Morning Report

Vital Statistics:

	Last	Change	Percent
S&P Futures	1352.3	4.9	0.36%
Eurostoxx Index	2266.2	14.3	0.63%
Oil (WTI)	88.68	0.3	0.28%
LIBOR	0.455	0.000	0.00%
US Dollar Index (DXY)	83.12	0.021	0.03%
10 Year Govt Bond Yield	1.49%	0.02%
RPX Composite Real Estate Index	184.2	0.1

Markets are firmer this morning on an earnings "beat" out of Goldman. I put "beat" in quotation marks because the report was actually lousy as revenues are at a 7 year low. Expectations are way low going into this earnings season.  As we approach August, the European newsflow should grind to a halt. Bonds are down a half a point, and MBS are down a tick or two. The Bernank is testifying in front of Congress at 10:00 this am. Expect a lot of newly-minted LIBOR experts to opine on the subject.

The CPI came in flat for June on falling energy prices. That is about to be offset by increased food prices as corn approaches $8.00 a bushel due to drought conditions in the Midwest. Industrial Production rose, while capacity utilization fell.

Bill Gross is warning of a recession "when measured by employment, retail sales, investment, and corporate profits." Investment banks are taking down their economic forecasts in a large steps - Jan Hatzius of Goldman took his 2Q estimate to 1.1% from 1.3%, while Deutsche Bank's Joe LaVorgna took down his forecast to 1% from 1.4%. These estimates would put the economy firmly in the "stall speed" range.

The WSJ notes that asking prices are rising as supply decreases. Asking prices are up 2.7%, while the number of homes listed for sale is down 19.4% from a year ago. Banks are holding back foreclosures from the market, and are often times finding bids on the courthouse steps from professional investors looking for rental properties. Median age has been falling as well.