"An except from Franck Biancheri's new book titled, "World Crisis: The Path to the World Afterwards" states:"The (current) financial and economic crisis....marks the end of the world order established after 1945." In 1991, the Soviet Union dissolved, and since fall 2007, we've "witness(ed) the accelerated decomposition of the 'Western pillar' with" America advancing disintegration.
After decades "spent living in the myth of an 'ended history' in which" Western ideology was triumphant, "it is almost impossible to imagine 'a world after' " without Washington/Wall Street dominance, "where 'Anglo-American' would not necessarily mean 'modern,' and where the dollar would no longer be king."
at http://www.marketoracle.co.uk/Article25635.html
Sunday, January 16, 2011
Commercial CDO delinquencies begin to take toll on investors
"Delinquencies within collateralized debt obligations in commercial real estate loans closed 13% higher in 2010 than a year earlier, according to Fitch Ratings.
The credit rating agency said the rate of December delinquencies rose to 13.6% from 12.7% in November, due primarily to higher defaulted REIT debt and increased credit impairments in CMBS..."
at http://www.housingwire.com/2011/01/14/commericial-cdo-delinquencies-begin-to-take-toll-on-investors?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+housingwire%2FuOVI+%28HousingWire%29
The credit rating agency said the rate of December delinquencies rose to 13.6% from 12.7% in November, due primarily to higher defaulted REIT debt and increased credit impairments in CMBS..."
at http://www.housingwire.com/2011/01/14/commericial-cdo-delinquencies-begin-to-take-toll-on-investors?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+housingwire%2FuOVI+%28HousingWire%29
The silent bank run continues
"Ireland’s central bank increased its provision of emergency liquidity support to its domestic banking system in December, as the country’s financial crisis intensified and bank deposit withdrawals rose.
Irish banks have become increasingly dependent on central bank support to fund their balance sheets, as they lose business and retail deposits and are unable to refinance maturing bank borrowings.
The article is here. This is one reason why the status quo cannot last forever, unless you think Ireland has the political will to transition to not having its own banking system. If you're a business or even Irish upper middle class, why put most of your money in an Irish bank?..."
at http://www.marginalrevolution.com/marginalrevolution/2011/01/the-silent-bank-run-continues.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+marginalrevolution%2FhCQh+%28Marginal+Revolution%29
Irish banks have become increasingly dependent on central bank support to fund their balance sheets, as they lose business and retail deposits and are unable to refinance maturing bank borrowings.
The article is here. This is one reason why the status quo cannot last forever, unless you think Ireland has the political will to transition to not having its own banking system. If you're a business or even Irish upper middle class, why put most of your money in an Irish bank?..."
at http://www.marginalrevolution.com/marginalrevolution/2011/01/the-silent-bank-run-continues.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+marginalrevolution%2FhCQh+%28Marginal+Revolution%29
A Rising "Military-Industrial Complex"
"As we look for ways to cut the budget, defense spending needs more scrutiny that it is getting:
50 years later, we're still ignoring Ike's warning, by Susan Eisenhower, Commentary, Washington Post: I've always found it rather haunting to watch old footage of my grandfather, Dwight Eisenhower, giving his televised farewell address to the nation on Jan. 17, 1961. ...
Of course, the speech will forever be remembered for Eisenhower's concerns about a rising "military-industrial complex," which he described as "a permanent armaments industry of vast proportions" with the potential to acquire - whether sought or unsought - "unwarranted influence" in the halls of government. ...
Looking back, it is easy to see the parallels to our era, especially how the complex has expanded since Sept. 11, 2001. In less than 10 years, our military and security expenditures have increased by 119 percent. Even after subtracting the costs of the wars in Iraq and Afghanistan, the budget has grown by 68 percent since 2001. In 2010, the United States is projected to spend at least $700 billion on its defense and security, the most, in real terms, that we've spent in any year since World War II.
However, at this time of increased concerns over our fiscal deficit and the national debt, Eisenhower's farewell words and legacy take on added significance.
Throughout his presidency, Eisenhower continually connected the country's security to its economic strength, underscoring that our fiscal health and our military might are equal pillars of our national defense. This meant that a responsible government would have to make hard choices. The question Eisenhower continued to pose about defense spending was clear and practical: How much is enough? ..."
at http://economistsview.typepad.com/economistsview/2011/01/a-rising-military-industrial-complex.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomistsView+%28Economist%27s+View+%28EconomistsView%29%29
50 years later, we're still ignoring Ike's warning, by Susan Eisenhower, Commentary, Washington Post: I've always found it rather haunting to watch old footage of my grandfather, Dwight Eisenhower, giving his televised farewell address to the nation on Jan. 17, 1961. ...
Of course, the speech will forever be remembered for Eisenhower's concerns about a rising "military-industrial complex," which he described as "a permanent armaments industry of vast proportions" with the potential to acquire - whether sought or unsought - "unwarranted influence" in the halls of government. ...
Looking back, it is easy to see the parallels to our era, especially how the complex has expanded since Sept. 11, 2001. In less than 10 years, our military and security expenditures have increased by 119 percent. Even after subtracting the costs of the wars in Iraq and Afghanistan, the budget has grown by 68 percent since 2001. In 2010, the United States is projected to spend at least $700 billion on its defense and security, the most, in real terms, that we've spent in any year since World War II.
However, at this time of increased concerns over our fiscal deficit and the national debt, Eisenhower's farewell words and legacy take on added significance.
Throughout his presidency, Eisenhower continually connected the country's security to its economic strength, underscoring that our fiscal health and our military might are equal pillars of our national defense. This meant that a responsible government would have to make hard choices. The question Eisenhower continued to pose about defense spending was clear and practical: How much is enough? ..."
at http://economistsview.typepad.com/economistsview/2011/01/a-rising-military-industrial-complex.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomistsView+%28Economist%27s+View+%28EconomistsView%29%29
Chinese President Hu Jintao: "The Current International Currency System Is The Product Of The Past"
"Chinese President Hu Jintao has targeted the dollar's reserve currency status ahead of his big meeting with President Obama saying, "the current international currency system is the product of the past."
In an e-mail interview with the Wall Street Journal, President Hu also attacked the Federal Reserve's use of dollar liquidity as a stimulant.
Particularly interesting were his comments on inflation. President Hu seemed to downplay the problem..."
at http://www.businessinsider.com/chinese-president-hu-jintao-dollar-2011-1?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+businessinsider+%28Business+Insider%29#ixzz1BELnuIqJ
In an e-mail interview with the Wall Street Journal, President Hu also attacked the Federal Reserve's use of dollar liquidity as a stimulant.
Particularly interesting were his comments on inflation. President Hu seemed to downplay the problem..."
at http://www.businessinsider.com/chinese-president-hu-jintao-dollar-2011-1?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+businessinsider+%28Business+Insider%29#ixzz1BELnuIqJ
Pimco CEO says "Europe is Kicking the Can, Bondholder Haircut Coming"
"Pimco co-CEO Mohammed El-Erian says European Bond Investors Must Accept Losses
"The main issue right now is the integrity of the eurozone is getting weaker and weaker as we delay the problem,” El-Erian tells CNBC. “They are simply kicking the can down the road."
"Ultimately there will be a haircut to bonds issued by certain governments in the eurozone, and the longer we delay that recognition the bigger the problem and the more disorderly the process will be."
El-Erian believes U.S. municipal bonds are an especially interesting market now.
"We are in the midst of a massive adjustment in the state and local level that we're going to have to undertake," he says.
"The key issue when you invest in municipals is two things: It's not just in the rate risk, it's interest rate and credit risk, and therefore be highly differentiated. You want to be very high up in the credit curve."
at http://globaleconomicanalysis.blogspot.com/2011/01/pimco-ceo-says-europe-is-kicking-can.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29
"The main issue right now is the integrity of the eurozone is getting weaker and weaker as we delay the problem,” El-Erian tells CNBC. “They are simply kicking the can down the road."
"Ultimately there will be a haircut to bonds issued by certain governments in the eurozone, and the longer we delay that recognition the bigger the problem and the more disorderly the process will be."
El-Erian believes U.S. municipal bonds are an especially interesting market now.
"We are in the midst of a massive adjustment in the state and local level that we're going to have to undertake," he says.
"The key issue when you invest in municipals is two things: It's not just in the rate risk, it's interest rate and credit risk, and therefore be highly differentiated. You want to be very high up in the credit curve."
at http://globaleconomicanalysis.blogspot.com/2011/01/pimco-ceo-says-europe-is-kicking-can.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29
Accelerating Deposit Flight In Ireland Forces Irish Central Bank To Print Money Independent Of ECB
"It appears that Irish savers are sufficiently smart to realize that their money is no longer safe in a banking system whose existence is now only backstopped merely from referendum to referendum. As it is very unclear what will happen to the IMF/ECB rescue mechanism once the Irish election is held in March, with a material possibility that the whole plan will be unwound, leaving the country's financial system in the wind, a behind the scenes bank run is accelerating. Incidentally while this was the topic of the December letter by Guggenheim's Scott Minerd, which we discussed in a post titled "Scott Minerd's Detailed Pre-Mortem On What Europe's Bank Run Will Look Like, And Other Observations", his just released January missive deals with precisely the same topic (see chart below). So faced with the prospect of accelerating deposit redemptions, what does the Irish Central Bank go ahead and do? According to the Independent it has gone ahead and proceeded with that traditional recourse to all regimes in the bring: print money. "The Irish Independent learnt last night that the Central Bank of Ireland is financing €51bn of an emergency loan programme by printing its own money." In other words, whereas Ben Bernanke may be 100% confident that US inflation courtesy of POMO and inflation printing will be absorbed by the "massive" excess slack in the economy (oddly enough it wasn't in Tunisia, as food prices hit records despite surging unemployment), we wonder if he feels the same way about other countries in the world, which are already part of a monetary union, yet which have decided to boost the "other assets" line in their balance sheets..."
at http://www.zerohedge.com/article/accelerating-deposit-flight-ireland-forces-irish-central-bank-print-money?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
at http://www.zerohedge.com/article/accelerating-deposit-flight-ireland-forces-irish-central-bank-print-money?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
Saturday, January 15, 2011
Chinese fighter 'has changed power balance'
"THE shock unveiling of a new Chinese stealth fighter aircraft has changed Asia's power balance and means Australia must dramatically rethink its regional strategy, according to an Australian analyst.
Peter Goon, a vehement critic of the F-35 Joint Strike Fighter Australia has committed to buying from the United States, says the Chinese J-20 is far superior to the American fighter and Australia must immediately adapt to the new status quo...
...Mr Goon said he believed it was clear from the images of the plane and other material that it was far superior to the JSF, and even to the US's top-of-the-range F-22 ''Raptor'' jet.
''It is basically a lot more stealthy than the JSF, will fly faster and higher, be more agile, and because it's a much bigger aircraft it can carry more weapons,'' Mr Goon said. ''This thing has been designed to compete with and defeat the F-22. They haven't even bothered with the JSF, and why would you?''...
at http://www.theage.com.au/national/chinese-fighter-has-changed-power-balance-20110114-19rcw.html
Peter Goon, a vehement critic of the F-35 Joint Strike Fighter Australia has committed to buying from the United States, says the Chinese J-20 is far superior to the American fighter and Australia must immediately adapt to the new status quo...
...Mr Goon said he believed it was clear from the images of the plane and other material that it was far superior to the JSF, and even to the US's top-of-the-range F-22 ''Raptor'' jet.
''It is basically a lot more stealthy than the JSF, will fly faster and higher, be more agile, and because it's a much bigger aircraft it can carry more weapons,'' Mr Goon said. ''This thing has been designed to compete with and defeat the F-22. They haven't even bothered with the JSF, and why would you?''...
at http://www.theage.com.au/national/chinese-fighter-has-changed-power-balance-20110114-19rcw.html
The Global Economic Slump: Dramatic Job Losses in all Major Regions of the World
"Prof David McNally writes: I have never accepted the postmodernist contention that contemporary capitalism is all about smoke and mirrors. The notion that ideology and illusion make the system go round strikes me as another mode of reductionism – this one based on culture rather than, say, economics. But it must be said that, at first blush, the mainstream business media certainly offers some sustenance for the smoke and mirrors thesis.
Consider, for instance, new data showing that as of November the slump in U.S. housing prices had surpassed that of the 1930s. For 53 consecutive months American home prices have fallen. What's more, their 26 per cent drop on average since 2006 exceeds the home price meltdown of the first five years of the Great Depression (see here).
None of this seems to faze the vast majority of business commentators, who display a manic ability to shrug off such facts in favour of any uptick they can find in some economic indicator or other. This is then quickly trumpeted as proof that the long-awaited recovery is underway and that all will soon be right with global capitalism.
So it was that on Monday Jim O'Neill, chairman of Goldman Sachs Asset Management, proclaimed in the Financial Times that “This will be the year of the U.S. comeback.” This followed on the heels of numerous claims in the same vein that dotted my daily newspaper last week, including one headed “The recovery is on.”
at http://www.marketoracle.co.uk/Article25615.html
Consider, for instance, new data showing that as of November the slump in U.S. housing prices had surpassed that of the 1930s. For 53 consecutive months American home prices have fallen. What's more, their 26 per cent drop on average since 2006 exceeds the home price meltdown of the first five years of the Great Depression (see here).
None of this seems to faze the vast majority of business commentators, who display a manic ability to shrug off such facts in favour of any uptick they can find in some economic indicator or other. This is then quickly trumpeted as proof that the long-awaited recovery is underway and that all will soon be right with global capitalism.
So it was that on Monday Jim O'Neill, chairman of Goldman Sachs Asset Management, proclaimed in the Financial Times that “This will be the year of the U.S. comeback.” This followed on the heels of numerous claims in the same vein that dotted my daily newspaper last week, including one headed “The recovery is on.”
at http://www.marketoracle.co.uk/Article25615.html
China: it is big and it is clever
"America, an apology: perhaps we were too quick to worry about the 47 per cent of you that believe China is the world’s foremost economic power.
They may have read this cogent post from Peterson’s Arvind Subramanian, which crunches updated purchasing power parity (PPP) estimates and finds:
My calculations (explained in greater detail below) based on the most recent version [2011 Penn World Table], which is due in early February, show that the size of the Chinese economy in 2010 was about $14.8 trillion dollars—surpassing that of the United States..."
at http://ftalphaville.ft.com/blog/2011/01/14/459816/china-it-is-big-and-it-is-clever/
They may have read this cogent post from Peterson’s Arvind Subramanian, which crunches updated purchasing power parity (PPP) estimates and finds:
My calculations (explained in greater detail below) based on the most recent version [2011 Penn World Table], which is due in early February, show that the size of the Chinese economy in 2010 was about $14.8 trillion dollars—surpassing that of the United States..."
at http://ftalphaville.ft.com/blog/2011/01/14/459816/china-it-is-big-and-it-is-clever/
More Reasons Why Banks Should Worry About Ibanez Decision
"Banks and the securitization industry have been spinning the Ibanez decision as hard as they can, even going so far as to put forward Baghdad Bob style claims that the Massachusetts Supreme Judicial Court ruling said that mortgage assignment in blank worked, when a reading of the ruling show the polar opposite.
Industry participants have been claiming that the ruling is no big deal, since Massachusetts law has some quirks and the securitization documents on the two mortgages at issue were a real mess.
One of the court’s big beefs was that even if you were to try to use the pooling & servicing agreement to prove that the loans in question belonged to the securitzations in question, the loan schedules in question fell far short of providing the necessary detail to identify the particular properties (address, name of borrower, loan number or servicing number). Georgetown law professor Adam Levitin has done a bit of digging to see if the securitization industry defenders’ claims, that most mortgages in RMBS meet the documentation standard set forth in Ibanez, actually holds up. He find that many deals fail to meet the decisions’ requirements:..."
at http://www.nakedcapitalism.com/2011/01/more-reasons-why-banks-should-worry-about-ibanez-decision.html
Industry participants have been claiming that the ruling is no big deal, since Massachusetts law has some quirks and the securitization documents on the two mortgages at issue were a real mess.
One of the court’s big beefs was that even if you were to try to use the pooling & servicing agreement to prove that the loans in question belonged to the securitzations in question, the loan schedules in question fell far short of providing the necessary detail to identify the particular properties (address, name of borrower, loan number or servicing number). Georgetown law professor Adam Levitin has done a bit of digging to see if the securitization industry defenders’ claims, that most mortgages in RMBS meet the documentation standard set forth in Ibanez, actually holds up. He find that many deals fail to meet the decisions’ requirements:..."
at http://www.nakedcapitalism.com/2011/01/more-reasons-why-banks-should-worry-about-ibanez-decision.html
MUNICIPAL BONDS IN TROUBLE
"It has been a constant theme in the news for some time that state, county, and local governments are under severe pressure because revenue and revenue projections are falling far short of spending plans. Here in California we are facing a budget deficit of about 25%. Can you imagine? I have heard that some California bonds, I presume the most recently issued, are yielding over 8%. That’s tax free . . . if you can collect. Yes, munis are insured, but the problem is nationwide, and the ability of insurers to meet their obligations must be coming into question.
The following is a chart of the Municipal Bond ETF. While it is down only about 8%, the perspective offered by the chart shows it has fallen off a cliff..."
at http://pragcap.com/municipal-bonds-in-trouble
The following is a chart of the Municipal Bond ETF. While it is down only about 8%, the perspective offered by the chart shows it has fallen off a cliff..."
Junk Bonds and Leveraged Buyouts: Here We Go Again, with "Disturbingly High" Debt Issuance
"In the mad dash for yield it's a case of "here we go again". No one cares about risk, or valuation. It is doubtful anyone cares about relative values. In fact, it appears as if there is no care at all.
This is part of the reckless "success" Bernanke initiated with Quantitative Easing Part II that he is now bragging about..."
at http://globaleconomicanalysis.blogspot.com/2011/01/junk-bonds-and-leveraged-buyouts-here.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29
This is part of the reckless "success" Bernanke initiated with Quantitative Easing Part II that he is now bragging about..."
at http://globaleconomicanalysis.blogspot.com/2011/01/junk-bonds-and-leveraged-buyouts-here.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29
"The Fed No Longer Even Denies that the Purpose of Its Latest Blast of Bond Purchases ... Is To Drive Up Wall Street"
"Last November, after it started to become apparent that rates were moving in the wrong direction, Bernanke pulled a bait-and-switch, defending quantitative easing on other grounds:
This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion..."
at http://www.zerohedge.com/article/fed-no-longer-even-denies-purpose-its-latest-blast-bond-purchases-drive-wall-stree?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion..."
at http://www.zerohedge.com/article/fed-no-longer-even-denies-purpose-its-latest-blast-bond-purchases-drive-wall-stree?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
Doom And Gloom
"Do you want some more doom and gloom?
*There are reports of "panic buying" of silver and other precious metals right now.
*Investors are bailing out of municipal bonds at an absolutely staggering rate.
*S&P and Moody's have both warned once again that the United States is in danger of having its credit rating slashed if it does not get government debt under control.
*U.S. housing prices have now fallen further during this economic downturn than they did during the Great Depression of the 1930s.
Meanwhile, America's economic infrastructure continues to be taken apart piece by piece.
The United States is losing more jobs to China. In fact, the United States is losing more high technology "green jobs" to China..."
at http://theeconomiccollapseblog.com/archives/doom-and-gloom
*There are reports of "panic buying" of silver and other precious metals right now.
*Investors are bailing out of municipal bonds at an absolutely staggering rate.
*S&P and Moody's have both warned once again that the United States is in danger of having its credit rating slashed if it does not get government debt under control.
*U.S. housing prices have now fallen further during this economic downturn than they did during the Great Depression of the 1930s.
Meanwhile, America's economic infrastructure continues to be taken apart piece by piece.
The United States is losing more jobs to China. In fact, the United States is losing more high technology "green jobs" to China..."
at http://theeconomiccollapseblog.com/archives/doom-and-gloom
Friday, January 14, 2011
The Coming Flood of Yuan and Chinese Gold Demand
"The Internationalization of the Yuan - Progress report
The Chinese government has allowed the Bank of China Ltd's to allow trading in Yuan for the first time in the U.S. Individuals can convert up to $4,000 a day without limit for now, on the amount of money businesses can convert, so long as they're engaged in international trading, the report said. We at the Gold Forecaster have been following the steady progress of the internationalization of the Yuan since it began. The goal that seems likely to be reached sooner rather than later will be for the Yuan to be a competing global reserve currency. Effective immediately, Bank of China's U.S. individual customers can now open a Yuan denominated savings account with a $500 equivalent minimum balance. The bank also offers certificates of deposit in 6-month and 1-year terms with a minimum of $1,000 equivalent. Now watch the rush. We don't believe that those who do it hoping to experience an appreciation of the Yuan will see that. But such investor objectives will create a huge demand for the Yuan.
Account Opening procedures
For interested subscribers, the account opening procedures are simple-- there is an application form, a W-9 tax form, and a signature card. Applicants are also required to provide a government-issued ID and one other form of identification such as a credit card, employee ID card, insurance card, etc. You do have to show up in person. Businesses can also open Yuan accounts with a $5,000 equivalent minimum and requisite entity paperwork like Articles of Organization, etc. At this time, Yuan cash cannot be withdrawn from the account. The bank does provide currency exchange services between dollars and Yuan at its Chinatown branch in New York; current limits are up to $4,000 per day, and $20,000 per year.
The Yuan replacing the U.S. dollar
China is doing this as part of a long-term plan to make the Yuan become a fully-convertible competing global reserve currency. Many sovereign nations are holding Yuan in reserve instead of just dollars, and Chinese cross border settlement is now frequently being transacted in Yuan instead of dollars because of new clearing and settlement platforms that have been established in Hong Kong. After Yuan exchanges are established in the U.S., Europe will be next. Then as we forecast, China will price its goods in the Yuan and then pay in Yuan..."
at http://www.marketoracle.co.uk/Article25580.html
The Chinese government has allowed the Bank of China Ltd's to allow trading in Yuan for the first time in the U.S. Individuals can convert up to $4,000 a day without limit for now, on the amount of money businesses can convert, so long as they're engaged in international trading, the report said. We at the Gold Forecaster have been following the steady progress of the internationalization of the Yuan since it began. The goal that seems likely to be reached sooner rather than later will be for the Yuan to be a competing global reserve currency. Effective immediately, Bank of China's U.S. individual customers can now open a Yuan denominated savings account with a $500 equivalent minimum balance. The bank also offers certificates of deposit in 6-month and 1-year terms with a minimum of $1,000 equivalent. Now watch the rush. We don't believe that those who do it hoping to experience an appreciation of the Yuan will see that. But such investor objectives will create a huge demand for the Yuan.
Account Opening procedures
For interested subscribers, the account opening procedures are simple-- there is an application form, a W-9 tax form, and a signature card. Applicants are also required to provide a government-issued ID and one other form of identification such as a credit card, employee ID card, insurance card, etc. You do have to show up in person. Businesses can also open Yuan accounts with a $5,000 equivalent minimum and requisite entity paperwork like Articles of Organization, etc. At this time, Yuan cash cannot be withdrawn from the account. The bank does provide currency exchange services between dollars and Yuan at its Chinatown branch in New York; current limits are up to $4,000 per day, and $20,000 per year.
The Yuan replacing the U.S. dollar
China is doing this as part of a long-term plan to make the Yuan become a fully-convertible competing global reserve currency. Many sovereign nations are holding Yuan in reserve instead of just dollars, and Chinese cross border settlement is now frequently being transacted in Yuan instead of dollars because of new clearing and settlement platforms that have been established in Hong Kong. After Yuan exchanges are established in the U.S., Europe will be next. Then as we forecast, China will price its goods in the Yuan and then pay in Yuan..."
at http://www.marketoracle.co.uk/Article25580.html
European Debt Dominoes Continue Top Tip! Immediate Steps to Avoid Losses …
"Portugal Next; Then Belgium? Spain? Italy?
The focus this week has been on Portugal. The country’s deficit hit 9.3 percent of GDP in 2009, putting it just a few small steps behind bailout nations Ireland and Greece.
Meanwhile, its overall debt outstanding is closing in on 90 percent of GDP. Standard & Poor’s will likely soon cut its A- rating on Portuguese bonds, while Moody’s Investors Service could lower its rating a couple of levels..."
at http://www.marketoracle.co.uk/Article25594.html
The focus this week has been on Portugal. The country’s deficit hit 9.3 percent of GDP in 2009, putting it just a few small steps behind bailout nations Ireland and Greece.
Meanwhile, its overall debt outstanding is closing in on 90 percent of GDP. Standard & Poor’s will likely soon cut its A- rating on Portuguese bonds, while Moody’s Investors Service could lower its rating a couple of levels..."
at http://www.marketoracle.co.uk/Article25594.html
An Even Uglier Federal Debt Chart
"In response to my updated More on Federal Debt post, reader dougiefreshhh comments:
for even more "on the street" bang, i'd plot this as a function of percent employed (non-public sector..as the gov't really doesn't produce anything)..."
at http://econompicdata.blogspot.com/2011/01/even-uglier-federal-debt-chart.html
for even more "on the street" bang, i'd plot this as a function of percent employed (non-public sector..as the gov't really doesn't produce anything)..."
at http://econompicdata.blogspot.com/2011/01/even-uglier-federal-debt-chart.html
European Banks in Peripheral Countries Addicted to ECB Lending.
"The European Central Bank’s addicted bank problem continued through December, according to the latest lending figures from national central banks.
Irish banks borrowed 132 billion euros from ECB facilities as of the end of December, a 4.4-billion-euro drop from November, according to figures Friday from Ireland’s central bank. Irish banks still account for almost one-quarter of all ECB lending even though the economy accounts for less than 2% of euro zone GDP..."
at http://blogs.wsj.com/economics/2011/01/14/european-banks-addicted-to-ecb-lending/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Feconomics%2Ffeed+%28WSJ.com%3A+Real+Time+Economics+Blog%29
Irish banks borrowed 132 billion euros from ECB facilities as of the end of December, a 4.4-billion-euro drop from November, according to figures Friday from Ireland’s central bank. Irish banks still account for almost one-quarter of all ECB lending even though the economy accounts for less than 2% of euro zone GDP..."
at http://blogs.wsj.com/economics/2011/01/14/european-banks-addicted-to-ecb-lending/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Feconomics%2Ffeed+%28WSJ.com%3A+Real+Time+Economics+Blog%29
Munis Crashing For Third Straight Day, And This Is The Worst Yet
"It's hard to look at this chart, and not have your heart skip a bit of a beat.
For three days now, munis have tanked, and this is the worst one yet..."
at http://www.businessinsider.com/munis-crashing-for-third-straight-day-and-this-is-the-worst-yet-2011-1?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+clusterstock+%28ClusterStock%29#ixzz1B2h28kiw
For three days now, munis have tanked, and this is the worst one yet..."
at http://www.businessinsider.com/munis-crashing-for-third-straight-day-and-this-is-the-worst-yet-2011-1?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+clusterstock+%28ClusterStock%29#ixzz1B2h28kiw
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