SAVING BANKS MEANS BANKING SAVINGS

[Joanne98]

The Chinese plan to execute the executives who screwed up baby formulas. The main reason for this sentence is the bribery of officials part of the inditement. The Chinese people applaud this. We are not nearly so serious about punishing corruption of officials. If we shot everyone who accepted bribes via ‘election committees’ and then did work for the bribers such as passing laws or going to war because of the bribery, DC would be a very empty city. The economic collapse is taking down both the sad remains of the British Empire as well as the US empire. This is the real story, not ‘can we fix the banks?’ It is, ‘Can we fix the empires?’



Northern Trust Interest Rate Outlook.pdf

*Paul Kasriel is the recipient of the Lawrence R. Klein Award for Blue Chip Forecasting Accuracy

No, our title does not refer to our 43rd president. Rather, it refers to the shape of an economic scenario that is beginning to look to us as the most probable going forward. The current economic environment is indeed bleak and there are precious few signs of a recovery. But we believe that if the massive fiscal stimulus package being worked up in Congress is financed largely by the banking system and the Federal Reserve, there is a good chance the economy will begin to grow by the fourth quarter of this year and continue to do so throughout 2010.

And if we are correct on this, we also believe there is a good chance that the consumer price index will be advancing at a fast enough pace by the second half of 2010 to induce the Federal Reserve to become more aggressive in draining credit from the financial system. This could set the stage for another recession commencing in 2012, or perhaps some time in 2011. So, the shape of the path of economic activity we see over the next few years is not a “V”, a “U”, or an “L”, but a “W” – down, up, down, up, all within four or five years.

Continued>>>
http://emsnews.wordpress.com/2009/01/22/saving-banks-means-banking-savings/#more-1143

Scary!
:scared:

[Joanne98]

1. The Yen is UP!

Jan. 23 (Bloomberg) -- The yen traded near a record high against the British pound and the strongest level since 1995 versus the dollar as concern the global slowdown will worsen spurred investors to take refuge in Japan’s currency.

Sterling fell toward a 23-year low versus the dollar and traded near the weakest in two weeks against the euro before a U.K. report that may show Britain’s economy shrank in the fourth quarter by the most since 1990. The euro headed for a fourth weekly loss against the dollar before a European report that economists say will show manufacturing and service industries contracted for an eighth month in January.

“The U.K. and the eurozone seem to be the worst off among the major economies,” said Satoshi Tate, a senior vice president in the foreign-exchange division in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan’s second-largest publicly traded bank. “Risk aversion is still prominent among some investors, so the yen is likely to remain a haven currency.”

Japan’s currency traded at 123.45 per pound as of 8:50 a.m. in Tokyo, after advancing to a record 119.42 on Jan. 21. The yen was at 88.98 versus the dollar following a rally to 87.13 on Jan. 21, the strongest level since July 1995. The yen traded at 115.74 per euro after appreciating to 112.12 on Jan. 21, the highest since March 2002.

The pound traded at $1.3875 from $1.3877 in New York yesterday, after falling to $1.3622 on Jan. 21, the weakest since 1985. Against the pound, the euro was at 93.74 pence from 93.70 pence yesterday, when it reached 94.67 pence, the strongest since Jan. 5. The euro was little changed at $1.3006, after declining to $1.2825 on Jan. 21, the lowest in six weeks.

Carry Trade

The yen has strengthened against all of the 16 most-active currencies this week, rising 5.7 percent to 46.89 against New Zealand’s dollar and 4.9 percent to 58.21 versus Australia’s dollar. Investors tend to purchase the yen in times of market turmoil because of Japan’s current-account surplus and low interest rates.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aOXeWycurQkQ&refer=home

[Joanne98]

2. UK. It's Official we ARE in a Recession.

Britain will today officially enter recession as Gordon Brown faces fresh attacks over his handling of the economy.
Figures are expected to confirm the worst slump for 30 years, with the economy shrinking by around 1.2 per cent, in a downturn which experts fear will be long, deep and painful.
The financial watchdog yesterday suggested Mr Brown had failed to spot that Labour's credit and housing boom had left the economy 'fraught with systemic risk'.

http://www.dailymail.co.uk/news/article-1126482/Now-official-We-ARE-recession.html

[virgogal]

4. Recessions come,recessions go. That's life.

[Joanne98]

3. Trouble in Tokyo … and in London.

Posted on Thursday, January 22nd, 2009

By bsetser

Japanese exports are down. Way down. The 35% y/y fall in December is consistent with a brutal collapse in intra-Asian and global trade.

The yen, though, is up. Way up against some currencies. It recently approached a record high against the slumping pound.

The yen’s rise amid Japan’s slump is no doubt a source of concern at the Bank of Japan — and the Ministry of Finance. No one right now really wants an appreciating currency.

It also has to be a bit of a concern to a few other central banks as well. At least to their reserve managers. Over the past several years, the pound has been a popular diversification play, taking a rising share of the world’s rapidly growing reserve pie.

In 2000, the IMF indicates that central banks that report detailed data to the IMF held a little less 4% of their reserves in pounds and around 6% in yen. By the end of 2007, the pound’s share topped 7% while the yen’s share had slipped to under 3%. Central banks didn’t like low yen rates, and the pound offered a bit of carry.

Some industrial counties (like the US) have long held a lot of yen, but the data from those emerging economies that report the currency composition of their reserves to the IMF is consistent with the global trend. If those emerging economies that do not report detailed data to the IMF acted like those that did, annual central bank purchases of pounds over the past several years have been in the $40 to $70 billion range. That is real money for an economy of the UK’s size.

The pounds share of the total slid a bit in q3 as the dollar and yen rallied, but that doesn’t mean that central banks were selling pounds. Those emerging markets that report data to the IMF bought $9 billion of pounds and sold $9 billion of yen in q3.


I will be curious to see if central banks continue to try to maintain their allocation to pounds now. Portfolio balancing, remember, means buying what is going down to keep its share of your portfolio constant. That could provide a bit of support for the pound.

If not, watch out. As Lisa Scott-Smith of Millennium Global Investments note (via Joanna Slater of the WSJ)

“The pound isn’t a natural reserve currency in the way that the dollar would be.”

http://blogs.cfr.org/setser/2009/01/22/trouble-in-tokyo-and-in-london/