Having spent the weekend watching the US political talks shows, there is one thing with certainty I can relay: the 9% Congressional approval rating will go lower. From these appearances by members of the Joint Select Committee, it was clearly indicated that they will not be moving forward on a deficit reduction plan and will likely announce this at the end of today. The positions were delineated along Democrat’s inability to cut entitlements to reduce spending and Republicans inability to raise taxes to increase revenues to reduce the deficit.
Any serious study of the US debt and deficit situation has … …READ MORE
Tag Archives: President Obama
Super Committee Kryptonite
Bin Laden: what’s next is what counts.
Last night, President Obama went on air to announce the killing of the United States enemy number one, Osama Bin Laden. Many of us in the financial markets knew, spoke to, or had contact with those that died in real time. For the US, it was the end of an era of the “Peace Dividend” and the beginning of an era of military campaigns. Unlike the killing of Hitler, Bin Laden’s death will not signal the end of the war on terrorism nor will it end the military efforts in Afghanistan and Iraq.
The death of the world’s most notorious … …READ MORE
Top FX Themes and Trades
1. Euro Strength. From a low of 1.2875 on January 10th, the Euro currency has rallied over 5.4% and is ending the week at new highs. Moreover, it’s doing it against all currencies not just the US dollar. EurJpy, EurGbp and EurChf have all made new highs since January 10th. The main reason for the rally is a reduction in uncertainty over the European debt crisis (EDC). Credit default swaps and 2 year debt spreads to German debt have shown significant easing. The EDC appears to be running on a cycle that has a shortened duration for each subsequent occurrence. … …READ MORE
Obama Making More Market Friendly Moves
Today, President Obama returns to Washington, D.C. from Hawaii and a well earned rest after a flurry of legislation was passed in the last two months of the year. His approval ratings have increased to 50% as the Bush tax cuts were extended, a new 1 year tax cut was passed, DADT was repealed, START nuclear arms treaty was ratified and a health care bill for 9/11 responders was funded.
For those keeping score, this shift to the center by President Obama was one of my key factors for stronger equity markets and Risk-On trading. While Republicans had been skeptical … …READ MORE
Posted in Front Page Also tagged Bush tax cuts, Peter Rouse, Richard M. Daley, William Daley Leave a comment
5 things u need 2 know 2dy
1. China raised interest rates 25 basis points. The People’s Bank of China increased their one year lending rate and deposit rates 25 basis points on Saturday. The one year benchmark lending rate rose to 5.81% and the deposit rate rose to 2.75%. Chinese officials are attempting to reduce the amount of lending and credit expansion to drop the rate of inflation. In November, the inflation rate soared to 5.1% and was the highest rate in 28 months. It was driven mainly by food inflation and poor families spend up to half their incomes on food. The PBOC is shifting … …READ MORE
Posted in Front Page Also tagged China, currency intervention, Japan, People's Bank of China, Tim Geithner 1 Comment
Positive US Cycle Accelerating
By now, you have seen that late last night the US House passed President Obama’s tax and spending bill. Despite the hyperbole from the left, lame duck Democrats joined Republicans to ensure the US economy avoid a disastrous hike in tax rates. Most economists are calling for the measure to add 0.5-1.0% to GDP and taking the US economy up to 3.0-4.0% growth for 2011.
In turn, this has triggered a fascinating development in the financial markets. US interest rates have soared with the yield on the US Treasury 10 year note rising over 100 basis points to 3.55%. While … …READ MORE
Posted in Front Page Also tagged CNBC, congress, Fed's Senior Loan Officer Survey, interest rates, NFIB Leave a comment
The Conflict of Economic Compromise
Yesterday, President Obama cited the extension of the long term jobless benefits as one of the major reasons for why he was willing to compromise on tax cuts for high income earners. With the unemployment rate increasing to 9.8%, almost every economist and strategist on CNBC believed that this extension was the humane thing to do to help them.
What’s interesting is the dilemma it generates from a job creation standpoint. The federal government sends out the benefit checks, but businesses help pay for it. In general, US businesses have to pay for laid off workers (not fired) as long … …READ MORE
Posted in Front Page Also tagged Bush tax cuts, jobless extensions, Republicans, small business Leave a comment
5 Things U Need 2 Know 2day
1. According to a top ranking Chinese official from Wikileaks, their GDP figures are “man-made.” Reuters reports that “Li Keqiang, head of the Communist Party in northeastern Liaoning province at the time, was unusually candid in his assessment of local economic data at a dinner with then-U.S. Ambassador to China Clark Randt, according to a confidential memo sent after the meeting and published on the Wikileaks website.” While this is getting the headlines, I would remind everyone that the US revises not only its GDP, but its employment data significantly at times. The best part of this Wikileaks story isn’t … …READ MORE
Posted in Front Page Also tagged Ben Bernanke, China, European debt crisis, Hungary, QE2 Leave a comment
G20 Who Will Lead?
China’s trade surplus has soared and stands over 25% above the pre-crisis 2008 levels. This will be red meat for those pointing to China to address their current account imbalance as well as the weak currency issue. It will be almost impossible for China to state that they must be cautious in allowing the currency to appreciate due to a fragile export sector. However, China will not be the only country under fire.
With the heavy criticism of the Federal Reserve’s QE2 program and the general dismissal of US Treasury Secretary Tim Geithner’s 4% current account plan, the US appears … …READ MORE
Top 5 on the Midterms
1. A 60 seat swing in the US House of Representatives is massive and larger than the 1994 Republican takeover.
2. While the Republicans won net 5 seats in the Senate, the Democrats retained control of this crucial legislative body.
3. Soon to be Speaker of the House John Boehner stated the path forward very clearly: “The President sets the agenda.”
4. Republicans winning the governors of Ohio, Florida, and Pennsylvania will impede President Obama’s reelection in 2012.
5. Voters are reassessing every two years and will likely swing again if Congress and the President can’t work together to solve … …READ MORE
