have more pictures).

Wed, 09/22/2010 - 10:14 | Link to Comment kathy.chamberli...
kathy.chamberlin@gmail.com's picture

tyler, i love to have zombification penetration. do U?

Wed, 09/22/2010 - 12:00 | Link to Comment doolittlegeorge
doolittlegeorge's picture

well you are made out of wood.  tell me, how do you stretch that nose?

Wed, 09/22/2010 - 17:05 | Link to Comment kathy.chamberli...
kathy.chamberlin@gmail.com's picture

stretch, bitchez†

Wed, 09/22/2010 - 12:17 | Link to Comment sureseam
sureseam's picture

Hum - there are, even now, uplands in the UK where the sheep are deemed unfit for human consumption due to radioactivity following events at Chernobyl - many many years later.

Keep that testing going and keep it all transparent.

Wed, 09/22/2010 - 12:01 | Link to Comment doolittlegeorge
doolittlegeorge's picture

bring on the gold, silver, wheat, corn, soybeans, Hansel, Gretel....

Wed, 09/22/2010 - 12:10 | Link to Comment sureseam
sureseam's picture

>>Europe Debt Crisis Is Over, Declares Spanish Leader

oh, wait, let me guess ... triple A rating again?

Wed, 09/22/2010 - 14:45 | Link to Comment -273
-273's picture

Check this must read article, in  Forbes magazine magazine of all places, with respected oil analyst and oil industry veteran Charles Maxwell. Basically we are talking about an ongoing downward adjustment as far as the eye and mind can see:

Bracing For Peak Oil Production By Decade's End

Charles Maxwell: The use of petroleum in the world is now up to about 30 billion barrels per year. The rate at which we have found new supplies of petroleum over the last 10 years has fallen to an average, of only about 10 billion barrels per year.

We’re obviously in an unsustainable situation. We are now using up a greater number of barrels that we have found in the recent past and that we have reserved in the ground. We are now beginning to use it up relatively quickly–with scary consequences for the future.

The peak of production usually comes sometime between 30 and 50 years after the peak of finding oil. “The peak of discovery,” as they call it. For instance, in the North Sea, the peak of discovery was in the late 1960s, and the peak of production was in the late 1990s. So it was around 30 years between the peak of finding oil and the peak production of that oil.

Maxwell’s views.

  • I view a global oil production peak within the decade as a near-certainty.
  • I think there is a small probability that the peak has already occurred, but we won’t know that until several years after the fact.
  • I don’t believe that there is anything in the technology pipeline that can prevent a growing gap between supply and today’s demand.
  • I believe that gap will be closed by price-induced rationing, which will be very hard on businesses and individuals.

Higher prices will result in a very difficult transition period in which we are forced to use less because we simply don’t have the money to use the oil that we have historically used. This will be a period of great economic difficulty.

The difference between supply and demand is not going to be very much at first. It would not normally cause a big rise in price. On the other hand, in 2014, that tightness begins to grow and it is now a trend. By 2015 perhaps we’re only able to produce 0.50% more with about 1.25% higher demand, so that we’re 0.75% short. And now we have to raise prices enough to stop some people from using that oil because it is actually not available.

We call that “the destruction of oil demand.” It is important because it forces the price of oil up on an accelerated basis.

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