"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

The Required Disclosures

The information presented in this blog and its individual articles is provided for informational use only and should not be considered investment advice or an offer for a particular security. The contents reflect the views and opinions of the individual writer as of the date the article was written and do not necessarily represent the views of the individual writer on the current date. They also do not in any way, shape, or form represent the views of the Firm Never-To-Be-Named. Any such views are subject to change at any time based upon market or other conditions and The Great Redoubt and its individual writers disclaim any responsibility to update such views. These views should not be relied on as investment advice, and because investment decisions for any security are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any contributor to The Great Redoubt. Neither The Great Redoubt nor any individual author can be held responsible for any direct or incidental loss incurred by applying any of the information offered. Please consult your tax or financial advisor for additional information concerning your specific situation.

Thursday, December 30, 2010

China In The News (Again), New Vatican Bank Rules, And First Time Jobless Claims

Looking to the global picture first, China is in the news[1]. They've released their Purchasing Managers Index, which dropped from 55.3% in November to 54.4% in December. Even though that's still considered to be an expansion in the marketing sector[2], this does indicate that manufacturing growth is slowing.
In further Chinese news, Jiang Yu has reiterated China's position that they are fully entitled to regulate the mining and exporting of their own nation's rare earth resources. "In the future, China will continue to supply rare earths to the international market and will take effective management steps over their export in accordance with WTO rules." Translated, this says "It's our stuff. It's in our nation. You don't like it? Wah."
Spinning round the globe to Europe, Italy reported a 0.4% increase in the PPI for November (putting it up 60 bps, and at 4.1% for the rolling year). That's not great news for one of the PIIGS, since it's a pretty good indicator that CPI will be going up over the next month or so.
European share trading in general is down a little right now, mostly on declining energy stocks and concerns about the "euro zone debt crisis". Copper prices have hit a new high ($9550 per ton) on expectations of rising emerging nations demand, and US crude oil prices are still near a two-year high. The dollar, on the other hand, is dropping like a stone - everybody expects the Fed's quantitative easing program to churn out more US currency in 2011 - bringing it to a 20-year low against the Australian dollar, a seven-week low against the yen, and a six-month low against the yuan.
Also in European news, Pope Benedict XVI has signed off on new rules to bring the Vatican's banking regulations in line with EU banking regulations. Why? Because Rome prosecutors have put the director of the Vatican Bank[3] and his deputy under criminal investigation for possible money laundering, and have seized 23 million euros worth of Vatican deposits at an Italian commercial bank (which were allegedly deposited without proper identification of the depositor or the recipient). Also, they have until tomorrow to bring themselves into compliance with EU banking regulations[4].
Moving westward across the Atlantic, the United States is braced for the First Time Jobless Claims for the week of Christmas with baited breath. For the week ending 12/18, we had 420k claims. Analysts are expecting a mild Christmas miracle (possibly driven by a last-minute surge in seasonal employment) which will hopefully bring Christmas cheer and a drop in first time claims to "only" 415k. Looking at the report, we see that the actual claims were only 388k - far, far better than expected.
So why are the futures flat? A couple of reasons, really. Everyone is still waiting to see the Chicago PMI (analysts are expecting a mild contraction in the growth rate to 62%) and the Pending Home Sales Index (no consensus yet).
[1] Isn't it always, these days?
[2] Any result over 50% is considered to be a sign of an expanding sector.
[3] Officially known as the Institute for Works of Religion.
[4] The EU, applying the "if it walks like a duck and quacks like a duck" rule, is no longer accepting the Vatican's position that the Institute for Works of Religion is not technically a bank.

No comments:

Post a Comment