News Crumbs

China's exports for February: - 26%. Imports were down -24%. The trade balance was +$5 billion, down from +$39 bil in Janruary and $8 bil a year ago. Don't tell me China's bouncing back. This could also be what has been pressuring the Treasury market recently.

Deflationary news is just everywhere; it's just too much to mention. Bank credit is contracting at a 2% annual rate. However, there is even worse news. Consumer credit expanded last month, with credit card balances mushrooming at a +25% annual rate over the last four weeks. No wonder banks are cutting back balances. It looks like people are running up the balances again, and in this economy, it's not because they're doing well.

Inventories in almost everything (except maple syrup) keep rising as a percentage of sales. Credit conditions remain tighter than ever, with the NFIB survey showing 13% of business owners say it was harder to get credit, the highest % since 1981. Plans to boost prices and wages are at all time lows.

With that in mind, I'm going to keep my eyes open for an opportunity to short oil again, or maybe even credit card related co's: COF, JPM, BAC, DFS, or AXP.

And this story from Bloomberg about how Banks' Bondholders May Be Next in Line to Share Bailout Pain makes me bullish on gold and bonds and bearish on stocks again. Bond yields for bank stock including C and BAC average 8.21%. Citi's almost $800 bil of 7.25% bonds due October 2010 are yielding 9.4%.

The Euro doesn't look so strong after this news: German manufacturing output vaporized by -38% yoy. As the country with the second largest trade surplus (last year) after China, this is no surprise.