FeedPosted Nov 11th 2009 6:30PM by Connie Madon (RSS feed)
Filed under: International markets, Market matters, Money and Finance Today, Commodities, Federal Reserve

A wise trader once told me: "It's all in the price. All the thoughts, ideas and emotions of all the traders throughout the world are in that one number."
Gold is trading at $1,118.00 per ounce. What is that number telling us? Pure and simple, the market is telling us that inflation is on the way. The Indian government just bought 200 tons of gold valued at over $7 trillion dollars. In other words they exchanged $7 trillion US dollars for the 200 tons of gold.
At the same time the December US dollar contract traded below 75.00 on a trade-weighted basis. What is that number telling us? Traders are turning in dollars for other investments, mainly stocks and commodities.
Continue reading Why is gold making a new high, trading at $1,118.00 per ounce?
Posted Nov 11th 2009 7:40AM by Melly Alazraki (RSS feed)
Filed under: Before the bell, International markets, Market matters, Amer Intl Group (AIG), United Parcel'B' (UPS), Economic data, Commodities, Oil, Federal Reserve

U.S. stock futures were higher Wednesday morning, indicating stocks will open on an upbeat note after investors expectation that interest rates will remain low for some time increased following speeches from Federal Reserve officials. As the dollar further fell, investors turned to asset buying, pushing stocks higher.
Stocks looked for direction Tuesday, finishing the day mixed and not much changed, as Wall Street took a break from a 6-day rally. Today, U.S. bond markets are closed for Veteran's Day.
Continue reading Before the bell: Stocks ready to climb on hopes of continued low rates
Posted Nov 9th 2009 1:20PM by Zac Bissonnette (RSS feed)
Filed under: Federal Reserve
Don't count me among Henry Blodget's admirers, but he makes an interesting argument in a recent video posted on BusinessInsider.com (see below). Blodget argues that Federal Reserve Chairman Ben Bernanke has a "secret plan" to keep interest rates too low for too long on purpose. Why? To encourage inflation. According to Blodget, Bernanke has two good reasons for doing this:
- Faster economic growth, which leads to more jobs, fewer angry constituents, and a Congress that's happier with Ben Bernanke.
- Faster erosion of the real value of our debts. Consumers and the government are drowning under a massive debt load. One way to make paying off this debt easier is to make the dollars it is denominated in worth less. Bernanke will try to hasten this process as much as possible, taking it right to the point where our creditor China is mad as hell -- but not quite to the point where China actually stops lending to us.
Continue reading Blodget says Ben Bernanke has a 'secret plan'
Posted Nov 7th 2009 11:20AM by Tom Johansmeyer (RSS feed)
Filed under: Costco Wholesale (COST), Gap Inc (GPS), Federal Reserve, Recession
Consumer borrowing fell for the eighth straight month in September. This record-setting streak is due largely to tightening by lenders, unemployment and the conservative preference to pay down debt rather than spend. This widespread fit of fiscal responsibility, economists fret, could prevent a recovery from taking root, since consumer spending is responsible for 70% of the U.S. economy. This conventional thinking, of course, overlooks the fact that an eventual increase in spending that isn't fueled by consumer spending will yield a recovery that's more likely to last.
According to the Federal Reserve, borrowing fell at an annual rate of $14.8 billion in September -- it's biggest drop since July and much larger than the $10 billion predicted by economists. The behavior is exactly what you'd find in people worried about losing their jobs or focused on rebuilding safety funds and investment portfolios. Those who want to borrow are finding banks won't be complicit this time, as they clamp down on lending practices.
Continue reading Consumer spending falls victim to debt repayment
Posted Nov 6th 2009 5:00PM by Connie Madon (RSS feed)
Filed under: Management, Industry, Market matters, Money and Finance Today, Politics, Headline news, Federal Reserve, Financial Crisis
US Senator Bernie Sanders, independent from Vermont, is known for his straightforward and unbiased positions.
His new legislative proposal is to break up big banks that are deemed "too big to fail." To quote Mr. Sanders: "if an institution is too big to fail, it is too big to exist. We should break them up so they are no longer in a position to bring down our entire economy."
Continue reading Senator Sanders proposes legislation to break up large banks
Posted Nov 5th 2009 4:30PM by Connie Madon (RSS feed)
Filed under: India, China, Brazil, Russia, Market matters, Money and Finance Today, Federal Reserve
The US dollar is down 20% since 2002 on a trade weighted basis. Other world economies like China are dynamic, with growth rates of 8 and 9%. With that kind of clout, countries like China, India and Brazil, can choose where to place their reserves.
Slowly, developing countries are shifting their reserves away from the dollar into the euro and yen. Neil Mellor, strategist at Bank of New York Mellon Corp (NYSE: BK), which has some $20 trillion dollars in assets under custody said: "I don't think there will be an imminent move, but it is quite clear there's a plan to shift reserves to a more balanced portfolio."
Barclays Capital Research reported that central banks placed 63% of new cash in non US currencies between April and July.
Continue reading Central Banks lead a shift away from the dollar
Posted Nov 5th 2009 9:50AM by Kevin Kersten (RSS feed)
Filed under: India, Federal Reserve

Ben Bernanke and the Federal Reserve have kept interest rates low for some time. Interest rates lie somewhere below a quarter point and a zero, giving people very little reason to save. Why should you save money when inflation could work against you and the money will not grow?
Low interest rates also work to reduce the cost of borrowing. This could help businesses that want to expand, or the federal government that has trillions of dollars of debt that it needs to finance.
Continue reading Are low interest rates hurting the U.S. dollar?
Posted Nov 5th 2009 7:40AM by Melly Alazraki (RSS feed)
Filed under: Before the bell, International markets, Cisco Systems (CSCO), Toyota Motor Corp. (TM), Market matters, Economic data, Federal Reserve

U.S. stock futures drifted a little lower (later a little higher) Thursday morning following Wednesday's Federal Reserve's statement that it was keeping rates at record low levels. However, earnings from tech giant Cisco accompanied by an upbeat outlook could give a boost to tech. Also this morning, investors will watch as retail chain-stores report October sales.
[
Update: Futures now point to a higher open following retail sales data, earnings and lower claims numbers.]
On Wednesday, Wall Street ended mixed and relatively flat after the Federal Reserve decided to keep rates steady. While conceding the economy has picked up, policymakers said this was not enough to hike interest rates, saying an increase will instead depend on when the labor market and inflation pickup. Given that there have been no inflationary pressures and that unemployment is expected to rise, the dollar weakened yesterday and short-term Treasury yields fell. The Fed also cautioned consumer spending would remain strained. Of course, the market would have liked to see a stronger show of confidence.
Continue reading Before the bell: Futures higher after data, earnings
Posted Nov 4th 2009 7:30AM by Melly Alazraki (RSS feed)
Filed under: Before the bell, International markets, Time Warner (TWX), Berkshire Hathaway (BRK.A), Market matters, Johnson and Johnson (JNJ), Economic data, Oil, Federal Reserve, Burlington Northern Santa Fe (BNI)

U.S. stock futures climbed on Wednesday morning, ahead of the decision by the Federal Reserve on interest-rate and monetary policy. This afternoon, the Fed will give its outlook on the economy and the corresponding policy it's taking. It is widely believed the Fed will not raise rates. Meanwhile, more earnings and economic data are on tap.
Unlike this morning, traders appeared more cautious Tuesday, as the Fed began its two-day policy meeting. Stocks ended mixed and fairly unchanged following news that Warren Buffett's Berkshire Hathaway (NYSE: BRK.B) has decided to buy Burlington Northern Santa Fe (NYSE: BNI) in a deal worth $44 billion and as Johnson & Johnson (NYSE: JNJ) announced a 6-7% workforce reduction.
Continue reading Before the bell: Futures rise ahead of Fed decision
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