![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
Nov. 30th, 2008
Good morning.
On Friday, the Baltic Dry Index measurement of shipping activity fell to 715; to get historical numbers that low, you have to go back to July of 1986. Japanese stocks are down on news that 2008 domestic auto sales will fall to levels not seen since 1974.
I'd comment on the sharp improvement in H.3 data but sadly I instead have to comment that banks are utilising new bailout/swap instruments which no longer are counted as "borrowed" moneys and are applying those towards their "nonborrowed reserves" number. Or so I am told. With no transparency and a clear, demonstrated, and continuing systematic pathology towards lying throughout these bailout operations (and indeed throughout this administration), I find this report entirely plausible, and one more tool to observe the underlying reality is gone.
Last week's stock rally was substantial, but major investors were selling into the rise. (This chart may update, so have a partial, here.) Meanwhile, the US prepares to "flood [the] world with more dollars." Meredith Whitney is even more bearish than she has been, and supports the liquidity flood.
But consumer spending is keeling over dead. "The holiday season is over. The reason? It just never got started," said Marshal Cohen, chief industry analyst at NPD Group, a market research firm. According to a named source in the article, stores are now actively expecting deflation, which means inventory loses price as it's held, which means inventory is unacceptable. "...what normally happens after Christmas is taking place this weekend, [Liquidation.com's Bill Angrick] said. "This is about survival. This is not about muddling through the holiday season." Sales were "at best in line with [stores'] low expectations." Consumer spending was already flooring before this weekend, and sales fell outright the week before Thanksgiving. January is going to be brutal.
Brad Setser has a long post on China's manufacturing sector, which includes a pointer to more reading. Mish reports that you're seeing outright panic in parts of China over the imploding economy.
Much more worryingly, Mish also reports that Chesapeake Energy is having to sell stock to raise cash for operations. They're the largest US producer of natural gas.
Finance minister Flaherty is out of his fucking mind if he thinks Canada is not going to have a recession.
Hugh Hendry, chief investment officer at hedge fund Eclectica Asset Management, thinks all significant US financial institutions will be nationalised within a year. All of them. CNBC video at the link, but also text.
In "rage" news, Citibank board member and former Treasury secretary says it's not his fault Citigroup fell over. Here's a breakdown on the US$7.7 Trillion in bailout pledges. And another US$800B on top of that. Mish:
On Friday, the Baltic Dry Index measurement of shipping activity fell to 715; to get historical numbers that low, you have to go back to July of 1986. Japanese stocks are down on news that 2008 domestic auto sales will fall to levels not seen since 1974.
I'd comment on the sharp improvement in H.3 data but sadly I instead have to comment that banks are utilising new bailout/swap instruments which no longer are counted as "borrowed" moneys and are applying those towards their "nonborrowed reserves" number. Or so I am told. With no transparency and a clear, demonstrated, and continuing systematic pathology towards lying throughout these bailout operations (and indeed throughout this administration), I find this report entirely plausible, and one more tool to observe the underlying reality is gone.
Last week's stock rally was substantial, but major investors were selling into the rise. (This chart may update, so have a partial, here.) Meanwhile, the US prepares to "flood [the] world with more dollars." Meredith Whitney is even more bearish than she has been, and supports the liquidity flood.
But consumer spending is keeling over dead. "The holiday season is over. The reason? It just never got started," said Marshal Cohen, chief industry analyst at NPD Group, a market research firm. According to a named source in the article, stores are now actively expecting deflation, which means inventory loses price as it's held, which means inventory is unacceptable. "...what normally happens after Christmas is taking place this weekend, [Liquidation.com's Bill Angrick] said. "This is about survival. This is not about muddling through the holiday season." Sales were "at best in line with [stores'] low expectations." Consumer spending was already flooring before this weekend, and sales fell outright the week before Thanksgiving. January is going to be brutal.
Brad Setser has a long post on China's manufacturing sector, which includes a pointer to more reading. Mish reports that you're seeing outright panic in parts of China over the imploding economy.
Much more worryingly, Mish also reports that Chesapeake Energy is having to sell stock to raise cash for operations. They're the largest US producer of natural gas.
Finance minister Flaherty is out of his fucking mind if he thinks Canada is not going to have a recession.
Hugh Hendry, chief investment officer at hedge fund Eclectica Asset Management, thinks all significant US financial institutions will be nationalised within a year. All of them. CNBC video at the link, but also text.
In "rage" news, Citibank board member and former Treasury secretary says it's not his fault Citigroup fell over. Here's a breakdown on the US$7.7 Trillion in bailout pledges. And another US$800B on top of that. Mish:
By my count the government has now pledged $8.5 trillion in lending facilities with $5.55 trillion of that coming from the Fed, allowing $250 billion for the Citigroup Bailout Agreement. Taking into consideration Treasury Secretary Henry Paulson's statement that $200 billion is just the “starting point” for the TALF asset-backed securities program, there is really no upper limit on pledges.Good luck this week.
