Deeper Analysis
U.S. and Japanese Growth Properties
May 27, 2010
U.S. real GDP growth of 3.0% at a seasonally adjusted annualized rate (saar) in the first quarter was only 60% as rapid as Japanese growth of 4.9% saar in the same period. However, two-quarter U.S. annualized growth between 3Q09 and 1Q10 was very similar at 4.3% saar to Japan’s 4.6% over the same period. Other […] More
New Overnight Developments Abroad - Daily Update
Verbal Vote of Confidence for Euro from China
May 27, 2010
China’s State Administration of Foreign Exchange released a statement asserting China remains a long-term investor in Europe and denying rumors of any consideration of downsizing its euro portfolio. The statement, although just words (but what else could realistically be said?) boosted world stocks and bond yields while depressing the dollar. British PM Cameron also made […] More
Larry's Blog
An Understandably Spooked Market
May 26, 2010
The obscure but critically important corners of the international banking system, which seized up in 2007-8, may be performing more normally, but segments of the financial system that are followed by average folks increasingly resemble a chaotic casino game. Wide swings in equities and the euro not only between days but within them are becoming […] More
New Overnight Developments Abroad - Daily Update
Calmer Tone in Markets
May 26, 2010
Financial markets have reverted today to their Jekyll side after yesterday’s Hyde performance. The dollar is narrowly mixed, with gains of 0.2% against the euro and 0.1% against the yen but losses of 0.4% against the Australian dollar, 0.3% relative to the Swiss franc, 0.2% versus the kiwi and 0.1% against the Canadian dollar and […] More
Deeper Analysis
British and German Growth
May 25, 2010
Global financial markets have been unnerved by concern about the impact of the sovereign debt problems of several countries in Europe. Governments failed to downsize their full-employment deficits when growth was expanding decently in the middle of the last decade, and fiscal deficits shot up as tax revenues plunged during the great recession. Premiums that […] More
Central Bank Watch
Polish Monetary Policy Still on Hold
May 25, 2010
As expected, the Narodowy Bank’s key reference interest rate was kept at 3.5%, its level June 2009. A 25-bp rate cut back then culminated a six-step easing from a prior cyclical high of 6.0%. The first reduction, also by 25 basis points had been made in November 2008. The Polish economy is projected to continue […] More
New Overnight Developments Abroad - Daily Update
Market Crisis Intensifies
May 25, 2010
Stocks plummeted overnight by 3.5% in Hong Kong, 3.7% in Indonesia, 3.1% in Japan and Thailand, 3.2% in Taiwan, 2.8% in South Korea, 2.7% in India, and 1.9% in New Zealand and Malaysia. In Europe, the Spanish IBEX, Paris Cac, German Dax, and British Ftse are down by 4.1%, 3.8%, 3.0%, and 2.9%. Futures point […] More
Deeper Analysis
A Slippery Monday For the DOW
May 24, 2010
Stock markets crested four weeks ago today on April 26. The subsequent downturn had avoided a bad Monday until today, which was good. Several really big historical stock market crashes have clustered around Mondays. Immediately following the bankruptcy of Lehman Brothers, the DOW fell by 4.4% on September 15, 2008, 3.3% on the following Monday, […] More
Central Bank Watch
Bank of Israel Policy Interest Rate Kept at 1.5%
May 24, 2010
Israel began the process of gradually returning to normal short-term interest rates nine months ago. The central bank was the first to raise rates after the world recession. While raising rates by 25 basis points in August, November, December and March 2010, the central bank paused in September, October, January, February, April and now May. […] More
New Overnight Developments Abroad - Daily Update
Weaker Euro
May 24, 2010
The dollar gained 1.5% against the euro, ending last week’s respite for the common European currency. Parts of Germany, France, Netherlands and Norway are closed for Whit Monday. The dollar has also risen 0.9% against the kiwi, 0.7% against the Swissy, 0.5% relative to the Australian dollar and sterling, and 0.1% against the yen. CAD/USD […] More
