One Minute Macro Update

US:  The market tone is mixed today as the onslaught of sovereign headlines has expanded from Europe to the broader market.  Moody’s issued commentary on the US, UK, France and Germany that illustrates concerns on the countries’ debt ratings, while reiterating the current AAA status for now.  Following a mutedly optimistic Beige Book yesterday, today will feature weekly jobs data as well as PPI for December.  The weekly data are likely still in their holiday downdraft, but we should see some return to normal trends over the next two weeks.

Europe:  The Italian and Spanish bond auction went relatively smoothly compared to yesterday’s closes, but the trend in issuance continues to be wider and wider for the entire periphery.  Headlines from the Eurozone continue to highlight the fundamental problems of fiscal unity and the growth/fiscal responsibility conundrum.  These issues are best illustrated (today) by Sarkozy’s comments that Ireland cannot keep its low corporate tax rate while seeking European aid.  So you have a country that would be engaging in de facto taxation of its citizens (that is what most all of these programs entail) saying that they want Ireland to engage in fiscal responsibility (hiking taxes) to the detriment of growth (Ireland’s economy is highly financial and thus tax hikes could have dire and immediate impacts on their economy).  This is merely a microcosm of the central debt problem worldwide, which is growing in headline volume as the debate continues on potentially expanding the EFSF.  BOE leaves rates unchanged.

Asia:  China’s People’s Daily stating that 2010 CPI could be 3.5%, well above the 3.0% target as the National Bureau of Statistics’ Chief Economist Yao Jingyuan states that Chinese inflation is closely linked to US QE.  Japan has third consecutive MoM decline in Machine Orders.

From Knight Capital

Comments

[hugovanderbubble]

As promised,

Here are the current CDS 5yr for US States and Munis...

http://www.financialchat.com/sites/default/files/CDSUSSTATES13JAN2011.gif

Interesting Ohio has not retraced...

The big problem California,Illiniois,Minnesota and NewJersey

The next Pomo is for Bailoutting US States not corporations...

VXX at lows (come on¡¡¡¡¡¡¡) wake up¡

Loading PUT Eurostoxx  range march-may 2011 10% OTM

Divergence in volume vs price since september 2010

Divergence in Outflows vs price since Columbus discovered America´s

Divergence in Raising CDS during December to make up mutual funds end of year.....and Equties living at LimboParty...oh well Limbo doesnt exist more...

Swiss Franc Massacre and Margins decreasing in 2011 cos commodities are impossible to give a break...higher oil costs...energy...how we gonna grow?with Aliens Bailouts?

No salaries increase, no employment improvement... What are we buying ? well better said what the computers are making...."smokescreens" to improve false confidence with a weak basis...

Be careful with 2011 gonna be a turning point year for sure.

Banks hasnt recapitalize yet...Stress Test are all false, cos accounting and real estate valuations (realtors + audit Mafias)

and Everyone saying Portugal doesnt need AID....WHAT A FARCE¡

BPI, Banco Espiritu Santo, Caixa Geral and Banco Comercial Portugués doesnt have any solvency all the big money is deposited in Switzerland and Luxembourg, so what the hell. SHORT EUROPE, Till they crash.(in order words, till we clean up the bad stuff)

Then Italy,Belgium and Spain

And Please put your eyes on Pakistan vs India ...geopolitically gonna be the trigger for raising volatility.

-

[99er]

ES

Grrr...

http://99ercharts.blogspot.com/2011/01/es_13.html

http://www.zerohedge.com/forum/99er-charts-0