Economics Update

Good news everyone!

I invented a device that makes you read this in your head using my voice!

Well, the Fed's Beige Book, more formally known as the "Summary of Commentary on Current Economic Conditions", came out today, and they are seeing signs of improvement (also here).

It seems to me that we are talking about evidence of a bottom, or at least a moderation, as opposed to improvement, but it could be a prelude to a recovery, or a breather on the way down, but either way, it's good news.

We still have CRE and insurance meltdowns to deal with.

There is also good news from Moody's, that there is no expectation that they will cut the ratings on sovereign debt for any of the major industrialized nations, so the ratings of, "U.S., U.K., Germany, France. and Spain," are safe.

Then again, if they are so safe, why did they even have to make this statement?

We also have further evidence of the credit markets thawing, with the 3-month Libor interbank lending rate hitting a record low, and the TED Spread, basically the interest rate spread between public and private debt, falling.

The dropping interest rates, kicked mortgage applications to a 3 month high.

Still, in the real world, single family home prices fell by 0.5% in July, and bankruptcy filings are up 22% in August year over year.

In energy we are now seeing statements from OPEC that there will be no changes to quotas which drove prices up 21¢ to $71.31/bbl, despite increases in inventories.

In currency, the dollar fell to a near 10-month low, despite a slight bump following the release of the Beige Book, to $1.4562:€1.0000 and $1.0000:¥91.61.