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What happened to all of the doom and gloom economic threads?

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richard_daily said:
Jen, where did you swipe your fake avatar from?
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from your personal pictures! do you like my new profile picture? I've only been using it for how long now? thank god the drugs don't fog up your mind.....:rolleyes:

did you get a job yet? still living in mom's basement? keep on living that obama dream, one welfare check at a time
 
mercury14 said:
Koala. I heard somewhere that correlation =/= causality.

No economist believes that tax cuts pay for themselves. That's just some baseless, sourceless shit ignorant Litsters say.
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So if you reduced taxes from 99% to 50%, that wouldn't affect people's behavior?

You are staggeringly ignorant of economics.

(Plus other areas, too, of course.)
 
The Municipal Debt Bubble

Double, double toil and trouble
Fire burn, and cauldron bubble.

The parallels with the housing bubble are worrisome. Prior to the meltdown, mortgages were perceived as very low-risk investments. Banks were encouraged through government policies to lend large amounts to people, whether they could afford it or not, and borrowers were encouraged to spend more than they should. Both lenders and borrowers had faith that nothing would go wrong—and that if anything did go wrong, Washington would save the day.
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http://reason.com/archives/2010/12/14/the-municipal-debt-bubble
 
Sounds like Gillibrand all over again...

Now some of those investors, like the few lonely mortgage-industry short sellers in 2005–06, have started betting against the borrowers. Time reports that some of them “are jumping into the credit default swap market to bet against cities, towns and states.” A CDS is an insurance contract that protects a bond holder against default. But there’s a difference: You don’t necessarily have to be exposed to the underlying bond to buy a CDS. They can be bought or sold, and are priced depending on the market’s perception of bond default probability. If the risk increases, it is likely that the demand for CDSs will too, leading to an increase in their price. Brian Fraser, a partner at the law firm Richards Kibbe & Orbe LLP, told Time, “The spreads on CDSs have been growing, and the dollar amount of CDSs on municipals has grown in the last year. That’s a clear warning sign that people are effectively starting to short the muni market.”
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firespin said:
So if you reduced taxes from 99% to 50%, that wouldn't affect people's behavior?

You are staggeringly ignorant of economics.

(Plus other areas, too, of course.)
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Well of course when you over simplify. If you raised the taxes from 99% 110% on everybody making ten billion a month or more you'd have close to effect on anything.
 
Strong kickoff to holiday shopping season


http://money.cnn.com/2010/12/14/news/economy/November_retail_sales/index.htm?eref=mrss_igoogle_cnn

NEW YORK (CNNMoney.com) -- Retail sales were solidly higher in November, the government reported Tuesday, fueled in part by deep discounting on holiday merchandise.

The sales were so strong that the leading retail industry group boosted its forecast for the holiday season by a full percentage point.


The Commerce Department said total retail sales rose 0.8% last month.

Economists surveyed by Briefing.com on average had forecast an increase of 0.5% for November, compared to a revised 1.7% jump in sales the prior month. October sales were originally reported to have increased 1.2%.

Sales excluding autos and auto parts rose 1.2%, compared to a revised 0.8% gain in ex-auto sales in October. Ex-auto sales were originally reported to have increased 0.4%.
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The U.S. economy is being artificially stimulated; it's on the equivalent of a completely unsustainable sugar "high" and the strength cannot last. There will be a reckoning for our fiscal and monetary profligacy.


If fiscal and monetary policies are aimed at increasing both growth and inflation, it is hard to make any case for lower rates and higher bond prices. That suggests bonds should turn in a sub-standard performance and one should keep durations as low as possible. Because higher growth suggests a strong economy, moving down the credit quality curve makes more sense than lengthening duration.

As for equities, there is no question that 2011 will be a much stronger year for the economy than 2008-2010. The question is how enduring is the recovery and can it last once excess stimulus is withdrawn. If it is withdrawn responsibly before inflation or debt accelerates to uncomfortable levels, we will arrive at Shangri-La. 2011 will be a fine year for stocks and the outlook for 2012 would be for continued improvement. But if stimulus is left in place too long (again!!) and no fiscal discipline is put into place then there are multiple potential outcomes. We could “enjoy” another asset bubble before yet another crash. In that case, remaining overweighted in stocks would be very good, at least for a while, but one cannot afford to overstay one’s welcome yet again. If investors in America fear we are heading for a train wreck and they refuse to buy U.S. Treasuries, the costs of doing business could skyrocket with all sorts of nasty consequences. Perhaps the best place to look for evidence is the relative 10-year cost of credit for the U.S. and Germany, a nation with a much more sober fiscal structure and outlook. At the moment, our debt is about 30 basis points more expensive and the spread has been about this level for some time. If it were to widen appreciably or suddenly, take it as a sign to exit quickly.
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Let's take a look at the U.S. national debt outstanding and its UNFUNDED LIABILITIES as reported by http://www.usdebtclock.org. At the moment, the total stands at a stunning $125,785,600,400,000 ( for U.S. based innumerates, that's ONE HUNDRED TWENTY-FIVE TRILLION SEVEN HUNDRED EIGHTY-FIVE BILLION SIX HUNDRED MILLION FOUR HUNDRED THOUSAND DOLLARS ) or $411,064 per person or $1,010,100 per taxpayer.



U.S. Debt Clock:
http://www.usdebtclock.org/


 
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http://noir.bloomberg.com/apps/news?pid=20601080&sid=asMuwCgQXask


Yuan-Ruble Trade Starts as Russia, China Shun Dollar
By Emma O’Brien and Artyom Danielyan

Dec. 15 (Bloomberg) -- Moscow’s Micex exchange started trading the yuan against the ruble for the first time today, as Russia and China seek to reduce the use of dollars in trade.

The ruble closed at 46.3405 per 10 Chinese yuan by 11 a.m. in Moscow, after opening at 46.35 per 10 yuan shortly after 10 a.m. By the end of trading the volume of transactions amounted to 4.92 million yuan ($738,850), or 22.78 million rubles, according to the index’s data.

Both China and Russia have called for the dollar’s role in global trade to be diminished since the global financial crisis, and Russia is promoting the ruble as a reserve and trading currency within the former Soviet Union. China is allowing greater use of the yuan, which is not yet fully convertible, in international transactions as it seeks to reduce its reliance on the greenback. Asian exchanges that trade palm oil derivatives and gold are starting to accept yuan for payment and collateral.

“This event will become part of history in Russia-China relations, in the history of our financial markets,” Viktor Melnikov, a deputy chairman of Russia’s central bank, said at a ceremony to launch the trade at the Micex headquarters in Moscow, attended by China’s Ambassador to Moscow Li Hui. “No doubt this will become a serious catalyst for economics and trade.”

The Micex, which is Russia’s biggest exchange by volume, expects about 3 million yuan ($450,518) to change hands each day, the exchange’s Vice President Igor Marich said Dec. 6. China allowed the yuan to trade versus the ruble on its interbank market from Nov. 22.

‘Exotic’
“It’s an exotic cross that may develop in importance in the coming years,” Piotr Matys, an emerging markets currency analyst at 4Cast Ltd. said by phone from London today. “The dollar will continue to be the most important trading currency, but obviously given these two countries’ trading relations this step makes sense.”

Chinese companies buying Russian products including timber, seafood and coking coal and Russian companies importing Chinese goods will be the main clients of the yuan-ruble trade, Bank Rossii’s Melnikov said Dec. 6. Clients of Russian banks doing business in China will be able to save as much as 5 percent on transaction costs by buying yuan through the Micex, according to Melnikov.

Chinese Premier Wen Jiabao said in March he was “worried” about holding assets denominated in the greenback. The Bursa Derivatives Berhad, which sets the global benchmark for crude palm oil, started in November to accept Chinese yuan as margin collateral for trading on the Malaysian derivatives market. The Chinese Gold & Silver Exchange will start the first international gold contract in yuan early next year, the Financial Times reported yesterday, citing exchange president Haywood Cheung.

“The launch of this trade is a big deal,” said Ruben Aganbegyan, president of the Micex. “It won’t become the leading currency pair on our market, but it’s the first step in a very interesting direction.”
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vetteman said:
I wonder what Fire thinks of the great need to elect Sen. Castle, now that he's voting with the Dems.
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:rolleyes:

The bearded Marxist is already seated in the Senate, where he'll vote to support Harry Reid as majority leader. Think Castle would have voted with the Dems on that one?

Castle's votes in the House don't make any difference at this point.
 
firespin said:
:rolleyes:

The bearded Marxist is already seated in the Senate, where he'll vote to support Harry Reid as majority leader. Think Castle would have voted with the Dems on that one?

Castle's votes in the House don't make any difference at this point.
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Not only yes, but hell yes...
 
And he would have brought home the bacon...





As long as we can clearly see that Congress, especially the Republicans have learned no lesson other than the one the press is spoon-feeding them, YOU WERE ELECTED TO COMPROMISE YOUR PRINCIPLES.

Assuming, of course, they possessed ANY to begin with.
 
http://noir.bloomberg.com/apps/news?pid=20601095&sid=avxsX2wMAtho


Yuan Trade Poised to Expand as China Ties Deepen
By Emma O’Brien

Dec. 17 (Bloomberg) -- Russia, the first country to offer direct trading of yuan outside of China, plans to extend dealing hours as increased exports spur demand for the currency.

“The potential is as big as the trading between the countries,” said Ruben Aganbegyan, president of the Micex Stock Exchange, where the trades take place, said in an interview in Moscow. “People need to see that it’s a real market and that they can buy size.”

Banks led by OAO Sberbank and VTB Group have been buying and selling yuan for rubles since Dec. 15. Transactions exceeded the Micex’s estimate by 64 percent in the first day of trading at 4.92 million yuan ($738,185). Trading currently lasts for one hour from 10 a.m. in Moscow.

China, the fastest-growing major economy, and Russia, the biggest energy exporter, are challenging the international role of the dollar. Russian President Dmitry Medvedev called in June for the ruble to become a regional reserve currency and Chinese Premier Wen Jiabao said in March he was “worried” holding U.S. assets after the financial crisis hobbled the world’s largest economy.

Chinese exports to Russia surged 74 percent last month, the biggest increase of the 20 nations and trade groups tracked by the Beijing-based Customs General Administration, while Russian trade flows to China hit a monthly record of $2.6 billion in May this year. China overtook Germany to become Russia’s largest trading partner along with the Netherlands in the first 10 months of this year as trade climbed 53 percent from the same period last year to $47.5 billion, according to Russian customs service data.

Cost Saving
Exporters will shave as much as 5 percent in transaction costs by dealing in the local currency rather than in dollars, Viktor Melnikov, a deputy chairman of Russia’s central bank, said at a conference in Moscow on Dec. 6. Russian importers of Chinese manufactured goods and Chinese importers of Russian products including timber, seafood and coking coal will be the main clients of yuan-ruble trading, Melnikov said.

As much as 30 percent of all trade with China will be conducted in the yuan within five years, said Oleg Radichkin, HSBC Holdings Plc’s head of development and sales of bank products in Moscow.

Rusal Yuan Bond
HSBC, Europe’s biggest bank, concluded on Dec. 13 what it said was the first Russian trade transaction in yuan for Moscow- based sporting goods retailer Sportmaster.

United Co. Rusal, the world’s largest aluminum producer, plans to hire banks this month to sell yuan-denominated bonds as early as the first quarter of 2011, said Oleg Mukhamedshin, head of capital markets at the Moscow based company.

A “reasonable” amount to raise would be about 1 billion yuan, Mukhamedshin told reporters in Moscow today.

VTB, Russia’s second-largest bank, became the first company from an emerging market outside Asia to sell bonds denominated in Chinese yuan on Dec. 10. The three-year bonds were priced to yield 2.95 percent, compared with a yield of 5.395 percent for Moscow-based VTB’s five-year bonds in dollars, according to data compiled by Bloomberg.

Eurasian Development Bank, a lender run by the Russian and Kazakh governments, based in Almaty, may issue part of its planned $500 million of debt next year in yuan, Chairman Igor Finogenov said Dec. 13.

China, Russia Ties
Operations with the yuan “have a future” even if demand isn’t so high at the moment, German Gref, chief executive officer of Russia’s largest lender, Sberbank, told reporters in Moscow on Dec. 13. “There is no alternative for the dollar, but the world is moving in a different direction, not toward a single reserve currency.”

Rusal raised $2.2 billion in January in the first initial public offering by a Russian company in Hong Kong.

“The relationship between Russia and China on the business side is getting closer,” said John-Paul Smith, a London-based emerging markets strategist at Deutsche Bank AG, the world’s largest currency trader. “You’ve got these Russian IPOs either achieved or attempted in Hong Kong so relations have taken on momentum.”

The ruble strengthened 0.3 percent to 46.1950 per 10 yuan yesterday. Transactions topped 4.25 million yuan, or 19.6 million rubles yesterday, according to the exchange’s data. The Micex, which is Russia’s biggest exchange by the amount traded, expects about 3 million yuan to change hands each day, Vice President Igor Marich said Dec. 6.

Extra Yield
The ruble snapped a three-day advance against the dollar yesterday, sliding 0.2 percent to 30.7127 by the end of trading. Non-deliverable forwards, or NDFs, which provide a guide to expectations of currency movements and interest rate differentials and allow companies to hedge against currency movements, showed the ruble yesterday at 31.0201 per dollar in three months.

Russia’s dollar bonds due in 2020 fell yesterday, sending the yield 6 basis points, or 0.06 percentage point, higher to 5.11 percent. The price of the country’s ruble notes due August 2016 rose for a second day, pushing the yield down 10 basis points to 7.59 percent, the lowest this week.

The extra yield investors demand to hold Russian debt rather than U.S. Treasuries rose 3 basis points to 204 yesterday, according to JPMorgan EMBI+ indexes. The spread compared with 137 for debt of similarly rated Mexico and 177 for Brazil, which is rated two steps lower at Baa3 by Moody’s.

The spread on Russian bonds is 37 basis points below the average for emerging markets, the widest since Nov. 18, according to JPMorgan indexes.

Default Swaps
The cost of protecting Russian debt against non- payment for five years using credit-default swaps was 141 basis points yesterday, down from this year’s peak of 217, according to data provider CMA. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements.

Credit-default swaps for Russia, rated Baa1 by Moody’s Investors Service, its third-lowest investment grade rating, cost nine basis points less than contracts for Turkey, which is rated four levels lower at Ba2. Russia swaps cost as much as 40 basis points less on April 20.

VTB bought yuan on the Micex on the first day of trading and will “function as a market maker,” according to a statement issued Dec. 15. The state-controlled lender said it will use yuan to finance trade operations and tourism.

Bank of Moscow
“The volume in ruble-yuan will unquestionably grow significantly in the years to come,” Yury Gruzglin, global head of fixed income, currencies and commodities at Renaissance Capital in Moscow, said by e-mail on Dec. 15. “Bilateral trade will continue to grow between Russia and China and there seems to be support to move away from the dollar as a settlement currency for this.”

Renaissance has added the yuan-ruble cross-rate to the list of trades it offers and has had demand from clients, Gruzglin said.

Bank of Moscow has opened a trading account in yuan for OAO Kuibyshevazot, a Russian fertilizer maker that exports to China, in July, the lender controlled by the capital city’s government said Dec. 15. Deals amounted to 10 million yuan this year and allowed the company to “minimize the expenses tied to conversion and dollar rate fluctuations,” according to a Dec. 15 statement. The bank is considering taking part in yuan-ruble trading, it said.

Bursa Malaysia
For demand to increase, China’s government needs to encourage businesses to use the yuan in their dealings with Russia, Zhao Qingming, a senior analyst at China Construction Bank Corp., the country’s second-largest lender, said from Beijing yesterday.

“This is important in helping make the yuan a global currency,” he said. “If there is little demand for yuan in bilateral trade the trading volume between the yuan and ruble won’t pick up.”

The Bursa Malaysia Derivatives Berhad, which sets the global benchmark for crude palm oil, started accepting yuan as margin collateral for trading on the Malaysian derivatives market last month. The Chinese Gold & Silver Exchange will start the first international gold contract in yuan early next year, the Financial Times reported Dec. 14, citing exchange President Haywood Cheung.

China’s central bank set the ruble’s reference rate at 4.6246 per yuan yesterday, from 4.6229 on Dec. 15. The regulator may allow trading in forwards and swap contracts on yuan-ruble, Sergey Tsyplakov, the Russian trade representative, said this week, according to China Business News.

“We’ll just see how the market performs and what volumes are like and if the demand is there we’ll just extend it,” Micex’s Aganbegyan said. “We’re quite opportunistic like that.”
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