Saturday, April 30, 2005
Is China Ready To Float Currency?
Alan Greenspan may get what he wants from China, but will he like the result? "A state- sponsored newspaper in China said the government may let its currency trade more freely at any time."
"What's most significant is the fact that it's in effect officially sanctioned in a state-sponsored newspaper."
"What's most significant is the fact that it's in effect officially sanctioned in a state-sponsored newspaper."
Thursday, April 28, 2005
Credit, Trade Issues Coming To A Head
The junk bond markets are signaling a pull back in the economy. "Almost $1.5 billion in high-yield bond offerings were postponed last week, some leveraged buyout deals could be in trouble, and mutual fund investors are starting to cash out of high-yield bond funds."
The trade and currency problem with China is making headlines too. "As for the United States, its assumption that it can have continuous 3 percent GDP growth based almost entirely on other nations' savings is even more remarkable. The buyers of U.S. debt have helped sustain U.S. illusions about its economic prowess. More the fool they. But the United States itself is mainly to blame for abusing the role of the dollar to buy growth. China is right that the trade deficit is a U.S. problem that will not be solved by a yuan revaluation."
The trade and currency problem with China is making headlines too. "As for the United States, its assumption that it can have continuous 3 percent GDP growth based almost entirely on other nations' savings is even more remarkable. The buyers of U.S. debt have helped sustain U.S. illusions about its economic prowess. More the fool they. But the United States itself is mainly to blame for abusing the role of the dollar to buy growth. China is right that the trade deficit is a U.S. problem that will not be solved by a yuan revaluation."
Wednesday, April 20, 2005
Chinese Pension Crisis Looms
This story at USAToday should dispel the notion that the communist giant is an economic juggernaut. "In 1970, there were eight Chinese workers for every retiree. Today, there are about six. By 2040, there will be just two — fewer even than in the far more prosperous U.S., where the ratio is projected to be 2.3 to 1."
Get out the pitchforks, "Ultimately, the pension issue becomes an issue of social instability. The government sees that, they can't help but see that. But they don't know what to do."
Get out the pitchforks, "Ultimately, the pension issue becomes an issue of social instability. The government sees that, they can't help but see that. But they don't know what to do."
Monday, April 18, 2005
Nikkei Down Over 400 Points
They have the jitters in the foreign markets. The Nikkei is off 432 points, or 3.8%. Thailand is down 3%, Hong Kong is off 2%, all following big losses on Friday.
Thursday, April 14, 2005
Debt Markets Roil
Emerging market debt spreads "blew out" as the high risk market seems to be making a turn. Reuters, "The rush of new issuers hit what economists and analysts have said is a risk-weary market and sent spreads 15 basis points (bps) wider to 389 bps, according to the benchmark JPMorgan Emerging Markets Bond Index Plus."
And another big firm loses it's credit rating. "Fitch Ratings downgraded Kerr-McGee's senior unsecured debt Thursday to a non-investment, 'B,' or junk rating from a rating of 'BBB." In a statement explaining the downgrade, the agency noted that the buyback plan would increase Kerr-McGee debt to $7.2 billion from $3.2 billion."
"Fitch questions Kerr-McGee's long-term strategy and future expectations regarding reserve bookings, production, capital expenditures and debt reduction," the agency said."
And another big firm loses it's credit rating. "Fitch Ratings downgraded Kerr-McGee's senior unsecured debt Thursday to a non-investment, 'B,' or junk rating from a rating of 'BBB." In a statement explaining the downgrade, the agency noted that the buyback plan would increase Kerr-McGee debt to $7.2 billion from $3.2 billion."
"Fitch questions Kerr-McGee's long-term strategy and future expectations regarding reserve bookings, production, capital expenditures and debt reduction," the agency said."
Friday, April 08, 2005
MG Rover Goes Under For Lack Of Chinese Help
It is a sign of the economic collapse of the west when 100 year-old manufacturers fail for lack of Chinese support. From CNN.com, "Rover workers and the British government were reeling Friday after the sudden collapse of Britain's last mass auto manufacturer after its Chinese partner pulled out of a proposed tie-up."
Monday, April 04, 2005
Series EE Treasury Bond Rates Now Fixed
The series EE bonds that up until now were adjusted every 6 months for interest rate changes will be fixed upon purchase. "The move will save the government money in a rising interest rate environment because it will mean lower payments on this portion of the national debt."
This stunning move is an admission that rates have entered a period of uncertainty. The link is at MSNBC.
This stunning move is an admission that rates have entered a period of uncertainty. The link is at MSNBC.
Saturday, April 02, 2005
NYT : US Dollar Head Down "No Matter What"
In an editorial titled "Before The Fall", the New York Times has an article up that sees no hope for a stronger dollar. "The dollar is heading down, no matter what." It is a sign of a countrys' weakness that the dominant media address the debasement of the currency so openly.
