As Bernanke immolates his credibility by insisting that inflation remains contained, the dollar union is cracking up. The Gulf sheikdoms, which have all been pegged to the dollar for decades, are tired of double-digit and rising inflation so that they can maintain an antiquated currency peg with an obviously politicized central bank.
“Kuwait really did very [...]
Read Full Post »
MBIA credit default swaps have traded at junk levels for the past two weeks. However, the authorities agree that it’s still AAA material. Reality has been suspended — for now.
MBIA Defends AAA Insurer Rating, Dismisses Bankruptcy Rumors
By Christine Richard
Jan. 31 (Bloomberg) — MBIA Inc. Chief Executive Officer Gary Dunton said the world’s largest bond [...]
Read Full Post »
Posted in politics, russia on January 31, 2008 | No Comments »
MOSCOW, January 31 (RIA Novosti) - Russia’s Finance Ministry said on Thursday it had divided the Stabilization Fund, set up to accrue surplus revenue from high world oil prices, into the Reserve Fund and the National Prosperity Fund.
The Stabilization Fund held 3.852 trillion rubles ($157 billion) as of January 30.
Pyotr Kazakevich, deputy director of the [...]
Read Full Post »
Posted in politics on January 31, 2008 | No Comments »
Karl Rove has some “lessons” from the latest campaign. Typically for the Beltway, they run the gamut from “obvious” to “myopic” to “wrong.” A few highlights:
The new rules include:
- The big bounce is gone.
Obama? Iowa? McCain? New Hampshire? Michigan was the aberration because it has been the ancestral stomping ground of the Romneys. [...]
Read Full Post »
Posted in politics, russia, volatility on January 31, 2008 | 2 Comments »
Stratfor tells us that Yuri Luzhkov, Moscow’s hybrid of Bill Daley and Al Capone, is in Vladimir Putin’s sights.
Luzhkov wields unprecedented mayoral power over the Russian capital, with close ties to major bankers, media moguls and the city’s biggest businesses. When he became mayor in 1992, his wife Yelena’s small construction company, Inteco, burst onto [...]
Read Full Post »
Bush has been awful for the dollar. Could the Democrats be worse? …
On Tuesday, House Financial Services Committee Chairman Barney Frank told Reuters a Democratic president might want to appoint a Federal Reserve chairman in 2010 “more in tune with Democratic views,” implying the current chairman, Ben Bernanke, ought to be replaced. Mr. Frank issued [...]
Read Full Post »
Why not just cut the funds rate to -5 percent?
Read Full Post »
Olmert, we learn, made a “reasonable” choice in sending 30 Israeli soldiers to die in the last day of the war. His management of the war, also, was “reasonable.”
Judge Eliyahu Winograd, issuing the panel’s final report on the Second Lebanon War, told a packed auditorium in Jerusalem that the war ended without victory and the [...]
Read Full Post »
Posted in china, volatility on January 30, 2008 | No Comments »
I am a huge fan of Professor Michael Pettis’ “China financial blog“. He has two long but very worthy posts up for anyone interested in a less in-the-clouds, more realistic perspective on the Chinese economy:
“The new China-Europe-US world order” :: Prof. Pettis heaps scorn upon the latest outbreak of Sinosupremacism, a typically in-the-clouds piece by [...]
Read Full Post »
Supposedly, the Baltic Dry shipping index is a very reliable forward-looking commodities indicator. Basically, if shipping falls, commodities will almost certainly fall in the not-too-distant future. Shipping is a lot like refining: when demand is above capacity, prices soar, and when demand is below capacity, prices plunge. So volatility is the order of the day, [...]
Read Full Post »
If gold were dumped because of the poor economic numbers (implying lower liquidity expectations) then it should have bounced back somewhat as expectations of a larger Fed cut would have increased.
Seems like somebody expects a lower than anticipated Fed cut today. If history is any guide, that’s a very dangerous bet …
Read Full Post »
We now know that the European Central Bank bailed out Spanish banks to the same tune that the UK bailed out Northern Rock (although not nearly as much as the FHLB and Fed have in the United States).
This kind of secretive bailing out reinforces my conviction that central banks must be abolished. European savers were [...]
Read Full Post »
Two columns by respectably sentient market commentators today:
January 29, 2008
Ben Bernanke at Year Two
By John Tamny
This week marks Ben Bernanke’s second anniversary as Chairman of the Federal Reserve. Since his nomination in 2005, the dollar has plummeted against major currencies worldwide, while the price of gold has nearly doubled on its [...]
Read Full Post »
The one rationalization I have gotten from the National Intelligence Estimate, a revolt by the CIA, DNI and probably the Navy which crushed America’s negotiating leverage with Iran over the future of Iraq, is that Israel cannot be a credible linchpin of American foreign policy after Hezbollah defeated them in 2006. Adding insult to injury, [...]
Read Full Post »
Posted in dollar, wall street on January 29, 2008 | No Comments »
Buy! Buy! Buy!
Buffett’s Bond Insurer to Go National, Regulators Say (Update2)
By Josh P. Hamilton
Jan. 28 (Bloomberg) — Warren Buffett’s Berkshire Hathaway Inc. agreed to expand its new bond insurer nationwide in exchange for faster licensing, a group of U.S. state regulators said today.
Cathy Weatherford, chief executive officer of the National Association of Insurance Commissioners, [...]
Read Full Post »
ABX
53.50
+1.33
+2.55%
CEF
12.08
+0.40
+3.42%
RGLD
31.47
+1.24
+4.10%
GG
38.40
+0.54
+1.43%
S&P 500
1,343.00
+12.39
+0.93%
Read Full Post »
It is high time for investors American and foreign to consider political risk as a sizeable risk factor in weighing whether or not to invest in the United States.
With the Kennedy endorsement of Obama, Obama is at worst a coin toss against Hillary Clinton, if not the favorite. According to Novak, members of Obama’s inner [...]
Read Full Post »
Posted in china, doomsterism on January 27, 2008 | 1 Comment »
Rupert Murdoch has not had a good run of late. “Fox Business News” is possibly the greatest fiasco in MSM memory, with the only Nielsen figures showing that FBN has about 8,000 daily viewers; at that level, I’m sure Fox gets more viewership out of laughter (see: “Shitigroup”) than out of genuine interest.
Then there have [...]
Read Full Post »
Among uber-academia, I am pretty sure Willem Buiter is the only man of his degree of stature or higher who gives the Bernanke-Mishkin Fed anything near the level of scorn and contempt it deserves. I try not to be a promiscuously copy-pasting linkbot, but Willem Buiter is hands down the best credentialed commentator I have [...]
Read Full Post »
As I noted last night, the first “independent analyst” attempt to quantify the scale of a bailout of the bond insurance industry ($200 billion) seemed a tad sensationalistic and over-the-top. I said that $75-125bn sounded more accurate, on the basis of pretty minimal information.
Barclays has completed its own analysis. If the monoline ratings are cut [...]
Read Full Post »
