Are global markets happy with the Fed's move? We won't know until tomorrow
$600 billion by June. Add in the re-investment of interest and you get about $110 billion a month. The Federal Reserve’s announcement on quantitative easing came in at about the Wall Street consensus of $100 billion a month in Fed buying And as you’d expect from an...Even before the Fed acts, the long bond is signalling rising inflation worries
Something odd is happening in the bond market on the way to the Federal Reserve’s second program of quantitative easing: Interest rates at the long end of the Treasury market have started to rise. From one perspective this is counter-intuitive. The Fed is about to...China hadn't raised its benchmark interest rates since 2007–Why today?
China caught global financial markets flatfooted today, October 19, by raising its benchmark interest rates for the first time since 2007. The People’s Bank of China raised its one-year lending rate to 5.56% from 5.31% and its deposit rate by 0.25 percentage points to...Inflation barely present in September frees the Fed to move to buy billions in Treasuries
Friday’s inflation data put the last bit of icing on the quantitative-easing cake. Released on October 15, the CPI, the consumer price index, showed inflation slowing to just 0.1% in September after prices rose by 0.3% in August. The core CPI, which subtracts...China and the U.S. are increasingly at odds on currencies and the global economy as the stage shifts from the IMF to the G20
The annual meeting of the IMF (International Monetary Fund) ended with the U.S. accusing China of keeping the yuan artificially low and with China accusing the U.S. of flood merging markets with hot money by keeping its interest rates near 0%. I think Brazil got it...Japan's yen intervention has failed–which means Japan will intervene again to weaken its currency against the dollar
Now that worked out just swell, didn’t it? Remember way back on September 15 when Japan intervened in the currency markets to drive down the soaring yen. The yen had just stormed through the 83 yen to the dollar level that a number of large Japanese exporters had...Watch the dollar! While the medium and longer-term trend is still down, the U.S. currency is looking like it wants to bounce
When the IMF (International Monetary Fund) and the U.S. dollar go head to head, the dollar wins. On October 6, in the second of its “World Economic Outlook” reports for 2010 the IMF was bullish on commodities, especially on base metals such as copper and tin....Yes, it's a currency war, and No, no one is doing anything about it
Do you think he reads this site? “We’re in the midst of an international currency war,” warned Brazil’s finance minister Guido Mantega on September 27. Governments around the world are competing to drive down their currencies to boost their exports. How dangerous...China's currency moves a little closer to challenging the dollar
(Jim Jubak is on vacation until August 24. During that period I’ll post just once or twice a day on JubakPicks.com. I will resume a full schedule for JubakPicks after August 24.) The renminbi is coming. The renminbi is coming. At this pace it may take a decade...So much for any hopes for quick appreciation in China's currency
Day 2 isn’t nearly as positive as Day 1. A day after the Chinese government announced that it would end its policy of keeping its current strictly pegged to the U.S. dollar, the world is getting an object lesson in exactly how slow any appreciation in the Chinese...Companies are sitting on the highest percentage of cash since the 1960s
Want to know why the U.S. economic recovery isn’t producing more jobs? For part of the explanation, look at where companies are putting their cash. With record levels of cash on company balance sheets U.S. companies aren’t putting it into expanding production, buying...The debt world turned upside down: the U.S. cuts the size of its bond sales in May
The Euro Zone’s pain is the U.S. Treasury’s gain. The yield in for the 10-year U.S. Treasury note is down below 3.5% again thanks to bond buyer’s flight to safety in the euro debt crisis. The drop takes the yield back to where it was in December 2009. Ordinarily, the...Brazil raises interest rates as emerging economies step up their fight against inflation
Brazil’s central bank, Banco Central do Brazil, raised interest rates as expected yesterday, April 27. But the bank also did the unexpected. The increase in the benchmark Selic rate to 9.5% from 8.75% was more than most economists and analysts had expected. 30 of the...Cheap money is the root of all financial bubbles–and it's still at work now
If you’d like to see somebody—lots of somebodies, if I had my wish–go to jail for their role in creating the lob al financial crisis, then $8 million looks cheap. That’s the budget for the Financial Crisis Investigation Commission. If, just for starters, some of...The renminbi moves closer to climbing against the dollar
It looks like the fix is in. The governments in Beijing and Washington look like they’re figured out a formula that will lead, sooner rather than later, to an end to the renminbi/dollar peg and the appreciation of China’s currency versus the dollar. Sooner, I’d say,...Winners in banking's new world order
All we need is Will Smith and some zombies. Tattered for rent signs hang in the windows of the building that once housed Bear Stearns. All that’s left of Lehman Bros. is a digital crawl that endlessly cycles news. American International Group keeps itself alive by...Here's how the U.S. could lose its AAA credit rating
The good news, according to Moody’s, is that the U.S. government will spend about 7% of its total revenue in 2010 servicing the huge U.S. debt. That will rise to 11% of total revenue in 2013. That’s the good news? Well, sure. Moody’s, one of the three major debt...If not now, Wen? Still no signs that China is planning a quick appreciation of its currency agains the dollar
In trying to read the tea leaves of China’s economic and monetary politics, you have to pay as much attention to the Who as to the What of any official statement. So while it’s significant that anyone in the Chinese government is making noises about China abandoning...How to maximize what your cash pays even when nothing is paying much of anything now
Got cash? Maybe you’d love to invest it, but where? The stock market seems pricy after a 70% rally from the March 2009 lows. And it’s been so up and down lately that it doesn’t inspire much confidence. So maybe stocks are just too risky for you. Or you’re close to...Want to see the U.S. dollar's future? Watch the fall of the pound
Short-term politics trump long-term economics. That’s the message in the beating administered to the pound yesterday. The implications for the United States are rather depressing. The pound got killed yesterday (March 1), falling almost four cents against the U.S....China sells short-term Treasuries but buys long-term U.S. bonds
China sold U.S. Treasuries in December. At a record pace. (Well, records for this do only go back to 2000 but still…) The country sold a net $34.2 billion in Treasuries in the month. That brought China’s holdings of Treasuries to a mere $755.4 billion. That’s down...Euro rally a one day wonder? (Maybe three?)
Today’s rally in oil and other commodities that pushed the entire stock market higher was built on a weak dollar and a stronger Euro. Right now this looks like just a euro bounce. A one (or at most a few days) wonder. The Euro is still well below its 200-day moving...Honey, we bankrupted the kids!
Worried that the global financial crisis combined with the Great Recession in the United States has bankrupted not just ourselves but our kids and their kids? Good. You should be worried. Maybe then we’ll do something about the problem before it’s too late. First,...The dollar's up so everything else is down: What else isn't new?
Looking for an explanation for the rout in emerging market stocks and commodities? Blame it on the U.S. dollar. Oh, the original decline in the prices of those assets started in a different quarter with worries that government moves to cut bank lending and to tighten...Trouble in Japan and the U.K. add up to a stronger U.S. dollar
Expect the dollar to keep moving higher in the near term. Credit rating worries in Japan and disappointing economic numbers in the United Kingdom pretty much guarantee that the U.S. dollar will continue to gain on the yen and the pound. On January 25 Standard &...China's exports up, currency to follow by mid-2010
A month later than the optimists hoped for but a quarter ahead of what pessimists feared in December China’s exports recorded their first year-to-year increase in 14 months. The 17.7% growth in exports from December 2008 puts China on track to allowing its currency...No surprise, the dollar lost market share to the euro in the last decade–but not as much as you might think
The U.S. dollar earned about a C+ in the decade from 1999 to 2009, according to the International Monetary Fund (IMF). The dollar’s share of allocated global reserves had declined to 62% by the end of September 2009, according to the IMF. That was down from 71% at the...Japan's huge budget gamble will push up global interest rates
It’s a desperate gamble but Japan’s Democratic Party government, headed by Prime Minister Yukio Hatoyama, doesn’t have much choice. To break the hold of deflation on the Japanese economy, the country has to spend money—lots of money—it doesn’t have to stimulate an...Deflation's back in Japan–and why investors should care
Deflation has returned with a vengeance in Japan. And we’re not talking about some short-term dip in prices either. The Bank of Japan is forecasting that prices in Japan will fall by 1.5% this year, by 1% in 2010, and by 0.7% in 2011. So much for any recovery in the...Jim’s Daily Email Alerts:
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