Oil
Do I Hear $5?
April 18, 2008
I saw my first $4+ price at the gasoline pump today. Just regular, not the high octane, and it was in a full-service line. I can think of no reason why the rise should end there. Sooner or later, higher crude oil costs are going to trickle down to gasoline. Crude oil prices have risen […] More
Currency Markets in the News
Some Interesting Data Findings
April 17, 2008
Japan has rebased its industrial production data to 100=2005 from 100=2000. Revisions caused by such a rebasing usually do not modify the basic trend as much as in this instance. At the end of March, February output using the old base year was reported to have fallen 1.2% after a drop of 2.2% the month […] More
Larry's Blog
What Inflation?
April 16, 2008
U.S. consumer price inflation data are developing a serious credibility problem. All consumer prices were flat in February, then up 0.3% last month. That’s the most comprehensive CPI measure, including both energy and food but also consumer electronics where quality enhancements have been depressing prices for years. The 12-month rate of CPI inflation held at […] More
Currency Markets in the News
A Triple Threat
April 15, 2008
Economic news headlines these days are much more often worrisome than reassuring. Today’s main front-page story in the Financial Times captures two dangers in a seven-word headline: “Wachovia warns on U.S. Outlook after loss.” Global financial market remain stressed, and revelations of new asset losses by major financial institutions will continue past the trough in […] More
Currency Markets in the News
Market to G7: So What?
April 14, 2008
Currency markets are unimpressed with the new G7 language of concern about recent foreign exchange developments. Before the remarks, the dollar closed on Friday at 1.583/euro and Yen 101.8, and quotes at 18:45 GMT on Wednesday (14:45 EDT) were 1.5805 per euro and Y 101.2. That ho-hum reaction contrasts sharply with earlier big initiatives by […] More
Currency Markets in the News
Thoughts on the G7 Statement from Washington
April 12, 2008
New language used by G7 finance ministers and central bank heads to more firmly protest recent foreign exchange movements closely resembles the group’s joint statement a day after the last round of concerted intervention. About six billion euros of central bank purchases were done on September 22, 2000 collectively by the Fed, Bundesbank, Bank of […] More
Bearish on the Dollar
April 9, 2008
It will take more than central bank credit lines to needy institutions to restore a normal-working financial system. The problem is not just a matter of insufficient liquidity, and the further house prices fall, the more complicated the solution will be come. Japan’s banking system problems of the 1990’s had shades of insolvency, and so […] More
Currency Markets in the News
Previewing Upcoming Central Bank Policy Meetings
April 9, 2008
Central bank interest rate policy meetings are being held this week in Japan, Britain and the euro area. Word will arrive in a few hours from the Bank of Japan that its overnight money rate target is remaining at 0.5%. The target was lifted from zero to 0.25% in July 2006 and just one time […] More
Uncategorized
My Background
April 8, 2008
Allow me to introduce myself. I have 33 years of fairly unique experience as an international economist and currency market analyst. The big bang in currency trading occurred in March 1973. From the end of the Second World War until then, governments had defended fixed parities between the dollar and the currencies of other major […] More
Uncategorized
Analytical Philosophy
April 8, 2008
Economic forecasters come in basically two flavors. Alamo economists stake out a position and hold to it come what may by interpreting all subsequent information in such a way to support the baseline view. Flip-flopping economists see forecasting as an organic process and with no disgrace in modifying a view as information emerges that does […] More
