Economic News - September 16, 2008

Housing Market Index - September 2008

• Current Month Index: 18


• Monthly Change: Up 2


• Current 1-Family Sales Index: 17


• Monthly Change: Up 1

Federal Funds Rate (FOMC) - September 16, 2008

Federal Funds Rate: 2%

Discount Rate: 2.25%

Treasury International Capital - July 2008

• Foreign purchases of Long Term US Securities: -$25.6 billion


• Official purchases: -$4.9 billion


• Private purchases: -$20.7 billion

Consumer Price Index (CPI) - August 2008

• CPI-U: 219.086


• Monthly Change: Down 0.4%


• Year-to-year Change: Up 5.4%

Core CPI question revisited

Today's release of CPI data for August reinforces the point. In a pattern opposite to the one we've seen the
last 14 months (and that I don't hear anyone complaining about), energy
and food prices fell precipitously in August, bringing the unadjusted
full CPI down 0.4%. The prior lesson still applies - the core CPI rose
0.2% in August. September looks to be another big down month for energy
and food prices, likely to bring full CPI down even as core CPI rises
slightly.

Mixed signals from Spain, but leading indicators down

The Spanish economy sent mixed signals in July, with the Coincident
Index showing strong growth of 0.3%, while the Leading Index projected
worse times ahead with a 0.4% drop. With most of Europe sending
consistently bad signals the last several months, the rise in the
Coincident Index looks an awful lot like the calm before the storm. The
only declining coincident indicator was industrial production, while
only one leading indicator, the Spanish contribution to Euro M2, rose.

AIG May Get $85 Billion U.S. Loan in Return for Majority Stake - Federal Government buys out and bails out top insurer with a 2-year loan

Fed Silence on Energy Speaks Volumes

The six-week period between the August and September FOMC meetings was the
most favorable of the Ben Bernanke era when it comes to controlling
inflation, but you wouldn't it from Tuesday's Fed statement.

Fed Keeps Rate at 2%, Rebuffing Call for Cut to Soothe Financial Markets

The Federal Reserve left its main
interest rate at 2 percent, rebuffing calls by some investors
for an immediate cut after Lehman Brothers Holdings Inc.'s
bankruptcy shook markets worldwide.

Central Banks in Japan, Australia Inject $22 Billion to Soothe Markets

Central banks in Japan and Australia
injected $22.4 billion into their financial systems amid ongoing
efforts to calm markets roiled by the demise of Lehman Brothers
Holdings Inc. and crisis at American International Group Inc.

Bank of Japan May Keep Key Rate at 0.5% After a $24 Billion Cash Injection

The Bank of Japan, fresh from
injecting 2.5 trillion yen ($24 billion) into the banking system,
may keep interest rates unchanged today following the collapse
of Lehman Brothers Holdings Inc.

Hong Kong's Yam Says Next Few Days `Crucial' to Resolving Financial Crisis

Hong Kong Monetary Authority Chief
Executive Joseph Yam said the next few days will be crucial to
restoring health in the global financial system after the credit
crisis deteriorated.

Consumer Prices in U.S. Fall First Time in Almost Two Years as Fuel Drops

U.S. consumer prices fell in August
for the first time in almost two years as fuel costs declined
from record levels.

US consumer confidence rises in latest week-ABC 

NEW YORK, Sept 16 (Reuters) - ABC News released on Tuesday
its weekly Consumer Comfort Index (CCI), which measures
consumer confidence in the United States. In the latest
release, the CCI rose to -41 from -47 in the previous
week. 

Wall Street snaps global sell-off

Sep 16 - U.S. stocks rallied on Tuesday,
following steep losses in Europe and Asia, as speculation of Federal
assistance to American International Group. 

Canada maintains growth outlook despite turmoil

OTTAWA, Sept 16 (Reuters) - Canadian Finance Minister Jim
Flaherty sees no need to lower his forecast for the country's
economic growth, despite a deepening global financial crisis
and his expectation of a further slide in U.S. growth.