Succinct summation of week’s events:
Positives:
1) EU officials finally have framework for debt crisis control, stay tuned for details. While not nearly enough, cut to Greek debt the only long term positive, all else just buys time and that time is getting more and more expensive
2) China’s HSBC preliminary mfr’g # at 51.1, 1st time above 50 since June
3) US Durable Goods orders surprise to upside, only a few months left for 100% accelerated depreciation tax benefit
4) US New Home sales in Sept a touch better than expected but still bouncing along bottom and we need to sell more existing homes
5) Q3 GDP grows 2.5% led by personal consumption
6) UoM confidence almost 3 pts higher than estimates and up 1.5 pts from Sept
7) India raises rates, fighting inflation and RBI hints done for now
Negatives:
1) Notwithstanding EU deal, markets losing faith in Italian politicians will to liberate their economy and cut spending, 5 yr yield rises to highest since 1997, Spanish yields spike too
2) Italian consumer confidence falls to lowest since 1982
3) EU’s insistence on sticking it to CDS buyers may end the sovereign market and its hedging benefits
4) Euro region mfr’g and services composite index falls to lowest since July ’09
5) US Savings Rate falls to 3.6%, lowest since July ’08. Contrary to US fiscal and monetary policy, we need more savings and investment and less borrowing and spending
6) Conference Bd Consumer Confidence falls to lowest since Mar ’09
7) CS home price index down to just shy of lowest since ’03
8) India again raises rates, will they over do it?
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