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Thoughts on People's Bank of China Annual Press Briefing

China becoming more of a worry…its becoming clear  that China has moved up to the top of the list on the worry side. One thing not really well defined what the potential issue is  and  that is a good and a bad thing. Good because it could all just end up being the product of a slower growth outlook for China…which is a pos longer term, but in the interim, gives plenty of reasons for bears to get concerned (as an example, bad loans are of course gonna be higher as nominal growth is at a lower rate. BUT as long as inflation is tame, which it seems like it is and food prices are coming down, then things should be ok). The bad news is more short term…it could lead to an overreaction short term to continued soft China data  and or an eventual short term correction in SPX if Chinese stocks continue to move lower over the next few days (how many more days can we shrug off A share decline that ...

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US Q1 GDP tracking: Up three-tenths to 2.5% on sharp rise in retail inventories

 

 

 

via Barclays

Release date

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Classic Quote

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Citi Morning Comments: U.S. Economy Catching Up With Robust Financial Markets

Been a while since we've posted anything here, between being short staffed at work and Chardee taking a hedge fund job with strict blogging prohibitions, there's been no time. So we'll kick things off by sharing comments from Citi's Steven Wieting...

 

Citi Morning Comments: U.S. Economy Catching Up With Robust Financial Markets

 

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Reinhart and Rogoff: The Federal Reserve's First Centennial

*Reinhart and Rogoff: The **Federal** Reserve’s First
Centennial*â€"
a noteworthy read.
*“the US price level from 1775 (set equal to one) until 2012. In 1913
prices were only about 20 percent higher than in 1775 and around 40 percent
lower than in 1813, during the War of 1812. Whatever the mandates of the
Federal Reserve, it is clear that the evolution of the price level in the
United States is dominated by the abandonment of the gold standard in 1933
and the adoption of fiat money subsequently. One hundred years after its
creation, consumer prices are about 30 times higher than what they were in
1913. This pattern, in varying orders of magnitudes, repeats itself across
nearly all countries.â€*
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Econ Brothers' Morning Macro 12/6/12

Slow night…most risk higher on an apparent phone call between Boehner and Obama, but not much has changed on the fiscal cliff front. We did get much better Germany factory order data (Germany Oct Factory orders +3.9% m/m vs. consensus +1.0% and prior revised to (2.4%) from (3.3%).  Export sales soared 6.7 percent in October, driven by an 8.5 percent increase in orders from outside the euro area, today’s report shows. Orders from the 17-nation currency bloc rose 3.5 percent and domestic orders were up 0.4 percent.) And that seems to be helping the Euro/DAX. Asia taking a bit of a breather post yesterday move as Shanghai down a touch, and gold/silver/copper (reflation) are all down a touch (yet the USD is weak across the board). It’s another non correlated day in the macro backdrop and I expect that will continue until we get some 1) fiscal cliff clarity and 2) some idea of what the actual austerity will feel like (so as we ...

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Econ Brothers' Morning Macro 12/5/12

OVERNIGHT NEWS/DATA: A bit more action overnight as Chinese stocks had a monster move higher (+287bp…rest of Asia very strong) and we got a bunch of PMI from around the world. Europe was better than expected, but still in contraction territory for 10th month. And India/UK came in lower than expected …we also got much worse retail sales for Oct (Eurozone Oct Retail Sales (3.6%) y/y vs. consensus (0.8%) and prior (0.8%)) and the auctions for Spain not as great as they have been (Spain was at recent lows on yields as they have collapsed of late…so makes some sense that auction didn’t go as well.)…2yr Euro basis swap is much tighter this AM, so that measure of risk is very positive and probably speaks to overall better backdrop with the strong Asia (good for Europe/Germany), yields in Europe near the lows and general more pos policy outlook given recent Merkel comments on haircuts and Greece in general. (ISI)

 

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Econ Brothers' Morning Macro 12/3/12

OVERNIGHT NEWS/DATA: Very slow night…really don’t have much on the news front. (via ISI)

RBA cut by 25bp and the forward looking statement was not as dovish as some had feared (full impact of previous cuts yet to be observed, so indicates less potential easing is how that line is being taken) and Brazil IP came in lower than expected. UST yields are higher, inflation expectations are higher and the USD is weak across the board….that speaks to an reflationary backdrop (and less worries on fiscal cliff), yet gold/silver are getting hit pretty hard and copper is flat (and Bloomberg is citing increased odds of going over the fiscal cliff)…so the backdrop is not very correlated at all and I think we are going to continue to see some very whacky moves in stocks/asset classes that are tough to rationalize till we get some resolution on the fiscal cliff.  Yesterday ...

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Econ Brothers' Moning Macro 12/2/12

SUMMARY: Global data is getting better and that is very good news for SPX EPS…especially considering corporate profits (which is more US focused) have been so strong (driven by strong nominal GDP). I think what we write below on the EPS outlook is important considering how negative many seem to be on earnings next year, and European fear spreads continue to move tighter.

 

OVERNIGHT NEWS- GOOD BACKDROP: Better data from China, Geithner saying a deal could get done, European PMI in line (Eurozone Manufacturing PMI 46.2 vs. consensus 46.2 and prior 46.2…even Greek PMI was higher than previous! Greece Manufacturing PMI 41.8 vs. prior 41.0), Merkel indicated private sector haircuts could happen (Merkel was asked by German weekly Bild am Sonntag if such a haircut could come after German elections in autumn next year. "If Greece one day gets along with its revenue without making new debt, then we have to look at the situation and assess it," Merkel replied.) ...

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Learning to Love Volatility: Nassim Nicholas Taleb on the Antifragile - WSJ.com

Learning to Love Volatility

By NASSIM NICHOLAS TALEB

Traders on the New York Stock Exchange in 2008

Several years before the financial crisis descended on us, I put forward the concept of "black swans": large events that are both unexpected and highly consequential. We never see black swans coming, but when they do arrive, they profoundly shape our world: Think of World War I, 9/11, the Internet, the rise of Google GOOG -0.61% .

In economic life and history more generally, just about everything of consequence comes from black swans; ordinary events have paltry effects in the long term. Still, through some mental bias, people think in ...

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