The currency markets warmed up a bit yesterday, as investors gained confidence and moved funds back out of the ‘safe haven’ of the US dollar. The main driver of investor confidence was the ISM Manufacturing Index, which expanded in January at the fastest pace since August 2004. The index rose to 58.4 in January from December’s 54.9 level. Any reading above 50 signals expansion in the US manufacturing sector. The surprising strength of this index had investors shifting funds back into the higher yielding assets yesterday, and selling dollars. Chuck took a look at the ISM numbers yesterday, and sent me the following on his way out the door:
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Global Budget Deficits: A Timeless Love Story
The Greek story is a universal tale… It will soon be played by the UK…and then it will be the US.
Let us summarize: Innocent fellows are seduced by debt. They fall in love with deficits. Debt proves to be an evil temptress. Our heroes are ruined.
Isn’t the story more or less the same in Britain and America too?
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