Where to Start….Hmmm

               Let’s begin with U.S. economic data that was released this morning.  Biggest market mover was the consumer confidence number that came in at 56 versus 39.8 which beat expectations by 13.5.  An absolutely huge boost to confidence, right? Not really.  As it turns out, the consumer confidence number reported today is actually from October.  I seem to remember a large rally in October which was likely the reason for the boost.  Probably more telling was the Case Shiller number that came in at -3.6% versus -3.8% which shows a modest improvement but missed expectations by .6% on the downside.  That number was mirrored by the FHFA price index coming in at .9% versus -.1% prior, beating by 1%.  Over all, the U.S. market data remains overshadowed by Eurozone concerns.

                Out of Europe; a bond auction, more rumors, and red flags.  The Italian bond, auction which was expected to be abysmal, beat expectations in terms of demand.  Yeah, hooray, people will still buy Italian bonds, however at historically high and unsustainable yields.  The 3 year yield came in at 7.89% and the 10 year at 7.56%.  Later the rumors began to fly that the ECB and IMF were looking to leverage the EFSF by 2.5 times which on the upper end of the spectrum should bring about 625 billion euros.  Not only is this the 4^th time (I think) that this rumor has been floated, but it wouldn’t be nearly enough.  600 billion might, might be enough for one of the PIIGS but not for all of them.  And then, the OECD (Organization for Economic Co-operation and Development) came out and cut European forecasts and warned of a possible Eurozone breakup.

                So U.S. data, with exception of the lagging Case Shiller, was rather lackluster.  Italian bond auctions weren’t terrible but were still bad.  Rumors of a solution were being recirculated although they had already been refuted and would be ineffective even if true. And rate cuts, downgrades, and possibility of a breakup of the Eurozone.  Oh my.  Maybe we need us some ruby slippers, a tin man, a scare crow, and a cowardly lion.