Links: 2013-11-05
Manufacturing
Manufacturing leads recovery in global economy | Business | The Guardian
“China, Japan, South Korea and India all reported rising new export orders. Britain enjoyed its fastest growth in overseas demand for its goods for more than two years, and in the US factories escaped the hit from the government shutdown that markets had been expecting.
The US manufacturing sector grew at its fastest pace in more than two years, according to the Institute of Supply Management’s monthly report. Its headline index rose to 56.4 from 56.2 in September, well above a forecast for 55 in a Reuters poll.”
Manufacturing in U.S. Expands at Faster Pace Than Forecast – Bloomberg
Canadian manufacturing growth hits highest level in 2-1/2 years in October | Financial Post
BBC News – Eurozone factory orders up for fourth month in October
Spain’s manufacturing sector expands for third straight month in October: PMI | Reuters
ekathimerini.com | Greek manufacturing activity shrinks faster in October, survey shows
“The Markit index of manufacturing sentiment dipped to 47.3 in October from 47.5 a month earlier. It had hit a 44-month high of 48.7 in August, though that remains below the 50 point line dividing expansions in activity from contractions.”
French factory activity shrinks faster in October: PMI | Reuters
“Data compiler Markit said its final purchasing managers’ index fell to 49.1 in October after climbing to 49.8 in September, just below the 50 point line dividing expansions in activity from contractions.
Export orders were the one positive note in October, rising for the third time in the past four months and at the fastest rate since May 2011.”
Factory activity hits one-year low in Oct: Markit | Reuters
This data is in contrast to all the other bullish data we have seen on manufacturing both in the US and globally.
Fed
Fed’s Fisher says U.S. government bears blame for slow recovery | Reuters
Fed’s Fisher says stimulus tapering will be data dependent | Reuters
Bullard: Fed Will Cut Bond Buys When Job Market Improves – WSJ.com
Fed’s Bullard: no hurry to taper because of low inflation | Reuters
Fed should get out of the market’s way – Outside the Box – MarketWatch
“In more than 30 years of money management, I’ve never seen such a rapid change in the way people make financial plans. Instead of saving for the future, many are opting for fast gains – yet at the same time they want low risk.”
The Fed might not be as confused as Doug Kass thinks
“The dovish speech in July and the September decision not to taper may have “shocked the market” but that’s because, once again, the market had over-corrected, this time from QE Infinity to Taper Now. “
The Fed is locked in a QE prison of its own making – Telegraph
“the Fed’s Catch-22. If Bernanke starts preparing the world for tapering again, yields will start to spiral, choking off recovery and robbing the Fed of its resolve to taper. So US policymakers are caught in a trap – a seemingly inescapable dilemma that stems directly from the massive scale of QE.
These issues will come to a head, and in full public gaze, during Congressional hearings into the nomination of Janet Yellen as Bernanke’s replacement. “
Housing
Calculated Risk: Lawler on Homebuilders: Home Orders Off Significantly Last Quarter
“Net orders for the latest quarter were down 25.0% from the previous quarter, compared to a sequential quarterly decline of 12.1% a year ago.”
New Homes Get Built With Renters in Mind – WSJ.com
“Last year 5.8% of the 535,000 single-family homes started were being built as rentals, up from 4.8% in 2011 and the highest share since at least 1974, according to an analysis of census data by the National Association of Homebuilders. From 1974 to the home-price peak in 2006, only about 2% of single-family homes were built for rentals.”
Dutch Gamble on U.S. Housing Debt After Patience Wins – Bloomberg
“The Dutch government’s decision to hold onto U.S. mortgage debt acquired during the 2009 bailout of ING Groep NV has paid off so far as prices of the securities soared, more than doubling in some cases from lows that year. “
Banks
BBC News – Sallie Krawcheck: Wall Street boss who was glad to be sacked
“”What I saw a thousand times during the downturn was, ‘We’d like to give her that opportunity, but we need to go with the sure thing – we can’t afford diversity right now,'” she says.
So now, as the boss of 85 Broads, Ms Krawcheck says her goal is to work in a more active way to correct the gender imbalance at the top.”
Barclays suspends several traders in FX probe: source | Reuters
“A string of banks, including Standard Chartered, JP Morgan and Citigroup, have put dealers on leave as regulators in the United States, Europe and Asia investigate whether there has been manipulation in the $5.3 trillion-a-day foreign exchange market.”
ECB’s Asmussen: Europe should fix bank liability rules by 2015 | Reuters
Asmussen is NOT ruling out using the ESM for banks. He is just saying the hurdle is high. That difference should be noted.
UBS, Credit Suisse hit by stricter capital rules threat | Reuters
EconoMonitor : Great Leap Forward » What Do Banks Do? What Should They Do?
Good piece on accounting and asset-liability duration mismatches which lead to liquidity problems/crises.
United States
Chart of the Day: The Collapse of the American Middle Class | Mother Jones
“Forty years ago, 65 percent of us lived in middle-income neighborhoods. Today, that number is only 42 percent. The rest of us live either in rich neighborhoods or in poor neighborhoods.”
Yellen’s Confirmation Process to Test GOP Unity – WSJ.com
“Sen. Lindsey Graham (R., S.C.) has said he would try to block final votes on major White House nominees, including Ms. Yellen, until he is provided access to survivors of the 2012 attacks on U.S. diplomats in Benghazi, Libya. Ms. Yellen is currently vice chairwoman of the Federal Reserve.”
Europe
E.U. Predicts Anemic Growth and High Unemployment in 2014 – NYTimes.com
BBC News – UK construction growth ‘at six-year high’ in October
Draghi’s Deflation Risk Complicates Recovery: Euro Credit – Bloomberg
““The ECB has become unusually tolerant of low inflation, even by its own standards,” said Greg Fuzesi, an economist at JPMorgan in London. “The argument for inaction is becoming more stretched, however. The refinancing rate cut is the simplest option in the near term.”
Euro-area inflation slowed to 0.7 percent in October, the lowest level since November 2009 and the ninth straight month that the rate has been less than the ECB’s ceiling”
German Surpluses: This Time Is Different – NYTimes.com
“There’s a tendency, in discussing Germany’s position in world trade, to assume that massive surpluses have always been the German norm — that the country’s high-quality products have always fueled an export engine that inevitably sold much more abroad than Germans bought. But it’s not true. “
The Harm Germany Does – NYTimes.com
” Germany hasn’t adjusted at all; all of the rise in peripheral European current accounts has taken place at the expense of the rest of the world.”
Italy eyes ‘Google Tax’ to help fix public finances | Reuters
“Italy’s largest ruling party has proposed legislation to raise government revenues by making it more expensive for multinational online companies like Google, Amazon and Yahoo to do business there.”
“Should Germany persist in imposing its contractionary ruin on Europe – “should the euro break apart, with one exchange rate in the North and one in the South”, as he puts it – Germany itself will reap as it has sown. “Their exchange rate will double and they will not sell a single Mercedes in Europe. German industrialists know this but all they manage to secure are slight changes, not enough to end the crisis.””
Europe is a currency saint but an egregious demand sinner – Telegraph
“The euro exchange rate is too high for two thirds of the euro states that use it, and cripplingly high for a third of them. It is pushing Europe’s crisis economies into incipient 1930s deflation, making it almost impossible for Italy, Spain, and Portugal to dig their way out of debt traps.
A Deutsche Bank study said the euro “pain threshold” for Germany is $1.79 to the dollar. It is $1.24 for France, and $1.17 for Italy, a staggering difference. The euro ended last week at $1.35. This means Germany is sitting pretty, and it is Berlin that dominates the policy machinery. It has not felt much pain, though as you can see in the chart, it has not done that well wither. Its industrial output is still below its 2008 peak.”
Civil Liberties
““The NSA allegedly collected the phone records of 320 million people in order to identify roughly 300 people who might be at risk. It’s just bad public policy…and perhaps illegal,” he said.”
Snowden soll in Deutschland Asyl bekommen « WirtschaftsBlatt.at
Supposedly there is some political momentum in Germany for granting asylum to Edward Snowden. I don’t believe it.
Technology
Amazon Mines Its Data Trove To Bet on TV’s Next Hit – WSJ.com
Lenovo Yoga 2 Pro: Basically a Perfect Upgrade
“Last year’s Lenovo Yoga was one of the better laptops we’ve ever used, and certainly right at the top of Windows 8 convertibles. This year’s Yoga 2 Pro refines the hell out of that notion, and adds a super high res screen on top.”
Elsewhere
Mayor Rob Ford can only be taken out by voters: James | Toronto Star
Munich: Authorities Discovered 1500 Works of Art Stolen by Nazis – SPIEGEL ONLINE
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