Wayne Atwell: Mideast Mayhem to Drive Gold Higher

By The Gold Report, on February 28th, 2011

As Casimir Capital Managing Director Wayne Atwell sees it, further political unrest in the Middle East could push gold higher while inflation risk and sovereign debt issues in Europe are longer-term price catalysts. He also shares a few up-and-coming gold juniors that Casimir covers in this exclusive interview with The Gold Report.

The Gold Report: In a recent interview with Bloomberg you said, “Gold’s gotten stronger because it’s no longer weak.” Can you explain that concept to our readers?

Wayne Atwell: Commodities and securities tend to trade on momentum. Gold had been exceptionally strong, but a lot of investors became nervous because gold appeared too strong and people started taking profits. Then the dollar strengthened and we received some more good economic news, which drove gold down again. Gold has corrected about 7% from its high late last year. Once it breaks through its support level, it could go meaningfully lower. It was in a negative technical pattern and once there is a certain technical pattern on the charts investors start dumping gold and go short. Some people don’t believe it, but many people invest based on charts and technical patterns. If enough people invest enough money, then it works.

Gold was on the verge of breaking down further when the Middle East uprisings began and investors became a bit anxious. So far, the citizens of two Arab countries have overthrown their governments. It’s been relatively peaceful, which is great, but you can envision a scenario in which it wouldn’t be peaceful. Saudi Arabia is likely to have some difficulties that may or may not result in a change of government, and now we’re hearing about protests in Iran. The probability is high that both those countries are going to have additional issues. They may not, but unrest in the Middle East has turned the gold price around.

TGR: That parallels what you’ve described in the past as an “event-driven market” for gold. Would further unrest in Arab countries push the gold price back above $1,400/oz.?

WA: I tend to think so, I guess it depends on what form that unrest takes. Obviously, the government changes in Egypt and Tunisia were relatively peaceful. But the uprising has already spread to Yemen and Saudi Arabia—and now there’s talk of revolts in Jordan and Iran. Saudi Arabia, as you’re probably aware, is responsible for about 11%–12% of global oil production. God forbid that country has a problem—that could cause a real crisis. Fighting in the Middle East is certainly an event that could push gold meaningfully higher. You will remember what happened in October 1973 when the Arabs cut off oil to the West and the oil price went through the roof. It caused massive anxiety and a very serious recession.

TGR: What are some other events that you anticipate could move the gold price this year?

WA: In terms of events, I’m worried about the sovereign debt situation in Europe. The European Union (EU) has dealt with liquidity issues for both Iceland and Greece into 2013, but it hasn’t solved the underlying problem; it’s just dealt with the short-term issue. Unless these countries start balancing their budgets, which is unlikely—come 2013, the same problem will resurface. A sovereign default in Europe is highly probable. Spain has an unemployment rate of +20%, which is just huge. That’s an issue, too.

In the U.S. a number of municipal governments are very deeply in the red. They haven’t funded their pensions and healthcare for their municipal workers. There’s a reasonably high chance that one or more of these municipalities could fail, which would cause a high degree of anxiety and force investors to dump municipal bonds, which again would result in investors’ flight to gold as a safe haven.

TGR: In an interview with BNN, you talked about the Chinese and American economies “laying the groundwork for inflation.” How are these countries doing that and what do you believe is the timeframe for dramatic inflation increases in both countries?

WA: I’ve been going to China for 30 years and I have seen a phenomenal change. I’ll just throw out a few numbers to put the country in perspective. China consumed about 3%–4% of the world’s commodities in 1985 and now consumes 35%–45% of global commodities, which is astounding. To put that in context, from 2000–2010, global steel consumption grew at a rate of 5% a year. Chinese steel consumption has grown at a compound rate of 17%. So, in 2000, China actually produced 127 million tons (Mt.) of steel; in 2010, it produced 626 Mt. of steel. Basically, the country grew its steel industry by 500 Mt. in 10 years, providing the bulk of global growth.

On average, commodity-consumption growth averages 2.5%, yet here we have steel growing at 5% over a 10-year period and China’s steel consumption growing at 17%. It’s unprecedented. That, in turn, has caused a shortage of metallurgical coal. Met coal is breaking out and will probably reach a new high shortly because China has gone from being an exporter to an importer. Iron ore is now within about $10 of its all-time high. About 10 years ago, China was about 70% self-sufficient in terms of iron ore; now it’s 30% self-sufficient, so China is driving up the iron ore price, as well.

TGR: It’s a similar story with copper.

WA: Yes, copper made a new high last week and China consumes 38% of the world’s copper; it’s only 15% self-sufficient, so 85% of its copper comes from offshore. The rapid growth in China is being driven by the need to move people from the country into the cities, and the country consumes a lot of material when it constructs new buildings, rail lines, power facilities, bridges and ports. China is transforming from an agrarian to an urban society, having moved about 15 million people per year into cities over the last 15 years. It’ll likely have to do that for another 10, maybe 20 years.

China is only 43% urban but it will likely become at least 60%, maybe even 70% urban within 20 years. This is putting a strain on the global supply of industrial materials—prices for many of which are at or close to all-time highs, which is inflationary. The mining industry has a pattern of looking for new mines and developing new properties but when you grow at a rate that’s faster than the historical norm, it puts extra strain on the industry. We’re not going to run out of these materials but we must go look in more remote locations to find the materials.

TGR: What about inflation in the U.S.?

WA: Here in the U.S., the government is out of control. Our government spending is frightening. Last year, we had a $1.6 trillion deficit. It’s coming down a bit this year, but it’s still going to be very high. The deficit is about 10% of GDP; historically, it peaked at 4%. Government spending is about 25% of GDP. We haven’t seen these numbers since the end World War II. We’re in uncharted territory—the government is spending too large a share of our GDP. The interest on our debt, as forecast by government budget office, is going to go from $350 billion this year to $900 billion within five years. Forget healthcare, social security, Medicare or Medicaid—we’re going to add +$500 billion to the interest expense. This will drive the dollar down and result in serious inflation.

In the case of China, industrial demand is pushing up commodity prices and creating inflation. As far as the U.S. is concerned, you can’t have this pattern of government spending in the reserve currency of the world without causing serious problems. There is every reason for investors to go into the gold market to put a certain percentage of their assets in gold for protection against super inflation.

TGR: Do you think these factors will push gold to an all-time nominal high in 2011?

WA: Gold made a new high late last year. It has made a new high 10 years in a row. We think it will make a new high of $1,600 this year and $2,000 within the next one to three years. We suggest buying on a correction; it probably won’t go much lower. We believe holding 5%–10% of one’s assets in gold makes sense.

TGR: Among other financial services, Casimir Capital puts together financings for companies, many of which are junior miners. Why does Casimir focus on the junior mining segment of the market?

WA: I wrote a piece on the junior gold industry recently, which makes a number of points. One is that the denominator is obviously much smaller for the gold juniors. If both Newmont Mining Corp. (NYSE:NEM) and a junior gold exploration company find a 1 million-ounce (Moz.) gold deposit, it’s going to have a much more significant impact on the junior explorer’s share price. Both Newmont and Barrick Gold Corporation (TSX:ABX; NYSE:ABX) produce 5–7 Moz. gold annually, so only about 5 out of every 100 exploration discoveries is really of interest to them because most of the very large gold properties have already been found.

It’s extremely difficult to find an exciting new gold property. So, if you’re spending money on gold exploration, the probability is you’re going to find a small gold deposit. But in many cases, the gold majors are prospecting for new exploration properties in their corporate finance department. They’re looking at and frequently buying intermediate or small gold companies with substantial gold deposits that the majors can develop themselves.

TGR: Yes, the gold majors essentially use the junior explorers as their exploration arm.

WA: Exactly. It’s like their exploration department. Gold deposits will be in production anywhere from 5–20 years. They’re generally small. Majors have to replace their depleting resources, plus people expect growth. It’s very expensive for a major to go out and find, and then develop gold properties. If, however, a junior develops a 0.5 Moz. deposit, it doesn’t have to build as much infrastructure. Developing a property as a junior is just a lot less expensive than it is as a major.

TGR: But they’re selling the gold for the same price.

WA: Exactly. The index we put together last year showed the juniors appreciated about 49% in 2010, whereas the majors were up roughly 27%.

TGR: Could you tell us about some of the companies you’ve recently helped finance? There are a number of promising gold companies on that list.

WA: Eastmain Resources Inc. (TSX:ER) is a name that we cover. None of us owns it, as it’s a banking client. The company’s located up in Canada and has 12 different deposits. It’s going to spend maybe $9 million on exploration this year. Eastmain published some data late last week on its drill results, which was exciting. The company’s been a little slow to announce new resources, but it’s due to provide an NI 43-101 here shortly. When you look at what the company’s announced and connect the dots, it’s likely that several of these deposits will turn into something pretty exciting.

Eastmain’s goal is to find a resource, start the environmental permit application process and sell; it’s not going to develop these deposits. It’ll simply define, develop and sell the property. One scenario could be that Eastmain gets acquired, spins many of its assets into another company and starts all over again.

TGR: Much like Virginia Mines Inc. (TSX:VGQ) did a few years ago when it sold the Eleonore gold deposit in north-central Quebec to Goldcorp Inc. (TSX:G; NYSE:GG).

WA: Exactly.

TGR: What are some other companies you cover?

WA: Golden Predator Corp. (TSX:GPD) is pretty interesting. Again, it’s a banking client and none of us owns it. It’s a very exciting company with a number of deposits in the Yukon, which is a rather new territory for gold exploration in the sense that the Yukon has not had the money spent on it that a lot of the places in North and Central America have. I don’t want to say it’s virgin territory but, to some extent, it’s undiscovered. In the Yukon, there’s a lot of what we refer to as “placer gold.” If you have a gold deposit and it gets worn and weathered, the flakes and pebbles roll into the creeks and rivers. Then miners and prospectors mine the gold out of the creeks.

The point is that if it’s in the streams it came from somewhere else. So, they follow the riverbeds and find out where the gold stops being attractive and chances are that’s pretty close to where it came from. A lot of deposits are being “reversed engineered” by virtue of the gold in the streams. Golden Predator has uncovered some very exciting properties but it’s early days for the company. It’s got some huge properties that have a great deal of potential. Golden Predator is a pretty exciting company.

TGR: Golden Predator has some royalties, too.

WA: Right. Golden Predator has a number of properties that it’s sold or made available to other miners on which GPD gets paid a royalty. That’s going to provide some nice value for the company, as well.

TGR: What are some other names you cover that you believe have some promise?

WA: We think Richmont Mines Inc. (TSX:RIC; NYSE.A:RIC) up in Canada is pretty interesting. It’s not a banking client; it’s an older company that’s been mining gold since the 1990s. The former management wasn’t very aggressive, so growth was modest at best. The story wasn’t too exciting. The company now has new management and some pretty interesting drill results. It has about three or four irons in the fire.

It’s just put out some numbers on one property called Wasamac that look pretty interesting. With Wasamac, we think Richmont could add meaningfully to its resource base. If it could double or triple the resource, we think it’ll put that into production. It’s a pretty small company with 85,000 oz. (Koz.) of production. With the Wasamac discoveries, there’s a reasonably good chance the company could ramp-up to 150 Koz. And Richmont’s board has set a goal of adding a 100 Koz./year acquisition. So, here’s a sleepy company that hadn’t been setting the world on fire but now has new, more aggressive management and numerous irons in the fire. We think one or two of those will turn into something pretty exciting. It’s quite a good story that hasn’t gotten a lot of attention.

TGR: Before we let you go, could you give us your outlook for gold over the next few months?

WA: Let’s go back to the event-driven motivation for moving the gold price. The events we don’t yet know about will likely determine the direction of the gold price. The underlying momentum is positive when you look at the U.S. budget, government spending and Europe’s sovereign debt problems. And the problems that governments have created will only get worse as populations age and Social Security obligations become greater—that’s certainly a problem.

We’re all aware of those slower-moving issues, but I think what drives gold in the short term are events in the Middle East and any sovereign debt default. Unless there’s a major unexpected event, we’ll probably see the gold price break out to a new high in the second quarter. We’re roughly halfway through the first quarter now, so we look for the gold price to be rangebound the next two to six weeks before breaking out in the second quarter. But it’s subject to material impact by unexpected events, which always have a way of happening.

TGR: Thank you for talking with us today, Wayne.

Mr. Atwell has more than 35 years of experience in the field of investment analysis for the metals and mining industries. He currently serves as a managing director of Casimir Capital L.P. From 1991–2006, Mr. Atwell was a managing director at Morgan Stanley where he was the Global Group Team leader in equity research and built and managed a 12-member global metal and mining team of analysts. From 1983–1991, Mr. Atwell was a VP at Goldman Sachs covering the metals and mining industries. He was also a VP and principal in the privately held Davis Skaggs, a regional research firm, from 1977–1983. And from 1969–1977, he worked for Merrill Lynch as a senior metals and mining analyst. Mr. Atwell has toured 200 mines and 300 steel mills on six continents. He was selected as one of the 10 best buy-side stock pickers by Institutional Investor magazine several times and was rated as one of the top analysts in metals and mining by Institutional Investor and Greenwich Associates for more than 20 years. Mr. Atwell graduated from Pennsylvania State University in 1969 with a degree in mineral economics. He earned his MBA from the Stern School of Business at New York University in 1974.



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Inflation v Deflation - Which Door do you Pick?

By Claus Vistesen, on February 28th, 2011

As the debate between inflationistas and deflationistas appear about to rev up again, I thought that I would try to pen to virtual paper and sketch my thoughts on the matter.

The specific catalyst for looking into this is naturally in part the fact that oil looks set to do a round of catch-up with the rest of the frothy commodity space but also this piece by the Pragmatic Capitalist citing David Rosenberg on the coming deflationary shock;

David Rosenberg makes some interesting comments in his morning note regarding the price action in US Treasuries.  He cites the rally as a sign that the world is concerned about the deflationary shocks from rising oil prices:

“It is also interesting to see how government bond markets are reacting to the oil price surge — by rallying, not selling off. In other words, bond market investors are treating this latest series of events overseas as a deflationary shock.”

I think Rosey has this one spot on.  The risk of rising oil is not a hyper inflationary spiral, but rather a deflationary spiral.  Oil price increases are cost push inflation of the worst kind and for a country still mired in a balance sheet recession that means spending gets diverted which only gives the appearance of inflation in (highly visible) gas prices while creating deflationary trends in most (less visible) other assets (have a look at today’s Case Shiller housing report for instance).

Hang on for minute then. Do you mean to tell me that we have been running around worrying about QE2 leading to bubbles all over the place while the real danger is continuing and entrenched deflation? Well, yes this exactly what this means, but note the important distinction between the US (and the OECD) and emerging markets. Greed and Fear kicks off this week with the following point [1];

(…) an oil-led commodity spike would clearly cause an intensification of the current inflation scare which has been hitting Asia of late with India the most vulnerable market. Still, as occurred in 2008, such a spike is likely to have the perverse effect of short circuiting the inflation scare in terms of duration. This is because sharply higher oil and food prices will hit current growing optimism on the US recovery. For ordinary Americans are not seeing the income growth to offset such prices increases.

This point is echoed in BCA’s chief economist Martin Barnes’ recent mischief which exactly sets out to clear up the (non)-threat of inflation in the global economy.

Despite investor angst, the above analysis paints a relatively benign inflation picture for the developed countries. The policy mix of large fiscal deficits and highly stimulative monetary policies certainly appears inflationary. However, there currently is no excess monetary growth, and the pass-through from higher commodity prices is weak given ongoing slack in the economy.

(…)

The emerging economies are in a very different position [from the OECD]. All three approaches to inflation are telling the same story: There is excess money growth and the absence of slack implies that higher commodity and energy costs will push up wages and the overall prices of goods and services. Thus far, inflation is edging higher, not spiraling out of control. Nevertheless, policymakers need to get ahead of the curve by raising rates and, where necessary, allowing exchange rates to appreciate.

A large part of Barnes’ analysis is based on the notion of slack and thus the most illusive of all macroeconomic concepts, the output gap. But the argument is really quite simple. For cost push inflation to lead to higher overall inflation there must be an inbuilt tightness in the economy for this to happen. This is to say that workers must be able to pass on rising prices to larger than expected increases in wages and firms must observe strong final demand in order to be able to pass on the increase in prices to consumers. Barnes’ argument in nutshell is then that while capacity constraints might be an issue in the emerging world it isn’t in the OECD still mired by a balance sheet/deleveraging recession.

This argument is interesting in relation to the notion of unintended consequences from low interest rates in the developed world and just what output gap central bankers should look at then. Enter James Bullard, president for the St Louis Fed and the discussion (hat tip FT Alphaville) of the global output gap vis a vis the US output gap.

The argument here combines the two point made by Barnes in the sense that while the analysis of the US economy might certainly merit low interest rates for a long time given the excess slack of the economy, Bullard explicitly mentions the potential of adverse effects from ZIRP at the Fed due to an increasingly neutral to positive global output gap. Here is the FT’s John Kemp with the gist of Bullard’s speech as he sees it;

It is the first time a senior official at the U.S. central bank has acknowledged global capacity issues rather than a narrow focus on U.S. unemployment and capacity utilisation might give a better indication of where inflation is headed.

The obvious question here is whether the US should care at all here about global capacity issues, but given my endorsement of Rosenberg’s point noted above I obviously think they should. A central bank can argue up to a point that rising headline inflation should not be a reason for assuming a rise in underlying inflation pressures, but it is evidently obvious that as if an oil price rising to 120-150 USD (even for a short while) becomes a trigger for an even strong deflationary shock, then the original argument for low interest rates become very difficult to make.

And finally, just to make sure we get all sides of the argument we should never forget that stagflation is also looming as an increasingly likely outcome in parts of the global economy (hat tip: Global Macro Monitor).

(quote from the Economist)

Historically, the margins of retailers and manufacturers have been remarkably stable, says Carsten Stendevad of Citigroup’s corporate-advisory arm. If commodity prices continue to rise, they will eventually be passed on to consumers one way or another. After years of goods getting cheaper, consumers may have to start getting used to everyday higher prices.

This highlights a crucially important issue namely, the underlying trend of inflation in the global economy. It stands to reason that if the trend of global headline inflation is up due to structural capacity issues, an increased prevalence of adverse supply shocks and low interest rates, then bouts of headline price volatility may incrementally find its way into core prices and in a deleveraging world facing the effects of a balance sheet recession it is tantamount to stagflation.

What is the take then?

If the small tour above of the informed punditry serves to set the stage for general argument what is then the important points to take away? Below I offer my suggestions.

  • The stronger the meltup the stronger the correction. This is a classic dictum in the world of finance and translated into the inflation v deflation debate it means that the stronger and longer the outbreak in commodity prices last, the larger is the risk of a deflationary correction and we are then talking about a re-run of 2008. It also raises important questions regarding the policy tools used by global central banks. Bernanke and co can hardly claim, ex post after the crash, that they were right not to react to rising headline inflation when it stands to reason that the low interest rates were the main source of the commodity melt-up in the first place (and indeed will also be the source of the next meltup a couple of years from now). In this sense, it almost amounts to a self-fulfilling prophecy that as the wall of lingering inflation and stagflation rise to a zenith you also know that the time is nigh for the correction.
  • Where is the capacity? Bloomberg recently ran a number of stories pushing the story that while emerging markets were the strong performers in the immediate wake of the crisis, the fortunes were now turning to the US and developed markets. On the surface, this is undoubtedly true and a rotation out of emerging markets into developed markets remain the main consensus trade at the moment. Structurally however this masks a more fundamental question of the so-called emerging economies’ ability to sustainably absorb all the excess liquidity and savings which is trying to find an outlet. The evidence from 2008 and the current melt-up suggests that while the long term story of emerging markets as the new drivers of global growth remains intact, this is not a linear process. Indeed, we are presented with some grave questions as to the collateral damage from the process of global rebalancing that is bound to take place. Some part of the immediate inflation issues could perhaps be solved by allowing a more gradual appreciation of a broad basket of EM currencies to the USD, but this then pushes the problem further towards the question of just what magnitude of external borrowing the emerging world can be expected to do to transfer growth to ailing economies in the OECD. In addition, there is a real risk that higher interest rates coupled with an open capital account would lead to an exacerbation of hot money inflows.
  • Volatility around a Trend? One of the most crucial questions to answer in this debate is whether the underlying trend of prices is one of inflation or deflation in the developed world. Based on the reaction by monetary and fiscal policy makers they squarely believe in the former. But volatility has a cost independent of the trend around which it operations. Given that we seem to be looking at a re-run of 2008 it must be factored in that the volatility and speed (and subsequent decline) of commodity prices are a problem in itself. The famous loss function which must then be metaphorically minimised is the one which plots the trade-off between the cost of recurrent flares of commodity prices and the need to act as a counter trend to the destructive forces of a balance sheet recession. Here, it becomes a rather serious issue if one of the main collateral effects of providing buckets of liquidity is to engender strong commodity melt-ups with a subsequent deflationary outcome. Could it be that we are then talking about two trends here? One which is the underlying structural forces of deleveraging and the second is the structural issue of too much capital chasing too little yield proxied by the fact the growth to fight deleveraging must largely come from external sources.
  • Stagflation coming to a town near you? As I am currently living in the UK I think I am as good as any to talk about the spectre of stagflation. Whether or not you agree with the BOE in its rather complacent view of inflation (given its own inflation target policy mandate) it seems to me that the UK citizens may be the first in the OECD to really experience what a hike in indirect taxes as well as rising global commodity prices mean. Again, you could of course note that if this all ends in a deflationary implosion in the end it is a matter of semantics, but these are then semantics which matter. More generally and going back to the point made by the Economist, if the general trend in global headline inflation for structural reasons is up then one would find it hard to believe how this would not act as a stagflationary trend in a world where demand pull inflation and growth are kept at bay by deleveraging. I want to see entrenched prices before I believe it and I still concur that this is playing out largely as in 2008 (with a deflationary outcome), but in some economies it might be different and the UK is a good candidate.
  • Inflation today, deflation tomorrow? The extent to which we are watching a rerun of 2008 this is what we are going to see but I also think that the further we get down towards the path where low interest rates become structural parts of the macro picture the risk is that inflation expectations get entrenched. I am not talking in the global economy as such, but perhaps in individual economies and this divergence between those still stuck in deflation and those experiencing stagflation is a dangerous cocktail.
  • Kill the speculators!? I remember during the heaty days of 2008 how a large part of the observed punditry slowly but surely came to the uniform opinion that high commodity prices were here to stay and that obviously speculation had no hand at all in this. Apparently, if oil prices went up 100% over the course of 6 months, then it was all a question of fundamental supply and demand. Like Fischer and his famous remark on US stocks reaching a permanent plateau it lasted until it didn’t. In short; obviously speculation plays a part. I would have thought this to be blatantly clear. Commodities of all forms and kinds have been thoroughly securitised which is exactly what allows such a melt-up in the first place. But this does not mean that the speculators should be lined up and shot let alone that they are a force of evil. I any case, what speculators are you talking about here? What about China (and other sovereigns) stockpiling commodities in turn bidding up prices? Should these be regulated and how? And if you really want to have a go at the masters of the universe of Wall Street and the City, would that really change a bit? Speculation in the form of what Sarkozy et al waffle about is a phantom menace and the real issue here is more structural. But speculation … indeed, lots of it! Finally, I should note that this time around we have had a number of concurrent and severe supply shocks to especially soft commodities which clearly have exacerbated the melt-up. Further, the extent to which adverse weather phenomenon become more prevalent it will add volatility to the commodity edifice regardless of what markets and regulators do.

Which door should you pick then to get it right on the global economy? You would not be surprised if my answer here is ambiguous. At the moment, I am leaning towards a 2008 re-run but precisely because it appears to be a re-run it raises some additional important questions. Consider then the following form one of my friends;

The underlying problem is that the Emerging Markets as a group (while many of them are long term growth positives) simply cannot withstand the short term massive funding injection without food prices getting out of control. Food prices getting out of control produces, as we are seeing, political instability, and this leads investors to withdraw.

As noted above, this is then a issue of short term capacity to add as magnets of yield as well as long term capacity to rebalance the global economy. But this is the trend then, the speed and volatility matters too as another of my friends pointed out;

I think rates of change in oil price matter a lot more than the level.   People adapt, but they can’t adapt quickly. We need to watch the speed of the oil price move.  If it moves quickly, that could be a huge drag on growth like 1980, 1991, 2008.

I think these two arguments combined are very, very important. I would hold lingering deflation to be a near certainty in the European periphery and Japan where it never left. I also see many of the worst affected economies in Eastern Europe suffering a deflationary outcome. In the US, we will see and in the UK stagflation is a real threat if only because inflation may soon feed into expectations on a sustained basis. For the emerging economies as a whole they will be fighting inflation for a long time to come especially as the hunt for yield continues. In the end then, picking the door may depend as much of your time frame and unit of analysis as anything else.

—

[1] – I get G&F and a few selected of BCA’s publications through a well connected network of analysts and economists, but I cannot (obviously) reprint the whole editions here for copyright reasons.



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Economic Events on February 28, 2011

By B.P.T., on February 28th, 2011

At 8:30 AM EST, the monthly Personal Income and Outlays report for January will be released.  The consensus for Personal Income is an increase of 0.4% over the previous month and the consensus Consumer Spending index change is an increase of 0.4%.

At 9:45 AM EST, the Chicago PMI Index for February will be announced.  The consensus index value is 68, which is 0.8 points lower than last month, but is still well above the break-even level at 50.

At 10:00 AM EST, the value of the pending home sales index for December will be announced.

At 3:00 PM EST, the Farm Prices report for January will be released, giving investors and economists an indication of the direction of food prices in the coming months.

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