Economic News - September 22, 2008

Dollar Falls, Oil Rises On Rescue Doubts

Volatility spread across financial markets, undermining the
dollar and contributing to the biggest-ever one-day surge in oil prices.

Treasury Relents On Key Points

The White House and Congress inched closer to agreement on the rescue plan, with the Treasury making most of the concessions.

Bailout Pitch Tests Paulson's Political Skill

Henry Paulson knows how to do a deal on Wall Street behind closed doors. But how about in Washington?

Paulson May Push Debt to Highest Level Since 1954, Deficit to $1 Trillion Treasury Secretary Henry Paulson's
$700 billion proposal to stabilize the banking system may push
the national debt to the highest level since 1954, threatening
an erosion of foreign appetite for U.S. bonds.

Singapore Inflation Slows as Fuel Prices Drop, Reducing Currency Pressure Singapore's inflation slowed for a
second month in August as petrol stations lowered pump prices
and food costs eased, reducing pressure on the central bank to
allow faster gains in the currency.

Paulson, Bernanke May Find Painful Parallels in 1990s Nordic Bailout, Bust If Henry Paulson and Ben S.
Bernanke want to know what happens when central banks and
governments bail out financial institutions, they should be
``learning Swedish.''

Paulson Plan Is a `Joke', Says Ohmae, Calling for $5 Trillion Rescue Plan Treasury Secretary Henry Paulson's
$700 billion plan to buy devalued assets from financial companies
is ``a joke'' because it doesn't go far enough to calm markets,
said Kenichi Ohmae, president of Business Breakthrough Inc.

South Korea Lowers Property Taxes to Bolster Economy as Buiding Work Drops South Korea will lower taxes on
residential and commercial properties to stoke an economy that
is growing at the weakest pace in more than a year as consumers
cut spending and building work declines.

Oil surges in biggest 1-day jump

Sep 22 - Oil prices surged to the biggest
one-day gain in history. Prices rose more than 16 dollars, on the heels
of the government financial rescue plan. 

Economic News - September 21, 2008

US investors will be wondering Monday morning how Friday's Treasury Department plan to bail out the financial industry from the bad paper floating around. In Asian trading so far Monday, oil prices are
relatively flat (up 0.33%). The dollar is down slightly against most Asian currencies (down 0.93% against the yen, less against others and up against a handful). Tokyo's Nikkei 225 stock index is up 1.4%. Overall, most markets are not up or down much. The pictures is mixed, but can best be described as "calm", a great change after the last three weeks.

Financial Roadmap: The Week Ahead September 22 to 26, 2008

For the third week running the biggest factors moving markets are
likely to be developments in the ongoing efforts by the Federal Reserve
and US Treasury to restore order to credit markets. A couple of
scheduled events that may shed some light on how foreign investors are
taking those efforts are Treasury security auctions Tuesday for 52-week
T-bills, Wednesday for 2-year Treasury Notes and Thursday for 5-Year
Treasury Notes. The shorter term bills have been benefiting from a
«flight to quality» that resulted in essentially zero yields part of
last week. The slightly longer term bills are slightly riskier and may
reflect more of the 1 to 5-year outlook for the dollar and the US
economy.

Lawmakers Battle Over Rescue Plan

Lawmakers are scrambling to put their mark on the Bush
administration's $700 billion plan to save financial markets -- a
fast-moving test of wills that could reshape one of the biggest
bailouts in U.S. history.

Goldman Sachs, Morgan Stanley Become Banks, Ending an Era for Wall Street

The Wall Street that shaped the
financial world for two decades ended last night, when Goldman
Sachs Group Inc. and Morgan Stanley concluded there is no future
in remaining investment banks now that investors have determined
the model is broken.

Paulson Widens $700 Billion Rescue Beyond Mortgages, Limits Fund Insurance

The Bush administration widened
the scope of its $700 billion plan to avert a financial
meltdown by including assets other than mortgage-related
securities.

Dollar May Get `Crushed' as Traders Weigh $1 Trillion Cost of Bailout Plan

Treasury Secretary Henry Paulson's
plan to end the rout in U.S. financial markets may derail the
dollar's three-month rally as investors weigh the costs of the
rescue.

Treasuries Prove Irresistible as Deflation Bet Outweighs Paulson's Bailout

As details of Treasury Secretary
Henry Paulson's plan to revive the U.S. financial system by
pumping as much as $700 billion into the markets emerged Sept.
19, bond investor Michael Cheah was reminded of Japan.

Wall St. fallout hits Main St.

Sep. 19 - The financial crises and subsequent
government bailouts will cost businesses and families across the U.S.,
not just bankers on Wall Street. 

Economic News - September 18, 2009

Current Account US - 2nd Quarter 2008 (Preliminary)

• Current Account Deficit: $183.1 billion


• Quarterly Change: Up $7.5 billion


• Goods Deficit: $216.3 billion


• Quarterly Change: Up $5.3 billion

Housing Starts - August 2008

• Housing Starts: 895,000


• Monthly Change: Down 6.2%


• Year-to-year Change: Down 33.1%


• 1-Family Monthly Change: Down 1.9%

Jobless Claims - September 18, 2008

• Initial Claims: 455,000


• Change from Last Week: Up 10,000

Leading Index (US) - August 2008

• Leading Index: Down 0.5%


• Coincident Index: Down 0.1%


• Lagging Index: Up 0.4%

Weekly Mortgage Applications Survey - September 18, 2008

• Market Composite Index: 661.7


• Change: Up 33.4%


• Purchase Index: 380.4


• Change: Up 2.4%

Money Supply - September 18, 2008

• M1 Seasonally Adjusted Prior Month: $1391.2 billion


• M1 Annual Change (Unadjusted): Up $21.8 billion

US petroleum demand down sharply

The weekly petroleum data from the US Energy Information Administration
showed hurricane effects for another week as inventories fell again for
total commercial petroleum, crude oil and all refined products other
than propane/propylene. The gasoline inventory drop was more moderate
than last week, but still fairly big at 3.3 million barrels, putting
gasoline inventories even further below the average range for the
season.

More good housing news on several fronts

Mortgage applications increased last week according to the Mortgage
Bankers Association’s Weekly Mortgage Applications Survey, while the
Mortgage Bankers Association and Freddie Mac both reported interest
rates down across the board. The Housing Market Index released Tuesday
by the National Association of Homebuilders and Housing Starts released
Wednesday by the Commerce Department indicate that builder confidence
is rebounding based on strengthening sales and buyer traffic, but
builders are still starting less new projects, a good sign for the new
homes inventory glut.

Wall Street Crisis Not Quite 1929

Discount Window Borrowing Soars; AIG Taps $28 Billion of Fed Credit

Investment bank borrowing from the U.S. Federal Reserve's newly expanded discount
window soared in the latest week, reflecting severe strains in credit
markets in the wake of the collapse of Lehman Brothers Holdings Inc.

Paulson Plans to Cleanse Companies of Troubled Assets, Insure Market Funds

U.S. Treasury Secretary Henry
Paulson and Federal Reserve Chairman Ben S. Bernanke proposed
moving troubled assets from the balance sheets of American
financial companies into a new institution.

Bailout Backlash Against Fed, Treasury Mounting in Congress, Wall Street

Amid calls for the government to
take stronger measures to stabilize financial markets, some
former Federal Reserve officials, lawmakers and Wall Street
executives are saying too much has already been done.

Domino Effect of Takeovers Pushes Bernanke, Paulson to Work With Congress

The Federal Reserve and Treasury's
efforts to solve the financial crisis may have only undercut the
ability of banks and Wall Street firms to raise new equity
capital, leaving them to fail or be taken over.

How Russian authorities are tackling market crisis

Sept 19 (Reuters) - Russian markets are due to reopen on
Friday after a 1-½ day trade halt, following a sell off of
more than 20 percent earlier in the week.

Wall St. 2008 vs 1929

Sep. 18 - Analysts say fears that 2008 could mark the second coming of the Great Depression are vastly overstated.

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.

Economic News - September 15, 2008

Empire State Manufacturing Survey - September 2008

• Business Conditions Index: -7.4


• Monthly Change: 10 points


• New Orders Index: slightly above 0

Industrial Production - August 2008

• Industrial Production Index: 110.3


• (Base year 2002, Seasonally Adjusted)


• Monthly Change: Down 1.1%


• Manufacturing Change: Down 1.0%

China Sharpens Focus on Growth

China's central bank cut rates for the first time in more than six years, as concern over the U.S. reorders economic priorities.

ECB, BOE Pump Cash Into Markets

Central banks around the world pumped cash into money markets amid the turmoil
on Wall Street. Expectations are rising that rates will be cut.

Oil's Fall to $100 Brings Relief

Oil futures pushed lower Sunday even after Hurricane Ike forced shutdowns
of Gulf Coast refineries and platforms. Crude fell $2.09, or 2.1%, to
$99.09 a barrel.

Wall Street Convulsions May Further Erode U.S. Growth, Put Pressure on Fed

The Wall Street convulsions that
took down two of the largest investment banks in 24 hours
threaten to make it harder for consumers and companies to borrow,
push unemployment higher and put pressure on the Federal Reserve
to consider an interest-rate cut.

China May Cut Rates Again, Increase Lending, Spend More to Boost Economy

China may cut interest rates again,
ease limits on bank lending and boost spending to spur economic
growth after lowering borrowing costs for the first time in six
years.

Japanese Consumer Sentiment Falls to a Record Low as Inflation Quickens

Japanese consumers became the most
pessimistic they've been in at least 26 years, making it
unlikely they will spend to aid an economy weakened by slower
global demand.

German Investor Sentiment Probably Increased on Retreat in Oil Price, Euro

German investor confidence probably
rose for a second month after a decline in oil prices and a weaker
euro improved the prospects of Europe's largest economy, a survey
of economists shows.

Panama consumer prices up 0.4 pct in August

Canadian home resales cool in August

NY Fed manufacturing shrinks unexpectedly in Sept

US Aug industrial output drop biggest in 3 years

Economic News - September 14, 2008

Financial Roadmap: The Week Ahead September 15 to 19, 2008

Normally the Tuesday Fed announcement should be the big event of the
week, but two things stand in the way. First, it's almost a foregone
conclusion that the announcement will be no change. Barring a surprise
move or a major shift in the announcement language looking to the next
meeting, that's a nonstarter for market moves. Second, like last
weekends seizure/bailout (depending who you ask) of Fannie and Freddie,
this weekend promises a big announcement on troubled investment banker
Lehman Brothers.

Producer Price Index (PPI) - August 2008

• Finished Goods Index: Down 0.9%


• Finished Goods Core: Up 0.2%


• Finished Goods Annual Change: Up 9.6%

Retail Sales - August 2008

• Total Retail and Food Service Sales: $381.2 billion


• Monthly Change: Down 0.3%


• Annual Change: Up 1.6%

No Deal Reached Yet for Lehman

The outlines of plans to determine Lehman's fate emerged as it became clear
that a clean sale of the entire firm would be too difficult to execute.

Retail Sales Tumbled in August

Retail sales in August were weak across the board, falling 0.3% from July, a sign that consumer spending is weak.

Options for Battling Crisis Narrow

The credit crunch could be entering a critical stage, with the share prices of Lehman and other financial firms reeling.

Paulson, Bernanke Brave `Raptors' in Resisting Taxpayers' Money for Lehman

Henry Paulson and Ben S. Bernanke may have to weather more speculative attacks on financial
institutions as they resist using public funds to aid the sale of Lehman Brothers Holdings Inc.

ECB's Weber Is More Confident on Inflation Outlook, Can't Give `All-Clear'

European Central Bank council member Axel Weber said the outlook for inflation has brightened
and the recent fall in oil prices is ``reassuring.''

China May Ease Lending Restrictions After Export Growth, Production Cooled

China's central bank may cut the amount of cash it requires lenders to set aside as reserves as
inflation slows and economic growth weakens.

EU's Almunia says still risks of second-round effects

ATHENS, Sept 13 (Reuters) - European Union and euro zone
inflation has probably peaked, but risks of second-round effects
should not be underestimated, EU monetary Affairs Commissioner
Joaquin Almunia said in an interview published on Saturday.

Economic News - September 11, 2008

CASH Index - September 2008

• CASH Index Reading: 69.2


• Monthly Change: Up 33.8


• Job Index: 95.5


• Job Index Change: Up 9.7

Federal Budget - August 2008

• Monthly Deficit/Surplus: $111,914 billion deficit


• Prior Year Monthly: $116,973 billion deficit

Import Export Price Index - August 2008

• Import Prices: Down 3.7%


• Non-petroleum Import Prices: Down 0.3%


• Export Prices: Down 1.7%


• Non-agricultural Export Prices: Down 0.7%

International Trade (US) - July 2008

• Exports: $168.1 billion


• Monthly Change: Up $5.4 billion


• Imports: $230.3 billion


• Monthly Change: Up $8.7 billion

Jobless Claims - September 11, 2008

• Initial Claims: 445,000


• Change from Last Week: Down 6,000

Money Supply (M1 and M2) - September 11, 2008

• M1 Seasonally Adjusted Prior Month: $1391.5 billion


• M1 Annual Change (Unadjusted): Up $21.6 billion


• M2 Seasonally Adjusted Prior Month: $7716.5 billion


• M2 Annual Change (Unadjusted): Up $402 billion

Freddie Mac reports big rate drop

Freddie Mac reported that mortgage rates fell further this week,
bringing the average rate for a 30-year Fixed Rate Mortgage down to
5.93% - down 0.6% over the last four weeks and down 0.4% from last
week.

Korean economic indicators bounce back

Korean economic indicators bounced back strongly in July after big drops in June. Both the Leading Index and the Coincident Index rose 0.9% in July.

Japan's Economy Contracts

Japan said its economy shrank at an annualized pace of 3% during the April-June quarter, revising down an earlier estimate.

Exports Keep Driving U.S. Growth

U.S. exports surged in July and will continue to add a much-needed boost to the nation's economic growth.

Economist: Market at Near Bottom

Economist Karl Case says he thinks the housing market may be near a bottom.

China's Industrial Output Expands at Slowest Pace in Six Years on Exports

China's industrial production grew
at the slowest pace in six years on weaker export demand and
factory shutdowns for the Olympics, increasing the likelihood
the government will stimulate the economy.

Japan's Economy Shrinks 3%, Most Since 2001, as Spending, Exports Decline

Japan's economy shrank 3 percent
last quarter, the steepest contraction since 2001, as companies
and households cut spending and exports fell.

Mexican gross fixed investment jumps 8 pct in June

Canada new home market cools further in July