Posts Tagged ‘Bush tax cuts’

Notes From Underground: Chinese inflation is the overblown news story

December 12, 2010

The markets were waiting to see the Chinese inflation numbers and a possible interest rate increase from the CENTRAL BANK. The Chinese price increases were higher than expected and some analysts believed that the rise in food prices was the culprit for the inflation increase. Hu Jintao, China’s president, assured the Politburo that inflation would be dealt with and they would “battle inflation without jeopardizing growth.” Friday, before the release of the inflation data, China raised its reserve requirement by another 50 basis points. Reserve requirements have not yet had much success in slowing Chinese growth in the past. If food prices are REALLY the major variable causing prices to rise, wouldn’t an appreciating YUAN with increased food imports do a great deal to stem food price inflation?


Notes From Underground: Just like Frank Zappa, the markets are like a Penguin in Bondage

December 8, 2010

During the last two days the markets have heard from the Australian and Canadian central banks and both institutions held its rates steady. Both banks cited its strong currencies and the still-fragile state of the global economy outside of emerging Asia as the primary reasons for holding.  (more…)

Notes From Underground: Where are the jobs? Recent employment report doesn’t jive

December 5, 2010

Friday’s U.S. unemployment report was far less robust than anticipated. This consensus miss led to a selloff in the DOLLAR and a rally in commodities as the weak number gave rise to the need for more aggressive FED action. At first blush the GOLD was sold and other commodities also were falling but that didn’t last long as the risk-on trade gained the upper hand on the full execution of QE2. The worst part of the unemployment data was that the RATE INCREASED TO 9.8 PERCENT and this is what drives the FED at this juncture.


Notes From Underground: CEBS and the ECB roll the dice and it comes up seven

July 25, 2010

The “results” of the European bank stress tests were released Friday afternoon and we learned that seven European banks failed and need to raise about €3.5 billion to meet the needed tier one capital ratios.