Counting inflation

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country; nominal interest rate; date; official CPI; last update; real interest rate
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China 7.47% 06/13/08 7.70% 05/31/08 -0.23%
Hong Kong [...]

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Quote of the day

on today’s seismic Treasury selloff:
“The point is that the world was long Treasury, and we can see how they’ve been suckered.”
In other news, more insanity from the federales, who think they can permanently reduce commodities prices by shoving out leveraged players.

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Huh?

Didn’t get this memo. No sir.

Fetch your tin helmets once again. The European Central Bank is opting for a monetary purge. So too is the US Federal Reserve, now ruled from Dallas.
Über-hawks and Cromwellians have gained the upper hand at the great fortress banks. Whether or not they admit it, both are embarked on policies [...]

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Establishment-liberal bankruptcy

Thomas Palley, Open Society Institute pontificator emeritus cum DC-cocktail laude, mocks himself best when he’s most honest. As do most political people.

Defending the Bernanke Fed
Filed under: U.S. Policy, Uncategorized — Administrator @ 6:37 am

Federal Reserve Chairman Ben Bernanke has recently been on the receiving end of significant criticism for recent monetary policy. One critique [...]

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The Mofaz meme

There were about five pieces of news on Friday that delivered such a massive upside kick to oil.
1) Chinese oil consumption numbers came in much higher than expected.
Wall Street is still being blindsided by the impact of the Sichuan earthquake, and apparently most of it is ignorant that ~30 percent of Chinese oil/ natgas/ heating [...]

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Chinese reserves

Setser on the PBOC:

What cann’t go on still hasn’t slowed, let alone stopped (Chinese reserve growth)
Posted on Thursday, May 29th, 2008 by bsetser
… Back in 2004, it was considered rather stunning when China added close to $100 billion to its reserves ($95 billion) in a single quarter, bring its total reserves up to around [...]

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NYT front page slobbers all over BS Bernanke

“With Bold Steps, Fed Chief Quiets Some Criticism”:
[...]
“It has been a really head-spinning range of unprecedented and bold actions,” said Charles W. Calomiris, professor of finance and economics at Columbia Business School, referring to the Fed’s lending activities. “That is exactly as it should be. But I’m not saying that it’s without some cost and [...]

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Good news for dollar bears …

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Vietnam world’s highest consumer of gold in Q1

via
Using figures compile [sic] by independent research house GFMS Ltd., the council says the consumption of 31.5 tons in the first quarter shows a steep increase of 110% year-on-year and accounting for 43% of the world’s net retail investment demand of 72.2 tons in the period.
Vietnam’s arrival into pole position in the retail investment sector [...]

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The “shadow stats thesis” goes mainstream, …

… underwritten by PIMCO’s Bill Gross.
Just in time for the huge TIPS burp a couple of nights ago, when massive buying pushed the 5-year TIPS yield down to -.77.
I’ve been a huge fan of the SS hypothesis for a long time, so it’s good to see the world’s biggest fixed income guru practically copy-paste from [...]

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Bleeding hearts v. bleeding hearts: Tanta’s home run

The credit crisis has separated true libertarians from phony libertarians, and separated true liberals from phony liberals.
The phony liberals have inadvertently mocked themselves throughout the entire credit crisis, manning the barricades to defend the greatest act of socialism for the rich in US history. Ditto for supposed “libertarians,” eg Robert Rubin, Bruce Kovner, and the [...]

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Meanwhile, on the Nordic front

The entire economy of Iceland has come under massive speculative assault in the past several months, as the most ludicrous example of an overextended, overleveraged, underfunded European economy.
As of December 2006, its rolling annual trade deficit was 26 percent of GDP. That has come down to “only” 15 percent as of January 2008.
However, Iceland’s currency [...]

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Tax-collector of the corporate welfare state

Bernanke wingman Frederic Mishkin today, parroting Barney Frank:
I would like to emphasize the importance of regulatory policy. Monetary policy–that is, the setting of overnight interest rates–is already challenged by the task of managing both price stability and maximum sustainable employment. As a result, it falls to regulatory policies and supervisory practices to help strengthen the [...]

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Recent USD strengthening

IFR:

[13:57 US GOVTS: Fallout From Credit Crisis Seen in TIC Data]
Boston, May 15. Though foreigners continued to buy treasuries (a record $55 bln) and agency ($18 bln) paper hand over fist in the latest March TIC data the net flow for the month was actually a negative $48 bln. While far from an expert in [...]

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Narcissistic over-complication of Econ 101

Regular finance-focused readers have probably noticed that I’ve neglected economic commentary recently. That’s because 1) there hasn’t been much net marginal information recently to clarify what I see right now (monstrous reflation in the West, looming monstrous deflation in the East, looming war in the Mid-East, commodities as The Big Thing through late July). 2) [...]

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Asian nations pool reserves to perpetuate export/consumption bubble

Right-wing hedge fund legend Bruce Kovner, responding to the standard “How do you make all of your money?” question, supposedly said, “From stupid governments.” Speaking of which:
Asian Ministers Agree to Pool $80 Billion of Reserves (Update1)
By Keiko Ujikane and Seyoon Kim
May 4 (Bloomberg) — Finance ministers from 13 Asian nations agreed to create a [...]

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Wall Street welfarism has consequences

May 2 (Bloomberg) — A month after the Federal Reserve rescued Bear Stearns Cos. from bankruptcy, Chairman Ben S. Bernanke got an S.O.S. from Congress.
There is “a potential crisis in the student-loan market” requiring “similar bold action,” Chairman Christopher Dodd of Connecticut and six other Democrats wrote Bernanke. They want the Fed to swap Treasury [...]

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Fed/Treasury usurpation of free markets

Forget about NYC ever recapturing London’s financial crown. What sane hedge fund manager would de-privatize all his information, and submit to “surveillance” by the very Praetorians who have exacerbated every shock of the last 20 years?

Treasury eyes stronger powers for Fed
By Gillian Tett in London and Krishna Guha in Washington
Published: April 29 2008 23:23 | [...]

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BOE blackout

via
The Bank of England has imposed a permanent news blackout on its £50bn-plus plan to ease the credit crunch.
Ferocious and unprecedented secrecy means taxpayers will never know the names of the banks that have been supported through the special liquidity scheme, which was unveiled by Bank Governor Mervyn King last week.
Requests under the Freedom of [...]

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Dangerous knowledge

What would happen when non-government T-bill chumps figure out that they’re getting between negative 5 percent and negative 9 percent real interest on a 2-year Treasury note?
… In March, consumer prices rose 0.34 percent, for an annualized rate of more than 4 percent, according to the U.S. Department of Labor. That’s only slightly lower than [...]

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