Morning Economic News - October 9, 2008

US stocks are poised for an up open Thursday, with Dow Jones Index futures up 196 points in overnight trading [4:47 AM Eastern], but the pattern of the last several days has seen multi-hundred point swings in the space of a day, so who knows what could happen by mid-day. Oil prices are off slightly in overnight trading after yesterday's US oil report showed a big drop in demand and a big spike in inventories. The US dollar is trading mixed, but up more than 2% against the yen, 6% against the Aussie buck and 3% against the New Zealand dollar.

Good news on housing - but can it hold?

You probably missed the double dose of good news from housing markets
today as Wall Street and Washington continued with their barrage of
apocalyptic news. The Mortgage Bankers Association reported that new
mortgage applications for home purchases rose more than 3% last week as
mortgage rates fell, while the National Association of Realtors
reported that Pending Home Sales rose 7% in August and were nearly 9%
above the August 2007 level.

Weekly Mortgage Applications Survey - October 8, 2008

Market Composite Index: 465.5

Change: Up 2.2%

Purchase Index: 314.5

Change: Up 3.2%

Pending Home Sales - August 2008

Pending Home Sales Index: 93.4

Monthly Change: Up 7.4%

Yearly Change: Up 8.8%

Global interest rate cut

Several major central banks today made a concerted move to cut key
interest rates to deal with the ongoing global credit crisis. The
concerted move is not likely to have an immediate effect on currency
markets, but may play more to the economies with the most fundamental
strength and the jump on dealing with the crisis. That would tend to
favor Britain, the US and Asia over continental Europe.

British economy still holding on, but heading south

The British economy continued plugging along with a stiff upper lip in
August in spite of another big drop in leading economic indicators. The
August Coincident Index, which measures current economic activity, was
up 0.2% after rising 0.1% in July. The Leading Index was down 0.6% in August, after falling 0.7% in July.

That popping you hear - it's the oil bubble

With demand down strongly, supplies up, the dollar strengthening and
global economic activity in the tank, the oil bubble may be well and
permanently popped. Speculators who fled stocks for the «safe haven» of
oil at $140/barrel have lost twice the money of those who stayed in
stocks. Home prices are off their record highs by even less. You can
bet those once bitten by oil will be twice shy about diving back in and
driving up prices again. Unless there's a major geopolitical
disturbance and a concerted effort by OPEC, Goldman Sachs dream of $200
oil making their clients rich has gone the way of AIG and Lehman
Brothers.

World's Central Banks Launch Rate Cuts

The world's central banks lowered short-term interest rates
in unison. Separately, the U.S. Treasury is considering ways to inject
capital directly into banks, possibly by taking equity stakes.

Asian Stocks Surrender Gains

Most Asian indexes gave up early gains and failed to
recover from the previous day's selloff despite a series of
interest-rate cuts from key central banks.

Iran inflation nears 30 percent in September - media

TEHRAN, Oct 9 (Reuters) - Iran's annual inflation rate
jumped 1.8 percentage points in September to 29.4 percent,
Iranian media said on Thursday, highlighting a growing source of
discontent ahead of next year's presidential election.

Canada housing starts steady in September

Conference Board: US GDP to shrink through H1 2009

Taiwan cbank can't rule out snap rate meeting-source

Kuwait slashes rates; UAE joins global move to cut

South Korea, Taiwan, Hong Kong Cut Interest Rates Following Global Easing South Korea, Taiwan and Hong Kong cut
interest rates a day after reductions by the U.S., Europe and
China to stem damage from the global financial crisis.

U.S. Entered a Recession as Record Consumption Boom Ended, Economists Say By almost all accounts, the U.S. is
now in a recession, according to economists surveyed by Bloomberg
News.

China Cuts Rate to Protect `Big Enchilada' Economy, While Japan Stagnates Wednesday may go down as the day the
economic balance of power shifted in Asia.

Paulson Signals U.S. May Invest in Lenders as Part of $700 Billion Rescue Treasury Secretary Henry Paulson
signaled the government may invest in banks as the next step in
trying to resolve the deepening credit crisis.

Japan Machine Orders Plunge 14.5%, Capping Off Worst Streak in Seven Years Orders for Japanese machinery fell
for a third month in August, marking the longest losing streak
since the country's last recession in 2001.

Trichet Engineers `Regime Change' at ECB as Crisis Engulfs European Banks European Central Bank President Jean-
Claude Trichet is opening up the floodgates as the credit crisis
threatens to cripple the region's banking system.

Bank of England May Follow Rate Cut With `Another Big One,' Allsopp Says Former Bank of England policy maker
Christopher Allsopp said the U.K. central bank may follow its
half-point interest rate cut with another reduction if the
financial crisis doesn't abate.