Against the Grain

If you want to see bank regulators in action look at Nigeria where over the past fortnight five bank (40% of the sector) boards of management were summarily dismissed and a few bank bosses arrested and locked up as the country’s central bank injected US$ 2.6 billion into them after the discovery of bad loans to the tune of US$ 7.45 billion that they had run up. All the country’s 24 banks are being audited.

Very quiet Asian session with slightly weaker equities leaving metal prices in limbo, with the uncertainty over China’s monetary policy boosting the yen. The Spt South Korean manufacturing confidence index rose to 93 (Aug 80 and Mch 44). In Europe Aug Italian consumer confidence rose to 111.8 (Jul 107.5). In Australia Q2 business investment rose 3.3% (Q2 -7.3%). The German Spt GfK consumer confidence survey rose to 3.7 (Aug 3.4) while an Aug Euroland retail purchasing PMI dipped to 47.1 (Jul 47.3). In the UK Q2 total business investment fell 10.4% (Q1 -7.6%) yoy -18.4% (-9.7%). See the attached assessment of the UK economy in The Times Aug 26 by Ruth Lea “Summer recovery will turn to a cold winter” (www.timesonline.co.uk).

Apart from a fall in al LME stocks saw rise the norm with ni the largest into Rott.

The US “cash for clunkers” program generated car sales of 700 k units with Toyota accounting for 19%. The weekly initial jobless claims rose to 570 k (revised up to 580 k). The Q2 GDP preliminary was unchanged at -1% against an expected -1.5%, personal consumption was revised to -1.0% (-1.2%). At 14:30 cu traded tick for tick with the DJI (interestingly had a meeting with an equity analyst who was complaining that equities are only focused on metal prices while we said it was the other way round – who is leading who up the garden path?). Equity surfing was the order of the afternoon with DJI rallying from down 80 points to down 20 in the last half hour of the kerb.