SAR #11364

When the perceptive become suddenly obtuse, blame ideology.

"Unexpectedly": As in initial applications for unemployment unexpectedly jumped 17,000 from last weeks initially reported 364,000, which had, of course been revised upward by 2,000. Actual terminations (smoothed away by 'seasonal adjustments') jumped from 421,000 to 490,000. Unexpectedly.

The Horsemen: Rank the following possible disasters in their order of probability: Collapse of the Eurozone. Oil price spike/shortages due to geopolitical factors. Oil price spike/shortage due to geologic factors. Collapse of the Chinese housing bubble. Economic setbacks due to governmental austerity and budget cutting programs. Natural disasters of enormous scope and damage. Societal upheaval.

Can You Hear Me Now? Starting January 15^th, Verizon plans to charge customers $2 to pay their bill via Verizon. Also via the Internet. I wonder how they feel about pennies piled on the floor of one of their stores?

Collateral, Damaged: Banks in the EU need to roll over about $800 billion a month in order to finance their outstanding loans - one of the dangers of borrowing short and lending long is when the shorts grab you by the shorts. This will not be a problem until, of course, a month comes along when they cannot raise $800 billion in new short term money.

"Unexpectedly II": November's pending sales of existing homes unexpectedly rose 7.3% m/m after an even more unexpected 10.4% increase in October. Doesn't anybody know how to play this game?

Contagioncy Plans: The UK is reported to be planning what steps it will take when the euro break-up begins. It will restrict the movement of money and people in and out of the country, and plans to help thousands of its citizens return from the continent, using the Ministry of Defence to organize and coordinate that effort. A major effort - and not just of the UK but of all governments - will be to obtain and husband the means to obtain basic necessities in a world where most food and energy is imported. And 'means' means dollars.

Playing the Odds: About 5% of the Chinese economy is exports. About 70% of it is construction. The Chinese real estate bubble seems to be collapsing. This will most probably bring on the same problems the US has faced for the past five years. Will the economic problems cause the current food and housing riots to spread, triggering anarchy on a regional or national basis? Stay tuned.

Paper Chase: A predicted increase in foreclosures in 2011 – based on seriously delinquent and in process properties – didn't happen. In fact, foreclosures are down to their lowest level since 2007. Owner occupied properties, in particular, are not being foreclosed. Given the 2.2 million loans either seriously delinquent or “in process” in January, that only 815,000 foreclosures were completed should be seen as a sign of the difficulties mortgage servicers have had meeting the legal requirements to foreclose.

Well, Dry: Hungary held a bond auction and nobody came - all the bids received on its offering of 3-year notes were rejected. Its 10-year debt offering went with a 9.70% interest rate, up from last month's 8.78%.

Playing In Traffic: The DOT says that US drivers drove 2.3% less in October this year than last. This makes 47 consecutive months where miles-driven was less than the previous peak. Higher gas prices and lower employment rates both contributed to the decline.

Precis: “Europe's leaders have spent most of the euro crisis denying there's a euro crisis.” First it was a Greek problem. Then it was the PIGS problem. Then it was 'Club Med'. Italy was flavor of the week recently. But it is not, repeat after me, not a euro problem. Mostly because if the problem is the euro, and it is, there is no acceptable solution.

Limbo: Congress has failed to extend the subsidized conversion of food to fuel, bringing at least a temporary halt to the very bad idea of using fossil fuel energy to turn corn into fuel, a process that at very best was a break-even in terms of energy even while it lined the pockets of a lot of important political contributors. It is unclear if this is a temporary lapse or if the country is finally going to stop wasting $6 billion a year on this boondoggle.

Porn O'Graph: As long as you don't drive to the the grocery store, you're doing fine.