Quote of the Week:
Dallas Fed President Fisher – “The US does not suffer from a lack of low interest rates. Nor does it suffer from a lack of liquidity. What it suffers from is a lack of policy credibility.”
Oil (NBC Energy – Tim Simard)
+ Inventories fell over 10 million bbls last week; this is the 7th consecutive week of declining inventories for a total of 35 million bbls.
+ Y/Y demand has increased 2.9% ~500,000 barrels per day.
+ The International Energy Agency expects oil demand to reach 99 million barrels a day by 2035 (15 million barrels a day more than 2009).
+ Compliance with OPEC quotas in September declined to 51%; the worst offenders are Nigeria and Angola. Saudi Arabia actually lowered production.
+ Spreads between Irish debt and German debt have risen to a record 8.8%, exceeding levels from April 2010.
+ According to Dennis Gartman, Ireland’s banks are effectively insolvent, and banks in Portugal, Spain, Italy, and Greece are also in line for recapitalization.
+ No trade protection policy; Stephen Harper said the G20 did not resolve imbalances; Brazil says the currency war will continue and China is moving to higher interest rates.
+ China’s CPI surged to 4.4% in October from 3.6% in September; key driver of inflation was the food component but is no longer dominated by the meat industry.
+ Chinese insurance companies will be allowed to invest part of a $106 billion in Canada.
+ US turkey prices rose to a record $1.09 per pound, up 28% from 2009, just ahead of US Thanksgiving.