• I have to head into another meeting.

I hope to be back for the close. If not, enjoy the weekend!

• Adding to QQQ short at $75.20 and RTH at $55.29.

• I have been pressing my shorts -- on scales -- all afternoon.

• Here is a summary of this week's major macroeconomic events from The Lindsey's Group Peter Boockvar: 

Positives

1. June New Home Sales, while in line with May revision, total 497k annualized, the most since May '08. Months' supply falls to 3.9 from 4.2, matching the lowest since '04.
2. Final July UoM Consumer Confidence up 1 pt to 6 yr high at 85.1 which is about the middle of the Jan '00 high of 112 and Nov '08 low of 55.3.
3. KC manufacturing region joins NY and Philly in showing m/o/m improvement.
4. AAA said gasoline prices backed off 2.5 cents on the week after prior two weeks of gains that took it higher by .20.
5. Positive from perspective of policy makers, we'll wait to see from consumer view: Japanese CPI ex food rises .4% y/o/y, highest since Nov '08 but prices still fall ex food and energy by .2% y/o/y.
6. The Japanese give Abe full government control, all eyes on structural reform.
7. China trying to force a better allocation of capital as it orders the closure of all excess capacity by yr end in 19 industries such as copper, steel and aluminum.
8. EU manufacturing and services composite July index rises to 50.4 from 48.7, the highest since Jan '12 and 1.3 pts above consensus.
9. German IFO business confidence rises to 106.2 vs 105.9, a 4 month high and a hair better than expected.
10. French business confidence up 2 pts to best since April 2012.
11. French consumer confidence up 3 pts but easy feat off lowest level since at least 1972.
12. Greece gets another package of cash from its EU sugar daddies and the EU claims they are fully funded for another year. Wash, rinse, repeat.
13. UK GDP in Q2 up .6% q/o/q, in line but growth for 2nd straight quarter.
14. Spanish unemployment rate moderates to 26.3% in Q2 from record 27.2% in Q1. Imagine if they didn't have large underground economy.
15. Irish home prices rise 1.2% y/o/y in June, the 1st gain since Jan '08 after prices fell 50% peak to trough.

Negatives

1. Mediocre demand picture for newly issued US debt from Treasury, 2s, 5s and 7s. 10 yr yield up 8 bps on the week to two week high but also in sympathy with global rate rise.
2. Initial Jobless Claims rise 7k to 343k vs the estimate of 340k.
3. Mixed June Durable Goods data with headline strength solely due to aircraft as orders ex transports flat line m/o/m. Non defense capital goods ex aircraft orders rise .7% but shipments unexpectedly fall by .9%.
4. Even with 10 bp drop in mortgage rates on the week, refi apps fall another .7%, down for 10th week in past 11 to two year low. Purchase apps down as well by 2.1% to four month low.
5. Existing Home Sales in June, reflecting pre rate jump, total 5.08mm, 180k less than expected and prior month revised lower by 40k to 5.14mm (still highest since Nov '09). Months' supply at 5.2 vs 5.0 in month prior. First time buyers total only 29% of purchases.
6. Possibly sequester influenced, Richmond manufacturing survey falls to -11 from +7, bucking trend seen in other regions.
7. Notwithstanding yen weakness, Japanese June exports rise a less than expected 7.4% y/o/y vs est of up 10%.
8. China's HSBC preliminary manufacturing index falls to 47.7 from 48.2, weakest since Aug '12.
9. Hong Kong exports in June fall .2% y/o/y vs expected gain of 2.4% as exports to all major regions fall.

• Midday musings by Sir Arthur Cashin:

Various currents influence action.  Market ignores several blowout earnings to open down after Tokyo stocks get clocked and yen spikes on somewhat deflationary data.

Nikkei down and yen up are exact opposites of several large hedge fund positions raising fears of one ¿ or more ¿ caught off base.

The already weak market got hit with SAC position liquidation speculation and more Tokyo concerns.

IMF comments on possible yield pop (125 bp) on early taper may have added to stock angst but didn't move bonds much.  Moves in gold, oil, stocks and others suggest liquidation fears at work but easing now.

Run rate looks to 550/630 with some wondering if it's SAC-lite.

• I have a series of conference calls with companies I either own/short or am considering.

Be back in a few hours.

• Let's review.

My look back at the week's daily diary highlights borrows its title from a popular 1960s BBC comedy show hosted by David Frost.

On Monday, I started the week by reshorting Yahoo! (YHOO) (after the company agreed to buy back 40 million shares from Loeb/Third Point) and I added to the McDonald's (MCD) short. As the market ramped, I doubled my overall net short exposure. The Chicago Fed National Activity Index faltered, adding to the mixed domestic economic data. 

I added to my SPY short at $169.40. In "What The Hell Happened?" GMO had the answer.

CNBC talked my book on "The Turn of Screwflation."

On Tuesday, "The Growing Impotence of Quantitative Easing" was an important post. 

Monitise (MONI.L) had a very good update. 

More economic weakness in the Richmond Activity Index.  

Sir Mark J. Grant at Southwest Securities chimed in all week. 

Northwest Bancshares' (NWBI) earnings included several non recurring charges. The weakness provides a buying opportunity. 

In "The Return of Debt-Ceiling Issues" I noted the headwind of budget nonsense is soon to be back. 

In "Blues Travelers" I suggested that auto premium rate competition was rising, potentially putting pressure on Berkshire Hathaway's (BRK.B) stock. I was right on this one as BRK.B has trended lower all week.

After the close Apple (AAPL) reported very much in line with my expectations. I see the stock being range bound and would sell the gap.

Wednesday began with why I expect a pause in the housing recovery.

In "Fiesta on Siesta" I suggested a September tapering is likely on.

I began to scale out of Chimera (CIM) and pressed my Berkshire short further.

In "Watch your BAC" I called for a new market "tell" indicator.

With real interest rates rising, I advised using caution on gold.

Throughout the week, real estate maven Mark Hanson chimed in negatively on the U.S. housing market. 

In "There is Realogy --Then There's Reality" I questioned Richard Smith's view of home affordability. 

In "More About the MBS Mess," I explained why I sold out of CIM.

Thursday started with more Mark J. Grant on the eurozone. 

Goldman Sachs again lowered its 2Q 2013 Real GDP forecast. 

I added to my IWM and QQQ shorts.

As I anticipated, "Homebuilders Get Hammered."

I offered a refresher on sovereign debt yields. 

I really enjoyed reading Jim "El Capitan" Cramer's "The Game Seems Rigged."

New highs for old favs Altisource Asset Management (AAMC) and Altisource Portfolio (ASPS). 

Uh oh! "The 10-Year Yield Watch."

Friday began with my customary "Peek." 

And some more Mark Grant in "Grant Gets Grimm."  

I am now very large short in QQQ because it's different this time!

That was the week that was!

• On the short side:

I am offering more Berkshire Hathaway (BRK.B), Home Depot (HD), Lowe's (LOW) and Market Vectors Retail ETF (RTH) now.

• I am now at my highest net short exposure for all of 2013.

Yesterday I explained my more aggressive move to the dark side.

• Where, you might ask?

I will tell ya ...  the Russell index, which has led us up, is starting to lead us down.

• From Peter Boockvar at The Lindsey Group on consumer confidence:

The final read of July UoM Consumer Confidence was 85.1, up 1 pt from June and better than the beginning of the month print of 83.9 and expectations of 84.0. The components were mixed though as Current Conditions fell 1.1 pts from the preliminary figure but was still up from June and the Economic Outlook was the opposite, rising 2.7 points from early July but falling 1.3 pts from June. One year inflation expectations were 3.1% vs 3.3% in the initial July survey but up from 3.0% in June as gasoline prices moved higher.

Bottom line, this measure of consumer confidence is at 6 yr high as the economy continues to climb out of its post recession shell but there is more room for improvement as the 20 yr UoM confidence average is 87.4. With respect to its impact on the market, it typically doesn't have one as this data point is coincident in nature and says little about how consumers will spent going forward. To this point, the high tick in confidence over the past 20 years was 112 in January 2000.

• I now have my largest QQQ short for all of 2013 put on.

• I am pressing my Market Vectors Retail ETF (RTH) short now.

• A heads up.

Banks look squishy this morning.

• After reviewing Altisource Portfolio's (ASPS) great earnings, $9.25 looks like the EPS number for 2014.

That is a huge year-over-year increase.

I missed buying this one back.

• I see the large Monitise (MONI.L) buyer back this morning.

• I am more aggressively shorting again this morning.

• Home Depot (HD) and Lowe's (LOW) starting to roll over a bit.

I like.

• More from Sir Mark Grant.

"What a big heart I have-the better to love you with

Little Red Riding Hood

Even bad wolves can be good

I'll try to be satisfied just to walk close by your side

Maybe you'll see things my way before we get to grandma's place

Hey there Little Red Riding Hood

You sure are looking good

You're everything that a big bad wolf could want

Owoooooooo

I mean baaaaaa

Baaa..."

 -- Sam The Sham and the Pharoahs, Little Red Riding Hood

This morning, Southwest Securities Sir Mark J. Grant talks (and huffs and puffs about) SAC, the eurozone, Detroit and Little Red Riding Hood:

"The two most important days in your life are the day you are born and the day you find out why."  -- Mark Twain

It is odd you know. Each day has twenty-four hours and yet one can end so quickly while another can drag on for eternity. Most days are a blur and hardly remembered while some singular days will never be forgotten. One day is a blessing while another is a curse and sometimes it takes courage and bravery to cross the line between one day and the next.

I mark September 22, 2013 as one of those singular days. This is the date of the German elections. There is no wizardry afoot here but deduction based upon fact. There is so much in Europe that has been swept under the rug so as not to upset Ms. Merkel's remaining in power and, once accomplished, so many dirt balls and fuzzy wumpkins that will come crawling out from underneath the carpet that all of the king's horses and all of the king's men couldn't properly clean up the room.

Greece, Cyprus, France, Italy, Spain and Portugal will all crawl out from the dust bin and dance along the tattered rug shouting, "Remember me?" There will be European banks aplenty at the regalia who will arrive unannounced and unwelcomed. It will not be WikiLeaks but EuroLeaks that come to the center of our attention as Germany changes its tune from the light and the airy to the dirges of Wagner.

The aria of "Happily Ever After" will be a lilt remembered after September 22.

In the meantime we will face the scourge of the SAC massacre. Not even Berlin can prevent this fallout I am afraid. It is going to be one mother of a massive liquidation and I do not believe anyone is prepared for it.

SAC will attempt to hold at the borderline but the scavengers of the marketplace lie in wait for the fetid meat to be thrown to the wolves and the air will become rancid with the offal offered. Just how bad it will become is unknown at present but to not think it is coming is a childish dream. Great care is advised.

Detroit is another subject that will change the landscape. It is likely, in my opinion, that the fallout from the inability of a Municipal pension fund to not pay its retirees will raise a cry to create new laws with criminal liability for those elected officials that oversee them. There will be more laws, more regulations and greater accountability demanded with State laws and perhaps Federal laws that attach criminality to mismanagement. This will change the operations of many municipalities and worsen their financial conditions as they fund more of their pension funds at the cost of providing civil services. Higher taxes are likely to result and Detroit will set a new and different kind of template for owners of Municipal Bonds.

Little Red Riding Hood thought it a lovely day to walk to Grandma's house. Then look what happened.

• The beat goes on.

"The beat goes on, the beat goes on

Drums keep pounding a rhythm to the brain

La de da de de, la de da de da

Charleston was once the rage, uh huh

History has turned the page, uh huh

The mini skirts the current thing, uh huh

Teenybopper is our newborn king, uh huh"

-- Sonny and Cher, The Beat Goes On

Let's start out by taking a peek at the overnight and early morning price action in the major asset classes.

S&P futures -5, Nikkei -3% (June inflation hotter than expected), European Markets -, euro , crude oil -$0.90, gold -$1 and the 10-Year U.S. Note yields 2.58%.

Worth mentioning (for perspective, in this section I am trying to provide a perspective on yesterday's market behavior and factors that could influence today's price action; I am also explaining what and why I traded/invested during the previous trading day) :

• Thursday's trading was another day that frustrated the bears and delighted the bulls, with the S&P recovering from an early-morning futures schmeissing.
• Facebook (FB) was a highlight for the bulls (as was Starbucks (SBUX) after the close). It is always amusing to me that after such an upbeat report it seems that every money manager in the business media loaded up on FB prior to the release of the better-than-expected earnings. The beat goes on. 
• Undaunted (or arguably stupidly) I continued to expand my short exposure by adding to my QQQ and IWM shorts. I am sticking to the notion that the U.S. stock market is making a July high.
• Here was my rationale for expanding my short exposure (I would add that some beats are now being met with a yawn/sigh (e.g. Ford (F) and GM (GM)). I also reentered shorts in Home Depot (HD) and Lowe's (LOW) based on my less-than-optimistic view on the U.S. housing market and of forward personal consumption expenditures. (Note: Homebuilders got smoked yesterday.)
• Asia traded poorly while Europe is in the red (near morning lows) and U.S. futures suffer small losses. 
• Amazon.com (AMZN) was a notable reporter after the close. Though top line was only in line and bottom line disappointed slightly, really nothing in the report that should change sentiment on the name.
• Expedia (EXPE) spit the bit on earnings and look for Priceline.com (PCLN) to suffer along with the rest of the travel-related stocks. (Growth slowing or more competition?)
• SAC/Steve Cohen were in the spotlight most of the day. Also here and here and here and here and here. I suppose, like noses, everyone has a view on the case. I was asked to go on various CNBC shows to discuss the SEC's action, but I decided not to as I am not a lawyer and I don't know the facts. The only thing I concluded with certainty was that "The Mooch" (Port Washington-born-and-bred Anthony Scaramucci) was a loyal and solid friend to Cohen.
• The WSJ's Jon Hilsenrath is at it again, but I am hearing he no longer has a direct line into the Fed as the Fed is fearful of his influence and rock star status.
• Increasingly, Janet Yellin looks like the next Fed head.
• In economic news, June durable goods orders were  up 4.2% (consensus was up 1.1%) as there was a 31% surge in non-defense aircraft (Boeing). But ex-transportation orders, durable goods were unchanged compared to up 0.6% expected. Initial jobless claims were up 7,000, higher than projected by the Street. Goldman Sachs and others modestly lowered their 2Q 2013 real GDP growth forecasts after these releases.
• Over there, in Japan, consumer prices rise the most since 2008. The Nikkei responded poorly, dropping by 3%. Bill King of The King Report: "With inflation appearing in Japan, if its exports, economy and household income don't increase commensurately or more than inflation in the coming months, look out below! Perhaps investors in the Nikkei are contemplating this unpleasant possibility."

In the press (good stuff if you have some extra time to do reading):

• Financial Times: There are better economic gauges than GDP.
• The Telegraph: Tapering could reignite the sovereign debt crisis in Europe.
• New York Times; Falling college enrollment.
• USA Today: "More on the Screwflation of the Middle Class" ¿ back-to-school supplies prices jump.
• Washington Post: Larry Summers leading Fed chair candidate.
• Zero Hedge: Seth Klarman on the economy (must read!)
• New York Post: New York election/political follies ..."Split-zer" (From the sublime to the ridiculous)  and The Wiener. The latter might have considered leaving Twitter as I had done!
• Zero Hedge: How bad is the economy?
• Washington Post: Fannie Mae and Freddie Mac profit showdown.
• National Journal: John Boehner goes on the offense.
• WSJ: Reid to tax reform ¿ drop dead!
• WSJ: Mistreating Bernanke, the man who saved the world.
• Financial Times: Falling fertility rates. 
• ESPN: Those "Damn Yankees."

Economic and Other Catalysts (a quiet day):

• US Michigan confidence for July  9:55 am ET. 
• China industrial profits for June (out Fri night)
• analyst meetings: DNB, SCHW
• earnings before the open: ABBV, AON, KKR, LEA, NWL, SWK, TYC, WBC, WY