Economics Update

Well, notwithstanding the "green shoots" that every fool (Ben Bernanke) is crowing about Consumer Confidence fell to 53.1 in September, down from 54.5 (revised) in August, and well below the predicted 57.0.

While this may not effect spending for the Christmas holiday, it does look like it's putting a crimp in Halloween spending, with consumers planning to spend about 20% less this year.

Of course, we are still seeing some good news, such as the Case-Shiller home price index rising for the 3^rd straight month, but, as Barry Ritholtz notes, it's still down 13.3% for the year.

I would also add, that these are seasonally adjusted numbers, which really make no sense when a market is as out of whack as this one is, it's YoY that gives meaningful data.

We also have the Chicago Fed's National Activity index falling in September, to -.90, from August's -0.54, indicating further contraction.

Overseas, we are seeing more good news though, with consumer confidence in Germany increasing to a 16 month high, and the Brazilian central bank being confident enough that it is starting to clamp back down on credit, which means that they are worried about inflation.

One hopes that the Brazilian bankers are not jumping the gun here.

In insurance, we have a bit of nostalgia, with the monoliner insurers popping up their head again, as S&P cut both MBIA, Inc. and MBIA Insurance credit ratings, to BB-minus and BB-Plus respectively.

Both ratings are below investment grade. (i.e. junk)

In energy, it looks like the consumer confidence numbers have driven oil prices down, to $66.71/bbl, and it looks like natural gas prices are about to fall off a cliff, because the salt domes, depleted oil fields, and aquifers used to story the fuel have reached capacity, meaning that anything pumped has to be sold, and delivered as soon as it leaves the ground.

Gasoline prices are continuing their fall too.

Meanwhile, the dollar is up, largely on increased worries about the economy, though the rate cut by Russia's central bank has also made the USD more attractive to investors.