Lots of attention today to the declining dollar. Interesting article on that theme in the WSJ by David Malpass from the Encima Global LLC. WSJ link: The Weak-Dollar Threat to Prosperity.

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As expected equity markets got a nice push up from Alcoa earnings. Looks like the earnings season will probably have similar “better than expected” flavor like the one preceding.The market looks bound to new highs.

The news flow on consumer and credit card credit continues to throw shadows on this equity rally. Consumer credit shrank for the seventh month in a row, contracting 12 billion USD in August to 2.46 trillion USD implying -5.8% annual growth rate. Credit-card debt fell for a record 11th straight month, down 9.9 billion USD. Shrinking at annualized rate of 13.1%. The credit outstanding ended at 899.4 billion USD. This could pose important set back to the recovery of U.S. economy as it shows the lenders are reluctant to extend credit to the economy and consumers are keen to reduce its debt. Consumer credit press release. I will post again the Meredith Whitney article explaining the issue in detail. WSJ story: The Credit Crunch Continues

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