The currencies and metals added to their gains yesterday as the day went along. The euro (EUR) traded briefly at 1.32, and the Aussie dollar (AUD) traded through $1.04. There were more Fed heads speaking, and Fed Head William Dudley agreed with Fed Head Janet Yellen, who had said the previous day that keeping interest rates near zero through 2014 was needed. Dudley said, “I haven’t seen any set of information that should suggest to me we should change that view.”
[Read more...]Bernanke Jawbones the Equity Markets Higher
March 27, 2012 By Leave a Comment
Good day. The dollar fell against many of the higher-yielding currencies yesterday following a speech by Fed Chairman Bernanke, which the markets interpreted as signaling Fed policies will remain accommodative for some time. Investors have been linking the more-positive U.S. data, including a steadily improving labor market, with concern that the Fed’s policymakers would have to retract their January statement that U.S. monetary policy would remain “exceptionally accommodative.”
[Read more...]Dollar Drops After US Inflation Slows Slightly
March 19, 2012 By Leave a Comment
Friday morning saw the dollar giving back more of the gains it had booked early last week and the greenback ended the week a bit weaker than it started. The CPI numbers were what sparked Friday’s selling, as the CPI came in a bit lower than forecasts. Consumer prices rose 0.4% in February, with just a 0.1% increase in the ‘core’ number (Ex. Food & Energy). The YOY gain was identical to the January reading at 2.9%, and the Core YOY figure was a bit lower at 2.2%. Apparently some of the currency traders felt these numbers may force the Fed to rethink their stimulus plans. Fed Chairman Ben Bernanke had indicated there would not be a need for another round of quantitative easing during the past few weeks, but the benign inflation data may indicate our economic recovery is in need of some additional fuel.
[Read more...]China’s Cinderella Story
January 17, 2012 By Leave a Comment
Everyone knows that when the clock strikes midnight for Cinderella, the carriage turns back into a pumpkin, the horse into mice and the jeweled gown into rags. The spell is broken and reality returns. I keep thinking of China in this context.
One of the big questions of the year is whether China blows up or not. Hard landing or soft? When will the clock strike midnight on the Chinese? Things are slowing down, and it feels like it’s getting late.
[Read more...]Avoiding the Danger Zones in the Year Ahead
December 30, 2011 By Leave a Comment
And here we are at the end of the week…and the end of the year.
And we’re no surer of what is going on than we were at the beginning of it.
The Dow rose 135 points yesterday. But gold kept going down. It is looking more and more like gold intends to make its big correction now… It’s been down for 6 days in a row.
[Read more...]Misunderstanding Capitalism
December 2, 2011 By Leave a Comment
As expected, the euphoria died overnight. On Wednesday, the Dow was up nearly 500 points. Thursday, it fell 23 points.
More and more people are coming to the same conclusion. The bull market is a fraud. And the system is corrupt. And they’re right. But not for the reasons they think.
Here is Number One on the “Capitalism as we know it doesn’t work” hit parade. From Forbes:
[Read more...]How China Will Defeat America
November 22, 2011 By Leave a Comment
Don’t expect spending on the pentagon to decrease. Not with our nation’s security at stake. And not with China posing an ever-greater threat.
An article by Yan Xuetong, translated from mandarin, tells “How China can defeat America.” The gist of Mr. Xuetong’s thought is that rising hegemons are a lot nicer than declining ones. Besides that, history is on the side of the rising power.
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China Widens Trading Band
Well… Friday quickly turned around regarding the currencies and metals rally, and sent them to the woodshed… Stocks also retreated, thus making it a triumvirate of risk assets getting sold… That makes it a Risk Off day… Apparently, the slower-than-expected (but still 8.1%) GDP in China really scared the bejeebers out of the stock jockeys, and once the selling began there it carried over to the currencies and metals.
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