The BEA released corporate profits for Q3 2011 along with the Q3 2011 GDP, 2nd revision. Corporate profits increased $39.8 billion to $1.9774 trillion. While GDP is anemic, and we're desperate for 12 million jobs right now, corporate profits are at all time nominal highs.

Pre-tax Corporate profits increased 2.1% from Q2 to Q3 and increased 7.9% from one year ago. Q2 pretax corporate profits were revised, from 3.0% to 3.3% change from Q1 to Q2.

You may have missed it. Fannie Mae released their Q3 2011 earnings report and announced more losses due to derivatives.

^{Chart: The Atlantic}

Steve Jobs has died. He was 56 years old. Pancreatic Cancer finally got him. This should come as no surprise since Mr. Jobs gave up his Apple CEO position earlier on August 24th.

This is a sad day for techies. Steve Jobs was the good one in terms of innovation and vision. To this day black hardware otherwise known as a NeXT computer is admired as one of the most brilliant and innovation systems to date. The operating system from the NeXT spawned eventually OS X, which propelled Apple back from the brink of extinction.

Apple has put on their entire front page a memorial to Steve Jobs with an email to share thoughts and condolences. Rightly so, his spirit is entwined throughout the company.

Apple has lost a visionary and creative genius, and the world has lost an amazing human being. Those of us who have been fortunate enough to know and work with Steve have lost a dear friend and an inspiring mentor. Steve leaves behind a company that only he could have built, and his spirit will forever be the foundation of Apple.

May his innovative spirit live on. MacWorld has created a biography of Jobs and noted he reigned as Apple CEO for 14 years.

The American Banker's Association released their Q2 2011 consumer loan delinquency statistics. A delinquency is a loan payment that is 30 days or longer late. No surprise, people late on payments or defaulting increased for Q2 2011.

Consumer delinquencies continued to move higher in this year’s second quarter, with nine of eleven loan categories showing slightly higher delinquencies amid weak job creation and a slowing economy.

The ABA blames....(no duh), the jobs crisis. No job, people cannot pay their bills, it's as simple as that. The ABA also blames increases in food and gas. Indeed, groceries are up 6% for the year and gas prices have increased 32.4% from last year.

Delinquencies are on the rise but still not as bad as a year ago.

The composite ratio, which tracks delinquencies in eight closed-end installment loan categories, increased 17 basis points to 2.88 percent of all accounts in the second quarter. That compares to 3.00 percent in the second quarter of 2010.

Here's the breakdown in ABA delinquency rates for Q2:

CLOSED-END LOANS

Steve Jobs has resigned from Apple as CEO, effective immediately. Tim Cook, is now CEO. Cook has been the #2 man, as COO, and has been effectively running Apple since Jobs latest medical leave.

Jobs has pancreatic cancer since 2004 with a liver transplant in 2009. Jobs is now chairman of the board. Jobs resignation marks an end of an era in a way. Apple was the great innovator that Microsoft copied, later to be handed over to a past Coca-cola CEO who mired Apple into bureaucratic boredom, engineers fast asleep, as Gates and his vision of the world dominated the planet. Jobs lost control of Apple in 1984, only to return in 1997.

Jobs Letter:

To the Apple Board of Directors and the Apple Community:

I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.

I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee.

As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.

I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role.

I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.

Steve

Just when you think you've had enough, here comes Italy. The European Central Bank is buying Italian and Spanish government bonds on a massive scale. From the ECB press statement:

1. The Governing Council of the European Central Bank (ECB) welcomes the announcements made by the governments of Italy and Spain concerning new measures and reforms in the areas of fiscal and structural policies. The Governing Council considers a decisive and swift implementation by both governments as essential in order to substantially enhance the competitiveness and flexibility of their economies, and to rapidly reduce public deficits.
2. The Governing Council underlines the importance of the commitment of all Heads of State or Government to adhere strictly to the agreed fiscal targets, as reaffirmed at the euro area summit of 21 July 2011. A key element is also the enhancement of the growth potential of the economy.
3. The Governing Council considers essential the prompt implementation of all the decisions taken at the euro area summit. In this perspective, the Governing Council welcomes the joint commitment expressed by Germany and France today.
4. The Governing Council attaches decisive importance to the declaration of the Heads of State or Government of the euro area in the inflexible determination to fully honour their own individual sovereign signature as a key element in ensuring financial stability in the euro area as a whole.

Of course we're paraphrasing. Regardless, this is in essence what the Federal Reserve, the FDIC, the NCUA and the Comptroller of the Currency said, translated, in a joint press release, issued way into the night on a Friday.

Earlier today, Standard & Poor's rating agency lowered the long-term rating of the U.S. government and federal agencies from AAA to AA+. With regard to this action, the federal banking agencies are providing the following guidance to banks, savings associations, credit unions, and bank and savings and loan holding companies (collectively, banking organizations).

For risk-based capital purposes, the risk weights for Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities will not change. The treatment of Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities under other federal banking agency regulations, including, for example, the Federal Reserve Board's Regulation W, will also be unaffected.

Basically they are saying S&P, you will have no effect on the United States, our bonds or any other financial instrument and private sector associated with the United States.

CNN interviewed S&P about their downgrade decision in the video below. Notice the resolve as well as the nervousness in the voice. Who can argue that Congress is bouncing off the walls, but is that reason to downgrade the United States of America?

Standards and Poor just downgraded the United States from AAA to AA+.

All Hail the credit ratings agencies. Some of S&P's reasons for downgrade are American politicians are whacked out nutso and play political games of chicken to the point of putting the entire nation at risk. Today's legislators are unpredictable and unreliable for future governing.

Moody's keeps the United States AAA credit rating but gives a negative outlook.

From their press release:

Moody's Investors Service has confirmed the Aaa government bond rating of the United States following the raising of the statutory debt limit on August 2. The rating outlook is now negative.

Moody's placed the rating on review for possible downgrade on July 13 due to the small but rising probability of a default on the government's debt obligations because of a failure to increase the debt limit. The initial increase of the debt limit by $900 billion and the commitment to raise it by a further $1.2-1.5 trillion by yearend have virtually eliminated the risk of such a default, prompting the confirmation of the rating at Aaa.

In confirming the Aaa rating, Moody's also recognized that today's agreement is a first step toward achieving the long-term fiscal consolidation needed to maintain the US government debt metrics within Aaa parameters over the long run. The legislation calls for $917 billion in specific spending cuts over the next decade and established a congressional committee charged with making recommendations for achieving a further $1.5 trillion in deficit reduction over the same time period. In the absence of the committee reaching an agreement, automatic spending cuts of $1.2 trillion would become effective.

In June, New Residential Single Family Home Sales decreased -1.0% from May's -0.6% decrease. June's annual sale rate was 312,000 new homes and May was 315,000. This is a +1.6% increase from a year ago. In June 2010, new home sales were 307,000.

These numbers are seasonally adjusted, but also with large error margins, and weather can influence sales. For example, the error window for the monthly percentage change is ±12.5%.

The supply of new homes is now at 6.3 months of inventory, or 164,000, a -23.2% decrease from June 2010.