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FX Review 15/01/2010

Posted by chrisdshaw in FX.
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The currency markets this week has firmly re-established one of the main trends seen in 2010; the inverse relationship between the US dollar and risk appetite. Although most of the G10 currency pairs traded in fairly tight ranges the price action of greenback showed the resumption of its as the most favoured funding and safe-haven currency. Earlier in the week, a boost to risk appetite, triggered by stronger than expected Chinese export data, coupled with positive Australian job numbers put the USD under pressure. The week has ended, however, on a decidedly more bearish note, with yesterday’s negative retail sales data from the US adding to the conviction among investors that any strong recovery in the world’s largest economy is still some way off.

A further factor weighing on risk sentiment was the continued concern over Greece and its ability to address its dire fiscal position. The ECB’s Trichet highlighted both the concern he had about Greece and ruled out any bailout, either by the central bank or another EU member. Moreove, German Chancellor Angela Merkel¬† is quoted as saying that she is not worried about the solidity of Germany’s finances because a law passed in her first term would ensure that public budgets were consolidated in the years ahead. However, she notes: “But what worries me … is whether all the euro countries will stick to similar stipulations.” She adds: “Who is supposed to tell the Greek parliament that it needs to carry out a pension reform?” She concludes: “In view of this the EUR is going to be in a very difficult situation in the next few years.” Her comments were briefly posted on the governments website before being removed. The government’s press department said that the comments were published accidentally.¬†EURUSD has fallen to 1.4400, a low for the week.

Teddy Pendergrass R.I.P. 15/01/2010

Posted by chrisdshaw in Music.
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Former lead singer of Harold Melvin & the Blue Notes Philadelphia legend Teddy Pendergrass has died.

Too Big to Fail: Reasons to be Fearful 12/01/2010

Posted by chrisdshaw in Economics, Financial Crisis.
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As investment banks announce record bonus pools for 2010 while economic growth expectations for the developed world remain sluggish, media attention has been directed once again towards the widening disparity between Wall Street and Main Street. Away from the non-financial press focus with bonuses, there appears to be a growing anxiety about the level of risk taken on by the largest institutions. Karl Whelan highlights the concerns, most notably by former IMF Chief Economist Simon Johnson.

Daily Read 12/01/2010

Posted by chrisdshaw in Daily Feeds.
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Stocks drop, bonds rally as economic recovery seen sputtering (Bloomberg)

Greece condemned for falsifying data (FT)

Trade deficit in US increased more than forecast (Bloomberg)

Government Debt (FT- Lex)

The Lex story, published at the end of last week, deals with the threshold beyond which government debt becomes a problem for inflation and economic growth rate. According to Rogoff and Reinhart, there is little link between public debt and higher inflation in the developed world. The same applies to economic growth so long as debt stays below 90%. The bad news is that the UK and US are fast approaching that level.

Daily Read 11/01/2010

Posted by chrisdshaw in Daily Feeds.
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China ends U.S. reign as largest auto market (Bloomberg)

U.K. financial company pessimism increases, CBI says (Bloomberg)

Dubai’s first foreclosure may open floodgates in worst market (Bloomberg)

Simon Johnson: The worst is yet to come (Naked Capitalism)

Strong Chinese exports boosts equities (FT)

Daily Read 04/01/2010

Posted by chrisdshaw in Daily Feeds.
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UK deficit warning from city economists (FT)

China and India lead Asian recovery (FT)

Cyclical outlook for 2010 (Pimco)

U.S. Credit Perspectives: Picking the Winners (Pimco)

All eyes on U.S. payrolls (Econometer)

Xmas reading 28/12/2009

Posted by chrisdshaw in Daily Feeds.
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How the noughties proved to be a hinge of history (Martin Wolf, FT)

The decade the world tilted east (Niall Ferguson, FT)

The Big Zero (Paul Krugman, New York Times)

The massive failure of the (US) Mainstream Media coverage of the Iran riots (Daily Dish)

Why is the modern view of progress so impoverished? (Economist)

but mostly, the excellent Nixonland by Rick Perlstein

Daily Read 16/12/2009

Posted by chrisdshaw in Daily Feeds, Uncategorized.
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Britain’s dismal choice: sharing the losses (Martin Wolf, FT)

Greece borrows privately as downgrade drives up yield (Bloomberg)

UK labour market shows signs of recovery (FT)

Moody’s warns of ‘social unrest’ as sovereign debt spirals (Daily Telegraph)

Sentiment on S&P 500 sinks to five month low (Bloomberg)

What are the chances…..? 06/12/2009

Posted by chrisdshaw in Uncategorized.
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Anticipating the next shock 06/12/2009

Posted by chrisdshaw in Uncategorized.
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US investors are increasingly protecting themselves against a jolt in the financial markets and hedging against a rise in the dollar