Archive for November, 2009

Thankful I'm not to blame

Wednesday, November 25th, 2009

As I wrap up some loose ends going into the long holiday weekend, I noticed that we have not commented here yet on last week’s partisan jousting over who is to blame for the financial mess we find ourselves in.

Republican Rep. Kevin Brady of Texas blamed Treasury Secretary Timothy Geithner for a major role in creating the problem when he was the president of the New York Federal Reserve Bank. Mr. Geithner shot back, ”What I can’t take responsibility is for the legacy of crises you’ve bequeathed this country.”

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Dollars for sale

Friday, November 20th, 2009

It might have been more than a little embarrassing for President Obama that the U.S. dollar was making 15-months lows just as he was visiting China in part to reassure the Chinese that their massive investment in U.S. Treasuries were secure. China is concerned that the massive holdings of dollars will continue to lose value. But threats of disinvestment holds a knife to their own neck as much as it does ours so they will likely continue to buy our debt.

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Dollar paradox

Tuesday, November 17th, 2009

In his speech before the Economic Club of New York yesterday, Fed Chairman Ben Bernanke expressed some conflicting  thoughts about  dollar policy. He said that the Fed is “attentive to the implications of changes in the value of the dollar.” At the same time, Bernanke reiterated his stance that economic conditions will warrant low levels of the Fed funds rate “for an extended period.” So it appears the Fed will maintain its low interest rate policy, which, in theory, could keep the dollar weak. This seems like a contradiction in terms.

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I'll worry about that tomorrow

Friday, November 6th, 2009

The CME Group’s Global Financial Leadership Conference held in Naples, Florida this week included several impressive speakers who analyzed markets and the economy in lieu of the credit crisis and efforts undertaken to deal with it.

While many issues were discussed and many points of view presented, there was an unmistakable common theme. That theme is that our current deficit spending and debt levels are unsustainable.

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Staying the course

Wednesday, November 4th, 2009

In this morning’s forex report, Andrew Wilkinson predicted that today’s statement by the Federal Open Market Committee (FOMC) would “convey an unchanged message in which they see a patchy economic recovery warranting an extended period of easy monetary policy.” He was right, as the FOMC said it would maintain the Fed funds rate at 0 to 0.25% and that economic conditions “are likely to warrant exceptionally low levels of the Federal funds rate for an extended period.”

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