Deeper Analysis
Bear Markets Typically Include Big Daily Gains
August 10, 2011
During a bear run, it is much more common to experience out-sized daily rises in share prices such as occurred on August 9 than during normal periods of sideways or upward sloping trends. During the collapse of 2008-09, there were numerous such days. The brunt of that bear market was compressed between the collapse of […] More
Central Bank Watch
Norwegian Monetary Policy Requires a Balancing Act
August 10, 2011
The Norges Bank, Norway’s central bank, did not raise its policy interest rate of 2.25% even though that level is “low” and the last full review in June projected the key rate would lie between 2.25% and 3.25% between then and October. The explanation for today’s decision is contained in a statement that speaks of […] More
New Overnight Developments Abroad - Daily Update
Swiss Monetary Authorities Ramp Up Actions to Stop Franc’s Rise
August 10, 2011
Share prices in Asia and Europe rose, relieved by the FOMC’s prediction of an exceptionally low fed funds rate until mid-2013. Apparently investors had imagined a sooner tightening than I had. The Fed statement also reiterated that principal on maturing securities acquired in QE1 and QE2 would be reinvested. The Swiss National Bank, which last […] More
Deeper Analysis
Swissy Zeroing in on Par Against the Euro
August 9, 2011
The franc got as strong today as 1.0071 per euro. Not only was that a record high, but it constituted a leap of a shade over 51% from this relationship’s lifetime average. The euro, which has only been around for 11 years and seven months, has posted an average value over the whole period of […] More
Central Bank Watch
Fed Called Out on Strikes
August 9, 2011
The FOMC proved not to be up to its task. With European and U.S. leadership having struck out already, the Fed represented the final out and failed to swing at a pitch in the strike zone. Like the politicians, the Committee couldn’t agree. A compromise extended the likely period for “exceptionally low interest rates” from […] More
Central Bank Watch
FOMC’s Moment of Truth
August 9, 2011
U.S. politicians struck out, failing to address America’s long-term fiscal strains. So did EU leaders and the ECB, leaving investors unconvinced that Italy and Spain can avert the insolvency problems of smaller EU economies and fearful that the EU as a whole will lack the resources to manage such a firestorm. The last chance to […] More
Central Bank Watch
Indonesia Reference Interest Rate Unchanged
August 9, 2011
It’s no surprise that Bank Indonesia’s key monetary policy rate will remain at 6.75% following this month’s policy meeting. Officials have shown no urgency to tighten policy, lagging behind most other Asian central banks. In contrast to the elevated price pressures in China and elsewhere, Indonesian CPI inflation in July was at a 14-month low […] More
New Overnight Developments Abroad - Daily Update
Continuing Market Upheaval
August 9, 2011
Investors continue to wait in vain for governments and central banks to take action and stop the turbulence. The FOMC meets today and will release a statement at 16:15 GMT amid speculation that QE3 will be undertaken, but no press conference is scheduled. The ECB was again buying peripheral bonds today, and Spanish and Italian […] More
Deeper Analysis
An Updated Look at How the U.S. Economy Performed Under Democratic and Republican Presidencies
August 8, 2011
The most visited post among all 3,002 articles on the Currency Thoughts web site remains one of the first, a comparative study of how five U.S. vital signs behaved when the president was a Democrat and when that person was Republican. That article screened on August 19, 2008, less than a month before the collapse […] More
New Overnight Developments Abroad - Daily Update
Numerous Official Efforts to Halt Market Turmoil Mostly Failing
August 8, 2011
After markets closed Friday, S&P downgraded the U.S. credit rating from AAA to AA+ and retained a negative outlook, meaning more downgrades are possible. Stocks in Israel tumbled almost 7% on Sunday. G-20 finance ministers and central bank governors released a statement that “affirms our commitment to take all necessary initiatives in a coordinated way […] More
