Headlines and data appearing in The Punch Line came from widely available publications including national and international newspapers, trade journals, economic and industrial bulletins and news websites.

Play Defense Again…

Amid continued disappointments on the job recovery’s progress, momentum has been building toward a Q4 Fed easing. While many commodity prices have been running away as if global recovery were robust, and the bid for risk assets overall quite intense, there is little evidence on the ground of a recovery except for the announcement that the recession was officially over. Softening in some sensitive employment leads warn of a new negative feedback loop if uncertainties in recovery’s staying power are not reduced soon. The first battle lines were crossed in this months’s elections, as little has come through to job seekers for all the policymakers’ talk. The voter unrest reflected a real fear that not just family finances but the country itself is in a state of decline. From that perspective, the enormous budget deficits don’t seem to be providing much of a tangible return. Ample cash sloshing around world financial markets plus anticipation of further easing have helped drive a rally in risk sectors and equities. Also, much easier corporate credit today is allowing large firms to rebuild their balance sheets and stay viable until the real economy picks up. This may not be true for smaller firms, however, according to most surveys. And the awkward dislocations and exaggerations in commodity, currency and even the debt markets should be disconcerting. With inadequate world growth, the risk of global currency and trade wars is rising, with some major economies now engaged in competitive devaluations. All are playing a game that some must lose.

From the section entitled: Credit Matters

In the wake of the global financial crises, a renewed plunge in property prices in Japan has fueled expectations of a new era of distressed asset fire sales, an opportunity specialist funds have been hungrily eyeing.

China has ordered six of the country’s largest banks to temporarily increase the amount of money they hold on reserve with the central bank as Beijing tries to reign in new lending and manage liquidity in the banking system.

The banks, which represent about half of all deposits in the country, will have to keep an extra 0.5 per cent of their deposits with the central bank for the next two months, according to bankers and analysts, who estimate this will remove about Rmb200bn ($30 bn) from the interbank system.

From the section titled: The Return to Normal!

CEO Confidence Declines, The Conference Board Reports

CEO confidence has cooled considerably in the second half of 2010…

CEOs’ appraisal of current economic conditions was much less favorable in the third quarter. Less than one-third say conditions have improved compared to six months ago, down from about two-thirds last quarter. In assessing their own industries, business leaders’ appraisal was also considerably less positive. Now, only 38 percent say conditions are better, compared with 61 percent last quarter.