Today at 11:10 AM ET, I’ll be appearing on CNBC’s the Call with Larry Kudlow discussing the outlook for China’s economy. Then I’ll be back at 11:40 to discuss how geopolitics will impact the US dollar in 2010.… …READ MORE
Monthly Archives: December 2009
No Top For Rates or Agency Debt
Yesterday, I tweeted about the Xmas Eve decision by the Obama administration on FNM and FRE. The cap to lending to these two mortgage giants was lifted and could cover unlimited losses over the next three years. The US Treasury receives preferred stock in both companies paying 10% dividends. Already, the US has paid out $111 billion: $60 billion to Fannie and $51 billion to Freddie. The previous cap was $400 billion. Treasury said that this was “necessary for preserving the continued strength and stability of the mortgage market.”
Why was this done at this time? The driver was a … …READ MORE
China's Inflation and Currency Problem
December 28th, 2009
Chicago, Illinois
Andrew B. Busch
Global Currency and Public Policy Strategist
(312) 845-2879
1-800-438-0434
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With Chinese Premier saying no to yuan appreciation and US holiday retail sales better than expected, the greenback is marginally lower against most major currencies in thin trading. The US dollar index is down .12 at 77.60. Australia, UK, Germany, and Canada (and others) are out for Boxing Day……I’ll do the OIS tomorrow when everyone gets back.
10:30 Dallas Fed Manufacturing Outlook
12:00 PM ChicagoFedMidwestManufacturing Index
1:00 PM Results of $44B, 2-Year Note Auction
4:30 PM Money … …READ MORE
Canada Sounds A US Warning Bell
Over the last two years, many government officials have critiqued the United States for their handling of the crisis. The problem with most of the comments is that they come from countries that are engaging in similar behaviors. Therefore, the validity of their analysis is similar to a family advice column by a golfer.
This is not the case with Canada. The Canadian banking system is held up by many as the shining example of how to avoid financial disaster. (FULL DISCLOSURE: I WORK FOR A CANADIAN BANK.) So when the Canadians offer advice or voice concerns, I think the … …READ MORE
Xmas and Health Care
If you have had the misfortune to follow this debate as it grinds through the Senate, several thoughts come to mind.
1. I’m glad a snowstorm hit the area.
2. I’m stunned that all the Senators can actually stand up to voice vote.
3. Politicians have now made a new inalienable right that the framers of the US constitution forgot: life, liberty, the pursuit of happiness, and government subsidized health care.
3. The extent of pandering to garner the last and critical 60th vote was a new low.
Hey rest of the 49 states, did you know that you will … …READ MORE
Posted in Front Page Tagged congress, federal government debt, fiscal deficit, health care Leave a comment
Chinese Real Estate Party Over?
Xinhua News reported today that the government will target excessive growth in property prices in some cities. This comes on the heels of the Chinese cabinet saying that it will impose a sales tax on homes sold within 5 years. China’s Ministry of Finance has tightened rules regarding the purchasing of land, raising the minimum down payment for buyers to 50% as the government continues to clamp down on the real estate market amid growing concerns about a bubble forming in some large cities according to Xinhua.
The Ministry of Finance statement also said that developers need to pay the … …READ MORE
Bernanke Vote Today
Benigans Part II
Today, the US Senate Banking committee will likely vote to recommend current Federal Reserve chairman for another four year term. This is not interesting. What is interesting is the increasing number of senators that are saying they will vote against him. Clearly, the American public needs a villain or several villains for what happened over the last 2 years. Goldman is one of them. The other appears to be Bernanke. Someone needs to take the blame for the 10% unemployment rate. Middle income voters feel that Bernanke & Co. bailed out Wall Street over Main Street. The … …READ MORE
It's All About Ben!
With growth returning and unemployment seemingly peaked, will the FOMC have to exit their massive stimulus. Here are 5 things to ponder for today:
1. A Bernanke Fed has never raised rates in an aggressive manner to combat either inflation or bubbles.
2. Wages are the major factor influencing prices in the United States and Bernanke believes we remain well below levels that will create pressure.
3. Gold and other commodities indicate inflation is a looming problem.
4. Fiscal policy is on a path to a crisis with total debt in the United States growing almost 20% in one year. … …READ MORE
Posted in Front Page Tagged Bernanke, FOMC, interest rates, Man of the Year, Time Magazine Leave a comment
Bad Bankers and Policy
Friday, the US House of Representatives passed their version of the financial regulatory reform package. By a vote of 223 to 202, the House followed much of what the White House wanted for the bill. The bill is broad in its scope from OTC derivative regulation to the creation of a new Consumer Financial Protection Agency (CFPA) to a new system for winding down failing financial institutions. The Senate is expected to move forward on their version next year.
Just weeks away from entering an election year, the Democratic leadership is pleased with delivering on a reform bill. At a … …READ MORE
Posted in Front Page Tagged Banks, competitive advantage, financial regulatory reform, obama Leave a comment
The Debt Hike Game
Due to the explosion in deficit spending, the federal debt ceiling needs to be raised to legally allow the US government to continue to borrow to fund itself. The current debt limit is at an astounding $12.1 trillion and borrowing has been pushed to this limit by a $1.4 trillion deficit in fiscal 2009. Regardless for who you blame for 2009′s spending, 2010 will be a problem for Congress and the current administration to correct. As an example of the fiscal crisis, 40 percent of this year’s budget will be funded by borrowing.
The debt ceiling hike is a game … …READ MORE
