Interesting start to the day...

Jobless claims down? Uh, maybe someone can tell me where all the layoffs from the lenders went? Interesting.... We're right in the low 300,000s on jobless claims, which doesn't show labor market stress.

The rest of the employment data came in pretty much where it was expected (unit labor costs, etc.) Productivity came in up 2.6%, unit labor costs up less than expected. These numbers were good on balance.

Both WalMart and Target had decent same-store sales for "Back To School"; Kohl's numbers were bad. The problem here is that without a "cliff dive" in economic news how do we get rate cuts? Looks to me like we won't get them eh?

The futures improved on these numbers significantly to essentially flat from modestly down. It will be interesting to see how people digest this as the day's trading progresses.

The ECB held interest rates steady, and the Dollar is under attack (again). None of this gives Ben room to cut rates. If he does into economic data that simply does not justify it, he's going to butt**** the dollar immediately and capital flight becomes a very real possibility. The DX chart (here) is a horror show and not headed in the "right" direction for rate cuts. The ECB's decision to stand pat didn't help it a bit.

Guys - in this environment rate cuts ain't gonna happen. Bernanke is many things, but absent some sort of radical change in data in the next two weeks the "Rate Cuts Now!" guys have a major problem on their hands - as do those who have built their "bullishness" in the equities markets around the thesis that Ben will ride in to the rescue.

I was 50/50 on rate cuts as you know. I'm now 75/25 - AGAINST.

Adding to that? Here 'ya go:

"Four regional Federal Reserve bank presidents declined to endorse a cut in the
benchmark interest rate this month, as policy makers gauge the impact of the credit- market rout on the U.S. economy.

Kansas City Fed President Thomas Hoenig and Dennis Lockhart of the Atlanta Fed said they hadn't seen sure signs of a housing spillover into the broader economy. St. Louis Fed President William Poole and the Dallas Fed's Richard Fisher said the effects of the turmoil so far are unclear."

Any questions?

Mortgage Defaults came in up 7 basis points. Big increase - highest increase in the history of the survey. Seriously delinquent (90 days+) now up to 0.98%, and subprimes up to 9.27% (!)

Loans entering foreclosure - up to 2.72%.

Adjustable rate mortgages are the problem - 12.40% for Subprime, and 2.02% for Prime. (Gee, is this is a surprise? NOT!

ISM Services came in a bit ahead of projection at 55.8, slightly ahead of expectations, flat .vs. July. Internals mixed, with the employment component soft.

The Commercial Paper numbers came in down big - $54 billion. $300 billion less over the last few weeks....... heh, you think? About ******n time the trash was taken out of this market.

National City (NCC) got slaughtered pretty good today. Good for them. And don't look at MTG. Oh my God.

Fortune Magazine has a nasty article in their upcoming issue - which was front-run on CNN's online site. You see it in print on the 17th - will that be before or after the crash in equities?

"As wonderfully favorable factors cool off, asset prices will be under broad pressure, and risky assets will be under extreme pressure. If the credit crisis gets out of control, this will happen quickly and painfully. The important point to make here is that even if all works out well on the credit front, it will still happen slowly."

Oh, that's nice. Ready for some, uh, "plunger" action?

Oh, and Israel/Syria? Shooting at one another eh? Hmmmm... is that good for stability over there where all that oil comes from? Speaking of oil..... Oil? 8 handle on oil anyone? We're headed there. Over $77 this morning..... falling back a bit, but guys - oil ain't getting cheaper, is it? Let's see - supply, meet demand. Oi.

Anything else interesting? A bunch of little things, and a few big. So guess what... you get two parts to the video tonight! Yep...... one for stocks, and one for the macro level.

Here 'ya go!