Has the US dollar turned? It certainly looks so.

Several major currencies are weaker against the dollar.  The Australian dollar, Euro, and Loonie are all trading past their 20,50 and 100 day moving averages. The Yen is above the 20 and 50 and nudging up against the 100 day moving average.  The concern over Greece is hitting the markets and causing a world wide derisking.  Is this the end of current US Dollar weakness? I think so.   The currency markets seem to trade on technicals quite a bit (I'm not an expert in currencies by any stretch of the imagination.)  and punching through all those moving averages it a big nail in the coffin of US Dollar weakness.

We'll see in a few months if I'm right.

Some pretty graphs to show you whats going on.  The Euro fall is impressive.

Consumer credit, where art thou?

Consumer credit (consumer loans excluding home loans) was released today.  Consumer credit continues to contract further and faster.  Unlike my previous posting I have extended the graph back to the beginning of the data series so you can see the extent of the current decline in context.

Since World War II at worst consumer credit levelled off for a period of time before resuming its ascent.  Not this time.  While you may not be able to see it, the current rate of decline is getting worse each month and shows no sign of at least slowing down. 

Bank lending continues cliff diving

Here's the update on total bank lending and it is not good.  Total loans and leases at US banks continue to drop and is picking up speed.

I went back and looked throughout the entire data set available (back to 1973) for bank loans and loan growth has never been this negative, ever.  

If you notice on the graph, bank lending levelled off and slowly resumed growing after each of the two previous recession.    So far bank lending continues to fall and shows no sign of even levelling off. 

The year over year deceleration in US government securities owned by banks is curious considering loans dropped as well.  Are banks deleveraging their balance sheets or is it just seasonal noise?

Until bank lending stabilizes and starts growing again we will not have any meaninful recovery.

Temporary workers -- data from the front lines

Temporary workers are the first to be fired and hired by companies as they attempt to balance demands and costs.  As you can see temporary worker employment is very seasonal, usually peaking around October and quickly falling to a seasonal low around January.

The usual 'spike' in temporary workers did not happen last year and the dropoff in temporary workers this recession is much larger than in 2000-2001.  As such year over year data will be less predictive until we settle into a new normal but on a longer term basis this data set is a good way to sense the pulse of corporate hiring and firing.  How many temporary workers are around in the nadir of 2010 employment sometime in January / February will be the next time we can start to tease out any real information.  I'll keep you informed.

Drugstore.com and Complete savings scam followup

I recently posted about drugstore.com and the Complete Savings post transaction scam. Apparently it is rather widespread and even the US Senate has noticed.    Please go to the Consumer Reports blog and see how this is unfortunately very widespread. 

I don't intend this to be a consumer safety blog but this sort of behaviour just chaps my hide.  One of the cornerstones of any corporation should be respect for the customer and their ability to trust you with their purchase and your products.  It's part of the 'brand'.   These scams destroys trust in the consumers whom you have finally convinced to buy from you. Short term thinking like this will seriously harm your corporation in the long term.  Cut it out!

On an interesting side note I received an email within 24 hours from Complete Savings after my first post on the matter explaining how the transaction occured.  Telling me in detail how I was deceived does not defend your actions.  Why don't you spend your time coming up with techniques to sell your services that aren't deceptive?

Contrary Copper talk part 2

I recently blogged about the rising copper inventories worldwide.   Copper inventories keep growing at an accelerated pace.

So why are prices rising as well?  I see a few items driving prices higher right now, those being the dollar, an expectation for a recovering worldwide economy, and strikes at copper mines in South America.

The recovering world economy and China specifically has been the standard mantra for why asset prices are rising, whatever the asset.  If China is rebounding, why are Chinese copper exports rising?  If China has a desperate need for copper right now why are the traders sending copper out of the country?  Don't know, but this does not coincide with the bullish copper thesis. 

There have been several strikes in South America at copper mines and several large copper mines have their work contracts ending in the next two months (Reuters list) .   So far all the striking mines have gone back to work and contracts at some mines have recently been concluded. The long running (40+ days) BHP / Spence mine copper strike just ended.  (Bloomberg)   Spence mine produced about 500 tons of copper a day so you can add that to the 2000+ tons / day of excess inventory already going into inventories.

A recovering housing market has been the hope of copper bulls as well, but as you will note from my numerous housing posts I do not think new home construction will come roaring back in America any time soon.  I suggest you go to Calculatedriskblog for the full details on American housing.

I don't have any short positions on copper or copper miners as the momentum upwards is just too strong and it fits with the worlwide reflation theme.  When this theme ends I fear copper prices could revert lower if inventories keep rising.

Home loan foreclosures keep rising

From Calculatedriskblog a great post and several charts on how the home foreclosure and delinquency rates keep rising.  Go over and read the entire post.

I agree with Calculatedrisk, until the deliquency rates start dropping we won't see any meaningful recovery in home prices.