Durable Goods, Housing, and POMO!

The Dow is currently up 186 points following the conclusion of the Fed's Permanent Open Market Operations (POMO).

The market surged at the open as Durable Goods orders in August came in at -1.3%. Stripping out transportation (because aircraft orders are never a factor in GDP, right??) changed the number to a positive 2% (biggest jump in 5 months.) So, ex-transportation we got a good number so the market should now assume that the Fed is less likely to launch QE2 in November, right? No matter, the Fed's POMO was unleashed this morning, with $3.89B in 2014-2016 treasuries immunized. The primary dealers are out buying up AAPL and AMZN with levered taxpayer dollars. Yippee!

For anyone interested, you can follow the Fed's POMO on the Fed NY site:
http://www.newyorkfed.org/markets/pomo/display/index.cfm

New home sales for August were also reported this morning. The number was a depressing 288,000 vs. the 295,000 expected. This is the 2nd lowest number in history. New home inventory now sits at 8.6 months, and the median home price of $204,000 is now the lowest it has been since December 2003.

Other 'bullish' news...

1. BBC reports that China has detained 4 Japanese officials due to illegal filming in 'violation of a Chinese law relating to protection of military facilities.'

2. Homeland Security Secretary Janet Napolitano on news reports yesterday that the US power grid would be susceptible to attack as the Chinese and Russians may have software on the system that could be used to shut down the grid in case of war, "..the vulnverability is something we have known about for years..."

3. HSBC CEO Mike Geoghegan resigned. This after Lloyd's Banking Group CEO Eric Daniels announced his retirement in one year from now. A lot of European banking CEOs leaving. Perhaps they believe the future will be less rosy?

4. Nicaraguan diplomat had his throat slit in his NY apartment ahead of the G20 meetings. Daniel Ortega, president of Nicaragua, has been criticizing the US and defending North Korea and Iran. Related? Who knows? (Other than the murderer that is...)

5. The Euro is flying this morning against an ever-weakening dollar. 1.3475 is the latest print. This doesn't bode well for the export growth/GDP of Germany, France, et al. How long they will allow the U.S. to win the campaign for devaluation is unknown. But this run-up cannot last forever...