Thursday, October 14, 2010

Those Numbers

From Zero Hedge;

Trifecta Of Economic Horror: Trade Deficit Explodes To $46.3 Billion, PPI Rises Above Expectations As New Jobless Claims Surge

"Today's economic data avalance is a trifecta of horror: the August trade balance came at - $46.3 billion (deficit, duh), on expectations of $-44.0 billion, with the previous revised to ($42.6) billion. This is the second highest trade deficit on record. This also means the Q3 GDP will be revised lower again. Oh yes, and Schumer is currently frothing in the mouth as the trade deficit with China was at a record $28 billion, as expected based on the reverse lookup from yesterday's China trade surplus (which dropped). Elsewhere, PPI came in at 0.4%, on expectations of 0.1%: congratulation Ben, you have your inflation, as the bulk of the increase was in food and gas. PPI ex Food and Energy was 0.1%, in line with expectations. Lastly, jobless claims surge from 445K to 462K, with the prior number revised higher for the 24 out of 25 times. And speaking of revisions, the prior week Continuing Claims number was revised from 4,462K to 4,511K: yes stunning, we know. Those on Extended and EUC claims plunge by 340,000 for the week ended September 25, taking away a few more pips from GDP. All in all, this further cements the economic suicide that is QE2." Expect more of the same.

As the last few days have demonstrated, an awful lot of people have bet on QE2. How much of whatever outrageous amount  of (ever cheaper ) dollars involved in the operation has been discounted is a guess. $1 Trillion? Perhaps the surging commodity prices, PPI, dissenting Fed voices and the rest of the world besides  Japan, will influence them to keep it to a mere 1/2 Trillion. Has THAT been discounted? Could be a disappointment. Last gasp desperate re try's have their own headwinds, being seen as an already  failed policy response.
In any case sure hope they get it right this time. Not betting on it though.

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