Global Macro Perspectives
POBC raised key one-year lending rate for 0.25% to 6.06%. Timing of the announcement came as a surprise to the markets, as the rise was expected further into the first quarter.
To repeat: Raising interest rates and stalling real-estate prices are a bad cocktail. I will cover China even more extensively next year, as big things could come from here.
*** The Economist: Can we trust TIPS? ***
*** FT Alphaville: China’s lunar rates rise ***
*** FT Alphaville: From the FT mailbag ***
*** FT Alphaville: Subprime metals ***
*** FT Alphaville: In Pharaoh’s currency markets ***
*** The Big Picture: Surprisingly Strong Q4 2010 Revenues ***
*** The Big Picture: Nonrevolving consumer credit outstanding at record high ***
*** The Slope of Hope: The Ongoing Bear Wedgie ***
*** The Slope of Hope: Broken Metal ***
*** The Slope of Hope: Picking Off the Sissies, Again ***
Weekly economic calendar.
*** Wired: Cracking the Scratch Lottery Code ***
*** The Washington Post: Why politics and investing don’t mix***
*** FT Alphaville: Gold is good to go at JPMorgan repos ***
*** FT Alphaville: HuffPo proves there IS (a lot of) money in blogs ***
*** FT Alphaville: Merrill’s missing Ireland note ***
*** The Big Picture: Investors Bet $102 Billion on Gold ***
*** The Big Picture: Gross: Fed is Contributing to rise in Commodity Prices ***
*** The Big Picture: Results: Egypt Crisis Poll ***
*** The Big Picture: American Warships Heading to Egypt ***
Baltic dry index fell 8.3% last week; Capesize Index was down 5.0%; Panamax Index rose 0.8%; Supramax Index decreased 9.8%; Handysize Index fell 10.9%.
Stockpile data was not reported last week because Chinese holidays. Iron ore price fell 4%.
We could see some improvement after the lunar new year; Keeping close watch on Egypt developments.
To sum up all books reviewed.
The author contends that the reason why capitalism succeeds in the west and fails everywhere else is legal structure of property rights. Functioning legal property rights system enables the capital to flow freely through the economy enabling it to be employed to create economic growth. I do not agree in full with that…my view is that this is just one of the reasons. Nevertheless this is an interesting and worthwhile book to read.
The most interesting aspect of the book for me is a comparison of legal structure of property rights structure across countries and through history and their interaction with economic development. The book also provides lots of empirical data on legal systems across the globe.
Baltic Dirty Tanker Index rose 1.5%; Baltic Clean Tanker Index fell 1.7%.
Again: too many available ships for the cargoes offered. We could see some positive freight rate developments if Egypt unrests affect Suez canal normal operation.
I haven’t looked this for a while… Breached -10.0% level this time was a false signal (recession didn’t occur).
ECRI Weekly Leading Index for week ending January 28 was reported up 3.7% y-o-y. Prior reading was at 3.5%.
U.S. railroads originated 291,147 carloads, up 4.6% compared with the same week in 2010 and down 0.8% compared with 5-year average. Week over week change was +2.9%.
Working gas in storage fell 189 Bcf from previous week. The consensus was at 187 Bcf.
Storage level is 53 Bcf lower than same time year ago.
Nonfarm payrolls rose 36.000 in January. The consensus was at 146.000, December reading was an increase of 121.000 (revised +18.000). The unemployment was reported at 9.0% vs. prior reading of 9.4% and consensus of 9.5%.
Private payrolls were up 50.000 vs. 145.000 consensus and 139.000 reading in December (revised +26.000).
Again: Huge miss in both nonfarm payrolls and private payrolls. Unemployment rate fell on reduced participation in labor force (lowest since ’80s). All in all: weak report, especially having in mind rosy sunglasses sentiment.
*** The Big Picture: NFP Day: The Most Over-Analyzed, Over-Emphasized, Least-Understood Data Point ***
*** The Big Picture: Intelligence Guidance: The Situation in Egypt ***
*** The Big Picture: It’s not just commodities that will drive inflation ***
*** The Big Picture: Bernanke, still not worried about inflation ***
*** Calculated Risk: Norris: From 1983, Hope for Jobs in 2011 ***
*** FT Alphaville: S&P: yeah, housing is still terrible ***
*** The Slope of Hope: AAII Sentiment Survey – Week Ending 2/1 (by Runedge) ***
*** The Slope of Hope: How To Spot And Trade Negative Divergence ***
Initial jobless claims in the U.S. were reported at 415.000 vs. 429.000 consensus; last week revised (down 3.000) reading was at 457.000.
Lot of noise in data; 4 week moving average rose in last two weeks.
*** The Infrastructurist: China To Create World’s Largest City ***
*** FT BeyondBRICs: Chinese property bubble: a myth? ***
*** The Big Picture: How U.S. Income Groups Get Squeezed By Food Prices ***
*** The Big Picture: Watch yields here ***
*** The Big Picture: Blogonomics: A New Chapter ***
*** The Big Picture: Microsoft the Innovator: Bing Copies Google Search Results ***
*** The Slope of Hope: Nope. No Inflation Here. Not At All. ***