“I’m always thinking about losing money as opposed to making money. Don’t focus on making money; focus on protecting what you have.” – Paul Tudor Jones

1. U.S. Postal Service hits borrowing limit for first time — per Reuters, the financially struggling United States Postal Service has hit its $15 billion borrowing limit for the first time ever, meaning it will have to rely on revenues from stamps and other products to fund operations.
2. BOE split on whether it might need to print more money — the Bank of England’s Monetary Policy Committee voted unanimously at a meeting earlier this month to leave its key lending rate unchanged at 0.5% and to maintain the size of its asset-purchase program at £375B, the minutes show.
3. China’s GDP growth slows but may mark bottom — according to MarketWatch, China’s economy cooled in July-September to its slowest pace of growth since the first quarter of 2009. China’s gross domestic product grew 7.4% in the third quarter compared to a year earlier, slowing from the second quarter’s 7.6%. However, data for September showed increasing retail sales, industrial production, and fixed-asset investment in urban areas, providing hope that China’s deceleration may be bottoming out.
4. Housing Starts And Building Permits 1959 – 2012 — courtesy of BIG, Housing Starts and Building Permits for the month of September exceeded forecasts by a wide margin as both indicators rose to their highest levels since July 2008. At current levels, Housing Starts have risen 82% from their recession lows, while Building Permits have increased by 74%. Even after these big increases, however, both are still well below their pre-recession levels.

5. European Central Bank will take responsibility for overseeing euro zone banks in 2012 — cnbc reported that EU leaders have agreed to give the ECB oversight of eurozone banks starting from next year, a critical step that will allow the ESM to begin recapitalizing troubled institutions.
6. 25th Anniversary of the Oct. 19, 1987, stock market crash — the Dow Jones Averages crashed 508 points, or nearly 23%. The collapse sparked fears of another depression, although a recession didn’t come for two years and was relatively mild reported by the NYTimes.

The week ahead — Economic data from Econoday.com:

“Stock prices tend to discount what has been unanimously reported by the mass media” — Louis Ehrenkrantz

1. IMF lowers global economic outlook — the IMF has cut its global growth estimates again, predicting a rise of 3.3% this year (down from 3.5%) and 3.6% in 2013 (down from 3.9%). The fund has raised its estimates for U.S. growth slightly to 2.2% in 2012 and 2.1% in 2013, but forecast that China will weaken to 7.8% this year and grow 8.2% next year.
2. Companies Took Advantage of Cheap Money — per WSJ, Firms lock in low interest rates for decades. Companies are not only exploiting rock-bottom interest rates to issue more debt, but are also taking advantage by offering long-term paper. Companies have sold $91.9B of 30-year bonds in 166 deals this year, up from $73.2B in 145 offerings in 2011 and the most in any full year since 1995. Those include GE (GE), Comcast (CMCSA) and UPS (UPS).
3. PBOC pumps more liquidity into markets — the People’s Bank of China has provided the money market with another liquidity rush, injecting 265B yuan ($42.14B) by offering reverse repurchase agreements. It’s the PBOC’s second-largest ever daily fund injection after the 290B yuan of reverse repos the bank offered on September 25.
4. U.S. panel to probe new wave of complaints against Chinese Telecommunication Companies (Huawei, ZTE) — per Reuters, a U.S. congressional report that urged American companies to stop doing business with Chinese telecom equipment makers Huawei and ZTE has triggered a fresh wave of complaints against the firms, opening a second phase to the panel’s investigation.
In a report issued last week after an 11-month investigation, the House committee warned U.S. industry that Beijing could use equipment made by the two companies to spy on certain communications and threaten vital systems through computerized links.
5. Standard & Poor’s Ratings Services Cuts Spain two notches to BBB-, with a negative outlook — In a statement, S&P said the downgrade could have a negative impact on several banks including: Banco Santander, Banco Popular Espanol, Bankia and Bankinter, among others.
6. Japan and China Agree to Hold Talks on Rift Over Island — Japan and China agreed to talks aimed at reducing tensions over a territorial dispute a day after Japanese Prime Minister Yoshihiko Noda warned that Asia’s two biggest economies would suffer without negotiations.

The week ahead — Economic data from Econoday.com:

“When you get to the end of your rope, tie a knot and hang on” — Franklin D. Roosevelt

1. Spain ready for a bailout, Germany signals “wait” – according to Reuters, Spain is ready to request a euro zone bailout for its public finances as early as this week but Germany has signaled that it should hold off. Participants said there were tense exchanges at a euro zone ministerial meeting in Cyprus in mid-September when Schaeuble told his peers Berlin could not take another bailout for Spain to parliament so soon after lawmakers approved up to 100 billion euros ($129 billion) to help Spanish banks in July.
2. Postal Service defaults again while Congress campaigns — the Postal Service has defaulted on a $5.6B payment for its retiree funds, which was due at the end of September, adding to a $5.1B payment the USPS missed earlier this year. The agency also expects net operating losses of $15B for FY 2012.
3. Apple suppliers said to be making smaller tablet — WSJ reported that Apple Inc.’s (NASDAQ:AAPL) Asian component suppliers have started mass production of a new tablet computer smaller than the current iPad. The smaller tablet will have a 7.85-inch liquid crystal display with a lower resolution compared with the latest iPad model that came out in March. South Korea’s LG Display Co. and Taiwan’s AU Optronics Corp. last month started mass production of the LCD screens for the new device.
4. Spanish Bond Auction Eases Bailout Pressure — per WSJ, the Spanish Treasury sold two-year and five-year bonds at lower costs than at previous sales as the latest bank stress test and the European Central Bank’s much anticipated bond buying plan provided a benign backdrop to the auction. Yields fell on the five-year bond to 4.77% and 3.28% on the two-year variety.
5. Japan Auto Makers See Plunge in Chinese Sales — the Senkaku-Diaoyu islands dispute between Japan and China hit Japanese car makers hard in September, with Mitsubishi’s Chinese sales plunging 63% on year and those of Mazda (MZDAF.PK) by 35%. Toyota’s (TM) sales skidded 40%, the FT reports, adding that the company will cut production in China by over half and suspend Lexus exports. Non-Japanese car makers have been benefiting from the spat.
6. Greek PM says can’t manage beyond November without next aid tranche — according to Reuters, Greek leader Antonis Samaras told a German paper that his country could not manage beyond November without the next tranche of international aid and suggested the ECB could help by easing the terms of its Greek debt holdings.

The week ahead — Economic data from Econoday.com:

“When everybody thinks alike, everyone is likely to be wrong.” — Humphrey B. Neil

1. European Banks set to shed €20bn property loans — Europe’s banks are on track to dispose of €20bn worth of loans backed by offices, shops and hotels this year as lenders across the continent race to reduce exposure to the volatile real estate sector ahead of tough regulatory changes. Banks, including Lloyds, Santander and the Bundesbank, have already sold portfolios worth €7.5bn during 2012. Activity is set to accelerate though, with lenders working on offloading another €11bn before the end of the year, according to data from CBRE, the property services group.
2. Senate passes $500B spending package — the Senate authorized a $500B spending bill that will finance the government for half a year from October 1, adding to approval from the House. Congress has now broken up ahead of the elections on November 6.
3. Durable-goods orders sink 13.2% in August, largest drop in three years tied to lower airplane bookings — ex transportation, orders fell a much smaller 1.6% in August. The weaker level of orders reflects a global economic slowdown — U.S. exports to Europe and China have softened.
4. Data show China’s central bank injected $58 bln — according to MarketWatch, data showed the People’s Bank of China injected 365 billion yuan ($57.9 billion) into the financial system via open-market operations, marking its highest-ever level for a single week.
5. Spain unveiled more austerity amid protests — Spain announced €39B worth of more austerity and its 2013 budget. The reforms are expected to include a new tax oversight body, more tax hikes, extended wage freezes and early retirement limits.
6. Spain Banks Stress Tests Needs $77 Billion — per CNBC, Spanish banks need around 60 billion euros ($77 billion) to return to health, an independent audit showed last Friday. Spain, the euro zone’s fourth largest economy, replaced Greece, Ireland and Portugal earlier this year as the main threat to the survival of the euro currency project.
7. S&P/Case-Shiller home price indices for July — courtesy from BIG, On a month-over-month basis, every single one of the 20 cities tracked by Case-Shiller increased in July. And 16 of the 20 cities are up year-over-over year, with Phoenix up the most at 16.59%. Minneapolis, Detroit, Denver and Miami are the four other cities with YoY gains of more than 5%.