By Satyajit Das a risk consultant and the author of the Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives During the European debt crisis, in a matter of days, the dollar strengthened by around 10%. The weakness of the Euro and resultant appreciation of the Renminbi by over 14% reduced […]
Read more...One of Winston Churchill’s oft repeated saying was, “I cannot forecast to you the action of Russia. It is a riddle wrapped in a mystery inside an enigma.” Of late, China has become a Russian-level conundrum to the wider world. Developed economies are troubled by Middle Kingdom’s increasingly aggressive economic stance; neighboring countries are rattled […]
Read more...After the in retrospect not that terrible first acute phase of the financial crisis, August-September 2007, this blog began taking note of Extreme Measures. These were proposals by respectable people for dealing with the burgeoning mess that were usually very creative and had zero chance of happening. The fact that so many normally sound people […]
Read more...By Wallace C. Turbeville, former CEO of VMAC LLC and a former Vice President of Goldman, Sachs & Co, now Visiting Scholar at the Roosevelt Institute. Cross-posted from New Deal 2.0 Why would such a large swaps market be a possible exemption from FinReg? The traded foreign exchange market is the big enchilada. It is […]
Read more...The fact that an IMF meeting ended with the participants unable to feign a narrowing of differences on the currency front is further evidence that positions are hardening. And let us put none too fine a point on this: the currency row is simply an acceptable way to fight over imbalanced trade patterns. As we […]
Read more...A scan of various news stories shows obvious signs of continued jockeying on the currency front. Bloomberg reports that the BRICs (at least according to Russia) aren’t at all receptive to US efforts to weaken currency controls. The US position, as presented by Timothy Geithner, is that undervalued currencies (meaning the renminbi) produce can produce […]
Read more...By Marshall Auerback, a portfolio strategist who writes for New Deal 2.0 Something is very wrong with Japan. The Japanese economy has been much weaker than any other major economy for a while now: over the last business expansion, through the Great Recession, and in the recovery since the Great Recession trough. Japan’s business cycle […]
Read more...Last week, the simmering threat of trade disputes erupted into a full boil when Brazil’s finance minister Guido Mantega said that national governments around the world were weakening their currencies in an “international currency war” to gain competitive advantage. Mantega stressed that Brazil was prepared to back his words with action to lower the value […]
Read more...A story up on Bloomberg may be far more significant than its bland headline, “China to Spur Domestic Demand to Stabilize Economy, Wen Says,” suggests. In recent posts, we’ve inveighed about the dangers of the path China is now on. Its economy is unbalanced to an unprecedented degree. Exports plus investment account for a full […]
Read more...By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2010, FT-Prentice Hall). Detox Cures In the first half of 2010, angst about European sovereign debt receded and market volatility eased. In the second half of 2010, concerns about Greece, […]
Read more...A measure passed by the House tonight, which would permit the US to impose tariffs on countries that keep their currencies artificially low, is at this juncture a mere statement of intent. It is nevertheless playing into a dynamic of the hardening of stances between the US and China. Note that the bill has yet […]
Read more...An ongoing China v. Japan/US row is getting interesting, and probably not in a good way. Readers may recall that we took note of a ban on shipments of rare earths raw materials to Japan, which in many ways was also a shot across the US bow. Even though so-called rare earths are not that […]
Read more...We have the specter of Greece’s finance minister insisting really, no really, it will never never default, or default via restructuring. Now given the unfortunate accident of timing, these protests sound awfully Dick Fuld like, although the better parallel is probably Mexico, which kept insisting in 1994, no way, no how would it need to […]
Read more...Let’s see….early in the days of this Administration, Treasury Secretary Geithner said some pretty critical things about China. The Chinese threw a big temper tantrum and Geithner backed down. He had tended to try to play down tensions with China over its mercantilist policies (the most important being pegging its currency at an artificially low […]
Read more...Yves here. I’m a fan of Tim’s work on the Fed beat, and consider this post on the implications of the announcement tonight of Japan’s intervention to lower the value of the yen to be particularly important. By Tim Duy, the Director of Undergraduate Studies of the Department of Economics at the University of Oregon […]
Read more...