Morning Report

Vital Statistics:

	Last	Change	Percent
S&P Futures	1408.3	5.7	0.41%
Eurostoxx Index	2423.9	7.9	0.33%
Oil (WTI)	93.39	0.7	0.71%
LIBOR	0.437	0.002	0.46%
US Dollar Index (DXY)	82.35	-0.088	-0.11%
10 Year Govt Bond Yield	1.71%	0.04%
RPX Composite Real Estate Index	190.1	0.4

Stocks are up this morning on good retail sales data. Retail Sales increased .8% last month vs an expected increase of .3%. The Despot also reported BTE earnings. The Producer Price Index increased .3%, higher than expectations. Inflation readings don't matter these days - the only real economic numbers that matter are employment-related. Bonds are off a point and MBS are down about 1/4 of a point.

The National Federation of Independent Businesses reported another decrease in its Small Business Optimism Index, which has been in recession levels since late 2006. About the only positive takeaway from the report is that the credit crunch that started in 2007 is more or less over. 93% of all owners reported that all their credit needs were met or that they were not interested in borrowing. Overall, any growth experienced in the economy has been due to population growth, so the economy is more or less stagnant.

While the NFIB cites a relatively benign credit environment for small businesses, the NY Fed sees continued obstacles to obtaining credit, but notes that there are encouraging signs for the future.

Will Paul Ryan merely rubber-stamp whatever the Street wants? (as is alleged by the obama administration)
Probably not. He won't be as hostile to the Street as obama is, but he is in favor of some sort of Glass-Steagall type regulation. He also dislikes the Resolution Authority which allows the government to take control of failing institutions and wind them down, which he views as cementing TBTF.

Interesting article from the NY Times on the effect technology has had on trading costs and speed. Since 2000, the cost of trading a share in / out with commissions has fallen from 7.6 cents a share to 3.8.  The length of time it takes to execute a trade on the NYSE has dropped from 3.2 seconds to 48 milliseconds. Pretty amazing, really. The article goes on to say that we have probably reached the point of diminishing returns for investments in trading technologies.  I would point out that the bond market has a long way to go.