These are the facts and are not disputed. Despite $787 billion dollars in stimulus spending, job growth in the United States remains negative. The price of this spending is an explosion in deficit spending. 2009 had a $1.4 trillion deficit that was 40% funded by debt. The overall outstanding debt of the United States expanded from $10 trillion to $11.7 trillion in less than two years. The 2010 omnibus spending bill for 2010 has given major agencies a 10% increase in spending per agency and will increase the debt. Ratings agencies are questioning the ability of the United States to … …READ MORE
Monthly Archives: January 2010
No Jobs=More Spending, More Deficits
President Obama announced Friday that he would be pushing for more spending on job-creation programs. Many in the media are circling that fact that had the participation rate in the US stayed the same as last month, the unemployment rate would’ve jumped to 10.4%.
Obama has urged Congress to pass a jobs package that includes new infrastructure spending, aid to small businesses, funding for state and local governments struggling to keep workers and incentives for green investments according to the Hill. “On Friday, he also called on them to include $5 billion to expand a tax credit for manufacturers who … …READ MORE
What I Want To Hear From Obama Today on Jobs
As I warned yesterday, market expectations were for a positive number. So today’s -85 print, clearly disappointed and went against the employment data positive mojo since last month. The US dollar dropped, bond yields dropped, and the stock market dropped. If we would’ve had a strong number, key resistance levels for further US dollar strength would’ve been tested. Alas, not today…..yet.
On employment, I would agree with those that say the government needs to do more to help the jobs situation. But I disagree that the government creates the jobs.
Here’s what I’d like to hear from President Obama at … …READ MORE
Why Politics Matters For the US Dollar
As a reformed currency trader, I often can asked why I spend my time following what happens in politics. Does the resignation of Sen. Dodd really matter? Why should we care if Congress fights over health care or regulatory reform? What difference does it make if there’s an estate tax or not? These are all questions that seem to have very little on the surface to do with currencies and the value of the dollar.
The best answer to all of this is that it all matters. Since the 1930s and the seismic shift of US governmental intervention into the … …READ MORE
The Krugman and I
On Sunday, Paul Krugman wrote an op-ed for the NYT on his China fears. One of the major themes that Krugman (and I) are concerned about is the imbalanced adjustment process for the US weak economy via currencies. In a free floating regime, the country that is experiencing weak or negative growth sees its currency weaken against others to help stabilize the economy via increased exports. However, this is not the case when China pegs its currency to the US dollar. As Krugman explains succinctly, “At this exchange rate, Chinese manufacturing has a large cost advantage over its rivals, leading … …READ MORE
Solid NYT 2010 article on investing
http://www.nytimes.com/2010/01/02/your-money/stocks-and-bonds/02money.html… …READ MORE
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Welcome Back Mr President!
Welcome Back Mr President!
From underwear screening to health care to a nuclear ultimatum from Iran, President Barack Obama has 2010 start with his agenda driven by events and not choice. This is the nature of the beast and Obama’s management skills will be tested this month. Let’s do a quick list of what’s happening and the major questions to resolve.
1. The Xmas Eve terrorist attempt and the fall out from the lack of CIA communication. Should a head roll and will this help?
2. Yemen as an almost failed state that is housing terrorists. What to do and … …READ MORE
