- Brazil Accuses US, China of Currency Manipulation, Looming Trade War
- Merk Commentary: Budget Battles Ahead
- Wildlife Wednesday – The Portu-Goose!
- Fed’s Kocherlakota: Not Yet Time For Fed’s Exit Strategy
- France Says Concerned By Surging Global Food Prices
- US Mint Bullion Product Revenue Rises 68.5% to Record $2.8 Billion
- Fed Bid to Limit Rescission Rights Sparks Consumer Outrage
Here are a few of the many stories I am following: The risk of trade wars escalates as Brazil accuses the United States and China of currency manipulation. In turn, the IMF is upset at Brazil for imposing capital controls. In Belgium, the king wants to end the “unprecedented hell” that has left Belgium without a government for 211 days smack in the midst of a budget crisis. China is set for multiple rounds of credit tightening even though China’s growth is weakening. Interest rates in Portugal and Spain suggest more bailouts coming up. Ireland is pondering the Iceland Solution and that has the IMF more than a bit upset.
The U.S tax battle on the federal level was fought and resolved a few weeks ago, but only temporarily. In early December, President Obama’s Deficit Commission (officially, National Commission on Fiscal Responsibility and Reform) presented its report, with the provocative title “The Moment of Truth.” Unfortunately, the report seems to have dropped out of the news already. I have read a huge amount of recent press commentary on what lies ahead, but some key issues are missing.
The investors jacking up the markets at 6am this morning understand very little about the relevance of Portugal’s sale of $1.62Bn in bonds. While the auction was a “success” with longer bonds going off at 6.7% that’s WITH intervention by China and Japan on an auction amount that either one of them could have tipped the cab driver on the ride over from the airport and not missed it. This is like going to your rich uncle for a used car loan because the bank wants 12% and your uncle says “sure I will help you out but you will owe me big time and I will make my brother’s life miserable because I have to give his kid money and I’ll never let him forget it” and then he hands you a contract to pay him back at 11.5%.
The U.S. Federal Reserve will likely wait until next year to begin an “exit strategy” from measures implemented to spur domestic economic growth, a Fed official said Tuesday. The U.S. central bank early last year discussed the structure of such a move, but the continued fragility of the U.S. economy makes it too soon to begin yet, according to Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis.
France is worried by sharp rises in global food prices, Agriculture Minister Bruno Le Maire said on Tuesday as he called again for stricter regulation to avoid speculation on commodities leading to sharp market swings….The UN Food and Agriculture Organization said last week food prices hit a record high in December and could rise further on erratic global weather patterns.
Revenue from the United States Mint’s American Eagle and American Buffalo Bullion Coin Programs rose to a record high of more than $2.8 billion for the fiscal year ending September 30, 2010. This represents an increase of 68.5% from the prior year, driven by higher prices and volumes.
The Federal Reserve is moving ahead with plans to change the right-of-rescission rule as part of the Truth in Lending Act (TILA) despite intense outcry from consumer advocates, civil rights groups, and top members of the Senate Banking Committee. Revised TILA will require borrowers to repay a mortgage in full before a loan is rescinded. Consumer groups say the measure is designed to prevent homeowners from using the right-of-rescission protection as a defense against improper foreclosure. The Fed’s proposal is designed to ward off frivolous lawsuits that will delay foreclosures and have an adverse impact on economic recovery by ensuring “a clearer and more equitable process for resolving rescission claims” that closely mirrors present court requirements. The central bank wants to lift what it views as undue compliance burdens and litigation risk for creditors.
Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the “3 Es.”