China may try new ways to manage bank credit

Extended Fed Currency Swaps Not Sign of Fresh Concern
By Michael S. Derby The Federal Reserve ’s extension of it currency swap arrangements with other major Central Bank reflects continued unease around the state of European Financial Markets. That said, the decision to maintain the swap lines with the Bank of Canada , Bank of England , the European Central Bank , the Bank of Japan and Swiss National Bank , should be viewed more as a protective action on the part of American officials. It is not, most Economists reckon, a sign that some new ...

Feds Bullard: Full of Self-Contradictions
James Bullard, President of the Federal Reserve Bank of St. Louis was on CNBC Monday, December 20, 2010 mostly defending the Fed’s Controversial $600 billion Treasury purchasing program (QE2) announced in Nov. What struck me as totally self-contradictory were Bullard’s statements regarding the QE2, treasury yield, Inflation expectations, and inflation, which I will outline and rebuff below. Bullard – Higher Treasury Yield = QE2 Success During the interview, aside from the ...

FOMC statement: Federal Reserve, European Central Bank, Bank of Japan, Bank of Canada, Bank of England, and Swiss National Bank
The Federal Open Market Committee has authorized an extension through August 1, 2011, of its temporary U.S. dollar Liquidity swap arrangements with the Bank of Canada, the Bank of England, the European Central Bank, the Bank of Japan, and the Swiss National Bank. The swap arrangements, established in May 2010, had been authorized through January 2011. ...

UK economic growth in 3rd quarter revised downward
Britain's economy grew by 0.7 percent in the Third Quarter, less than the 0.8 percent first estimated, official Statisticians said Wednesday. The Office for National Statistics also revised down its Second Quarter growth figure, to 1.1 percent from 1.2 percent, due to weaker construction activity than earlier calculated. Vicky Redwood, senior U.K. Economist at Capital Economics, said details within the report were a mixed bag of signals. Government Spending now appears to be a smaller component ...

Japan's export growth accelerates
Exports grew by 9.1% compared with a year earlier, the finance ministry said, compared with 7.8% in October. However, analysts remain concerned about the strength of Japan's economy. Also on Wednesday, the government forecast Economic Growth of 1.5% next year, a sharp fall on the 3.1% it predicts for this year. It also forecast that consumer prices will stop falling - they have been on a downward spiral for 20 consecutive months. However, this would not mean the battle against Deflation is ...

Economist recommends raising rates to 2% to stimulate lending
Once again, another Economist telling us that we should raise the benchmark Federal Funds Rate to 2%. Steve Hanke is an Economics Professor at Johns Hopkins and a Senior Fellow at the Cato. I would recommend 1.5%, but that is just a guess. Stay tuned as we have a more substantive piece coming up about where the Interest Rates should really be. Via Cato: In the monetary sphere, the Fed has, in a standard Keynesian manner, flooded The Economy with high-powered base money since the onset of the cr...

Bank Of Japan Holds Pat; Slightly Cuts Output View
TOKYO -- The Bank of Japan held pat on Monetary Policy as widely expected Tuesday and maintained its overall assessment of The Economy, saying it's showing signs of a moderate recovery. But it tweaked down its view on output, saying it's recently declined slightly. The BOJ's vote to keep Interest Rates unchanged in a range of zero to 0.1% was unanimous. The Central Bank said in a statement it will steadily purchase various assets and provide longer-term funds through its 35 Trillion yen ($418 bi...

Japan's export growth sees boost in November
However, the November figure missed expectations for a 10.8 percent rise in a poll of Economists by Dow Jones Newswires. Analysts said the Japanese Economy remains locked in a trend of shrinking exports due to a stronger yen, which makes Japanese products more expensive in overseas markets, and expectations that overseas demand will weaken. "Japan's exports are slowing, a trend that remains the same," said Taro Saito, senior economist at NLI Research Institute. "The Economy continues to be press...

Fed throws euro banks a lifeline
Fed throws euro banks a lifeline Posted by Colin Barr December 21, 2010 4:19 pm For an outfit whose policies supposedly are plunging the world into unspeakable conflict, the Federal Reserve is doing an awful lot to avoid another meltdown. The Fed said Tuesday it would extend The Dollar swap lines it provides to Central Banks in Europe, Japan and Canada in a bid to avoid a cash crunch like the ones seen to such devastating effect in 2008. Your dollars, our problem? The swap lines, under which...

Fed Increases its Treasury Security Purchase Limit to 70%
When the Federal Reserve decided to execute a new course of Monetary Policy in November, it had a problem. It wanted to buy more longer-term Treasury securities, but it was already nearing its concentration limit for the amount of each specific Treasury Security it could hold. But since the rule was self-imposed, it lifted the limit, effectively doubling the amount it can purchase of any given Treasury Security issue. This is a pretty big change. The Central Bank had temporarily relaxed its 35 ...

EUR/CHF Continues To Make Historic Lows On Euro Zone Tensions
The euro is slightly firmer today vs. The Dollar today, but continues to make new historic lows vs. Swiss franc just below 1.25, suggesting that euro zone tensions remain strong. EM currencies continue to firm, suggesting a bit of decoupling from the euro zone crisis. However, trading ranges are fairly narrow as we head into the holiday weekend. The ECB said will lend out EUR149.5 bln in 3-month loans, and that 270 banks bid for the money. Banks need to repay EUR96.9 bln in maturing 12-month l...

US Fed extends dollar lifeline for central banks
The US Federal Reserve on Tuesday extended until August an emergency tool for other Central Banks to access US dollars, amid market jitters and high demand for the safe haven greenback. The deal, which had been due to expire in January, allows the Central Banks of Britain, Japan, Canada and Switzerland, as well as the European Central Bank, to exchange local currency for US dollars. The swap agreements were sealed in May, but as a Debt crisis and slow Economic Recovery continues to roil markets ...

WHO IS ALICIA MUNNELL? AND WHY IS SHE DRAWING FIRE?
Presidential nominations to the Federal Reserve Board are normally humdrum affairs. In fact, Congress hasn't rejected a central-bank nominee in more than eight decades. But this is the Clinton White House, which seems unable to fill any job easily. And that creates uncertainty for the Clintonites' expected choice for a Fed opening: Alicia H. Munnell. Munnell, Assistant Treasury Secretary for Economic Policy, hasn't yet been formally nominated to replace Governor John P. LaWare. But Senate Republ...

On the Gutting of Financial Services Reform
Bloomberg has a well done but disheartening account of the watering-down-to-meaninglessness of Financial Services industry reform, with the case example being Basel III. Basel III is the latest iteration of capital standards for banks, which is hoped to be implemented more or less true to form by various national bank Regulators. Richard Smith has been ably covering the substance of this beat (see here and here for earlier posts) and the details are indeed more that a bit convoluted. However, ...

Book Publishers Scramble for Chinese Readers
BEIJING — Star-crossed love between Alexander the Great and his teenage male slave. Ferocious battles that defined an empire. The bloodshed and romance of Ancient Greece. Zheng Yuantao translated Mary Renault’s “The Persian Boy,” a tale of Homosexual passion that was published in China by Horizon Media. The novel “The Persian Boy,” by Mary Renault, has it all. In the West, the book, which is filled with scenes of pederasty and Homosexual passion, raises a fe...

Robot waiters in China never lose patience
FILE - In this Dec. 14, 2010 file photo, a customer collects a drink from a robot waiter cycling around a restaurant in Jinan in eastern China's Shandong province. The restaurant, which opened earlier this month, is touted as China's first robot hotpot eatery. Service with a smile also comes with an electronic voice at the Dalu Robot restaurant, where the hotpot meals are not as famous yet as the staff who never lose their patience and never take tips. Service with a smile also comes with an el...

Frustration Builds Over High Food Prices In China
Students at the No. 2 High School in Liupanshui City of southwestern China's Guizhou province had endured rising living expenses for months. But on November 22, after a new round of food price increase — though a relatively minor one of no more than 50 cents per meal — they had had enough. More than 1,000 students gathered in school canteen, smashing windows and vandalizing the cafeteria facilities. The event in Guizhou underscores a broader discontent over rising Inflation across C...

Protests rock Bangladesh as shares plunge
Hundreds of investors went on the rampage in the commercial heart of the Bangladeshi capital Dhaka after the Stock Exchange suffered its steepest ever fall. The benchmark DSE general index (DGEN) lost 552 points or 6.72 per cent by the close of trade on Sunday as panic gripped investors following last week's policy Rate Hike by the Central Bank and a series of recent volatile market swings. Local Police Chief Tofazzal Hossain said at least 500 investors hurled bricks at Law Enforcement officers ...

Fed Extends Currency Swap Lines Over Eurobank Dollar Funding Concerns
The party line is everything is fine in bank land….even Eurobank land. But some recent developments suggest otherwise. The business news on Europe has pretty much daily updates on the unfolding and linked Sovereign Debt/ bank solvency crisis. The officialdom insists this looming problem can be resolved but most observers think it can’t be in the absence of a fiscal union, which is a political bridge too Far Right now. In a not-widely-noticed replay of pre-crisis conditions, the co...

Japan Central Bank Leaves Interest Rate Unchanged
Japan's Central Bank kept its key Interest Rate unchanged at effectively zero Tuesday as the country struggles to keep its Economic Recovery alive. In a widely expected decision, the Bank of Japan's nine-member policy board voted unanimously at a two-day meeting to keep the overnight call rate target at zero to 0.1 percent. The Central Bank maintained its assessment of the world's No. 3 economy. "Japan's economy still shows signs of a moderate recovery, but the recovery seems to be pausing," ...

Economy grew modestly in July-September quarter
WASHINGTON (AP) — The Economy grew at a moderate pace last summer, reflecting stronger spending by businesses to replenish stockpiles. More recent barometers suggest the economy is gaining momentum in the final months of the year. Gross domestic product increased at a 2.6 percent annual rate in the July-September quarter, the Commerce Department reported Wednesday. That’s up from the 2.5 percent pace estimated a month ago. While businesses spent more to build inventories, consumers e...

Economy grew modestly in July-September quarter
The economy grew at a moderate pace last summer, reflecting stronger spending by businesses to replenish stockpiles. More recent barometers suggest The Economy is gaining momentum in the final months of the year. Gross domestic product increased at a 2.6 percent annual rate in the July-September quarter, the Commerce Department reported Wednesday. That's up from the 2.5 percent pace estimated a month ago. While businesses spent more to build inventories, consumers ended up spending a bit less. M...

Fed extends dollar lifeline for central banks
The Federal Reserve Building in Washington, DC. The US Federal Reserve on T... The US Federal Reserve on Tuesday extended until August an emergency tool for other Central Banks to access dollars, amid market jitters and high demand for the safe haven greenback. The deal, which had been due to expire in January, allows the Central Banks of Britain, Japan, Canada and Switzerland, as well as the European Central Bank, to exchange local currency for dollars. The swap agreements were sealed in May,...

CENTRAL BANKING 101: WHAT THE FED CAN DO AS "LENDER OF LAST RESORT"
That was the figure recently revealed for the Fed's "emergency Lending programs" to bail out the banks. "$12.3 Trillion of our Taxpayer money!" shout the bemused spectators as pigeons emerge from the showman's gloved hands. "We could have used that money to build roads and bridges, pay down the state's debts, keep Homeowners in their homes!" "Not exactly tax money," says the magician with his mysterious Mona Lisa smile. "When did you have $12.3 Trillion in tax money sitting idle?" Not only ...

Sheriff: Banker probably killed himself
Published: Dec. 21, 2010 at 4:19 PM Mich. police seek missing bank executive MOUNT CLEMENS, Mich., Dec. 21 (UPI) -- A Detroit-area bank executive whose body was found after he had been missing for a month almost certainly took his own life, investigators say. David Widlak's family disputes the Macomb County Sheriff's finding of Suicide, The Detroit News reported. The family arranged for a private Autopsy by the Oakland County Medical Examiner and has hired a Law Firm to investigate the death. Wi...