Tom Hanna's Lifestream

The South Korean central bank dropped rates 1% Wednesday as the Leading Index for Korea slid 2.7% in a single month. This move adds further momentum to the movement of central banks to follow the Federal Reserve's lead in dropping rates to combat a recession that has gone global. Markets seem to be responding positively with oil prices rebounding despite a strong US inventory increase and continued demand weakness, stock prices increasing in the US and holding fairly steady in Asia overnight and US stock market futures down less than a quarter-percent early Thursday. The dollar is down against the yen, Canadian dollar, euro and pound, indicating some at least temporary respite from the "flight to quality" run to the dollar. On the other hand, there is one big negative sign for the economy that continues - US short term T-bill rates are at essentially zero (or even below zero adjusted for inflation), signaling that investors are nervous enough that they would rather hold "safe" Treasuries at no interest than risk the same money on stocks or even corporate debt. Yesterday's Economic ReportsFederal Budget (US) - November 2008 Year-to-date: $401,574,000,000 deficit Prior Year-to-date: $155,076,000,000 deficitWeekly Mortgage Applications Survey - December 10, 2008 Market Composite Index: 796.8 Change: Down 7.1% Purchase Index: 298.1 Change: Down 17.4%Wholesale Trade - October 2008 Wholesale Sales: $377.4 billion Monthly Change: Down 4.1% Year-to-year Change: Up 2.7%Oil rebounds despite inventory build signaling possible market bottoms...oil markets shrugged off the news and rose Wednesday and in earlyovernight trading Thursday. Though this is the same pattern we wereseeing this time last year at the height of the oil bubble, in thiscase the news is a bit more positive than just a return of the oilbubble (which is not likely). For weeks nothing has put a floor underoil because the thing driving oil prices downward has been anxietyabout the global economy; this oil rebound seems to be part of abroader floor that includes stock prices, other commodity prices andforeign currencies (against the dollar), at least for now.Korean Leading Index plummets, central bank cuts rates 1%South Korea’s economic indicators took a big tumble in October, theLeading Index dropping 2.9% and the Coincident Index falling 0.7%, andthe South Korean central bank responded to the bad economic news with a1% drop in key interest rate targets. With a 0.7% decline in September and a 2.3% drop in August, this puts the Leading Index down a cumulative 5.9% in just three months.What I'm ReadingGas Consumption Kept in CheckU.S. gas consumption ticked up last week as prices fell,but experts don't predict a sizable rebound in demand until the economyimproves.Slowdown In China Gets WorseSudden declines in China's imports and exports show thecountry's economic slowdown is entering a new and more serious phase,exacerbating the global slump while jolting Chinese companies andworkers.Bank of Korea Reduces Interest Rate 1 Percentage Point to a Record Low 3% The Bank of Korea cut its benchmarkinterest rate to a record low of 3 percent in an effort toprevent the global economic crisis from pushing the nation intoits first recession since 1998. China's Inflation Cools to Weakest in 22 Months as Economic Growth Slows China’s inflation cooled to theweakest pace in almost two years, giving the central bank roomfor more interest-rate cuts. Australia's Jobless Rate Rises to a One-Year High as Economic Growth Slows Australia’s jobless rate climbed tothe highest in a year as employers cut part-time workers inNovember, adding to signs the economy may follow the U.S., Japanand Europe into a recession. Taiwan Central Bank May Cut Interest Rates as Global Recession Hurts Trade South Korea and Taiwan will probablycut interest rates today to shore up economies buffeted bydeclining demand for exports amid recessions in the U.S., Japanand Europe and weakening growth in China. Worst Spending Slump Since 1942 Paces `Scary' U.S. Recession, Survey Says The biggest slump in U.S. consumerspending since 1942 will extend the recession and push thejobless rate to the highest level in a quarter century, accordingto economists surveyed by Bloomberg News. US Nov retail sales post big drop -SpendingPulse NEW YORK, Dec 11 (Reuters) - U.S. retail sales excludingautos posted their biggest monthly drop in five years November,as consumers, spooked by a deepening recession, pared spendingfor a third straight month, a private report released onThursday showed. Thanks for reading. This content is originally from EconoIndicators or The Economic Indicators Blogger blog. Click through for more.