Renminbi Appreciation

Barry Eichengreen wrote a thorough defence of China’s exchange rate policy response to the global demands for letting the Renminbi appreciate and thus stimulate the reduction of US trade deficit.

US Treasury Department recently launched a series of initiatives which labeled China as a currency manipulator and a true source of America’s widening trade . . . → Read More: Renminbi Appreciation

New Home Sales Jump Is Best Since 1963

New home sales jumped up in March at the fastest single-month rate since March 1963. The government report released on Friday said buyers gobbled up new houses ahead of the federal tax credit that is just about to expire.

New-home sales rose 26.9% to a seasonally adjusted annual rate of 411,000 in March, compared . . . → Read More: New Home Sales Jump Is Best Since 1963

Greece Raises the White Flag

Earlier this week Edward mused about whether we were about to see movements in the Greek trenches as yields on 10 year bonds rose to a record 7.76 per cent at one point and closed up 26 basis points on the day. Today, as yields on 2 year bonds flirted with the 10% marker . . . → Read More: Greece Raises the White Flag

A Smarter Investment than Gold

A couple of quotes from Andy Smith’s Precious Thoughts commentary 19 April 2010 I like:

“the euro, still, arguably the most toxic structured product built by man”

“But this [SEC vs Goldman Sachs] is a never-ending story: The Inquisition -> Salem -> McCarthy -> Spitzer -> and here we are. It’s about politics/power/control. Guilt/innocence . . . → Read More: A Smarter Investment than Gold

Currency Futures: An Example of How India Changes

Exchange-traded derivatives originally only did commodity underlyings. The world’s first financial underlying was : currencies. On 16 May 1972, the Chicago Mercantile Exchange started trading in currency futures. To any finance person, nothing is simpler than a currency futures, but unfortunately in India a mixture of ignorance, ideology and turf considerations has hindered progress.

. . . → Read More: Currency Futures: An Example of How India Changes

Economic Events on April 23, 2010

At 8:30 AM EDT, the Durable Goods Orders report for March will be released.  The consensus is that there was a gain of 0.4% from February, which would be the fourth consecutive month of gains.

At 10:00 AM EDT, the new home sales report for March will be released.  The consensus is that 330,000 . . . → Read More: Economic Events on April 23, 2010

EU vs. USA

I published a brief analysis (link) for the European Enterprise Institute, discussing a pattern of a growing income differential between the EU and America. The financial crisis diminished European growth rates and further widened the economic growth between the two continents.

Given a weak economic outlook for EU countries, the gap between European Union . . . → Read More: EU vs. USA

Banking, Coffee, Movies, and Chips: Another Spate of Positive Earnings

Q1 2010 earnings season is in full swing and businesses continue their flurry of better than expected reports to start the new year.

Bank sector earnings continued strong with Morgan Stanley reporting strong profits.  The New York-based  investment firm posted a first-quarter profit of $1.78 billion compared with a loss of $177 million a . . . → Read More: Banking, Coffee, Movies, and Chips: Another Spate of Positive Earnings

Economic Events on April 22, 2010

At 8:30 AM EDT, the U.S. government will release its weekly Jobless Claims report.  The consensus is that there were 440,000 new jobless claims last week, which would be slightly less than the higher than expected number reported last week.

Also at 8:30 AM EDT, the Producer Price Index for March will be released.  . . . → Read More: Economic Events on April 22, 2010

Income Inequality in the United States

Gary Becker (link) and Richard Posner (link) opened an intense debate on the issue of a growing US income inequality since 1980s onwards.