Jeff Rubin, CIBC World Markets Chief Economist discusses why he feels we will see a 6% inflation rate soon. His argument, "this labor outsourcing story to the cheap labor markets in Asia is over" thanks to triple-digit oil prices. The result will be even higher prices. He also asks, "how much longer can the fed funds rate remain where it is when inflation is at 6%?"
click for video
source: 6% inflation ahead?
Jeff Rubin on Fox business news
http://cosmos.bcst.yahoo.com/up/player/popup/index.php?cl=9066592
Thursday, July 31, 2008
Interesting take on inflation by Jeff Rubin
EURUSD speculative sentiment net long
From DailyFx.com:
Retail sentiment has once again shifted; and this time, speculative traders are positioning for the EURUSD’s long-term trend to remain intact. Over the past week, the Speculative Sentiment Index ratio jumped to its highest reading since last October - though this shouldn’t be too surprising considering the retail sector’s affinity for prominent technical levels. Today, the pair’s ratio stands at 1.59 with nearly 61% of the market group holding a long position.
click to enlarge
source: Rising Long Interest Threatens A Euro Breakdown
DailyFx.com http://www.dailyfx.com/story/strategy_pieces/fxcm_speculative_sentiment_index/Rising_Long_Interest_Threatens_A_1217499461113.html
Wednesday, July 30, 2008
State of the housing market - another fascinating chart
How delinquency rates and home prices have changed in 200 U.S. metropolitan areas in the move from boom to bust.
click for interactive chart (or link below)
source: Shrinking Prices, Rising Delinquencies
WSJ
http://online.wsj.com/public/resources/documents/retro-MORTGAGE0807.html
Housing inventory is the key to recovery
This very interesting chart comes from the WSJ and highlights the current plague that torments the housing market in the U.S. While there are some improvements in unsold housing inventory in certain metro areas ("...supply of homes listed for sale declined from a year earlier in 19 of 28) others continue to pile on in part due to a growing glut of foreclosed homes. According to Barclays there are about 721,000 foreclosed homes on the market nationwide, up from 112,000 two years ago.
From the WSJ:
Housing markets generally are considered roughly in balance when the number of homes listed for sale is enough to last about six months at the current sales rate. Based on the average sales rate over the past year, The Wall Street Journal survey shows that supplies are enough to last about 13 months in the Atlanta and Phoenix areas, 15 months in Chicago, 19 months in Las Vegas, and 37 months in Miami-Fort Lauderdale. For condominiums alone in Miami-Dade County, the supply is enough to last 51 months.
click for interactive graphic (problems click link above)
source: Amid Housing Slump, Glut Eases Slightly
By JAMES R. HAGERTY, July 29, 2008; WSJ http://online.wsj.com/article/SB121727861946290899.html
Monday, July 28, 2008
David Simon of Simon Property: worst of the economic downturn in 2009
Simon Property Group, a real estate investment trust (REIT), that owns real estate properties primarily of regional malls, Premium Outlet centers, The Mills, and community/lifestyle centers in the U.S. and abroad (Europe, China, Japan) announced second quarter FFO topping Wall Street expectations. Despite the good results occupancy rates in the mall portfolio was down during the quarter. CEO David Simon sees the worst of the economic slowdown manifest in 2009.
Here is what David Simon, Chairman and Chief Executive Officer had to say during the call: Occupancy in the mall portfolio was down 20 basis points as compared with the year earlier period. Square footage lost to bankruptcy for the first six months of 2008 totaled 151,000 square feet as compared to 30,000 square feet during the first six months of 2007.
As we discussed in the first quarter, the decline in the premium outlet occupancy is primarily due to lease terminations or bankruptcies of four tenants comprising about a dozen spaces and the late March 2008 openings of Houston premium outlets and Phase 2 of Rio Grande premium outlets, we expect occupancy within the premium outlet portfolio to return to previous levels.
David Simon:
I’d just, Paul, though, it is, we’re going to have more store closings in ’08 and in ’09 than we did in ’06 and ’07. I mean there’s no ambiguity about that. Now again, we still think the way we operate and the way we’ll still be bale to grow our cash flow, but we’re going to deal with more store closings in ’08 and ’09 than what we have at least in the last couple years.
Now the one thing I will say at this point, the cycle that we’re in doesn’t feel like or seem like anything different from a retail perspective that we haven’t already dealt with previously unfortunately numerous times. So at this point, it feels like/seems like kind of something we’ve done. I’d say a déjà vu all over again, but we’ve seen it.
David Simon:
Well, I think it’s tough because we’re I think kind of in the… We’re in the first half of the downturn let’s say, okay. It’s a very tough judgmental call. I do think we’ll see the worst of it manifest itself in ’09, not ’10. But a lot of the story hasn’t been written and clearly the trend of better properties getting better and worse properties getting worse is only going to accelerate in a tough economic environment.
source: Simon Property Group, Inc. Q2 2008 Earnings Call Transcript
Seeking Alpha http://seekingalpha.com/article/87498-simon-property-group-inc-q2-2008-earnings-call-transcript?source=yahoo&page=-1
Manhattan real estate prices
This map of Manhattan real estate prices comes from The Daily Chart blog.
click to enlarge
source: The Daily Chart
Trulia (Home)
Posted by Cranky at 10:55 PM
http://thedailychart.blogspot.com/
Bill Gross IO for August 2008 - inflation/deflation conundrum and home prices
Bill Gross' new IO for August as always is a joy to read and again he hits the nail on the head. This time he tackles the risk for asset price deflation which in his opinion rests entirely with home prices. "Let's blame it on the barn, or if you must, home prices." Falling home prices put some 25 million homes, purchased in 2004 and beyond, at risk for negative equity which could eventually lead to a cumulative loss of 1 trillion dollars on the balance sheets of financial institutions according to Gross. If not matched by raising capital that loss necessitates a sale of assets and a general reduction of lending. There you have it "deflation", but to be sure we are not there yet. Capital raising so far has been very succesfull and the world is still awash in cash. Not all financial institutions have entirely lost its earnings prowess or so it seems. Last weeks gains in stock indeces was in part due to better than expected earnings for the second quarter from some of the major financial institutions in the U.S. C&I loans and consumer loans at US financial institutions are still growing according to data from the Federal Reserve Bank of St.Louis. All this for the moment argues against a major asset price deflation threat but if home prices continue to slide this possibility might become the next nightmarish reality and this time for the real economy.
Bill Gross' Mooooooo:
An asset deflation in turn becomes a debt deflation, as subprimes, alt-As, and finally prime mortgages surrender to the seemingly inevitable tide. PIMCO estimates a total of 5 trillion dollars of mortgage loans are in risky asset categories and that nearly 1 trillion dollars of cumulative losses will finally mark the gravestone of this housing bubble. The problem with writing off 1 trillion dollars from the finance industry’s cumulative balance sheet is that if not matched by capital raising, it necessitates a sale of assets, a reduction in lending or both that in turn begins to affect economic growth, creating what Mohamed El-Erian fears as a “negative feedback loop.”
Financial asset prices, as well as those for homes, are really the discounted present value of what investors believe those assets will be worth far into the future. When the discount rate – in this case a 30-year mortgage – rises faster than the expectations for home prices themselves – then the price of a home falls. 7% + “all in” yields for current home financing, in contrast to prior periods of monetary easing, are lowering, not raising the discounted present value of an existing home. Blow them up? Well, yes, I suppose if we could. But absent that, lowering the cost of mortgage credit via the omnibus housing/GSE bill now placed before the Congress and the President is the best way to begin the long journey back to normalcy.
To return the housing, cow milking, asset price deflating metaphor to its broader context, the increasing price of credit is a common denominator worldwide in the delevering process which it drives, or in turn, is driven by. If the cost of credit – the discount rate for present value – would go down, then asset prices would be better supported. Stocks wouldn’t sink so fast, commercial real estate wouldn’t wobble so, ..But the cost of credit is going up, not down, in contrast to prior cycles, because astute investors recognize the myriad of global imbalances that threaten future stability. In addition to home prices, $130 a barrel oil and their resultant distortion of global wealth and financial flows head that list. For now, investors should remain in high quality assets – until – until, well…until the prospect for home prices points skyward or until the cows come home, whichever one’s first.
source: Mooooooo!
Investment Outlook, Bill Gross | August 2008
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/Investment+Outlook+Bill+Gross+Mooooooo+August+2008.htm
read also: Consumer loans and C&I loans at commercial banks are still growing
Wednesday, July 16, 2008
http://manonthestreet64.blogspot.com/2008/07/consumer-loans-and-c-loans-at.html
U.S. projects record budget deficit for 2009
AP reports a budget deficit for 2009 approaching $490 billion. That is the largest deficit on record after the U.S. government inherited a record budget surplus in 2000. Bill Gross in his July IO projected an all time budget deficit record of $1 trillion for the next government.
From the AP:
In fact, the White House had included cost estimates for an economic stimulus bill in its earlier projections, so the new figures represent a considerable deterioration in the government's fiscal health.
The White House had predicted in February that next year's deficit at $407 billion, which means the increase in the projections since then would approach $80 billion or so. Figures for the 2008 budget year ending Sept. 30 may also set a record.
The numbers represent about 3 percent of the size of the economy, which is the deficit measure seen as most relevant by economists. That's considerably smaller than the deficits of the 1980s and early 1990s, when Congress and earlier administrations cobbled together politically painful deficit-reduction packages.
Still, the new figures are so eye-popping in dollar terms that it may restrain the appetite of the next president to add to it with expensive spending programs or new tax cuts. In fact, pressure may build to allow some tax cuts enacted in 2001 and 2003 to expire as scheduled at the end of 2010, with Congress also feeling pressure to curb spending growth.
The deficit for 2007 totaled $161.5 billion, which represented the lowest amount of red ink since an imbalance of $159 billion in 2002. The 2002 performance marked the first budget deficit after four consecutive years of budget surpluses.
source: Bush administration projects record 2009 deficit
AP, Monday July 28,
http://biz.yahoo.com/ap/080728/budget_deficit.html
read also: Bill Gross sends letter to the future President
Tuesday, July 1, 2008
http://manonthestreet64.blogspot.com/2008/07/bill-gross-sends-letter-to-future.html
Thursday, July 24, 2008
Germany Ifo business climate worsenes in July 2008
From the survey:
The Ifo Business Climate Index for industry and trade in Germany has fallen again significantly in July following a clear worsening in the previous month. The firms are much more dissatisfied with their current business situation and they are clearly more reserved regarding the six-month outlook. These results suggest that the economic upswing is coming to an end.
click to enlarge
source: Ifo Business Climate Index Falls
Ifo Business Survey July 2008 http://www.cesifo-group.de/portal/page/portal/ifoHome/a-winfo/d1index/10indexgsk
Wednesday, July 23, 2008
Arrear rates 2.5x higher on US subprime than British buy-to-let
Bradford & Bingley, the beleaguered British buy-to-let mortgage lender( British version of subprime), has successfully raised about $5 billion in its first securitization of the year. B&B has bought parts of GMAC's U.S. mortgage book last year and is now faced with loan losses from its own book and that of GMAC's. This new securitization is good news after a credit rating downgrade earlier this month to just two notches above junk.
In an interesting remark The Daily Telegraph cites arrear rates for both the U.S. GMAC book and B&B's origianted loans. Based on the assumption that GMAC's mortgage book is purely U.S. domestic (I can not confirm this at this point!) it appears that arrear rates are 2.5 times more frequent than B&B's originated loans.
The arrears rates on the GMAC book, from which it is obliged to buy £350m of mortgages every three months until 2009, are running at 5pc, against 1.9pc of the loans B&B originated itself.
source: Bradford & Bingley's £2.5bn deal proves ability to access funding
By Philip Aldrick, The Daily Telegraph
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/24/cnbrad124.xml
Tuesday, July 22, 2008
Plosser speech on the outlook for the U.S. economy and inflation
Charles Plosser, President of the Philly Fed, delivers a speech about his outlook for the economy and inflation. It is interesting to see that not everyone at the Board of Fed Governors is compromised by unflinching support for ailing Wall Street.
on inflation:
The consequence of our easing of monetary policy is that the inflation-adjusted — or real — interest rate on federal funds is now negative — between minus 1 percent and minus 2 percent. The last time we saw such a negative real fed funds rate was in 2003-2004. But the environment then was much different than it is now. Back then, the Fed was concerned about the threat of deflation. Today, as we all know, this is not the case. Many of us are concerned about rising inflation rates.
Keeping policy too accommodative for too long worsens our inflation problem. Inflation is already too high and inconsistent with our goal of — and responsibility to ensure — price stability. We will need to reverse course — the exact timing depends on how the economy evolves, but I anticipate the reversal will need to be started sooner rather than later. And I believe it will likely need to begin before either the labor market or the financial markets have completely turned around.
I want to make clear that the rise in inflation expectations in the 1970s was not caused by a wage-price spiral. That story has things backwards. The wage-price spiral was a consequence of the inflation and the unanchoring of expectations of inflation, not the other way around. And the unanchoring of inflation expectations was caused by the public’s loss of confidence in the Federal Reserve’s resolve to bring inflation back down. The credibility of the Fed’s promise to deliver price stability was lost.
In recent months I have heard some analysts suggest that the current economic situation is not like the 1970s because unions are less prevalent and there is no evidence as yet of a wage-price spiral. Thus, a weak economy, with rising unemployment and declining payroll employment, will presumably prevent workers from demanding higher wages. But, again, that story has things backwards. It is not demands for higher wages that kick off the spiral, but the loss of confidence that the central bank will keep inflation controlled, which, in turn, leads to a rise in inflation expectations. The wage-price spiral is not the cause of the inflation, but the result.
I want to emphasize that what we have been seeing in the economy this past year, and in my own outlook going forward, is very different from the 1970s, because I see the Fed as committed to keeping inflation expectations well-anchored. I agree with a statement Fed Chairman Bernanke made in June that the Fed will strongly resist an erosion of longer-term inflation expectations, because an “unanchoring” of those expectations would be destabilizing for economic growth as well as inflation.
Since energy price increases have been so persistent in recent years, I do believe more attention should now be paid to measures of headline inflation in setting monetary policy. I don’t believe we can be sanguine that the behavior of core inflation will keep the public’s inflation expectations well-anchored in the face of persistently high headline inflation. To keep inflation expectations anchored means that monetary policymakers will have to back up their words with action.
source: Perspectives on the Economy, Inflation, and Monetary Policy
Presented by Charles I. Plosser,
President and Chief Executive Officer, Federal Reserve Bank of Philadelphia
http://www.philadelphiafed.org/publicaffairs/speeches/plosser/2008/07-22-08_philadelphia-business-journal.cfm
Friday, July 18, 2008
EA May 2008 preliminary trade deficit: 4.6 bn euro
The EU released its preliminary trade data for May 2008:
The first estimate for the euro area1 (EA15) trade balance with the rest of the world in May 2008 gave a 4.6 bn euro deficit, compared with +1.4 bn in May 2007. The April 20082 balance was +2.5 bn, compared with +2.0 bn in April 2007. In May 2008 compared with April 2008, seasonally adjusted exports fell by 3.4% and imports by 1.3%.
The first estimate for the May 2008 extra-EU271 trade balance was a deficit of 21.5 bn euro, compared with -14.7 bn in May 2007. In April 20082, the balance was -15.4 bn, compared with -12.9 bn in April 2007. In May 2008 compared with April 2008, seasonally adjusted exports fell by 4.0% and imports by 1.3%.
click to enlarge
source: Euro area external trade deficit 4.6 bn euro, 21.5 bn euro deficit for EU27
Eurostat, May 2008
http://epp.eurostat.ec.europa.eu/pls/portal/docs/PAGE/PGP_PRD_CAT_PREREL/PGE_CAT_PREREL_YEAR_2008/PGE_CAT_PREREL_YEAR_2008_MONTH_07/6-18072008-EN-AP.PDF
read also: EA April 2008 preliminary trade surplus: 2.3 bn euro
Wednesday, June 18, 2008 http://manonthestreet64.blogspot.com/2008/06/ea-april-2008-preliminary-trade-surplus.html
Are we in a recession yet?
Citi says yes, at least according to credit trends in their NA card business.
click to enlarge
Citis's second quarter better than feared
click to enlarge
Consumer loan delinquencies by region were at $9.03 billion (2.43% ratio) in NA and $840 million (1.17% ratio) in EMEA (Europe, Middle East and Africa). Net credit losses were at $2.45 billion (2.55% ratio) and $431 million (2.49% ratio) in NA and EMEA respectively. The biggest contributor was consumer banking with net credit losses of $1.76 billion (2.33% ratio) and $266 million (2.51% ratio) in NA and EMEA respectively. Global Cards net credit loss ratio was 6.46% or $687 million in NA and only 3.9% or $166 million in EMEA.
click to enlarge
Institutional clients group (ICG) saw debt underwriting reporting a loss of $277 million substantially less than $2.08 billion loss reported in the first quarter of 2008. Fixed income reported a loss of $633 million that is substantially less than $7.023 billion in the first quarter of 2008 and $16.105 billion loss reported in the fourth quarter of 2007. Write-downs in the fixed income segment were $3.4 billion on subprime related direct exposure, $2.4 billion related to exposure of monolines and an additional write down of $0.5 billion on CRE positions. Off setting the steep write-downs were record revenues in interest rates, currency and commodities, mainly oil, the company stated during the conference call.
click to enlarge
Fixed income reported a loss of only $633 million despite a combined write-down in this segment of $6.3 billion! underscoring the off setting effect of commodities trading. This is a direct result of an accommodative Federal Reserve, and there is little hope for change as long as this dynamic of massive loan corrections continues. This is my base case for higher commodity prices over the near to medium term.
source: Second Quarter 2008 Earnings Review
Citi, July 18, 2008 http://library.corporate-ir.net/library/97/970/97076/items/300831/slidesv3.pdf
Thursday, July 17, 2008
Euro fails to take 1.60 - extreme SSI eases
From DailyFx.com:
EURUSD – Speculative positioning in EURUSD normalized after a significant dollar rebound marked the end of a dramatic run on 1.60. Since last Friday – when the Speculative Sentiment Index Ratio hit a near 10-month low -3.17 – the pair’s bullish advance was steadily tempered with the extreme sentiment reading capitulating. Today, the euro’s SSI reading stands at -1.39 with 58% of the group short. This reading happens to sustain a steadily diminishing, weekly trend following the -1.71 figure from last Thursday and the -2.48 print from two week’s ago. The indicator’s details confirm the ratio’s move back to parity. Long positions were a modest 0.5% weaker than yesterday, but a significant 26.6% stronger than last week. Showing the lack of interest in the pull back, shorts were only 0.6% above Wednesday’s levels and 6.6% weaker than last Thursday. Overall, the dramatic price action hasn’t drawn many volatility seekers as open interest has grown only 4.3% over the week and now stands 3.1% above the monthly average.
click to enlarge
source: Euro SSI Extreme Eases After The Currency Fails To Take 1.60 DailyFx.com, Thursday, 17 July 2008 http://www.dailyfx.com/story/strategy_pieces/fxcm_speculative_sentiment_index/Euro_SSI_Extreme_Eases_After_1216290636819.html
Wednesday, July 16, 2008
The dollar-crude arbitrage trade
Bernanke under oath testified before Congress that in his opinion the high price of oil is caused by supply and demand. The extend to which the value of the U.S. dollar influences the price of oil is highly complex and difficult to understand, so he sayed. Well Mr. Bernanke let me help you out. As the chart below shows the price of oil fell 10 percent in the last 48 hours in two separate five minute episodes. This resulted in a decline of the NYMEX CL August08 forward contract from peak ($146.73) to trough ($132.0) of $14.73. At the same time the EUR/USD cash contract declined from 1.6018 to 1.5897 between 10:00 and 11:20 a.m. on Tuesday and from 1.5890 to 1.5816 between 10:30 and 10:50 a.m. on Wednesday. As the chart below demonstrates a gain of 102 bp or 0.64% of the USD perfectly matched with the decline in the NYMEX CL August08 forward contract for crude oil.
The reason why crude oil future contracts plunged 10 percent are somewhat elusive but option expiration at the August 2008 contract on Thursday July 17 may have played a role. In addition the actual August future contract is about to expire on Tuesday July 22. The reasons for the concomitant decline in the U.S. dollar are less nebulous. It is simply the fact of an arbitrage trade or otherwise known as a "riskless profit" trade that is in play here. In other words being long crude oil and short the dollar is part of a speculation holiday for most trading desks on Wall Street. Mr. Bernanke if you and your colleagues could bring yourself to support the nations currency not only with lip service but with real action in form of a substantially higher fed funds rate, more inline with your real mandate, I predict oil prices would come down to $70 within a matter of weeks.
click to enlarge
U.S. industrial production advanced 0.5 percent in June 2008
The chart below speaks for itself. There is not much to add to it other than CapUt is down at the primary, semi-finished and finished processing level and up only on the crude processing level. In our opinion this is a direct result of high oil prices and not of a marked slowdown in the economy. A good example is Andrew Liveris, Dow Chemical CEO, who is ideling capacity in his plants to cover cash costs. On June 24 he said on CNBC:
"When you can't run the plant to make policy of cash costs you just have to bring it down. Let's call it managing the assets so we don't make negative margins. We are trying to maintain our earnings."
Indeed, the economy is barely slowing down (see Brian Wesbury yesterday), as seen in IP data for non-durable consumer goods, business equipment and non-energy industrial materials which are still up 10% to 30% respectively from their 2002 base levels.
from the release:
Industrial production advanced 0.5 percent in June after having fallen 0.2 percent in May. Industrial production for the second quarter as a whole dropped 3.1 percent (annual rate) from the first quarter. Manufacturing output gained 0.2 percent in June and was boosted by a jump of 5.4 percent in the output of motor vehicles and parts; activity resumed at motor vehicle parts and assembly plants that had been idled by a strike that began in late February and ended in late May. Excluding motor vehicles and parts, factory output edged down 0.1 percent. Outside of manufacturing, the output at mines increased 1.1 percent, and the output at utilities was up 2.1 percent. At 111.7 percent of its 2002 average, total industrial production was 0.3 percent above its level of a year earlier. In June, the capacity utilization rate for total industry moved up to 79.9 percent, a level 1.1 percentage points below its average for 1972-2007.
click to enlarge
source: INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION
Federal Reserve Statistical Release G.17 http://www.federalreserve.gov/releases/g17/current/
read also: Wesbury sees close to four percent growth in the second quarter
Tuesday, July 15, 2008
http://manonthestreet64.blogspot.com/2008/07/wesbury-sees-close-to-four-percent.html
read also: The rude cause of inflation raises the specter of recession
Tuesday, June 24, 2008
http://manonthestreet64.blogspot.com/2008/06/rude-cause-of-inflation-raises-specter.html
Consumer loans and C&I loans at commercial banks are still growing
One of the main arguments in the corner of the deflationistas is restricted supply of credit to industry and consumers. The most extreme call this period "peak credit". The culprits for that alleged credit crunch are the recent multi billion dollar losses at financial institutions world wide and their supposedly depleted capital base.
The Federal Reserve bank of St.Louis releases timely data (on a monthly and weekly bases) concerning the amount of credits loaned out from U.S. commercial banks in the form of H.8 assets and liabilities of commercial banks. On that level it should surprise at least those on the deflation train to learn that C&I loans reported on a weekly basis are still growing at a $110 billion to $140 billion range compared to a year ago. The most recent weekly data (July 2, 2008) for that loan group are growing close to $120 billion compared to the a year ago (see right side panel of chart 1).
chart 1, click to enlarge 
A similar scenario is being played out for another important loan group. Consumer loans from all commercial banks recorded on a monthly basis are still growing by about $65 billion dollar by June 1, 2008 compared to the same month last year (see left hand panel on chart 2). That is close to a record and up from about $20 billion at the beginning of the credit crises.
Not surprisingly another loan group, real estate loans at all commercial banks, continues its decline. On a monthly basis the growth rate was $180 billion on June 1, 2008 compared to last year. That is down significantly from a peak of about $450 billion at the beginning of 2007 (see right hand panel of chart 2 and chart 3). This is hardly surprising given the state of the housing market and the persistent failure of the securitization market. We will not expect significant recovery in this loan group for the foreseeable future. Even with real interest rates being negative we have not seen mortgage rates coming down, to the contrary are going higher, mainly because of the problems in the secondary mortgage market.
chart 2, click to enlarge 
At this time so called "peak credit" is only obvious in real estate loans. The deflation scenario is not applicable to the rest of the economy as this data series clearly demonstrates. The loss of about $300 billion in total loan growth and investments at all commercial banks from the beginning of this year to June 1, 2008 compared to the same time period last year can be attributed primarily to the loss in real estate loans (see chart 3).
chart 3, click to enlarge
Moreover Jean-Claude Trichet, President of the ECB, said the following at his latest policy statement on June 5 2008:
However, the growth of loans to non-financial corporations has remained very robust. While some moderation can be expected in the future in the light of tightening financing conditions and slower economic growth, bank borrowing by euro area non-financial corporations grew at an annual rate of 14.9% in April 2008, and the flow of loans in recent months has been strong.
source: Release: H.8 Assets and Liabilities of Commercial Banks in the United States
The Federal Reserve bank of St.Louis http://research.stlouisfed.org/fred2/release?rid=22&soid=1
source: Introductory statement
Jean-Claude Trichet, President of the ECB, Frankfurt am Main, 5 June 2008 http://www.ecb.int/press/pressconf/2008/html/is080703.en.html
read also: What credit crisis? - Commercial and Industrial Loans are still growing
Friday, April 25, 2008 http://manonthestreet64.blogspot.com/2008/04/commercial-and-industrial-loans-20-year.html
Tuesday, July 15, 2008
Wesbury sees close to four percent growth in the second quarter
Usually I don't care much about Washington consensus pundit L.K., but on the issue of the dollar and Fed's Bernanke we see eye on eye. In this interview he has an interesting crowd with Laffer as the inflation dove and Wesbury as the inflation hawk.
Wesbury sees at least 3 percent or higher (close to four percent) growth in the second quarter!
click for video
source: Bernanke's Next Move
Assessing Fed chief Ben Bernanke's outlook on the economy, with Art Laffer, Laffer Investments; Michelle Girard, RBS Greenwich Capital; Brian Wesbury, First Trust; and CNBC's Larry Kudlow.
http://www.cnbc.com/id/15840232?video=794295252
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