Around the Globe 06.25.2013

Orders for U.S. Durable Goods Rose More Than Forecast – Bloomberg.

U.S. Stocks Rebound From Nine-Week Low on Economic Data – Bloomberg.

Consumer confidence highest in over five years in June | Reuters.

US Durable Goods 06.2013

There was a bumper crop of positive economic news today led by the rise in durable goods orders.  Is this good news or bad? While rising factory activity shows a strengthening economy, this dynamic could portend the Fed reducing its bond purchases despite all the protestations to the contrary in the media yesterday.

The consumer confidence numbers are even trickier to analyze.  Today’s rise in the Conference Board suggests improving sentiment, but the University of Michigan numbers released last week show the opposite.  Let’s call this data “mixed” for now and move on.

Cyprus says not seeking re-work of debt bailout, but tweaks | Reuters.

Cyprus Debt to GDP

After the panic subsided, Cypriots realized that the country will suffocate underneath a crushing burden of debt.  Now, they do not wish to rework the bailout but merely tweak it.  What is the difference between reworking and tweaking? It’s a matter of semantics.  Presumably, German voters will not be as angry at donating more money towards tweaks.  No matter, after German elections, the Cyprus bailout will be reworked, as the chart above leaves no other choices.

Population in crisis-hit Spain down 114,000 – Yahoo! Finance.

Population of Spain 06.2013

The inflection point in Spain’s population growth is 2008, the start of the country’s economic woes.  Robust economic growth led to more immigration and less emigration, but this trend is over.  Population growth is one factor that fuels GDP, so this is one more reason while Spain will find itself mired in depression for the foreseeable future.

PBOC Says It Will Ensure Stability of China Money Market – Bloomberg.

PBOC Addresses Cash Crunch – WSJ.com.

China’s central bank seeks to allay fears of credit crunch | Reuters.

china-7-day-repo 06.25.2013

The PBOC has abandoned its laissez-faire posturing from the last few weeks and now pledges to support stability in the money markets.  The bank has ceased withdrawing cash from the system via bill sales, and this action combined with a little, good old-fashioned jawboning has succeeded in bringing rates down since last week.  Stability has been achieved in the short-term, but a creaking shadow banking system ensures that the long-term will be a wild ride in the Middle Kingdom.

New Homes Sales Hit Third Straight Month of Gains.

US Home Prices Jump in April, Setting New Record.

New-Home Sales Rise 2.1% in May; Case-Shiller Index Jumps – WSJ.com.

New home sales near five-year high, prices rise | Reuters.

Case Shiller 06.2013

When digesting the housing reports issued by the mainstream media, it is best to heed the advice of Chuck and Flav: Don’t believe the hype.  The recent rise in housing price brings them to 2004 levels.  When you remember that there has been inflation since then, you realize that prices still have not recovered.  Of course, they are better than they were, and this is good news if you own a home but bad news if you wish to buy.  While the recent rise in mortgage rates spells the end to the housing recovery meme, remember that the mainstream media’s narratives die hard.

Cash Is Tight: 6 More US Muni Bond Sales Postponed.

Bonds Steady, Taking Cue From Overnight Stabilization.

Exit From the Bond Market Is Turning Into a Stampede.

MUB 06.25.2013

Municipal bonds are down over 10% from their November peaks.  This is a story which started months ago, but the decline became steeper in once the taper tantrum set in.  Prices have stabilized today, but this is probably the start of a dead duck bounce.  Rates will bounce up and down, but they will generally trend down over the next few months.  One exception is the U.S. treasury market, which may benefit from haven flows if it gets serious.

By the way, one of the first markets to blow up in the beginning of the GFC was the muni market, particularly ARS.  Is history repeating itself?

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6 thoughts on “Around the Globe 06.25.2013

  1. I think you missed three amazing news items:

    1. Snowden was not covered.

    “No one should be charged under any law for disclosing information of human rights violations by the US government. Such disclosures are protected under the rights to information and freedom of expression,” said Widney Brown, Senior Director of International Law and Policy at Amnesty International.

    2. Obamas pitch on global warming despite the facts:

    this past WSJ acknowledgement

    No Need to Panic About Global Warming
    There’s no compelling scientific argument for drastic action to ‘decarbonize’ the world’s economy.

    http://online.wsj.com/article/SB10001424052970204301404577171531838421366.html#_methods=onPlusOne%2C_ready%2C_close%2C_open%2C_resizeMe%2C_renderstart%2Concircled%2Conload&id=I0_1372214610322&parent=http%3A%2F%2Fonline.wsj.com&rpctoken=62646829

    3. Ireland in a real tizzy over bankers arrogance subjecting the to
    unwarranted debt.

    TRUE INTENT of bank operatives to lure in naive politicians.

    Irish PM promises probe against bankers who duped government with figures ‘picked from their arse’

    http://rt.com/news/anglo-irish-bank-probe-221/

    .

  2. I think you missed three amazing news items:

    1. Snowden was not covered.

    “No one should be charged under any law for disclosing information of human rights violations by the US government. Such disclosures are protected under the rights to information and freedom of expression,” said Widney Brown, Senior Director of International Law and Policy at Amnesty International.

    2. Obamas pitch on global warming despite the facts:

    this past WSJ acknowledgement

    No Need to Panic About Global Warming
    There’s no compelling scientific argument for drastic action to ‘decarbonize’ the world’s economy.

    http://online.wsj.com/article/SB10001424052970204301404577171531838421366.html#_methods=onPlusOne%2C_ready%2C_close%2C_open%2C_resizeMe%2C_renderstart%2Concircled%2Conload&id=I0_1372214610322&parent=http%3A%2F%2Fonline.wsj.com&rpctoken=62646829

    3. Ireland in a real tizzy over bankers arrogance subjecting the to
    unwarranted debt.

    TRUE INTENT of bank operatives to lure in naive politicians.

    Irish PM promises probe against bankers who duped government with figures ‘picked from their arse’

    http://rt.com/news/anglo-irish-bank-probe-221/

  3. FORGOT probably most important

    IMMIGRATION

    under Obamacare, businesses with over 50 workers that employ American citizens without offering them qualifying health insurance could be subject to fines of up to $3,000 per worker.

    But because newly legalized immigrants wouldn’t be eligible for subsidies on the Obamacare exchanges until after they become citizens – at least 13 years under the Senate bill – businesses could avoid such fines by hiring the new immigrants instead.

    http://washingtonexaminer.com/obamacares-tariff-on-hiring-american-workers-still-plagues-immigration-bill/article/2532013

    I am non partisan, so I don’t care where you stand.

    But the incentive is to hire illegal or now “quasi” legal immigrants to avoid penalty.

    Save money and forget about hiring US citizens.

    .

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