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Morning Notes For September 1st 2010 at Trader’s Narrative

Morning Notes For September 1st 2010

The following is a guest post by a buy-side analyst working in a US asset management firm. The author’s comments are in italics. I welcome your feedback in the comments:

  • Credit Demand May be Achilles Heel of U.S. Economy – One of the most influential gauges of bank lending in the U.S. economy suggests that the credit crunch is over — at least for now. Most of the data compiled as part of the recent Federal Reserve Senior Loan Officer Opinion Survey shows supply of credit – banks’ willingness to lend and the terms and conditions that they are willing to lend at – is easing, even if only modestly. – Bloomberg

lending conditions GDP comparison Aug 2010

  • One of the key findings of the 2010 Best Places to Work in the Federal Government survey is that worker satisfaction is more profoundly affected by perceptions of top management than by immediate supervisors. – WP
  • White House weighing new measures to spur economic growth – among the options being considered are tax cuts (”possible payroll tax cut for businesses and individuals, as well as other business tax breaks”) and a new nationwide infrastructure program; the White House economic team has met “frequently” in recent days to consider options for the economy. Congressional leaders don’t see much happening however until after the mid-terms are out of the way. WSJ
  • Forex trading volumes soar to ~$4T daily; this $4T number is 20% higher than in 2007, the last time a survey of the market was taken (according to the BIS) – WSJ
  • Departing White House economist C. Romer calls for more action to spur growth - “We have tools that would bring unemployment down without worsening our long-run fiscal outlook, if we can only find the will and the wisdom to use them,” Romer said in excerpts from a speech she will deliver later at the National Press Club. Reuters
  • Obama small business tax cuts to pass - Democrats have lined up enough support to pass the small-business bill the Senate has been considering, said Jim Manley, a spokesman for Senate Majority Leader Harry Reid (D., Nev.). WSJ
  • Obama speech Tues night; overall nothing incremental that hadn’t been talked about in the press in the days leading up to the talk; the president did say he would make it is priority to get the US economy back on track (CNBC)
  • A better-than-expected increase in home prices isn’t likely to have staying power. – Bloomberg

case shiller SAAR home sales comparison Aug 2010

  • The market is up ~2.5% on the back of better than expected PMI data out of China and ISM manufacturing here in the US. Below is an overlay of ISM & GDP, showing that a healthy ISM Manufacturing number is important to the economy:

ISM manufacuring GDP comparison Aug 2010

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