BloggingStocks http://www.bloggingstocks.com BloggingStocks http://www.blogsmithmedia.com/http://www.bloggingstocks.com/media/feedlogo.gif BloggingStocks http://www.bloggingstocks.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[Ray of Light: China Quickly Returns to Robust GDP Growth]]>http://www.bloggingstocks.com/2010/01/21/ray-of-light-china-quickly-returns-to-robust-gdp-growth/http://www.bloggingstocks.com/2010/01/21/ray-of-light-china-quickly-returns-to-robust-gdp-growth/http://www.bloggingstocks.com/2010/01/21/ray-of-light-china-quickly-returns-to-robust-gdp-growth/#commentsFiled under: ,

A good news data point for investors: China's economy grew at a 10.7% rate in Q4 -- a pace that pushed 2009 GDP to an impressive 8.7% pace, China's Xinhua News Agency reported Thursday, citing National Bureau of Statistics data.

"The accelerating GDP growth in the fourth quarter was due to a low basis of the same period in 2008, when the quarterly GDP expanded 6.8% from a year earlier, also indicating that the country's economy is on a strong rebound," said Zhuang Jian, senior economist for the Asian Development Bank, Xinhua reported.

Continue reading Ray of Light: China Quickly Returns to Robust GDP Growth

Ray of Light: China Quickly Returns to Robust GDP Growth originally appeared on BloggingStocks on Thu, 21 Jan 2010 16:20:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>chinamonetary policyMonetaryPolicystimulusworld growthWorldGrowthThu, 21 Jan 2010 16:20:00 EST<![CDATA[The Fed decision: almost exactly as expected!]]>http://www.bloggingstocks.com/2009/11/04/the-fed-decision-almost-exactly-as-expected/http://www.bloggingstocks.com/2009/11/04/the-fed-decision-almost-exactly-as-expected/http://www.bloggingstocks.com/2009/11/04/the-fed-decision-almost-exactly-as-expected/#commentsFiled under: , , , , , ,

The Federal Reserve Open Market Committee (FOMC) issued its statement almost exactly as expected. The language on interest rates is remaining low for an extended period of time remained largely unchanged, and the decision was unanimous.

As I have mentioned earlier, the Fed continues to avoid any potential language which could disrupt the financial markets. Any potentially controversial ideas seem to be reserved for speeches by the Chairman and other government officials.

Continue reading The Fed decision: almost exactly as expected!

The Fed decision: almost exactly as expected! originally appeared on BloggingStocks on Wed, 04 Nov 2009 15:45:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bernankefeaturedfederal reserveFederalReservemonetary policyMonetaryPolicyWed, 04 Nov 2009 15:45:00 EST<![CDATA[Global economy will contract in 2009 for first time since World War II, World Bank says]]>http://www.bloggingstocks.com/2009/03/09/global-economy-will-contract-in-2009-for-first-time-since-world/http://www.bloggingstocks.com/2009/03/09/global-economy-will-contract-in-2009-for-first-time-since-world/http://www.bloggingstocks.com/2009/03/09/global-economy-will-contract-in-2009-for-first-time-since-world/#commentsFiled under: , , , ,

Investors received yet another indicator Monday that this is not your father's recession.

The global economy will likely contract in 2009 for the first time since World War II -- including a decline in trade - - the World Bank announced in its most recent report.

Continue reading Global economy will contract in 2009 for first time since World War II, World Bank says

Global economy will contract in 2009 for first time since World War II, World Bank says originally appeared on BloggingStocks on Mon, 09 Mar 2009 11:10:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>credit marketsemerging marketsfeaturedfiscal policyFiscalPolicygdpglobal economyglobalizationmonetary policyMonetaryPolicytradeWorld BankMon, 09 Mar 2009 11:10:00 EST<![CDATA[Dollar falls, then firms, as Fed commits $800 billion more to ease credit crunch ]]>http://www.bloggingstocks.com/2008/11/25/dollar-falls-then-firms-as-fed-commits-800-billion-more-to-ea/http://www.bloggingstocks.com/2008/11/25/dollar-falls-then-firms-as-fed-commits-800-billion-more-to-ea/http://www.bloggingstocks.com/2008/11/25/dollar-falls-then-firms-as-fed-commits-800-billion-more-to-ea/#commentsFiled under: , ,

The dollar fell, then firmed, against most of the world's other major currencies Tuesday at mid-day, on word of yet another U.S. government intervention to ease the financial crisis. (For full currency data, click here.)

Still, the more important theme, many economists and analysts agree, is how well the dollar has fared given the remarkable increase in debt by the United States and the supply of dollars globally.

The dollar weakened about one cent to $1.3040 versus the euro and about half a cent to $1.5160 versus the British pound on Tuesday at mid-day, after the U.S. Federal Reserve announced it would buy up to $600 billion in mortgage and mortgage servicer-related debt and up to $200 billion in consumer and small business-backed loans, to free up credit in these sectors. The dollar also fell about one cent to 95.53 versus Japan's yen, and about half a cent to $1.1881 versus the Swiss franc.

Under the new programs announced Tuesday, the U.S. Treasury will provide about $20 billion in credit protection to the U.S. Federal Reserve, using money from the $700 billion Troubled Asset Recovery Program (TARP).

In September, the Fed's balance sheet totaled $924 billion, when the first wave of the financial crisis began to freeze credit markets and decimate stock markets around the world. However, if all loan guarantees are accessed, and if all of the remaining $780 billion debt is added to the Fed's balance sheet, that balance sheet would increase to about $3 trillion.

Continue reading Dollar falls, then firms, as Fed commits $800 billion more to ease credit crunch

Dollar falls, then firms, as Fed commits $800 billion more to ease credit crunch originally appeared on BloggingStocks on Tue, 25 Nov 2008 14:10:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>auto loansconsumer loansdollareuroFedinthenewsloansmonetary policyMonetaryPolicystudent loansTARPterm auction facilityU.S. TreasuryyenTue, 25 Nov 2008 14:10:00 EST<![CDATA[Can the Fed fight deflation? How?]]>http://www.bloggingstocks.com/2008/11/20/can-the-fed-fight-deflation-how/http://www.bloggingstocks.com/2008/11/20/can-the-fed-fight-deflation-how/http://www.bloggingstocks.com/2008/11/20/can-the-fed-fight-deflation-how/#commentsFiled under: , , ,

Based on October wholesale and consumer price reports, July 2008 marked a shift from inflation into full-blown deflation. This has much to do with the declining price of oil, which in turn is related to the collapse of speculative buying of oil while shorting the dollar; the decline in demand resulting from a global downturn; and the failure of producers to cut supply fast enough.

However, as I posted, there's a vicious cycle underway which leads to:

  1. Excess inventory,
  2. Price cuts,
  3. Capacity and job reductions,
  4. Less spending power,
  5. Lower demand -- followed by a return to step 1.

And with jobless claims at 542,000 and the price of oil down below $50, it's pretty clear that this cycle is well underway. What can the Federal Reserve do to turn this vicious cycle into a virtuous one? It is likely to cut the Fed Funds rate to zero or very close to it -- 0.25% -- in January. But in a 2002 speech, Bernanke said that there are other ways the Fed could try to boost overall demand, which would reverse the deflationary cycle.

Continue reading Can the Fed fight deflation? How?

Can the Fed fight deflation? How? originally appeared on BloggingStocks on Thu, 20 Nov 2008 12:27:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>deflationfederal reserveFederalReservefiscal policyFiscalPolicyinthenewsmonetary policyMonetaryPolicyThu, 20 Nov 2008 12:27:00 EST<![CDATA[Short-term interest rates fall on cash injections, likely Fed rate cut]]>http://www.bloggingstocks.com/2008/10/29/short-term-interest-rates-fall-on-cash-injections-likely-fed-ra/http://www.bloggingstocks.com/2008/10/29/short-term-interest-rates-fall-on-cash-injections-likely-fed-ra/http://www.bloggingstocks.com/2008/10/29/short-term-interest-rates-fall-on-cash-injections-likely-fed-ra/#commentsFiled under: , , ,

The thaw in short-term interest rates continues.

The effort by major central banks to increase the supply of dollars globally to free-up credit continued to move rates in the right direction Wednesday -- down -- as private banks were encouraged by commercial paper purchases by the U.S. Federal Reserve and a likely interest rate cut later today.

The London rate for three-month loans in dollars declined for the 13th consecutive day, dropping 5 basis points to 3.42%. The three-month rate for the euro, the Euribor, also fell 2 basis points to 4.83%, and the three-month rate for Hong Kong dollars, the Hibor, dropped 30 basis points to 3.54%.

Short-term rates, including overnight rates, are key sources of cash for corporations and other large institutions, which use the cash to pay suppliers, make payroll, roll over debt etc. Hence, very high overnight and short-term rates will discourage corporations from conducting business, restricting commerce and slowing the economy, economists say.

Continue reading Short-term interest rates fall on cash injections, likely Fed rate cut

Short-term interest rates fall on cash injections, likely Fed rate cut originally appeared on BloggingStocks on Wed, 29 Oct 2008 09:30:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bond marketBondMarketcredit marketsCreditMarketsFedinterest ratesInterestRatesinthenewsLIBORmonetary policyMonetaryPolicyWed, 29 Oct 2008 09:30:00 EST<![CDATA[ECB's Trichet warns of inflation 'explosion']]>http://www.bloggingstocks.com/2008/07/02/ecb-s-trichet-warns-of-explosion-in-inflation/http://www.bloggingstocks.com/2008/07/02/ecb-s-trichet-warns-of-explosion-in-inflation/http://www.bloggingstocks.com/2008/07/02/ecb-s-trichet-warns-of-explosion-in-inflation/#commentsFiled under: , , , ,

In comments made June 23 to Germany's Die Zeit but published only today, European Central President Jean-Claude Trichet warned of an "explosion" in inflation if the bank does not act decisively to counter it, Reuters reported Wednesday.

"If we are not resolute, there is a risk that inflation will explode. If we act decisively, then we can master the situation," Trichet said in the German text of comments published by weekly Die Zeit on Wednesday.

Trichet's comments appear one day before the ECB's meeting on interest rates. Many economists expect the ECB to increase its key interest rate, the refinance rate, by 25 basis points to 4.25%. (The ECB decision will be announced Thursday at 7:45 a.m. EDT.)

At issue: How to check inflation

European inflation is running at a 3.7% annualized rate, and trending up. That fact, combined with Trichet's comments published Wednesday, "all but guarantee a rate hike Thursday by the ECB," in economist David H. Wang's interpretation.

Continue reading ECB's Trichet warns of inflation 'explosion'

ECB's Trichet warns of inflation 'explosion' originally appeared on BloggingStocks on Wed, 02 Jul 2008 13:31:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>BernankedollarECBeuroeuro zoneEuropean Central BankFedinflationinthenewsmonetary policyMonetaryPolicyoil pricestradeTrichetU.S. Federal ReserveWed, 02 Jul 2008 13:31:00 EST<![CDATA[ECB's Trichet seen backing inflation hawks, despite Europe's slowing economy]]>http://www.bloggingstocks.com/2008/06/30/ecbs-trichet-seen-backing-inflation-hawks-despite-europes-slo/http://www.bloggingstocks.com/2008/06/30/ecbs-trichet-seen-backing-inflation-hawks-despite-europes-slo/http://www.bloggingstocks.com/2008/06/30/ecbs-trichet-seen-backing-inflation-hawks-despite-europes-slo/#commentsFiled under: , , ,

So much for consensus building.

That was how one currency trader characterized the present mood in the currency markets regarding the European Central Bank's upcoming Thursday July 3 meeting to discuss interest rates and monetary policy.

"Initially there was talk that [ECB President Jean-Claude] Trichet would make a concession to the doves, and hold off raising rates for this meeting, but now the belief pretty much is that they'll raise rates a quarter point to 4.25%," currency trader Andrew Resnick said Monday. Resnick added that he is short with the dollar in the euro-dollar and British pound-dollar currency pairings.

European inflation is running at a 3.7% annualized rate, and trending up, Resnick said, and "a 4% refinance rate just doesn't look like it can cut the mustard and contain inflation the way Trichet wants inflation contained." If the ECB increases the refinance rate -- its key, short-term interest rate -- it would be the bank's first increase in a year.

Continue reading ECB's Trichet seen backing inflation hawks, despite Europe's slowing economy

ECB's Trichet seen backing inflation hawks, despite Europe's slowing economy originally appeared on BloggingStocks on Mon, 30 Jun 2008 11:22:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>BernankedollareuroEuropean Central BankFedinterest ratesinthenewsmonetary policyMonetaryPolicyTrichetU.S. Federal ReserveMon, 30 Jun 2008 11:22:00 EST<![CDATA[Fed expands lending program to $200B, increases ECB, Swiss swaps]]>http://www.bloggingstocks.com/2008/03/11/fed-expands-lending-program-to-200b-increases-ecb-swiss-swaps/http://www.bloggingstocks.com/2008/03/11/fed-expands-lending-program-to-200b-increases-ecb-swiss-swaps/http://www.bloggingstocks.com/2008/03/11/fed-expands-lending-program-to-200b-increases-ecb-swiss-swaps/#commentsFiled under: ,

The U.S. Federal Reserve announced Tuesday an expansion of its securities lending program.

The actions announced today supplement the measures announced by the Federal Reserve on Friday to boost the size of the Term Auction Facility to $100 billion and to undertake a series of term repurchase transactions that will cumulate to $100 billion.

The Fed added that "since the coordinated actions taken in December 2007, the G-10 central banks have continued to work together closely and to consult regularly on liquidity pressures in funding markets. Pressures in some of these markets have recently increased again." The Fed added that central banks "will all continue to work together and will take appropriate steps to address those liquidity pressures."

"To that end," the Fed said, "today the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are also announcing specific measures."

Fed Analysis: Without question, the Fed is attempting to head-off any building, short-term liquidity crunch banks may face in the weeks and months ahead. This latest increase in the Term Auction Facility, the coordination with the other major central banks indicates monetary, and lengthening of the primary dealers' term to 28 days from overnight will help the Fed and the other central banks achieve that liquidity goal.

Fed expands lending program to $200B, increases ECB, Swiss swaps originally appeared on BloggingStocks on Tue, 11 Mar 2008 09:19:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>BOEbond marketBondMarketcredit marketsCreditMarketsECBFedinthenewsmonetary policyMonetaryPolicySwiss National BankSwissNationalBankTue, 11 Mar 2008 09:19:00 EST<![CDATA[Despite inflation, Fed says 'relatively low' interest rates necessary 'for a time']]>http://www.bloggingstocks.com/2008/02/20/despite-inflation-fed-says-relatively-low-interest-rates-nece/http://www.bloggingstocks.com/2008/02/20/despite-inflation-fed-says-relatively-low-interest-rates-nece/http://www.bloggingstocks.com/2008/02/20/despite-inflation-fed-says-relatively-low-interest-rates-nece/#commentsFiled under: , ,

The U.S. Federal Reserve said that despite inflation concerns, "relatively low" interest rates may be needed "for some time," the central bank announced Wednesday in the minutes from its most-recent meeting. At the same time, however, the Fed raised its inflation projections for 2008.

"Several participants noted that the risks of a downturn in the economy were significant,'' the Fed said in minutes of the January 9 and 21 conference calls and the January 29-30 policy meeting last month. "Many participants were concerned that the drop in equity prices, coupled with the ongoing decline in house prices, implied reductions in household wealth that would likely damp consumer spending.''

Last week, in Congressional testimony U.S. Federal Reserve Chairman Ben Bernanke indicated that the Fed will lower rates further if financial conditions and the availability of credit deteriorate.

Also in the minutes, the Fed termed the inflation statistics since the end of the year, "disappointing." The Fed now expects 2008 core inflation of 2.0-2.2%, up from the previous 1.7-1.9% estimate.

Further, the Fed lowered its 2008 U.S. GDP outlook to 1.3-2.0% from the earlier 1.8-2.5%.

Continue reading Despite inflation, Fed says 'relatively low' interest rates necessary 'for a time'

Despite inflation, Fed says 'relatively low' interest rates necessary 'for a time' originally appeared on BloggingStocks on Wed, 20 Feb 2008 18:30:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>Bernankebond marketCPIcredit marketsenergyFedfoodforeclosuresGDPhousinginflationinterest ratesinthenewsmonetary policyMonetaryPolicyoilOPECterm auction facilityTermAuctionFacilityU.S. economyU.S. Federal ReserveWed, 20 Feb 2008 18:30:00 EST<![CDATA[In Europe, selling but no panic as U.S. Fed intervenes]]>http://www.bloggingstocks.com/2008/01/22/in-europe-selling-but-no-panic-as-u-s-fed-intervenes/http://www.bloggingstocks.com/2008/01/22/in-europe-selling-but-no-panic-as-u-s-fed-intervenes/http://www.bloggingstocks.com/2008/01/22/in-europe-selling-but-no-panic-as-u-s-fed-intervenes/#commentsFiled under: , ,

The selling in Europe continued before the markets staged a mild rebound -- which analysts attributed to short-covering and/or the U.S. Federal Reserve's action Tuesday morning to slash both the Federal Funds rate by 75 basis points to 3.50% and the Discount Rate by 75 basis points to 4.00%.

"The Fed's intervention...true, won't necessarily stop the selling that people are doing for fundamental reasons, but it will help calm the markets and reduce people's urge to sell because they fear the markets will freeze up....sell for fear reasons," London-based economist Mark Chandler told BloggingStocks on Tuesday.

There was also talk that the Fed's action will be coordinated with or followed by ensuing actions by the European Central Bank and the Bank of England to ensure the proper function of the markets, Chandler said.

At mid-day Tuesday, Europe's major bourses were down an average of 1% across the board. London's FTSE was down 24.90 points to 5,553.30, France's CAC 40 fell 56.86 points to 4,687.59, and the German DAX fell 147.32 to 6,642.87.

Continue reading In Europe, selling but no panic as U.S. Fed intervenes

In Europe, selling but no panic as U.S. Fed intervenes originally appeared on BloggingStocks on Tue, 22 Jan 2008 09:35:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>Bank of Englandbond marketBondMarketCAC 40creidit marketsCreiditMarketsDaxECBEuropean Central BankFedFranceFTSEGermanyinthenewsmonetary policyMonetaryPolicysubprimeU.S. Federal ReserveUnited KingdomTue, 22 Jan 2008 09:35:00 EST<![CDATA[U.S. Federal Reserve slashes Fed Funds rate 75 bp to 3.5%]]>http://www.bloggingstocks.com/2008/01/22/u-s-federal-reserve-slashes-fed-funds-rate-75-bp-to-3-5/http://www.bloggingstocks.com/2008/01/22/u-s-federal-reserve-slashes-fed-funds-rate-75-bp-to-3-5/http://www.bloggingstocks.com/2008/01/22/u-s-federal-reserve-slashes-fed-funds-rate-75-bp-to-3-5/#commentsFiled under: , , ,

In response to the global equities sell-off and the likely pressure on U.S. stock markets when they open later today, the U.S. Federal Reserve slashed the Fed Funds rate by 75 basis points to 3.5% Tuesday morning.

The Board of Governors also approved a 75-basis-point decrease in the discount rate to 4%. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Chicago and Minneapolis.

The Fed said:

The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households. Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets.

While the release said that "Appreciable downside risks to growth remain," it also mentioned that the committee expects "inflation to moderate in coming quarters." No doubt, the Fed has made its choice for now, preferring to stimulate the economy despite risking higher inflation. With lower oil prices -- caused by fears of lower demand as the economy slows down -- the Fed may have less to worry about inflation.

Has this move been enough? So far, futures indicate it may have been -- at least for today -- as their losses aren't as steep as before the announcement. Even with this Fed cushion, I'd expect the session to be bumpy.

U.S. Federal Reserve slashes Fed Funds rate 75 bp to 3.5% originally appeared on BloggingStocks on Tue, 22 Jan 2008 08:45:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>federal reserveFederalReserveInterestRatesinthenewsMonetaryPolicyU.S. Federal ReserveTue, 22 Jan 2008 08:45:00 EST<![CDATA[Bernanke expected to announce support for short-term economic stimulus package]]>http://www.bloggingstocks.com/2008/01/17/bernanke-expected-to-announce-support-for-short-term-economic-st/http://www.bloggingstocks.com/2008/01/17/bernanke-expected-to-announce-support-for-short-term-economic-st/http://www.bloggingstocks.com/2008/01/17/bernanke-expected-to-announce-support-for-short-term-economic-st/#commentsFiled under: , ,

When Ben Bernanke testifies before the House Budget Committee today, he's expected to announce his support for a short-term economic stimulus package, as long as it's based on measures that are quick and temporary, according to the New York Times this morning. He's told lawmakers he won't comment on proposals to link a stimulus package to the permanent extension of President Bush's tax cuts.

Finally some political sanity. I wish Alan Greenspan had taken that stance as President Bush continued to cut taxes during a war. If Greenspan had we wouldn't have added so much to U.S. debt and this country would be in much better shape fiscally to get us through the current credit storm.

Bernanke's support for the short-term fix is critical to getting many lawmakers to accept a stimulus package even if it means adding to the U.S. deficit. Without it, Congress probably could not pass a veto-proof economic stimulus package. President Bush would likely veto anything that doesn't include a permanent extension of his tax cuts to try to bully the Congress into continuing his economic folly - paying for a war on future debt. Our children certainly will hate us for a long time if we continue to ignore the burden we're putting on them.

Continue reading Bernanke expected to announce support for short-term economic stimulus package

Bernanke expected to announce support for short-term economic stimulus package originally appeared on BloggingStocks on Thu, 17 Jan 2008 07:30:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>ben bernankeBenBernankefederal reserveFederalReservefiscal policyFiscalPolicyinthenewsmonetary policyMonetaryPolicytax cutsTaxCutsThu, 17 Jan 2008 07:30:00 EST<![CDATA[Dollar falls to two-year low vs. yen on U.S. economic woes]]>http://www.bloggingstocks.com/2008/01/15/dollar-falls-to-2-year-low-vs-yen-on-u-s-economic-woes/http://www.bloggingstocks.com/2008/01/15/dollar-falls-to-2-year-low-vs-yen-on-u-s-economic-woes/http://www.bloggingstocks.com/2008/01/15/dollar-falls-to-2-year-low-vs-yen-on-u-s-economic-woes/#commentsFiled under: , , , ,

Dollar vs. pound The dollar plunged to a two-year low versus Japan's yen Tuesday, and retreated against other major currencies, on fears the U.S. economy has fallen into a recession, Bloomberg News reported.

The dollar fell 1.26 yen to 106.90 versus the yen. Meanwhile, the British pound rose about 1.5 cents to $1.9704 in mid-day Tuesday trading. The dollar was virtually unchanged versus the euro at $1.4862.

Economists and analysts say a recession in the United States would invariably drive the dollar lower, due to foreign investors' reduced demand for dollar-denominated U.S assets, many of which would underperform during a recession. The dollar also would be hurt by lower interest rates, a near-certainty in the months ahead, with the U.S. Federal Reserve widely expected to again cut benchmark, short-term interest rates to jump start the U.S. economy.

Continue reading Dollar falls to two-year low vs. yen on U.S. economic woes

Dollar falls to two-year low vs. yen on U.S. economic woes originally appeared on BloggingStocks on Tue, 15 Jan 2008 15:31:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>Bank of JapanBOJBritish poundbudget deficitcurrenciesdollarECBeuroeuro-zoneEuropean UnionEuropeanCentralBankexchange rateexportsfeaturedForeignExchangeforeximportsinflationmonetary policyMonetaryPolicyrecessiontrade deficitU.S. Federal ReserveyenTue, 15 Jan 2008 15:31:00 EST<![CDATA[Goldman recession forecast can't be ignored]]>http://www.bloggingstocks.com/2008/01/09/goldman-recession-forecast-cant-be-ignored/http://www.bloggingstocks.com/2008/01/09/goldman-recession-forecast-cant-be-ignored/http://www.bloggingstocks.com/2008/01/09/goldman-recession-forecast-cant-be-ignored/#commentsFiled under: , , , , ,

On Wall Street, there are forecasts...and then there are forecasts that investors/readers ignore only at their peril.

Put investment banking giant Goldman Sachs decidedly in the later category.

On Wednesday, Goldman Sachs (NYSE: GS) said the U.S economy is probably slipping into a recession, and also predicted that the U.S. Federal Reserve will cut its benchmark interest rate, the Fed funds rate, substantially, to 2.5% from 4.25% by third quarter, Bloomberg News reported.

Goldman, which projects an anemic 0.8% growth rate for the U.S. economy for all of 2008, also said it expects the Fed to lower its key interest rate to 3% by the middle of 2008, Bloomberg News reported.

To counteract the effects of the housing's sector's correction and other drags on the U.S. economy, including high energy prices, the Fed has cut benchmark interest rates three times since September.. The Fed Funds rate, the rate banks charge each other, now stands at 4.25%, and the discount rate, the rate the Fed charges banks for short-term loans, is at 4.50%. The Fed also set up a special term auction facility to help banks maintain short-term liquidity.

Continue reading Goldman recession forecast can't be ignored

Goldman recession forecast can't be ignored originally appeared on BloggingStocks on Wed, 09 Jan 2008 13:35:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>DefensiveStocksfeaturedGDPGoldman SachsGShousinginterest ratesmonetary policyMonetaryPolicyoilrecessionU.S. economyU.S. Federal ReserveWed, 09 Jan 2008 13:35:00 EST<![CDATA[Fed's Plosser: Slow growth a concern, but inflation complicates remedy]]>http://www.bloggingstocks.com/2008/01/08/feds-plosser-slow-growth-a-concern-but-inflation-complicates/http://www.bloggingstocks.com/2008/01/08/feds-plosser-slow-growth-a-concern-but-inflation-complicates/http://www.bloggingstocks.com/2008/01/08/feds-plosser-slow-growth-a-concern-but-inflation-complicates/#commentsFiled under: ,

Federal Reserve Bank of Philadelphia President Charles Plosser indicated that further interest rate reductions may be needed to stimulate the U.S. economy, should economic growth become "substantially weaker" than already projected, Bloomberg News reported Tuesday.

"A substantially weaker outlook than expected, particularly if that weakness is projected to be more prolonged than anticipated, may require further adjustments to policy,'' Plosser said in a speech in Gladwyne, Pennsylvania, adding that he already expects several ``sluggish'' quarters of growth, Bloomberg News reported.

However, Plosser also told Reuters that he's "concerned that developments on the inflation front will make the Fed's policy decisions more difficult in 2008."

The Fed's preferred measure of consumer prices has risen 2.2% on a November 2006-November 2007 basis, or at a rate above the Fed's comfort zone, leading many economists to argue that the Fed may not be as stimulative as it typically would be at this stage of the economic cycle. The Fed may also continue to use non-interest rate policy options to encourage economic activity, these economists say.

Continue reading Fed's Plosser: Slow growth a concern, but inflation complicates remedy

Fed's Plosser: Slow growth a concern, but inflation complicates remedy originally appeared on BloggingStocks on Tue, 08 Jan 2008 11:40:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>Bernankebond marketCPIcredit crunchcredit marketsFedGDPhousinginflationinthenewsmonetary policyMonetaryPolicymortgage ratesPlosserrecessionterm auction facilityU.S. economyU.S. Federal ReserveTue, 08 Jan 2008 11:40:00 EST<![CDATA[Has the Federal Reserve lost its independence?]]>http://www.bloggingstocks.com/2007/10/29/has-the-federal-reserve-lost-its-independence/http://www.bloggingstocks.com/2007/10/29/has-the-federal-reserve-lost-its-independence/http://www.bloggingstocks.com/2007/10/29/has-the-federal-reserve-lost-its-independence/#commentsFiled under: , ,

It's beginning to look like the Federal Reserve has lost its independence. However, rather than taking dictation from the White House, it appears to be under Wall Street's control.

Bloomberg News reports that the Fed is likely to cut interest rates when it meets this week. Traders in federal funds futures initially gave a 75% chance of a rate cut on October 31, but scaled back those odds to 50% after the October 5 revision of August payroll numbers to show a gain instead of a decline.

The reason the Fed stated for its September 18 50-basis-point cut made little sense to me -- some words about market turbulence. The market turbulence is real enough -- related to the subprime mortgage mess -- about which I posted here. But the Fed's job is to keep inflation in check -- and with oil prices hitting a record $93 a barrel and labor rates rising at a 4.9% annual rate -- it is surely failing at that job. (Save me the blather about core inflation -- and excluding energy and food prices.)

However, Bernanke is responding dutifully to his Wall Street masters -- using the interest rate cuts to ladle a heaping dollop of corporate welfare onto the gilt-edged plates of billionaire bankers and hedge fund grandees.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Has the Federal Reserve lost its independence? originally appeared on BloggingStocks on Mon, 29 Oct 2007 15:23:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>Ben BernankeBenBernankeFedFederal Funds RateFederal ReserveFederalFundsRateFederalReserveinterest ratesInterestRatesmonetary policyMonetaryPolicyMon, 29 Oct 2007 15:23:00 EST<![CDATA[Chinese threat to dump dollars - an expert's view]]>http://www.bloggingstocks.com/2007/08/09/chinese-threat-to-dump-dollars-an-experts-view/http://www.bloggingstocks.com/2007/08/09/chinese-threat-to-dump-dollars-an-experts-view/http://www.bloggingstocks.com/2007/08/09/chinese-threat-to-dump-dollars-an-experts-view/#commentsFiled under: , ,

I wrote yesterday about the recent Chinese veiled threat to dump its dollar holdings if the U.S. raises tariffs in hopes of coercing them to let the Yuan rise against the dollar. Today I had the opportunity to pick the brain of an expert on the topic, Brad Setser, Chief Economist at RGE Monitor and former acting director of the Office of International Monetary and Financial Policy at the U.S. Treasury.

My first question to him was, is this a credible threat? Setser didn't believe so, because it would represent a huge shift in China policy. The Chinese government, he explained, has shown a consistent bias toward supporting the country's exports, even at the cost of holding onto dollars as their value drops against other world currency. In fact, China continues to bolster its dollar holdings, adding $350-400 billion this year alone.

Setser went on to explain that, in his opinion, the Yuan was currently undervalued against the dollar by approximately 30%. If such an imbalance were abruptly corrected it would dramatically disrupt their export market.

He went on to say that China is in effect swallowing huge losses by holding dollars in order to support their exports, but the current regime has not indicated any likelihood to change that position.

However, he cautions, tensions between the two countries are growing, as the Chinese government takes umbrage at the growing movement in the U.S. to address the trade imbalance with legislation.

My take from this discussion: a change in the status quo is not in the offing, but the trade discussions in Congress are being watched carefully by the Chinese government. In the political season we are entering, pro-tariff campaign rhetoric could bring about more threats of reprisal.

Chinese threat to dump dollars - an expert's view originally appeared on BloggingStocks on Thu, 09 Aug 2007 17:20:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>brad setserBradSetsercentral bank chinaCentralBankChinachinachina exportsChinaExportsmonetary policyMonetaryPolicyrge monitorRgeMonitortariffstrade imbalancetrade negotiationsTradeImbalanceTradeNegotiationsyuanyuan imbalanceYuanImbalanceThu, 09 Aug 2007 17:20:00 EST<![CDATA[Are the Chinese playing economic brinksmanship?]]>http://www.bloggingstocks.com/2007/08/08/are-the-chinese-playing-economic-brinksmenship/http://www.bloggingstocks.com/2007/08/08/are-the-chinese-playing-economic-brinksmenship/http://www.bloggingstocks.com/2007/08/08/are-the-chinese-playing-economic-brinksmenship/#commentsFiled under: , , ,

Is our thirst for foreign capital about to bite us? According to a report in the U.K.'s Telegraph, officials of the Chinese government warn that they are prepared to dump their U.S. reserves onto the market should the U.S. government impose trade restrictions in an effort to persuade China to correct the Yuan/dollar imbalance.

China currently holds an estimated $900 billion in American bonds, and a total of $1.3 trillion worldwide. The warning is apparently a response to a bill backed by the Senate's Finance Committee that would impose tariffs to penalize China for currency manipulation.

This 'nuclear option', in the Telegraph's words, could be devastating to the already-weak dollar. However, as China's sugar daddy, such a blow to the U.S. economy would have vast repercussions on the Chinese economy as well. Any sane regime wouldn't take such a suicidal course of action.

So the question here, is one of sanity. Over the past decade, the Chinese leadership has shown many signs of economic savvy. One can only hope that the cooler heads prevail, and that this is simply brinksmanship aimed to carve out a better position in trade and monetary negotiations.

Are the Chinese playing economic brinksmanship? originally appeared on BloggingStocks on Wed, 08 Aug 2007 15:45:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>china/U.S. tradeChina/u.s.Tradedollarembargoforeign exchangeForeignExchangemonetary policyMonetaryPolicytradetrade balanceTradeBalancetrariffsyuanWed, 08 Aug 2007 15:45:00 EST<![CDATA[Bernanke begins to act like Greenspan]]>http://www.bloggingstocks.com/2006/11/30/bernanke-begins-to-act-like-greenspan/http://www.bloggingstocks.com/2006/11/30/bernanke-begins-to-act-like-greenspan/http://www.bloggingstocks.com/2006/11/30/bernanke-begins-to-act-like-greenspan/#commentsFiled under:

Analysis provided by Eric Buscemi of Theflyonthewall.com:

When Fed Chairman Bernanke took the helm of the Federal Reserve, it was refreshing to hear him say that the Fed would attempt to act more proactively. However, after hanging out with fellow board members, Bernanke is beginning to change his tune and sounds more and more like Alan Greenspan.

On Tuesday, Bernanke said policymakers want to see inflation continue to recede, suggesting the Fed probably won't be cutting interest rates any time soon. This means any proactive policy making decisions that he suggested when he took charge of the Fed will not occur.

Today, with massive amounts of top-down and bottom-up data to base decisions on, basing your decisions on inflation which is a lagging economic datapoint is just plain silly.

There is little evidence to suggest inflation is out of control and will not be decelerating during the next twelve months. Housing prices, oil, automobiles and everything technology-related will be cheaper in twelve months. The Fed Funds futures and the 10-year bond are all ready saying to start lowering rates.

Mr Bernanke, let's not act like Mr. Greenspan and act more proactively.

Bernanke begins to act like Greenspan originally appeared on BloggingStocks on Thu, 30 Nov 2006 09:00:00 EST. Please see our terms for use of feeds.

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