Thursday, August 6, 2009
“Failure to manage the degree of easing may lead to concerns about mid- and long-term inflation and exchange-rate stability,” the People’s Bank of China said in a quarterly monetary policy report, posted on its Web site yesterday.
China, the owner of $801.5 billion of Treasuries, pressed the U.S. at a summit in Washington last month for economic polices to protect the dollar’s value. The Bank of England is poised to end a five-month program of bond purchases, part of so-called “quantitative easing,” according to a Bloomberg News survey of firms bidding at government debt auctions. (more)
The value of all land and buildings on farms averaged $2,100 an acre at the start of this year, down 3.2 percent from a revised $2,170 a year earlier, the U.S. Department of Agriculture said today in an annual report. The change compares with a 19 percent drop in urban home prices. (more)
World history is filled with examples of “funny money policies”, and the Federal Reserve's and our government’s feeble attempts at stimulus are just a new name for old games.
For as Ecclesiastes 1:9 states "What has been will be again, what has been done will be done again; there is nothing new under the sun."
If we look to Roman history we see a story of funny money and stimulus. Rome conquered, grew, and with each conquest returned with more stimulus in the form of gold, silver, land, and slaves. But the stimulus injected into the economy after each conquest only stimulated the need for more stimulus. It did not stimulate real prosperity. It undermined it. (more)
A few years ago Jefferson County, Alabama bought 17 interest rate swaps from JP Morgan, Lehman Brothers and Bank of America with the intention of hedging interest rate risk.
Today the county said it may need the National Guard to hedge the the "anarchy risk" it now faces as a result of the fiscal disaster its venture into "sophisticated" derivatives turned out to be.(more)
Even after a rousing market rally that spurred new capital into giant institutions such as Wells Fargo (WFC, Fortune 500) and Bank of America (BAC, Fortune 500), numerous large banks around the country are still struggling with deteriorating finances.
Two dozen banks with at least $5 billion in assets get the lowest one-star rating on Bankrate.com's safety and soundness test, which is based on an assessment of regulatory filings for the quarter ended March 31. (more)
Home price declines will have their biggest impact on prime "conforming" loans that meet underwriting and size guidelines of Fannie Mae and Freddie Mac, the bank said in a report. Prime conforming loans make up two-thirds of mortgages, and are typically less risky because of stringent requirements.
"We project the next phase of the housing decline will have a far greater impact on prime borrowers," Deutsche analysts Karen Weaver and Ying Shen said in the report. (more)
"So, from now on, no exchanging dollars for gold for you either! Hahaha! You believed us when we guaranteed our promise about the value of