Economic News - September 10, 2008

Oil markets shrug off big inventory drops

Oil markets shrugged off a small OPEC production cut and a massive drop
in US oil inventories Wednesday as the spot price for WTI crude fell by
another 68 cents. This is a bubble that even with government
intervention (by OPEC governments) is rapidly deflating. Still, with
total US commercial petroleum inventories down more than 15 million
barrels in a single week and drops in all categories of refined
products except propane/propylene, traders should expect a pause and
maybe even some increase in prices the next few days.

Weekly Mortgage Applications Survey - September 10, 2008

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• Market Composite Index: 496.2


• Change: Up 9.5%


• Purchase Index: 371.5


• Change: Up 6.4%

Mortgage rates down

Fixed Rate Mortgage (FRM) and Adjustable Rate Mortgage (ARM) rates fell
last week while mortgage applications rose after adjusting for the
holiday shortened week, according to the Weekly Mortgage Applications
Survey from the Mortgage Bankers Association. Refinance applications
rose more than 15% on an adjusted basis, while purchase applications
rose more than 6%.

More bad news for British economy

The bad news continued for the European economy with the release of the
Leading Index for the UK Wednesday. The British leading indicators fell
0.7% in July, while the coincident index rose 0.1% according to the
Conference Board.

Kudlow: Look Through the Windshield

The commodity drop signals the death of inflation expectations. And of
course, the oil plunge itself is a big tax cut for consumers. Not only
will real wages start rising again, but folks will be able to service
their mortgages. That’s good for banks...
I know that there’s no confidence in the stock market. But I do want to
keep hammering away that falling commodities is a very good thing for
consumers. You can make money on that in the stock market.

Capital Commerce: Some Good Economic News

Here are a couple of rays of sunshine, via Reuters. First, the suits seem to be getting a bit more chipper...
And the folks at Disney aren't seeing a global recessio...

Image via Wikipedia

Exports Prop Up Local Economies

Exports have become a key to greater local prosperity in the U.S. more than at any time in decades, fueled by the dollar's fall.

EU Sharply Cuts Economic Forecast

Lower forecasts for growth in Europe underscored concerns that the region could slip into recession this year.

Supply of Homes for Sale Declines

The number of homes listed for sale declined in many metropolitan markets last month.

Fed May Increase Lending to Banks, Brokers as `Mother of Year-Ends' Nears

The Federal Reserve may have to
increase the cash it provides to banks and brokers, already a
record, to help them balance their books at the end of the year.

Japan Machine Orders Fall for Second Month as Makers See Demand Weakening

Japanese machinery orders fell for a
second month in July, signaling manufacturers expect the global
slowdown to crimp demand into next year.

New Zealand Cuts Key Rate More Than Estimates to 7.5%; Currency Tumbles

New Zealand's central bank cut its
benchmark interest rate by a half point to 7.5 percent, more
than forecast by most economists, saying the economy is in a
recession and inflation will slow.

Australian Employment Rises Three Times Forecast Pace, Jobless Rate Falls

Australian employers hired almost
three times as many workers in August as economists forecast,
adding to evidence a mining boom is helping offset weaker
domestic demand.

French Payrolls Fall More Than Twice Initial Forecast in Second Quarter

France lost more than twice as many
jobs as initially reported in the second quarter as economic
growth contracted for the first time in more than five years.

Japan machine orders hit by export slump, recession

China's troubled stock market

Sep 11 - China stock investors are running for cover on signs of an economic slowdown after the Olympics.

Economic News - September 9, 2008

Pending Home Sales Index - July 2008

• Pending Home Sales Index: 86.5


• Monthly Change: Down 3.2%


• Yearly Change: Down 6.8%

Wholesale Trade - July 2008

• Wholesale Sales: $410.6 billion


• Monthly Change: Down 0.3%


• Year-to-year Change: Up 16.5%

Pending home sales fell in July

The National Association of Realtor’s Pending Home Sales Index fell 3.2% in July.
The June index was revised upward slightly for a total increase of 5.8%
from May to June (and a net increase from May to July). On a
year-over-year basis, the index was down 6.8% nationally, 2.4% in the
Midwest, 13.4% in the South, 13.2% in the Northeast and the index was
up 6.5% from July 2007 in the West.

Japanese economy further in the hole

Japanese economic indicators dropped again in July following large losses in June. The Leading Index for Japan dropped 0.5%, while the Coincident Index which fell 0.2% in July. The yen fell on the news.

Housing Market Remains Weak

Pending home sales dropped 3.2% in July, reversing gains in June. Job openings and hiring continued to decline.

EU Pledges Closer Ties to Kiev

The EU said it would build closer economic and political ties with Ukraine
but stopped short of inviting the country to join the 27-nation bloc.

OPEC Will Curtail Oil Output

OPEC ministers decided to scale back output in the face of falling prices and slowing demand growth.

China Inflation Cools to Slowest Pace in a Year as Food Price Gains Ease China's inflation cooled to the
slowest pace since June 2007 on smaller gains in food prices,
giving the central bank more room to stimulate growth in the
world's fourth-largest economy.

Japan's Wholesale Inflation Eases for First Time in 11 Months as Oil Drops

Japan's wholesale inflation rate
slowed for the first time in 11 months as oil and commodity costs
fell, signaling price pressures are starting to ease in the
world's second-largest economy.

U.K. Economy Contracts for First Time Since at Least 1996, Institute Says

The U.K. economy is contracting for
the first time in at least a decade, the National Institute for
Economic and Social Research said.

U.S. Sales of Previously Owned Homes Decline 3.2%, Adding to Property Glut

Fewer Americans signed contracts to
purchase previously owned homes in July as harder-to-get
financing kept would-be buyers from taking advantage of lower
prices.

China's August Export Growth Slows to 21.1% on Weakening Global Demand

China's export growth slowed,
adding pressure for more government measures to protect jobs and
stimulate the world's fourth-biggest economy.

US economists boost 2008 GDP forecast-Blue Chip

WASHINGTON, Sept 10 (Reuters) - A sharp upward revision in

U.S. gross domestic product for the second quarter of 2008
prompted economists to ratchet up their forecasts for growth
for the whole year, a survey released on Wednesday showed.

CFOs more optimistic about U.S. economy -- survey

NEW YORK, Sept 10 (Reuters) - Chief financial officers are
more optimistic about the direction of the U.S. economy, but
remain concerned about consumer demand and weak credit markets,
according to a quarterly survey.

Economic News - September 8, 2008

The big economic news for Monday September 8, 2008 was not in any of the economic indicators. It wasn't even in the markets, though they did react well to the real news.
The big news was the seizure of Fannie Mae and Freddie Mac by the federal government. The dollar responded well to the news which helped markets from stocks to commodities in the US and worldwide.
The action leaves the Federal Reserve less likely to raise interest rates at its upcoming meeting and may affect OPEC's decision on whether to cut production as oil prices fall near $100 a barrel.

Employment Trends Index - August 2008

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• Employment Trends Index: 110.8


• Monthly Change: Down 0.5%

Consumer Credit - July 2008

• Total outstanding consumer credit: $2572.3 billion


• Total rate of change: 2%

Government Seizes Mortgage Giants

The government seized Fannie Mae and Freddie Mac in its most
dramatic market intervention in decades. Treasury plans to replace the
companies' CEOs and provide up to $200 billion as part of the rescue.

Fed Expected to Hold Rates Steady

The Federal Reserve is not likely to change its current course for
interest-rate policy amid the takeover of Fannie Mae and Freddie Mac.

Consumer Credit Inches Higher

Americans increased their borrowing at the lowest rate in seven months during
July, a sign of growing financial stress in the U.S.

McCain May Privatize Fannie, Freddie; Obama Sees Federal Role in Housing

John McCain and Barack Obama agree
the Treasury needed to step in to rescue Fannie Mae and Freddie
Mac. They disagree over how much the U.S. government should be
involved in the housing market once the immediate crisis is past.

Fannie, Freddie `House of Cards' Accounting Prompted Government Takeover

Fannie Mae and Freddie Mac used
accounting rules that created a ``house of cards'' as the
housing market descended into its worst slump since the Great
Depression.

Pending U.S. Home Resales Probably Fell in July as Mortgage Rates Climbed

Fewer Americans signed contracts in
July to purchase previously owned homes, a sign that falling
home prices aren't enough to bring buyers back into the market,
economists said before a private report today.

Hiring Plans at U.S. Employers Fall to Five-Year Low as Retailers Retrench

Fewer U.S. employers plan to hire in
the fourth quarter, according to a private survey that shows the
worst holiday-season job prospects on record at retailers.

Mantega sees Brazil real weakening against dollar

BRASILIA, Sept 8 (Reuters) - Finance Minister Guido Mantega
said on Monday the Brazilian real would likely continue to
weaken against the dollar due to the country's shrinking trade
surplus, a growing current-account deficit and tightening of
credit on the international market.

Mexico cuts 2008 growth estimate, sees better 2009

MEXICO CITY, Sept 8 (Reuters) - Mexico cut its forecast for
economic growth this year to 2.4 percent from 2.8 percent,
citing the slowdown in the United States, its main trading
partner, the finance ministry said on Monday.

Economic News - September 7, 2008

Employment Situation - August 2008

• Nonfarm Payroll Employment: 137,473 million


• Monthly Change: Down 84,000


• Unemployment Rate: 6.1%

Federal government to take over mortgage markets

The rumors are that sometime Sunday the Treasury Department will
announce that the two big mortgage market makers, Fannie Mae and
Freddie Mac, are being forced into conservatorship under the Federal
Housing Finance Agency. If true, this will mean the federal government
will directly control well over half the secondary mortgage market in
the United States when considering the Ginnie Mae (FHA) market already
in federal hands. For taxpayers, which means most homeowners, this is a
huge potential liability if mishandled.

Financial Roadmap: The Week Ahead September 7 to 13, 2008

This week will be a long one for investors, a full seven day week. The
most important event of the week is expected sometime Sunday when the
Treasury will formally announce a conservatorship for mortgage giants
Fannie Mae and Freddie Mac, placing the assets of half of the US
mortgage market directly under federal control. The week won't end
until Saturday's running of the St. Leger Stakes at Doncaster
Racecourse in Britain officially ends the summer down season for
stocks, at least for ceremonial and superstitious purpose

Treasury to Outline Fan-Fred Plan

The Treasury is expected to announce early Sunday afternoon details of a
plan under which regulators will effectively take temporary control
over Fannie Mae and Freddie Mac.

GSE Takeover May Help Homebuyers

Homebuyers and holders of Fannie and Freddie debt are the likely beneficiaries of
a Treasury plan to takeover the beleaguered mortgage giants, but it is
less clear how shareholders will fare.

Fannie Mae, Freddie Mac's Capital Concerns Prompt Paulson to Take Control

Treasury Secretary Henry Paulson
decided to take control of Fannie Mae and Freddie Mac after a
review found the beleaguered mortgage-finance companies used
accounting methods that inflated their capital, according to
people with knowledge of the decision.

U.S. Retail Sales, Excluding Autos, Probably Had First Drop in Six Months

A measure of U.S. retail sales probably fell for the first time in six months in August as
Americans paid less for gasoline and pared purchases at shopping
centers, economists said ahead of a government report this week.

Almunia Says Europe Faces a `Serious Slowdown,' Growth to Recover in 2009

European Union Economic and Monetary
Affairs Commissioner Joaquin Almunia said economic growth in the
region will recover in 2009 after a slowdown in the second and third quarters.

Lagarde Says France May Have to Cut 2008 Growth Forecast After Contraction

France may have to cut its growth
forecasts after the economy shrank in the second quarter and
because of ``current economic circumstances,'' Finance Minister
Christine Lagarde said.

Ecuador central bank ups '07 GDP data and '08 view

QUITO, Sept 5 (Reuters) - Ecuador's central bank chief on
Friday said his institution has revised upwards its economic
growth data for 2007 and was raising its forecast for economic
expansion this year to above 4 percent. 

U.S. jobs disappear

Sep. 5 - The labor market struggled in August
with the unemployment rate near a five-year high and jobs lost for the
eighth month in a row. 

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• Video: A government takeover of FannieMae & Freddie Mac could cost taxpayers up to $25 billion, according to the Congressional Budget Office
• Mortgages: Shying Away From N.Y. Loans
• Rescue cost: The big unknown
• Fannie-Freddie deal near, paper says
• Treasury near plan for Fannie and Freddie - report
• Mortgage Giants Agreeable to Rescue Plan, but Its Cost Is Unknown
• U.S. To Seize Fannie Mae, Freddie Mac
• Feds to Take Over Fannie, Freddie
• Gov't To Seize Fannie Mae, Freddie Mac
• U.S. to take control of Fannie and Freddie: reports

Economic News - September 4, 2008

Jobless Claims - September 4, 2008

• Initial Claims: 444,000


• Change from Last Week: Up 15,000

Money Supply - September 4, 2008

• M1 Seasonally Adjusted Prior Month: $1401.0 billion


• M1 Annual Change (Unadjusted): Up $33 billion


• M2 Seasonally Adjusted Prior Month: $7725.9 billion


• M2 Annual Change (Unadjusted): up $457.2 billion

Monster Employment Index - August 2008

• Index: 159


• Monthly Change: Up 2


• Year-to-year Change: Down 27 Points

Productivity and Costs - 2nd Quarter 2008

• Business Sector Productivity: Up 4.3%


• Nonfarm Business Productivity: Up 4.3%


• Manufacturing Productivity: Down 2.2%

Gustav hangover hasn't hit oil markets yet, strong dollar dominating the picture

The oil markets are breathing such a big sigh of relief from the US
Gulf production emerging relatively unscathed from Hurricane Gustav
that they are taking another down week for inventories in stride. The
strong dollar is also a factor the last several days. Gasoline
inventories also fell again, but the rate of decline has gotten back in
line with seasonal norms and gasoline is back into the low end of the
average range for this time of year.

Mortgage rates down across the board

Freddie Mac reported Thursday that 30-year Fixed Rate Mortgage (FRM),
15-year FRM, 5-year hybrid Adjustable Rate Mortgage (ARM) and 1-year
ARM rates all fell this week. Freddie Mac’s conforming 1-year ARM is
5.15% down 6/10 of a percent from this time last year and nearly 2%
below the non-conforming rate reported Wednesday by the Mortgage Bankers Association.

Central Banks focus on inflation, ignore economic weakness

Look for more strength in the US dollar as the European Central Bank,
Bank of England and Bank of Canada all left key interest rate targets
unchanged this week, choosing to focus on the threat of inflation and
ignore mounting evidence of recession.

Productivity Is Revised Higher

Productivity jumped 4.3% in the second quarter, higher than initially estimated,
while labor costs fell, reflecting a mix of employment declines and
export-generated growth.

Indonesia Raises Interest Rate

The key interest rate in Indonesia was raised a quarter point to 9.25%, predicting high inflation for the rest of the year.

Japan's Businesses Cut Spending 7.6% Last Quarter as Material Costs Surged

Japanese business investment fell
more than estimated in the second quarter as oil and commodity
prices surged to a record and the global slowdown damped demand
for the country's exports.

European Banks Face Higher Finance Costs as ECB Tightens Access to Capital

Banks in the U.K., Spain and Ireland
that have relied on the European Central Bank for low-cost funding
will have to pay more as it tightens lending rules.

U.S. Growth Is `Stagnant,' Europe Faces Recession, Conference Board Says The U.S. economy is ``stagnant'' and

Europe is falling into a recession, the Conference Board said
today, warning that central banks won't have much room to cut
borrowing costs amid elevated prices.

U.S. Probably Lost Jobs for an Eighth Month; Jobless Rate Forecast at 5.7% The U.S. probably lost jobs in

August for an eighth consecutive month, raising the risk that
growth will falter in the second half of the year, economists
said before a government report today.

Russia says further cuts Freddie, Fannie holding

SOCHI, Russia, Sept 5 (Reuters) - Russia has slightly
further reduced its holdings of U.S. mortgage agencies Freddie
Mac and Fannie Mae , central bank's first deputy
chairman Alexei Ulyukayev said on Friday.

Economic News - September 3, 2008

Federal Reserve Beige Book - September 3, 2008

• Commercial real estate activity was weak in 11 of the 12 districts.
  Dallas reported an increase in office leasing and public projects were
  buoying construction activity.


• Manufacturing activity was weak or declining in most Districts but improved in others.

Factory Orders - July 2008

• New Orders: $465.4 billion


• Monthly Change: Up 1.3%

Help Wanted Online Data Series - August 2008

• Online Advertised Vacancies: 4,833,700


• Monthly Change: Up 6.95 (Not seasonally adjusted)


• Year-to-year Change: Up 4%

Weekly Mortgage Applications Survey - September 3, 2008

• Market Composite Index: 453.1


• Change: Up 7.5%


• Purchase Index: 349.0


• Change: Up 10.5%

Mortgage Applications Up

If mortgage applications the last week are any indication, the housing
market is ready to stabilize, if not actually bounce back, in late
September and October. The Mortgage Banker’s Association reported a
10.5% increase (seasonally adjusted) in new applications for home
purchase mortgages last week.

Beige Book: Economy, Spending Slow

The Fed said economic conditions remain "slow" as consumers pull back and
focus on essentials, though exports continue to provide some boost to
the economy.

Factory Orders, Spending Rise

Factory orders climbed 1.3% during July, while a key barometer of business
spending -- nondefense capital goods orders excluding aircraft -- rose
2.5%.

Fed Beige Book Says Economy `Slow' in Most Regions as Price Pressures Rise

Business across most of the U.S. was
``slow'' last month, while almost all Federal Reserve districts
reported pressure to raise prices because of higher commodity
costs, the central bank said in its regional economic survey.

Australia's Trade Balance Unexpectedly Turns to Deficit as on Imported Oil

Australia's trade balance
unexpectedly turned to a deficit in July as oil imports surged
and exports fell.

ECB May Keep Rate at Seven-Year High as Inflation Trumps Risk of Recession

The European Central Bank will keep
interest rates at a seven-year high to fight inflation even as the
euro-region economy teeters on the brink of a recession, a survey
of economists shows.

South Korea to Proceed With Global Bond Sale as it Seeks Damp Crisis Talk

South Korea will start the sale of
$1 billion in global bonds next week and expects companies to
borrow a further $10 billion abroad by the end of the year as
the government seeks to quash speculation of a financial crisis.

BOE May Forgo Rate Cut as Inflation Limits King's Ability to Revive Growth

The Bank of England will keep its
benchmark interest rate unchanged today as the fastest inflation
in more than a decade makes it harder for policy makers to respond
to the risk of a recession, a survey of economists showed.

Foreign investors bought Japan stocks last week

GM August sales fall 20 percent amid incentives

Chrysler Aug U.S. vehicle sales off 34.5 pct

Volkswagen Aug U.S. vehicle sales up 2.9 pct

Nissan Aug U.S. vehicle sales up 13.6 pct

Ford Aug U.S. vehicle sales off 25.5 pct

Economic News - September 2, 2008

Manufacturing Report on Business - August 2008

• Purchasing Managers Index (PMI): 49.9


• 50+ represents growing economic conditions


• Monthly Change: down 0.1

Construction Spending - July 2008

• Total Construction Spending: $1,084.4billion


• Monthly Change: Down 0.6%


• Year-to-year Change: Down 4.8%

Some Dissent in Discount Minutes

Fed regional banks left the discount rate alone last month because their
policy achieved an "appropriate balance" between risks to the economy
and inflation. Some banks wanted to raise the rate.

Manufacturing Slows, But New Orders Rise

Manufacturing activity slowed last month but only slightly, and an increase in
exports and new orders shows that the sector remains a bright spot for
the struggling U.S. economy.

OECD Sees Slow Economic Growth

Developed economies will continue to grow slowly, if at all, for the remainder of
this year, the OECD said. The research group sees housing woes
spreading in Europe.

Australia Economic Growth Slows to Weakest Pace in Two Years on Consumers

Australia's economic expansion slowed in the second quarter to the weakest pace in two years as
consumers reduced spending, reinforcing the central bank's decision to cut interest rates for the first time since 2001.

U.K. Consumer Confidence Stays at Four-Year Low as Economic Growth Stalls

British consumer confidence held at the lowest level in at least four years in August after economic
growth stalled, Nationwide Building Society said.

Manufacturing in U.S. Falls First Time in Three Months as Investments Cut

A measure of U.S. manufacturing was little changed in August as gains in exports helped offset
falling domestic demand.

Consumer confidence up, still near historic low: survey

NEW YORK

(Reuters) - American consumers' confidence rose in the latest week on
the back of a better perception of the U.S. buying climate, but it is
still near its historic low, a survey showed on Tuesday.

Mexican e-commerce seen growing 70 percent in 2008 

MEXICO CITY, Sept 2 (Reuters) - Mexican firms will likely sell
70 percent more goods and services over the Internet this year,
mostly to people buying plane tickets and computers, experts
predicted on Tuesday.