Hungary's Central Bank Raises Interest Rates Again

Interest rates 'will have to rise sixfold in two years'
© unk It will bring financial pain to seven million home owners with floating Interest Rates who will see a jump of almost £200 on a typical monthly Mortgage payment. Charities have already warned that repossessions are likely to rise next year and the threat of a succession of quick interest rate rises will exacerbate their fears. The Confederation of British Industry predicts that higher than anticipated rises in the cost of living will push the Bank of England (BoE) to begin increas...

Fed extends USD swaps with major central banks
By Sakari Suoninen Frankfurt | Tue Dec 21, 2010 10:58am EST Frankfurt (Reuters) - The world's major Central Banks said on Tuesday they would extend emergency supplies of U.S. dollar funding to money markets, in a sign that authorities remain concerned about financial instability as governments grapple with Debt problems. The European Central Bank, the Bank of Japan, Bank of Canada, the Bank of England and the Swiss National Bank extended their U.S. dollar Liquidity providing operations with t...

China's forex inflows slow in November but still high
The amount of foreign currency flowing into China slowed in November but was still the second highest monthly total in 2010, the government said on Monday, amid official efforts to contain Inflation. Beijing has expressed concern about the flood of overseas money into the world's second-largest economy which it fears is fuelling inflation and helping to push property prices out of the reach of most ordinary Chinese. The large flow of foreign currency -- partly driven by strong demand for Chinese...

Stabilising spending
SCOTT SUMNER has been a frequent subject of this blog over the past year or so. Mr Sumner, an Economist at Bentley University, came to prominence during the Recession and recovery for observing that the Fed was doing far too little to support The Economy, and (perhaps more important) that it had helped precipitate the deep Recession by doing too little in 2008, during which time nominal GDP was falling sharply. Mr Sumner prefers an NGDP target to Inflation targeting; you can read a recent piece ...

Ignorance Is Bliss: The Matty Edition...
People occasionally email me asking why I continue to rag on Matthew Yglesias. It's hard to answer that question in a civil tone, simply because the "why" should be blindingly obvious to anyone with the I.Q. of a potted plant. Here's a perfect example of what I mean: When it comes to wages, the basic story of recent decades is redolent of Scrooge. Real average hourly earnings (excluding fringe benefits) now stand roughly at 1974 levels. Yes, that’s right, no real increase...

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. ...

Index futures rise on Adobe outlook, mergers
By Edward Krudy NEW YORK (Reuters) - Stock index futures rose on Tuesday as a higher earnings outlook from software maker Adobe Systems and more mergers looked to add fuel to the December rally. Adobe Systems Inc (ADBE.O) forecast earnings late on... Traders work on the floor of the New York Stock Exchange December 3, 2010. NEW YORK (Reuters) - Stock index futures rose on Tuesday as a higher earnings outlook from software maker Adobe Systems and more mergers looked to add fuel to the December ...

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 ...

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," ...

Japan central bank leaves interest rate unchanged
TOKYO (AP) - Japan's Central Bank is keeping its key Interest Rate unchanged at near zero amid a sluggish Economic Recovery. The unanimous decision to keep the overnight call rate target at zero to 0.1 percent came Tuesday after a two-day meeting of the Bank of Japan's nine-member policy board. The Central Bank maintained its assessment of the country's economy, saying the moderate recovery appears to be pausing. Japan's economy has been battered by a strong yen and persistent Deflation. A ke...

Investor Demand for Diversification Pushes Depositary Receipts to New Records in Trading and Program Availability
NEW YORK, Dec. 21, 2010 /PRNewswire-FirstCall/ -- American and global depositary receipts (DRs) proved their value as a preferred vehicle for portfolio diversification and cross-border investing in 2010, surging an estimated 30% in trading value and 11% in trading volume.   BNY Mellon's Depositary Receipts business estimates that DR trading volume will rise 11% to 150 billion DRs in 2010, an all-time high(1).  An estimated $3.5 Trillion of DRs are expected to trade on U.S. and non-U.S....

Who Will Prosper in 2011
The worry lines are finally starting to fade. After 18 months of a stutter-step recovery, The Economy seems to be gathering steam. Most companies that survived the Recession are lean and profitable, and there's a good chance they'll begin hiring again in 2011. Consumers who have jobs feel better about their prospects, which means they'll be more comfortable spending money. The latest stimulus and tax-cut plan out of Washington is surprisingly meaty, with the impact likely to be felt in many Am...

Euro Becomes Increasingly Popular Choice to Fund Carry Trades
By Stephen L. Bernard The euro’s struggles could become more pronounced in coming months as traders increasingly use the beleaguered currency to fund so-called “carry trades.” That may sound surprising, given the yen and The Dollar’s singular appeal as currencies is that they cost next to nothing to borrow. But the euro is perceived to be so vulnerable to further declines on the foreign exchange market that big market participants are zeroing in on trades to bet against...

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 ...

Fed extends program to ease Europe debt crisis...
The Fed is Lending dollars to other Central Banks in exchange for their currencies. The Central Banks can lend those dollars out to banks in their home countries to ease financial turmoil. The Fed's "swap" program was set up in May as fears rose that Greece's Debt crisis could engulf other European countries. European Banks need dollars to lend to companies across the continent. European companies that have operations in the U.S. pay their employees in dollars and buy raw materials with the U.S....

China may try new ways to manage bank credit
Beijing | Tue Dec 21, 2010 8:58am EST Beijing (Reuters) - China's Central Bank is considering changing a key component of its Monetary Policy management by altering the way it manages bank credit, three sources close to the matter told Reuters on Tuesday. Under the proposed changes, the People's Bank of China (PBOC) may judge how much a bank can lend by looking at its capital adequacy ratio, Liquidity conditions and provisions for bad loans. That means the PBOC may set different deposit reser...

Interest rates 'will have to rise sixfold in two years'
Interest rates will have to rise almost sixfold over the next two years to cope with rising Inflation, business leaders have warned....

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...

Hedge funds may skirt direct Fed scrutiny: source
By Rachelle Younglai and Dave Clarke WASHINGTON | Mon Dec 20, 2010 2:09pm EST WASHINGTON (Reuters) - The U.S. Federal Reserve does not believe any one Hedge Fund can topple the Financial System and therefore the private pools of capital may escape direct supervision by the Central Bank, an industry source familiar with the Fed's position said. The newly created Financial Stability Oversight Council, which includes the Treasury Secretary and 14 U.S. supervisors, including the Fed, are in the e...

Hedge funds may skirt direct Fed scrutiny: source
By Rachelle Younglai and Dave Clarke WASHINGTON | Mon Dec 20, 2010 3:00pm EST WASHINGTON (Reuters) - The Federal Reserve does not believe any one Hedge Fund can topple the Financial System and therefore the private pools of capital may escape direct supervision by the Central Bank, an industry source familiar with the Fed's position said. The newly created Financial Stability Oversight Council, which includes the Treasury Secretary and 14 U.S. supervisors, including the Fed, are in the early ...

Hedge funds may skirt direct Fed scrutiny: source
WASHINGTON (Reuters) - The Federal Reserve does not believe any one Hedge Fund can topple the Financial System and therefore the private pools of capital may escape direct supervision by the Central Bank, an industry source familiar with the Fed's position said. The newly created Financial Stability Oversight Council, which includes the Treasury Secretary and 14 U.S. supervisors, including the Fed, are in the early stages of determining which non-bank firms pose a threat to the financial system....

Best books on investing
FORTUNE -- After nearly 20 years as Sunday business columnist at The Boston Globe, and another eight as proprietor of Economic Principals -- a site that covers the lives, times and ideas of Economists -- I have seen my share of books offering investment advice. The most valuable, it seems to me, are those whose authors came up with a Thesis about the markets early and then kept refining and updating their ideas during the incredible expansion of Financial Markets that has occurred since 1975. T...

The best books on investing
FORTUNE -- After nearly 20 years as Sunday business columnist at The Boston Globe, and another eight as proprietor of Economic Principals -- a site that covers the lives, times and ideas of Economists -- I have seen my share of books offering investment advice. The most valuable, it seems to me, are those whose authors came up with a Thesis about the markets early and then kept refining and updating their ideas during the incredible expansion of Financial Markets that has occurred since 1975. Th...

Gov't affects 2011 tech projections (Politico)
Venture capitalists are Bullish about the information technology sector in the New Year, with investments expected to be on the rise. But technologies focused on Energy Efficiency and Medical Devices – two areas that have gotten a lot of buzz in recent years because of Washington’s policy focus – are not the subject of as much optimism as in previous years, according to a survey released Tuesday by the National Venture Capital Association and Dow Jones VentureSource. Despite a ...

5 Things to Consider for Retirement
The most important financial goal is saving for Retirement. Unfortunately, no one is going to hand over a hefty bag of cash when you stop working. You can't get a loan or Scholarship to pay for your living expenses in your golden years. So it's all up to you. Here are a few things to consider as you're saving and investing for retirement: 1. Don't take too much risk. Most people who have achieved financial critical mass—that is, they have enough money for retirement—save small amou...