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One Minute Macro Update: Japan Mulls Rebuild Funding

Tyler Durden's picture




 

Overview: Markets worldwide are negative this morning on the news of a possible increase in European bank capital levels while U.S. futures are still in positive territory.

U.S.: The U.S. Treasury Dept. has announced that it will publically grade mortgage providers on response quality to homeowners that need payment reductions. This is the government’s latest move to ease mortgage foreclosures. Pending Home Sales picked up 2.1% MoM v 0.0%E, making up for the -2.8% in the month prior but keeping the housing sector in its current slump. Atlanta Fed president Dennis Lockhart acknowledged the sector’s troubles in a speech yesterday and reaffirmed the completion of QE2, but seemed more sanguine about any early exit than Bullard’s comments from last week. The S&P/CaseShiller Home Price index for January due out this morning will likely remain depressed near December’s 142.42, a 12-month low. The Conference Board’s Consumer Confidence will also be released later this morning: 65.0E v 70.4 prior. The risk seems to be to the downside on the confidence number as forward expectations comprise the majority of the index. Inflationary pressures and rising consumer input costs could have a big impact on the number.

Europe: Italian bank equities dropped on UBI Banca announcing a €1B capital increase in order to boost its core Tier 1 capital. As a result of the announcement, speculation that other banks would follow suit resulted in a selloff in the equity markets. Despite that issue, SOVXWE continues to trade tighter at 169bp. Ireland and Spain both announced that government involvement may be necessary in several of its banks. ECB overnight lending spiked again for second day, with borrowings totaling €3.13B v €3.39B prior as markets await the result of Ireland’s stress tests later this week and further action in Portugal’s debt dilemma. Greece plans on raising $3B in selling Diaspora bonds, with interest rates below 5% and maturities between 3 and 10 years. ECB president Trichet yesterday reaffirmed his intentions to hike interest rates in April. Preliminary German HICP data out today, estimated at +0.4% MoM v +0.6% prior, will put the president’s inflation plan in perspective. Regional inflation measures suggest a softening in price increases, but national levels will be reported later today. U.K. 4Q10 GDP roughly met estimates, reporting at -0.5% MoM v -0.6%E and +1.5% YoY v +1.5%E. Net consumer credit for the U.K. in February was £0.8B, above expectations of -£0.1B. Mortgage approvals showed improvement over last month coming in at 47.0K v 45.7K prior. French Consumer Spending expanded 0.9%MoM v -0.5% prior. Italian Business Confidence improved slightly to 103.8 v 102.5E and 103 prior.

Asia: Increases in commodity prices sent New Zealand’s February trade balance surging to +NZD194MM v -NZD3MM prior, making it the country’s first trade surplus in eight months. Exports rose 17.3% MoM and imports grew 11.5% MoM. According to industry group’s New Zealand’s exports may be further assisted in the future by growing demand from Japan for vegetables untainted by radiation. Japan’s Vice Finance Minister said yesterday that the government may have to abandon a planned five percentage point cut in corporate taxes to help pay for earthquake damage. PM Kan followed that up today signaling that multiple government spending plans may be needed to pay for disaster rebuilding. The Japanese Jobless Rate fell to 4.6% while it was estimated to remain at 4.9% from last month and the Job-To-Applicant Ratio increased to meet expectations at 0.62 v 0.61 prior.

From Brian Yelvington of Knight Capital

 

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Tue, 03/29/2011 - 08:17 | 1112099 dark pools of soros
dark pools of soros's picture

TEPCO prez has fled Japan......

Tue, 03/29/2011 - 08:30 | 1112129 Harlequin001
Harlequin001's picture

How do you know?

Tue, 03/29/2011 - 08:36 | 1112142 dark pools of soros
dark pools of soros's picture

they said he was sick for a week and now working in a command center...yet no one has seen him - he's finished more than Qadaffay

Tue, 03/29/2011 - 12:02 | 1113033 Ahmeexnal
Ahmeexnal's picture

 

TEPCO prez has fled Japan......

 

Did they check his gulfstream for gold bars?

Tue, 03/29/2011 - 08:18 | 1112103 GrinandBearit
GrinandBearit's picture

Another earthquake a couple minutes ago in Japan... 6.3. 

Are these still considered "aftershocks"?

http://earthquake.usgs.gov/earthquakes/recenteqsww/Quakes/quakes_all.php

 

Tue, 03/29/2011 - 08:23 | 1112116 tek77blu
tek77blu's picture

Here's a great interview on the Japanese rebuilding...he says, "It will cost more then $250 billion to rebuild".....

http://www.contraryinvestorscafe.com/bobchapman

Tue, 03/29/2011 - 08:24 | 1112124 tek77blu
tek77blu's picture

Here's a great interview on the Japanese rebuilding...he says, "It will cost more then $250 billion to rebuild".....

http://www.contraryinvestorscafe.com/bobchapman

Tue, 03/29/2011 - 08:42 | 1112157 johnQpublic
johnQpublic's picture

i wonder how much and how many it will cost to stop the spewing reactors

and do they intend to start rebuilding before they figure out how they will stop said spewing reactors

seems wasteful to rebuild a potential wasteland....yet somehow bullish

Tue, 03/29/2011 - 12:40 | 1113165 goldfish1
goldfish1's picture

This guy's on dope.

Ghosn Visits Quake-Hit Nissan Plant, Vows Quick Recovery photo TOKYO (Nikkei)--While visiting an earthquake-stricken Nissan Motor Co. (7201) plant in Iwaki, Fukushima Prefecture, Tuesday, CEO Carlos Ghosn dismissed concerns that the automaker might permanently close the facility, and instead vowed to use every possible means to rebuild it.

http://e.nikkei.com/e/fr/tnks/Nni20110329D29SS347.htm

...the top government spokesman deplored the detection of plutonium in the soil of the Fukushima plant...

http://e.nikkei.com/e/fr/tnks/Nni20110329D29JF370.htm

 

Tue, 03/29/2011 - 12:30 | 1113148 goldfish1
goldfish1's picture

lowball

Govt May Ask Farmers To Delay Rice Planting Amid Radiation Scare

The agricultural ministry is considering asking farmers in Fukushima and some other prefectures to delay rice planting for a few weeks amid growing concerns about radiation leaks from the Fukushima Daiichi nuclear power plant crippled by the devastating earthquake and tsunami earlier this month, officials said.

The delay would give the Ministry of Agriculture, Forestry and Fisheries time to examine whether rice paddies are too contaminated with radioactive substances to allow cultivation, the officials said.

...The ministry intends to compensate affected farmers if necessary, the officials said.

http://e.nikkei.com/e/fr/tnks/Nni20110329D29JF371.htm

Tue, 03/29/2011 - 08:33 | 1112133 Harlequin001
Harlequin001's picture

'ECB overnight lending spiked again for second day, with borrowings totaling €3.13B v €3.39B prior as markets await the result of Ireland’s stress tests later this week'

Stress tests. You must be kidding...

That one's easy, they broke.

Tue, 03/29/2011 - 08:54 | 1112135 Mercury
Mercury's picture

The U.S. Treasury Dept. has announced that it will publically grade mortgage providers on response quality to homeowners that need payment reductions.

I guess we've given up on grading mortgage providers by how well they manage risk.  This ought to help kick "the recovery" into high gear...

Tue, 03/29/2011 - 09:05 | 1112231 NOTW777
NOTW777's picture

"The U.S. Treasury Dept. has announced that it will publically grade mortgage providers on response quality to homeowners that need payment reductions."

How about grading our president and congressman on how well they represent the interests of average citizens, how well they follow the constitution and how well they tell the truth.

Tue, 03/29/2011 - 09:07 | 1112237 HedgeFundLIVE
HedgeFundLIVE's picture

Japan picture is def. not getting any better, and mkt doesnt give a flying eff: http://www.hedgefundlive.com/blog/tuesday-morning-recap-pre-market-action-in-spooz-remains-muted

Tue, 03/29/2011 - 09:07 | 1112239 ivars
ivars's picture

It seems there might be a chance of a bigger aftershock coming to Japan very soon (1-2 weeks?)  (M>7) , from the  current clustering of 4 M>6 quakes in last 5 days.

http://www.saposjoint.net/Forum/viewtopic.php?f=54&t=1245&p=31457#p31457

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