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金融危机正在戏弄人类的经济学智慧，危机呼唤新经济学； www.6park.com
●资源是现代泡沫的根源，纸币是现代泡沫的酵母，它们构成现代金融大片的“女一号”和“男一号”； www.6park.com
●美国发行美元购买各国的商品和劳务，各国持有的美元只是美国给各国的白条； www.6park.com
●资源泡沫的破灭，必然使货币回流实业和技术革命。 www.6park.com
昨日，美国总统奥巴马签署了7870亿美元的经济刺激计划。这份史无前例的经济刺激计划，被视为美国经济走向复苏的重要里程碑，但也只是艰巨任务的开始。 www.6park.com
中信集团高级主管李才元长期关注于金融危机的研究。在他看来，奥巴马经济刺激方案是“回归”方案，回归科技和实业。 www.6park.com
在解析这场危机的根源方面，李才元是资源金融派的倡导者，他认为，被金融吹大的资源-能源泡沫急剧膨胀，最终导致实业及贸易领域严重失血是这一轮经济危机的根源。李才元建言，全球应该扶持并促成美元升级到真正的全球纸币——“世元”，并且在联合国内设货币理事会行使“世界央行”的职能。在他看来，这是世界经济、政治在和平中向前发展的正确方向。 www.6park.com
他认为，过往的经济学理论已经不能解释当下的金融危机，金融危机正在戏弄人类的经济学智慧，危机呼唤新经济学，中国人到了有所作为的时候。 www.6park.com
要走出经济危机，首先要正确解释经济危机。本文观点是一家之言，希望引发进一步的讨论和争鸣。 www.6park.com
当下，世界处在一场严重的经济危机当中。对于这场危机的起源以及走向，经济学界存在激烈的争论。 www.6park.com
李才元告诉记者，人类正深陷有史以来第一次真正的全球性经济危机中。其危害空间之广，前所未有，酝酿时间之长，史无前例。 www.6park.com
这场危机引起的学术分歧也空前巨大。主要有三派：一是金融-美元派，认为美国滥用美元霸权地位及其长期低储蓄高消费的发展模式积重难返、金融机构逐利和创新过度而金融监管极不匹配是危机根源；二是实业-贸易派，认为全球不合理的经济秩序和严重失衡的贸易结构是危机根源；三是资源金融派，认为被金融吹大的不创造价值的资源-能源泡沫急剧膨胀导致创造价值的实业及贸易领域严重失血是危机根源。 www.6park.com
美国土地+原油+金属=“泡沫铁三角” www.6park.com
“泡沫铁三角”是危机元凶 www.6park.com
广州日报：你本人持哪种看法？ www.6park.com
李才元：我在国内较早提出了资源金融危机的观点，认为美国土地+原油+金属=“泡沫铁三角”。“泡沫铁三角”是此次金融危机的元凶，金融-美元是帮凶，实业 -贸易是受害者。资源金融危机是“温水煮青蛙式危机”，被金融-美元煽风点火的资源-能源泡沫是“温水”，被金融-美元和资源-能源泡沫联手敲骨吸髓的实业-贸易是慢慢失血后无力挣扎的“青蛙”。 www.6park.com
广州日报：这个比喻听起来很形象。说起金融危机，必然说起另外一个词汇：美元。很多人认为美元绑架了世界经济，美元霸权制度是全球金融危机的根源。你认为是这样的吗？ www.6park.com
李才元：这种大众思维看似没错，其实只能算踩在了通向真理的门槛上，还远远不是真理。 www.6park.com
纸币是依靠国家信用和强制力发行和流通的货币符号。纸币不具有一般商品的价值，只是作为价值的一种货币符号而具有实用性。但是，貌似比黄金弱的纸币凭借国家信用完全超越了传统货币。 www.6park.com
理论上讲，建立在价值规律基础上的黄金等传统货币只能用来交换劳动产品，只能用来交换过去劳动的成果；而建立在国家政权稳定和国家信用基础上的纸币，不但能用来交换过去劳动的成果，还能透支未来劳动的成果。 www.6park.com
广州日报：纸币和货币对金融的影响，有什么不一样的？ www.6park.com
纸币改变了货币只能记录过去的“被动”局面，使货币活动有可能成为开辟未来的“主动”的“金融创新”。“金融创新”正是以纸币为货币，以投行为主要机构，是“未来统治过去”，追求价值发现和超额利润。 www.6park.com
现代金融出现了两路大军：一路主要经银行以信贷进入实业领域，经过商品逐渐丰富、繁荣、过度繁荣和生产过剩、实业“见顶”后，纸币开始大量流出；一路主要经投行以期货进入资源领域，经过“大宗商品”价格膨胀、资源泡沫破灭、价格暴跌后，纸币开始大量流出。 www.6park.com
于是我们发现，资源是现代泡沫的根源，纸币是现代泡沫的酵母，它们构成了现代金融大片的“女一号”和“男一号”。因为资源和金融的结合更能急功近利，所以实业渐渐被冷落，似乎沦落为配角。 www.6park.com
从实业金融危机到资源金融危机 www.6park.com
用外部世界承担内部成本 www.6park.com
广州日报：这带来了什么后果？ www.6park.com
李才元：二战前，经济和金融危机主要是实业金融危机，表现为生产相对过剩，同时生产技术见顶，实质是高生产和低消费的矛盾，也就是过剩的生产资料和不足的消费资料的矛盾，说白了就是先富的资本家和后富的劳动者之间的矛盾。二战后，经济和金融危机主要是资源金融危机，表现为资源绝对泡沫，同时叠加实业金融危机。 www.6park.com
资源金融危机既有资源的海绵效应使支撑实业的纸币血液流失过度，又包括实业内部纸币血液因生产相对过剩而循环不畅。实业金融危机一般表现为通货紧缩、物价下跌；资源金融危机中却出现了通货膨胀、物价上涨的反常现象。这是因为用继续扩大资源泡沫的方式挽救资源泡沫。 www.6park.com
广州日报：这两种危机的影响也是不一样的吧？ www.6park.com
李才元：两种危机路线不同：实业金融危机先是生产过剩导致使绝大多数人受害的实业危机，接下来是少数人受害的金融危机，最后是极少数人受害的资源价格下降。资源金融危机则完全相反，先是极少数人受益的资源泡沫破灭，接下来少数人受益的金融业爆发危机，最后是绝大多数人赖以生存的实业因失血过度而生命垂危。 www.6park.com
广州日报：为什么会从实业金融危机发展到资源金融危机？ www.6park.com
李才元：我们只能从第一生产力发展中寻找深层原因。生产力有三大要素：体力、物力和智力。在人类进入文明时代以来，绝大多数时间里，体力发挥着主要作用，因此人口是国民经济管理的主旋律；工业革命以来，物力也就是生产资料发挥着主要作用，因此工业是国民经济管理的主旋律；二战后，特别是信息技术革命以来，情况已经发生剧变，智力也就是科学技术正在成为第一生产力。 www.6park.com
近300年来，人类处在“物力第一生产力”主导的工业化全球扩张模式中，主要靠两点：先进的国内生产技术和廉价的国外自然资源。这两点具有强大的内在逻辑：“利润率趋向下降”。 www.6park.com
“ 追求利润最大化”是工业资本的本能，工业资本为追求更大利润必然不断提高生产技术，技术更替越来越快却导致利润率下降越来越快，进而导致经济危机周期越来越短。按照价值规律，这时过剩资本只有两条出路：和工人“共富”；在危机中“自焚”。前者会增加生产成本，后者是两败俱伤，都不是资本家情愿做的，他们必然只能选择从国外掠夺廉价的自然资源，将国内生产过剩输送到国外。也就是说，工业资本需要有一个外部世界来承担其必然不断增加的内部成本，全球扩张始终是工业资本的目标。 www.6park.com
金融占领取代军事占领 www.6park.com
穷国穷人的未来预期消费被透支 www.6park.com
广州日报：于是，在19世纪和20世纪上半叶，西方列强纷纷争抢殖民地，血与火的战争频繁上演。 www.6park.com
李才元：是的。一开始，资本主义获得国外自然资源的方式主要是政府支持下的巧取豪夺。二战后，随着民族国家版图的最后完成，各个民族国家对自己的自然资源有了现实的所有权，那种通过武力掠夺和低价占有各种自然资源从而实现全球扩张的模式也就走到了尽头。取代军事占领的是金融占领。资源金融迅速成为最大的金融力量。 www.6park.com
资源金融以泡沫的形式包容、掩盖和延缓了实业危机，直至资源泡沫自身破灭。一方面，资源金融吸收了富国富人的过去过剩资本，延缓了“利润率趋向下降”的趋势，使工业资本有了巨大的喘息空间，实际上延缓了“物力第一生产力”的寿命。另一方面，资源金融吸收了穷国穷人的未来预期消费，减少了劳动者的教育和科研投入，延缓了技术革命的进程，实际上推迟了“智力第一生产力”的到来。 www.6park.com
总之，资源金融对接了富国富人的过去过剩资本和穷国穷人的未来预期消费，当消费金融遇到资源金融，全球和全民资源泡沫化的时代也就必然到来了。这就是浓烟和泡沫并存的“黑色”发展道路。 www.6park.com
广州日报：这听起来令人沮丧。没有一个光明的未来吗？ www.6park.com
李才元：我相信，全球和全民资源泡沫的破灭，又必然会使货币回流实业和技术革命，“智力第一生产力”的时代必将到来。智力也就是科学技术第一生产力要求新的经济模式。 www.6park.com
但是，旧的模式不会自行退出历史舞台，资源金融危机必将给旧模式致命一击，世界经济在资源金融危机后必然走向新型工业化和“绿色”发展道路。 www.6park.com
既当球员又当裁判 www.6park.com
美国印美元就能买商品 www.6park.com
广州日报：刚才你也提到了现代金融大片的“男一号”，也就是美元。它的角色发生过什么变化？ www.6park.com
李才元：1944年布雷顿森林协议后，美元取得“准黄金”地位，成为全球最主要的价值尺度、流通手段、支付手段、贮藏手段、贸易结算货币，在全球范围内具有了传统货币的五大功能。按照该协议，其他国家手头的美元可以按照固定的价格兑换成黄金。若美国乱发美元，其他国家就可能将美元从美国兑回黄金，而黄金储备的下降会约束美元的发行。这种情况下，美元是作为黄金的美元。 www.6park.com
但是，美元决心摆脱沉重的黄金枷锁。1971年，时任美国总统尼克松宣布不再将美元与黄金挂钩，颠覆了布雷顿森林体系。这个决定标志着作为黄金的美元成为作为纸币的美元，开始了美元作为全球纸币的新时代。此后，美国只需通过自身的货币创造能力，就可实现“美元扩张-增加国际流动性-弥补国际收支赤字”的循环，开创了不受约束的美元本位制度。美元的发行再也不受价值规律的约束，而只是靠所谓的“美国信用”——其强大的军事力量、经济力量、科技实力和包罗万象的软实力。这是人类历史上第一张全球纸币。 www.6park.com
广州日报：美元以一国纸币之身份成为全球纸币，会带来什么问题？ www.6park.com
李才元：以一国纸币之身份成为全球纸币，“美元悖论”随之而来。 www.6park.com
第一，按照等价交换规律，美元充当全球纸币的经济基础是：美国内经济=美国外经济。美国内经济必须充分实心化，直至等于整个美国外经济。这可能吗？ www.6park.com
第二，按照纸币存在基础，美元充当全球纸币的主体前提是：整个美国=世界央行。美国内经济必须完全空心化，美国人民必须全部成为世界央行的员工。这可能吗? www.6park.com
美元就是在这两个明显的不可能的条件下充当第一张全球纸币的。于是，一个难题，一个全球货币的难题，早在美元上空徘徊良久了。这个难题就是既当球员又当裁判的难题，美元统治下的全球经济就是一场混乱的球赛。一方面，美国必然还是一个生产和贸易实体，追求国家利益最大化；另一方面，美国只要轻松地印刷美元就可以参与国际贸易，购买别国产品供自己消费。这样，美国制造业大量外迁，生产和贸易优势渐渐减弱，慢慢变成一个沉醉于消费的金融国家，逐渐由世界第一债权国变为世界第一债务国；与此同时，美元的泛滥必然带来美元的贬值。这样，世界同时出现了一个日益弱化的美国和一个日益弱化的美元，而全球化导致的对全球货币的必然需求又使世界越来越离不开同步弱化的美国和美元。 www.6park.com
早在1960年，美国经济学家罗伯特·特里芬就在《黄金和美元危机》一书中指出：如果美国国际收支持续出现逆差，不利于美元价值的稳定；如果美国国际收支持续出现顺差，美元的供给就将减少，难以满足国际需求。这样，以美元为主导的国际货币体系就会陷入两难境地。这就是后来被称为“特里芬难题”的著名悖论。这是人类共同的难题，是第一张全球纸币的必然难题。 www.6park.com
当“浪荡”的美元遇上“自由”的资源： www.6park.com
美元是美国给各国的白条 www.6park.com
广州日报：既然是悖论，在现实中就很难解决吧？ www.6park.com
李才元：理论上无法解释的“特里芬难题”，却在资源金融中得到了“浪漫”的解决。现代金融大片的“女一号”——资源也出场了。实际上，当“浪荡”的美元遇上“自由”的资源，人类有史以来第一次真正的全球资源金融危机就开始酝酿了。 www.6park.com
美元难题的实质是：用什么填补无限发行和泛滥的美元与有限增长和滞胀的美国经济之间的亏空。1.美国发行纸币美元来购买各国的商品和劳务,各国手中持有的美元只是美国付给各国的白条。2.美国向各国出售产品和技术换回各国手中的白条，这个过程不断弱化。3.通过让各国货币升值,这样美元在一进一出中让各国对美国的债权大幅下降，这种裁判式霸道遭到越来越强的抵抗。4.最重要的一步是，美国进行了金融创新,吸引各国手中的美元流到美元操纵的金融市场，而金融创新的标的物是各种自然资源。 www.6park.com
历史竟然给浪荡的美元及时地提供了获得自由身的自然资源。二战后，亚、非、拉等地区的民族国家纷纷独立，这些国家内原来被殖民占有的自然资源随之获得了“自由身”，成为了国际大宗商品，这个重大历史事件和美元成为世界纸币几乎同时出现。从此以后，资源金融危机竟然一天也不停地上演了。 www.6park.com
广州日报：提起资源金融危机，人们很容易想起上世纪70年代的中东石油危机。 www.6park.com
李才元：上世纪70年代的西亚石油危机有好几次。第一次发生在1973年，第二次发生在1978年底，两次石油危机使上世纪60年代末每桶1.8美元的油价提高到1980年底的38.63美元。高油价触发了持续3年遍及世界的经济危机。 www.6park.com
上世纪80年代，又出现了“拉美能源泡沫”。中东石油危机后，美国大量发行美元，经银行转手借给墨西哥、巴西等拉美国家，由拉美国家政府担保，主要投向能源等产业。在滚滚而来的国际资金诱惑下，拉美国家国内信用极度扩张，资源金融泡沫异常严重。1982年，美国提高利率后，墨西哥暂停偿付外债本息，立即引起市场恐慌，导致外资大规模撤出拉美国家，使拉美国家丧失了整整10年的经济发展机会。 www.6park.com
上世纪90年代，出现了“东亚地产泡沫 ”。美元大军在拉美无利可图后，大举入侵东亚,制造了“东亚地产泡沫”。先是日本，东京的地价最高时等于整个美国的地价总和；东京一家百货公司门前的土地能够换来整个美国好莱坞的土地。土地资源泡沫严重影响了宏观经济，引发了1990年的股市大跌、企业倒闭、经济崩溃，导致日本近10年衰退。1997年亚洲金融危机同样始于“地产泡沫”。 www.6park.com
2000年以来出现的“全球资源泡沫”，美国土地+原油+金属=“泡沫铁三角”。“泡沫铁三角”在“东亚地产泡沫”的基础上叠加了美国地产泡沫，在“中东石油泡沫”和“拉美能源泡沫”的基础上叠加了金属和矿石泡沫。金属和矿石更多地与新兴工业国家连在一起，因此，此次资源金融危机将美国等老牌工业国家和中国等新兴工业国家无一幸免地拖了进去，是第一次真正的全球资源金融危机。 www.6park.com
广州日报：美国通过美元霸权和金融创新创造出五六倍于美国实体经济的虚拟金融价值。有人因此将此次危机定性为货币战争和阴谋论。你的观点呢？ www.6park.com
李才元：危机的最终根源在资源泡沫，在于全球经济从业者对资源的偏好和追捧。绝大多数人赖以生存的原本是实业，在资源泡沫诱惑和金融误导下，他们却将越来越多的资金用于购买土地等资源金融资产。这样，不创造价值而只能以地租等形式吸收价值的自然资源就像海绵一样一点一点吸干了实业领域的血液，最终吸血链条断裂，实业已奄奄一息，资源海绵也慢慢干了。 www.6park.com
因此，此次危机在根源上不是货币战争，我们也没有成为货币战争俘虏，而是上了资源泡沫的贼船。世界金融结构越来越像一个倒置的金字塔，资源和资源金融的绝对膨胀建立在实业和实业金融相对萎缩的基础上，现在它倒塌了。 www.6park.com
布什方案：寅吃卯粮 www.6park.com
奥巴马方案回归实业 www.6park.com
广州日报：金融危机爆发后，各国政府出台政策拯救经济。就在昨天，美国总统奥巴马签署了7870亿美元的经济刺激计划。你怎么评价奥巴马的这个计划？ www.6park.com
李才元：近一年来，在危机发源地美国出现了两套挽救危机的方案：一套叫“布什方案”，已经结束；一套叫“奥巴马方案”，刚刚开始。这两套方案是两种第一生产力的较量，也是两种美元命运甚至两种世界经济前途的较量。 www.6park.com
先说“布什方案”。次贷危机后，布什领导的美国政府继续透支美国信用，向市场注入更多的美元，发行更多的国债，用于填充因金融机构倒闭而产生的黑洞。结果适得其反，这些黑洞越填越大，成了喂不饱的金融恐龙；与此同时，美元在全球加剧泛滥，进一步推高石油、铁矿等国际大宗商品价格，使其伴随次贷危机出现了持续一年多的历史新高，最终吸干和压垮了全球实业，包括美国的汽车制造业。寅吃卯粮的“布什方案”最终搬起石头砸了自己的脚。“布什方案”是一种饮鸩止渴的方式，旨在挽救旧经济模式和“黑色”道路。 www.6park.com
“奥巴马方案”则是“回归”方案，回归科技和实业，三个重点分别是作为实业基础的医疗和就业、作为基础实业的修路和建筑、作为新兴实业的新能源和宽带网，其核心是新能源。总体上看，“奥巴马方案”是一种开源节流的方式，旨在开辟新经济模式和“绿色”道路。 www.6park.com
广州日报：这两个方案的本质区别在哪里？ www.6park.com
李才元：“布什方案”的基础是“美元霸权主义”，直接发行美元或者间接通过国债发行美元，都是“印刷美元”，美元数量的泛滥和不负责任，最终给美元和美国金融业毁灭性打击。“奥巴马方案”要真正区别于“布什方案”，必须学会过苦日子，控制国债规模，更不能滥发美元。回归实业最有可能引起“贸易保护主义”抬头，美国要么不负责任地重拾“贸易保护主义”，要么负责任地按照贸易优势理论出售真正的优势产品——高科技产品。世界将拭目以待。 www.6park.com
“ 布什方案”和“奥巴马方案”集中体现了“美元悖论”和“美元难题”的两个方面：“布什方案”破坏美元作为全球纸币的价值基础，破坏实心化；“奥巴马方案” 破坏美元作为全球纸币的主体基础，破坏空心化。两套方案通向同一种命运：作为世界纸币的美元，最终将和世界渐行渐远。 www.6park.com
各国应扶持美元升级 www.6park.com
联合国下设机构行使“世界央行”职能 www.6park.com
广州日报：这是不是意味着美元可能崩溃，而且必须崩溃呢？ www.6park.com
李才元：是的。但同时最大的担忧马上也出来了：美元崩溃必然导致世界经济至少是世界贸易和金融体系的崩溃。美元于是成了令全世界又恨又爱的矛盾体，这个几十年来挥之不去的感觉在此次危机中达到了沸点。 www.6park.com
长期看，无论美国政府采取什么战略和策略，都改变不了美元看贬的趋势。中短期看，美国仍是世界上实力最强的国家，国民生产总值是欧盟、日本和中国三大经济体的总和，美元仍是“最硬的一国纸币”，当今世界上还没有另一种以一国信用为基础的纸币可以取代美元成为全球纸币。 www.6park.com
摆在美元面前的第一种前途是，美元回归到美国自己的货币，世界货币体系回归战国时代，世界的经济、政治甚至军事，也会回归战国时代，这是最危险的大倒退。 www.6park.com
广州日报：别的选择是什么？ www.6park.com
李才元：既然人类需要全球纸币，目前第二大国际性货币欧元也不能充当全球纸币，我们只能：扶持美元并协调诸币，酝酿并最终促成美元升级到真正的全球纸币—— “世元”。这个”世元”，是指面向未来的世界纸币。这是美元的第二种前途，也是世界货币体系、世界经济、政治甚至军事在和平中向前发展的正确方向。 www.6park.com
近年来，在“美元圈”、“欧元圈”之后再有一个“亚元圈”的呼声很高。我认为意义不大，原因很简单，世界主要贸易日益向中、美、欧集中，“世元”的基础已具备，完全可以在现存货币体系基础上直接开始“世元”进程。这个史上最大的货币婴儿或许不会比欧元难产。 www.6park.com
广州日报：在你看来，推动美元升级成世界纸币，应该怎么做？ www.6park.com
李才元：全球应择机启动“全球统一货币进程”，应做好三件事：第一，继续承认美元的全球纸币地位，维护并巩固现行一主多辅的全球货币体系。第二，各国央行的一致化和一体化，以真正的“世界央行”代替“美国整个国家的世界央行化”，明确“世元”的发行主体和“全球信用原则”。我建议，在联合国内设货币理事会行使世界央行职能。第三，“世界央行”以全球价值为基础，建立一主多辅的全球货币联动发行机制，将“美元”和平升级为“世元”。
Wednesday, February 18, 2009
Sunday, February 15, 2009
G-7 Says ‘Severe’ Downturn to Persist, Vows to Reverse Slump
Feb. 15 (Bloomberg) -- Group of Seven finance chiefs vowed to tackle a “severe” economic downturn that will persist for most of 2009 without spelling out new steps to do so.
U.S. stocks fell the most this week since November, extending the Dow Jones Industrial Average index’s decline since the start of the year to 11 percent.
The group repeated its traditional message that “excessive volatility” and “disorderly movements” in exchange rates must be avoided.
U.S. stocks fell the most this week since November, extending the Dow Jones Industrial Average index’s decline since the start of the year to 11 percent.
The group repeated its traditional message that “excessive volatility” and “disorderly movements” in exchange rates must be avoided.
Stimulus Aims Two-Phase Jolt at Fading U.S. Economy
http://www.bloomberg.com/apps/news?pid=20601068&sid=aKVgiDHFg6zk&refer=economy
Fair and other economists say the first evidence that the plan is working should be visible in consumer spending and retail sales, which they expect will stop declining around mid-year
The next sign may come in business investment, as companies grow more confident about a pick-up in sales. The final signal of success would be a turnaround in a labor market that has lost 3.6 million jobs since the recession started in December 2007.
The bill contains a $400 tax reduction for individuals and $800 for families for this year and next, according to House Speaker Nancy Pelosi’s office. Workers will see the relief in the form of a smaller amount of income taxes withheld from their paychecks.
“We can basically change those withholding tables very quickly so people will immediately see some more money going into their bank accounts,” Christina Romer, chairwoman of the White House’s Council of Economic Advisers, said in an interview yesterday on Bloomberg Television.
Many economists argue that such a delivery method, untested in previous stimulus packages, will be more effective at increasing demand because consumers will be less inclined to save the money or use it to pay debt
Fair and other economists say the first evidence that the plan is working should be visible in consumer spending and retail sales, which they expect will stop declining around mid-year
The next sign may come in business investment, as companies grow more confident about a pick-up in sales. The final signal of success would be a turnaround in a labor market that has lost 3.6 million jobs since the recession started in December 2007.
The bill contains a $400 tax reduction for individuals and $800 for families for this year and next, according to House Speaker Nancy Pelosi’s office. Workers will see the relief in the form of a smaller amount of income taxes withheld from their paychecks.
“We can basically change those withholding tables very quickly so people will immediately see some more money going into their bank accounts,” Christina Romer, chairwoman of the White House’s Council of Economic Advisers, said in an interview yesterday on Bloomberg Television.
Many economists argue that such a delivery method, untested in previous stimulus packages, will be more effective at increasing demand because consumers will be less inclined to save the money or use it to pay debt
ECB Policy Makers Signal no Rush to Start Unconventional Tools
European Central Bank policy makers signaled they are in no rush to step up their response to the credit crisis by purchasing securities and downplayed concerns about the fiscal health of some euro-region nations
The ECB is coming under pressure to follow the Federal Reserve and the Bank of England’s policy to buy government or corporate debt as Europe faces its worst recession in decades. Investors are also increasing bets that the price of banking bailouts and stimulus packages will strain public finances and hobble governments’ ability to meet bond payments.
ECB officials have so far resisted pledging to buy securities to increase the supply of money in the economy and grease credit markets. Unlike the U.S. and U.K., which have indemnified their central banks against any default risk, it is also unclear how the ECB could be covered.
The ECB is coming under pressure to follow the Federal Reserve and the Bank of England’s policy to buy government or corporate debt as Europe faces its worst recession in decades. Investors are also increasing bets that the price of banking bailouts and stimulus packages will strain public finances and hobble governments’ ability to meet bond payments.
ECB officials have so far resisted pledging to buy securities to increase the supply of money in the economy and grease credit markets. Unlike the U.S. and U.K., which have indemnified their central banks against any default risk, it is also unclear how the ECB could be covered.
Saturday, February 14, 2009
Eurozone slump worst in 50 years
Eurozone gross domestic product fell 1.5 per cent in the fourth quarter, led by a dramatic deterioration in Germany. This highlighted how the fortunes of the world’s economies have become entwined as the global crisis has unfolded.
German gross domestic produce contracted by 2.1 per cent in the final three months of last year – the worst quarterly performance since the country was reunified in 1990. That was significantly faster than the UK, where the fourth quarter contraction was in line with the eurozone average. Germany has had no housing bubble but has depended on exports to power growth.
With little sign of any rebound in global or European prospects, resistance to further cuts in eurozone interest rates has crumbled at the European Central Bank, which is widely expected to cut its main policy rate another half percentage point next month to 1.5 per cent – the lowest ever.
The ECB could soon follow the US Federal Reserve and the Bank of England in taking additional “non-conventional” measures to boost the economy – for instance by buying corporate debt.
German gross domestic produce contracted by 2.1 per cent in the final three months of last year – the worst quarterly performance since the country was reunified in 1990. That was significantly faster than the UK, where the fourth quarter contraction was in line with the eurozone average. Germany has had no housing bubble but has depended on exports to power growth.
With little sign of any rebound in global or European prospects, resistance to further cuts in eurozone interest rates has crumbled at the European Central Bank, which is widely expected to cut its main policy rate another half percentage point next month to 1.5 per cent – the lowest ever.
The ECB could soon follow the US Federal Reserve and the Bank of England in taking additional “non-conventional” measures to boost the economy – for instance by buying corporate debt.
Wednesday, January 14, 2009
hot money fleeing china
exports), China's foreign exchange reserves are not even close to keeping pace.Readers may recall that a massive amount of money flowed into China, a good bit of it disguised (FDI was one of the suspect categories) because RMB appreciation looked to be a one-way trade. Given China's currency controls, there were limited options for playing that point of view from overseas, hence the funds influx.But now that China has quietly gone back to a hard peg to the dollar, the dreams of a quick profit have been dashed, and the hot money is making an exit. Per Brad Setser (part of a longer and useful post, hat tip reader Michael). The reserve requirement mention comes about because the PBoC requires banks to hold some of their reserves in dollars, which means that the true FX reserves are greater than the official reserves:
The trade surplus should have produced a $115 billion increase in China’s foreign assets. FDI inflows and interest income should combine to produce another $30-40 billion. The fall in the reserve requirement should have added another $50-55 billion (if not more) to China’s reserves. Sum it up and China’s reserves would have increased by about $200 billion in the absence of hot money flows. Instead they went up by about $50 billion. That implies that money is now flowing out of China as fast as it flowed in during the first part of 2008.And in December, the outflows were absolutely bruta....$70 billion plus in monthly hot only outflows … That’s huge. Annualized, it is well in excess of 10% of China’s GDP. Probably above 15% …
The trade surplus should have produced a $115 billion increase in China’s foreign assets. FDI inflows and interest income should combine to produce another $30-40 billion. The fall in the reserve requirement should have added another $50-55 billion (if not more) to China’s reserves. Sum it up and China’s reserves would have increased by about $200 billion in the absence of hot money flows. Instead they went up by about $50 billion. That implies that money is now flowing out of China as fast as it flowed in during the first part of 2008.And in December, the outflows were absolutely bruta....$70 billion plus in monthly hot only outflows … That’s huge. Annualized, it is well in excess of 10% of China’s GDP. Probably above 15% …
Asia-Europe Shipping Rates Drop to Zero
http://www.nakedcapitalism.com/2009/01/asia-europe-shipping-rates-drop-to-zero.html
This is no regular cycle slowdown, but a complete collapse in foreign demand," said Lindsay Coburn, ING's trade consultant....The World Bank caused shockwaves with a warning last month that global trade may decline this year for the first time since the Second World War. This appears increasingly certain with each new batch of data.
Mr de Trenck predicts Asian trade to the US will fall 7pc this year. To Europe he estimates a drop of 9pc – possibly 12pc. Trade flows grow 8pc in an average year.He said it was "illogical" for shippers to offer zero rates, but they do whatever they can to survive in a highly cyclical market.Offering slots for free is akin to an airline giving away spare seats for nothing in the hope of making something from meals and fees.
This is no regular cycle slowdown, but a complete collapse in foreign demand," said Lindsay Coburn, ING's trade consultant....The World Bank caused shockwaves with a warning last month that global trade may decline this year for the first time since the Second World War. This appears increasingly certain with each new batch of data.
Mr de Trenck predicts Asian trade to the US will fall 7pc this year. To Europe he estimates a drop of 9pc – possibly 12pc. Trade flows grow 8pc in an average year.He said it was "illogical" for shippers to offer zero rates, but they do whatever they can to survive in a highly cyclical market.Offering slots for free is akin to an airline giving away spare seats for nothing in the hope of making something from meals and fees.
美媒研究中国模式: 欧美羡慕中国的国家干预能力
http://www.6park.com/news/messages/10774.html金融海啸冲击全球，美英等国先后将银行业和汽车业国有化，但中国却能独善其身。西方国家过去对中国的国家干预能力嗤之以鼻，但在危机下却效法中国，证明了中国的做法是生存之道。最新一期的美国《新闻周刊》便刊登题为“中国何以运转乾坤”的专题文章，详述中国的“指令性资本主义经济”如何有效运转，使之成为当今的金融海啸下，唯一能录得显着增长的主要经济体 www.6park.com
文章称，中国之所以能于全球经济乱局中鹤立鸡群，是因为她是唯一打破经济学教科书常规的国家。中国并没有完全放任市场经济，政府会于适当时候插手市场，重点的行业仍由政府主导，而银行业的重要职位都由政府官员出任，他们会听从国家指示，选择合适的贷款和投资对象。 www.6park.com
事实上，中国经济没有像其它5大经济体一样迅速减速，其主要原因在于中国具备自由派经济学家通常嗤之以鼻的国家干预能力，如在金融业中，中国限制外商投资，也不全盘引进外国的创新而复杂的投资工具，终能避开这次严重的金融海啸。 www.6park.com
中国看来最能抵御这场最严重的全球衰退，其指令性资本主义为何能奏效，这个问题更具时代意义。经济学家一直对这个问题感兴趣，他们往往把国家功能看得一无是处，而市场是灵丹妙药，而如今欧美也在向国家干预靠拢。 www.6park.com
文章称，中国官员面对危机时，可以像西方政府一样采用传统的市场手段，但也会加入干预，是指令式资本主义的后盾。比如去年初楼市过热，中国下令银行缩减房贷，接着当住房销售下滑时，他们又推出刺激楼市措施。同时，他们也会发布在西方被视为不当“干预”的指令，比如早前当局要求国有企业通过在国内外收购新资产，“积极扩大”在经济中的作用。 www.6park.com
中国的国家干预曾被视为不成熟经济的坏习惯，现在却获西方国家奉为圭臬，视之为稳定的堡垒。里昂证券经济师罗斯曼说：“大部分的资本密集型行业由政府控制，我因此对中国的前景感到乐观。”美国摩根士丹利亚洲区主席罗奇表示：“在经济困难时期，中国的指令控制型体制的确比其它的市场体系更有效。”
文章称，中国之所以能于全球经济乱局中鹤立鸡群，是因为她是唯一打破经济学教科书常规的国家。中国并没有完全放任市场经济，政府会于适当时候插手市场，重点的行业仍由政府主导，而银行业的重要职位都由政府官员出任，他们会听从国家指示，选择合适的贷款和投资对象。 www.6park.com
事实上，中国经济没有像其它5大经济体一样迅速减速，其主要原因在于中国具备自由派经济学家通常嗤之以鼻的国家干预能力，如在金融业中，中国限制外商投资，也不全盘引进外国的创新而复杂的投资工具，终能避开这次严重的金融海啸。 www.6park.com
中国看来最能抵御这场最严重的全球衰退，其指令性资本主义为何能奏效，这个问题更具时代意义。经济学家一直对这个问题感兴趣，他们往往把国家功能看得一无是处，而市场是灵丹妙药，而如今欧美也在向国家干预靠拢。 www.6park.com
文章称，中国官员面对危机时，可以像西方政府一样采用传统的市场手段，但也会加入干预，是指令式资本主义的后盾。比如去年初楼市过热，中国下令银行缩减房贷，接着当住房销售下滑时，他们又推出刺激楼市措施。同时，他们也会发布在西方被视为不当“干预”的指令，比如早前当局要求国有企业通过在国内外收购新资产，“积极扩大”在经济中的作用。 www.6park.com
中国的国家干预曾被视为不成熟经济的坏习惯，现在却获西方国家奉为圭臬，视之为稳定的堡垒。里昂证券经济师罗斯曼说：“大部分的资本密集型行业由政府控制，我因此对中国的前景感到乐观。”美国摩根士丹利亚洲区主席罗奇表示：“在经济困难时期，中国的指令控制型体制的确比其它的市场体系更有效。”
German Growth Slumped in 2008 as Recession Set In (Update2)
http://www.bloomberg.com/apps/news?pid=20601068&sid=an4RvXneBiUs&refer=economy
Companies are scaling back production and cutting jobs as global economic expansion slows and demand for German exports wanes. Bundesbank President Axel Weber last week indicated the economy may contract more this year than the bank’s 0.8 percent forecast. A decline of more than 0.9 percent would be Germany’s worst performance since records began after World War II.
“There is just no sign of the economic decline bottoming out,” said Kenneth Broux, an economist at Lloyds TSB Group Plc. in London, who expects the German economy to shrink 2.1 percent this year. “The first and second quarter will be awful. If we are very lucky, we may see a slight stabilization in the third or the fourth quarter.”
The European Central Bank has cut its key interest rate by a total of 175 basis points to 2.5 percent since early October as Europe’s economic slump deepened. Investors bet it will lower borrowing costs again tomorrow by at least 50 points, Eonia forward contracts indicate, even as some policy makers signal they’d rather wait.
Companies are scaling back production and cutting jobs as global economic expansion slows and demand for German exports wanes. Bundesbank President Axel Weber last week indicated the economy may contract more this year than the bank’s 0.8 percent forecast. A decline of more than 0.9 percent would be Germany’s worst performance since records began after World War II.
“There is just no sign of the economic decline bottoming out,” said Kenneth Broux, an economist at Lloyds TSB Group Plc. in London, who expects the German economy to shrink 2.1 percent this year. “The first and second quarter will be awful. If we are very lucky, we may see a slight stabilization in the third or the fourth quarter.”
The European Central Bank has cut its key interest rate by a total of 175 basis points to 2.5 percent since early October as Europe’s economic slump deepened. Investors bet it will lower borrowing costs again tomorrow by at least 50 points, Eonia forward contracts indicate, even as some policy makers signal they’d rather wait.
Citi gives control of brokerage to Morgan Stanley
http://biz.yahoo.com/ap/090114/citigroup.html
The deal, which will give Citigroup $2.7 billion in badly needed cash as it gives up control of Smith Barney, comes as the company still struggles in the aftermath of the mortgage and credit crisis. There is speculation that CEO Vikram Pandit, who for months supported Citigroup as a "universal bank," will be taking further steps to simplify and streamline the company
"I think within 12 months, Citigroup no longer exists," said William Smith at Smith Asset Management, who owns Citigroup shares. He has been calling for a breakup of Citigroup for years, and believes the government will force that fate in piecemeal fashion over the coming year.
The idea behind the supermarket is that the average person can do all his saving, borrowing and investing with one company. Citigroup had it all, the retail and business banking operations, the investment banking business, the brokerage, even Travelers insurance. Whether that one company does it better than a number of specialized companies does, though, has been the big question facing shareholders since the deregulation of the banking industry in the 1990s. And Citi's announcement Tuesday further undermines the idea that one company can handle such diverse businesses at once
The deal, which will give Citigroup $2.7 billion in badly needed cash as it gives up control of Smith Barney, comes as the company still struggles in the aftermath of the mortgage and credit crisis. There is speculation that CEO Vikram Pandit, who for months supported Citigroup as a "universal bank," will be taking further steps to simplify and streamline the company
"I think within 12 months, Citigroup no longer exists," said William Smith at Smith Asset Management, who owns Citigroup shares. He has been calling for a breakup of Citigroup for years, and believes the government will force that fate in piecemeal fashion over the coming year.
The idea behind the supermarket is that the average person can do all his saving, borrowing and investing with one company. Citigroup had it all, the retail and business banking operations, the investment banking business, the brokerage, even Travelers insurance. Whether that one company does it better than a number of specialized companies does, though, has been the big question facing shareholders since the deregulation of the banking industry in the 1990s. And Citi's announcement Tuesday further undermines the idea that one company can handle such diverse businesses at once
Sunday, January 11, 2009
How to Spot the Bottom… Then What to Buy, Home Prices Crash, Has China Peaked? And More!
http://www.contrarianprofits.com/articles/how-to-spot-the-bottom%E2%80%A6-then-what-to-buy-home-prices-crash-has-china-peaked-and-more/10707
The entire financial world had placed a wild bet that house prices in the U.S. would go up indefinitely. The year 2008 will go down in history as the year that proved them wrong… and then all hell would break loose.
Rather than commit hari-kari… let’s do something unusual and try to think, umn, positive… it is the holidays, after all. How will we know when the bear market is bottoming? And what should we buy when it does?
“Normalized earnings for the S&P 500 could be $60-70,” Agora Financial’s managing editor, Chris Mayer, opined this morning, taking a shot at an answer.
In layman’s terms, that’s a possible low of 600-700 for the S&P 500… 30% lower than it is today.
“The S&P at 600 is entirely possible,” Mayer continues. “So we could have more room to go. But it doesn’t have to go there. Signals to watch — when earnings stop falling quarter to quarter. I actually think we’ll see a big rally early 2009 a la 1930, when the Dow was up 48% from its bottom by April. Big rally coming, and that will be your last chance to dump your weaker holdings.
If you are going to invest in stocks in 2009,” Mr. Mayer suggests, “stick with hard assets, management teams with proven track records, strong balance sheets and businesses with good disclosures (i.e., no black boxes or funny business). Ag-related stocks will have a good year, I think — fertilizer stocks, in particular. Oil stocks will come back, too, particularly oil field service stocks.
Natural gas stocks will do even better, particularly the low-cost producers.
“I think now is a good time to pick up India’s blue chips, if you can sit with them for a while. I like emerging markets still. This is a pause, and not the end, of the emerging market growth story. It’s much bigger than most people think. India has less exposure to exports than China, has a lot of savings, little debt, a very young population (half under the age of 25) and some leading companies dirt-cheap…
After briefly falling below 80 yesterday, the dollar index has stabilized around 80.6 today. The euro and pound are on the verge of parity for the first time ever. The pound, slammed by a large U.K. recession, housing crisis and lower-than-normal rates, has weakened to 98 pence per euro. Year to date, it’s down 25% versus the multination currency.
The approaching parity is reflected in the dollar exchange, as well. A euro today goes for $1.40… the pound a “mere” $1.45.
“I believe oil and gold are the places to start getting well positioned in for 2009,” writes a reader, “if one hasn’t already. Oil especially is being primed for a V-shaped recovery. If investors are paying attention, they understand that the unrealistically low price of oil is just that — unrealistic.
“Many oil and gas exploration and production projects have been shelved due to the financial crisis and falling price. Some major oil exporters have exhausted their reserves, Mexico being one. Oil exploration and production require oil prices to be over $100 to be profitable. OPEC drastically cut production levels, due to falling demand. Problems of shortages and spiking oil prices are looming.
“Gold is also primed for a spike as the bailouts and stimulus package get under way. Great way to make up for the losses in 2008 if you’re ready for the ravages that will come along with this!”
“I believe 2009,” writes a reader with his own year-end forecast, “is going to be the beginning of a ‘rich get richer’ story that will reach levels never previously even imagined. This is how I see it playing out. There are many solid companies that have more than sufficient cash to get through the upcoming tough times, but are trading at huge discounts to their historic value. At the moment, the real estate- and energy-related sectors seem to have more of these companies than some other industries, but they exist everywhere. As is often the case, Mr. Market has overreacted and taken down the good with the bad.
“I predict that once there is even a hint that the economy is starting to turn around, there will be a flood of leveraged buyouts whereby those with access to cash will be buying the best companies for a fraction of even their future one-three-year value. And the banks will rush in to provide the financing with the cash they got from the Fed and currently have sitting on the sidelines.
“Bottom line is that Joe the Plumber will find out about a year from now that the only companies still in his portfolio are the companies that the buyout companies did not want. For buyout firms like KKR and Carlyle, this is going to better than robbing a bank, since it is legal. I suggest you provide some guidance as to how to share in this upcoming M&A activity.
“Even a master list of companies that are beaten down but still are earning good money and have plenty of cash would be a start.”
The entire financial world had placed a wild bet that house prices in the U.S. would go up indefinitely. The year 2008 will go down in history as the year that proved them wrong… and then all hell would break loose.
Rather than commit hari-kari… let’s do something unusual and try to think, umn, positive… it is the holidays, after all. How will we know when the bear market is bottoming? And what should we buy when it does?
“Normalized earnings for the S&P 500 could be $60-70,” Agora Financial’s managing editor, Chris Mayer, opined this morning, taking a shot at an answer.
In layman’s terms, that’s a possible low of 600-700 for the S&P 500… 30% lower than it is today.
“The S&P at 600 is entirely possible,” Mayer continues. “So we could have more room to go. But it doesn’t have to go there. Signals to watch — when earnings stop falling quarter to quarter. I actually think we’ll see a big rally early 2009 a la 1930, when the Dow was up 48% from its bottom by April. Big rally coming, and that will be your last chance to dump your weaker holdings.
If you are going to invest in stocks in 2009,” Mr. Mayer suggests, “stick with hard assets, management teams with proven track records, strong balance sheets and businesses with good disclosures (i.e., no black boxes or funny business). Ag-related stocks will have a good year, I think — fertilizer stocks, in particular. Oil stocks will come back, too, particularly oil field service stocks.
Natural gas stocks will do even better, particularly the low-cost producers.
“I think now is a good time to pick up India’s blue chips, if you can sit with them for a while. I like emerging markets still. This is a pause, and not the end, of the emerging market growth story. It’s much bigger than most people think. India has less exposure to exports than China, has a lot of savings, little debt, a very young population (half under the age of 25) and some leading companies dirt-cheap…
After briefly falling below 80 yesterday, the dollar index has stabilized around 80.6 today. The euro and pound are on the verge of parity for the first time ever. The pound, slammed by a large U.K. recession, housing crisis and lower-than-normal rates, has weakened to 98 pence per euro. Year to date, it’s down 25% versus the multination currency.
The approaching parity is reflected in the dollar exchange, as well. A euro today goes for $1.40… the pound a “mere” $1.45.
“I believe oil and gold are the places to start getting well positioned in for 2009,” writes a reader, “if one hasn’t already. Oil especially is being primed for a V-shaped recovery. If investors are paying attention, they understand that the unrealistically low price of oil is just that — unrealistic.
“Many oil and gas exploration and production projects have been shelved due to the financial crisis and falling price. Some major oil exporters have exhausted their reserves, Mexico being one. Oil exploration and production require oil prices to be over $100 to be profitable. OPEC drastically cut production levels, due to falling demand. Problems of shortages and spiking oil prices are looming.
“Gold is also primed for a spike as the bailouts and stimulus package get under way. Great way to make up for the losses in 2008 if you’re ready for the ravages that will come along with this!”
“I believe 2009,” writes a reader with his own year-end forecast, “is going to be the beginning of a ‘rich get richer’ story that will reach levels never previously even imagined. This is how I see it playing out. There are many solid companies that have more than sufficient cash to get through the upcoming tough times, but are trading at huge discounts to their historic value. At the moment, the real estate- and energy-related sectors seem to have more of these companies than some other industries, but they exist everywhere. As is often the case, Mr. Market has overreacted and taken down the good with the bad.
“I predict that once there is even a hint that the economy is starting to turn around, there will be a flood of leveraged buyouts whereby those with access to cash will be buying the best companies for a fraction of even their future one-three-year value. And the banks will rush in to provide the financing with the cash they got from the Fed and currently have sitting on the sidelines.
“Bottom line is that Joe the Plumber will find out about a year from now that the only companies still in his portfolio are the companies that the buyout companies did not want. For buyout firms like KKR and Carlyle, this is going to better than robbing a bank, since it is legal. I suggest you provide some guidance as to how to share in this upcoming M&A activity.
“Even a master list of companies that are beaten down but still are earning good money and have plenty of cash would be a start.”
Chinese Central Bank to Test Program to Settle Trade in Yuan Rather Than Dollars
A UBS Investment Research report says that while it would be wrong to write off the U.S. dollar as the global reserve currency, its roughly 90-year iron grip on that position is loosening. “The use of the U.S. dollar as an international reserve currency is in decline,” said UBS economist Paul Donovan.
The market share of the dollar in international transactions is likely to decline over the coming months and years, but only persistent policy error - or considerable fiscal strain - is likely to cause the dollar to lose reserve currency status entirely.”The UBS report maintains that the gradual slide of the U.S. dollar is being driven not by the world's central banks, but by the private sector, as individual companies increasingly abandon the greenback as their international currency of choice.“The private sector's use of reserves is more important than official, central bank reserves – anything up to 20 times the significance, depending on interpretation,” Mr. Donovan said. “There is evidence that the move away from the dollar as a private-sector reserve currency has been accelerating since 2000.”...
According to Alibaba.com, the online company that matches Chinese suppliers with international buyers, the vast majority of their almost 700,000 Chinese suppliers no longer use dollars to settle non-US transactions in order to minimise foreign exchange risk.
So one could read the pending PBoC pilot of a yuan-based trade settlement system as a response to realities on the ground. But there have also been US reports of far more fundamental discontent with the dollar, per the New York Times in August:
He said the officials blamed the United States and believed the controversial assertions set forth in the book “Currency War,” a Chinese best seller published a year ago. The book suggests that the United States deliberately lured China into buying its securities knowing that they would later plunge in value.
And Reuters reported a more frontal attack in October in an article that appears likely to have been sanctioned:
The United States has plundered global wealth by exploiting the dollar's dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday.The front-page commentary in the overseas edition of the People's Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies...The People's Daily is the official newspaper of China's ruling Communist Party. The Chinese-language overseas edition is a small circulation offshoot of the main paper.Its pronouncements do not necessarily directly voice leadership views. But the commentary, as well as recent comments, amount to a growing chorus of Chinese disdain for Washington's economic policies and global financial dominance in the wake of the credit crisis.
China's central bank said yesterday that it plans to implement a pilot program that would settle overseas trade with the Chinese currency instead of the US dollar.
Meanwhile, exporters in the Guangxi Zhuang Autonomous Region and Yunnan Province in southwestern China will be allowed to use the yuan to settle trade payments with members of the Association of Southeast Asian Nations.
Those moves are expected to facilitate overseas trade, as Chinese exporters might face losses if they continue to be paid in US dollars, analysts said.The dollar's exchange rate has become more volatile since the global financial crisis began.The central bank said it will make the exchange rate of the yuan more flexible and keep it "basically stable on a reasonable, balanced level."There has been speculation that the yuan's appreciation will slow down, which would help Chinese exports maintain price advantages in overseas markets
The market share of the dollar in international transactions is likely to decline over the coming months and years, but only persistent policy error - or considerable fiscal strain - is likely to cause the dollar to lose reserve currency status entirely.”The UBS report maintains that the gradual slide of the U.S. dollar is being driven not by the world's central banks, but by the private sector, as individual companies increasingly abandon the greenback as their international currency of choice.“The private sector's use of reserves is more important than official, central bank reserves – anything up to 20 times the significance, depending on interpretation,” Mr. Donovan said. “There is evidence that the move away from the dollar as a private-sector reserve currency has been accelerating since 2000.”...
According to Alibaba.com, the online company that matches Chinese suppliers with international buyers, the vast majority of their almost 700,000 Chinese suppliers no longer use dollars to settle non-US transactions in order to minimise foreign exchange risk.
So one could read the pending PBoC pilot of a yuan-based trade settlement system as a response to realities on the ground. But there have also been US reports of far more fundamental discontent with the dollar, per the New York Times in August:
He said the officials blamed the United States and believed the controversial assertions set forth in the book “Currency War,” a Chinese best seller published a year ago. The book suggests that the United States deliberately lured China into buying its securities knowing that they would later plunge in value.
And Reuters reported a more frontal attack in October in an article that appears likely to have been sanctioned:
The United States has plundered global wealth by exploiting the dollar's dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday.The front-page commentary in the overseas edition of the People's Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies...The People's Daily is the official newspaper of China's ruling Communist Party. The Chinese-language overseas edition is a small circulation offshoot of the main paper.Its pronouncements do not necessarily directly voice leadership views. But the commentary, as well as recent comments, amount to a growing chorus of Chinese disdain for Washington's economic policies and global financial dominance in the wake of the credit crisis.
China's central bank said yesterday that it plans to implement a pilot program that would settle overseas trade with the Chinese currency instead of the US dollar.
Meanwhile, exporters in the Guangxi Zhuang Autonomous Region and Yunnan Province in southwestern China will be allowed to use the yuan to settle trade payments with members of the Association of Southeast Asian Nations.
Those moves are expected to facilitate overseas trade, as Chinese exporters might face losses if they continue to be paid in US dollars, analysts said.The dollar's exchange rate has become more volatile since the global financial crisis began.The central bank said it will make the exchange rate of the yuan more flexible and keep it "basically stable on a reasonable, balanced level."There has been speculation that the yuan's appreciation will slow down, which would help Chinese exports maintain price advantages in overseas markets
Tuesday, January 6, 2009
US will emerge as undisputed top dog in 2009
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4123663/US-will-emerge-as-undisputed-top-dog-in-2009.html
Obama's America will shine. The country will reemerge as undisputed top dog, the only one with real demographic, scientific, and strategic depth. As first into the crisis, it will be the first to hit bottom. Those expecting the dollar to collapse will have to wait.
The damage to core Europe will take longer, but run deeper. Belgium will face a break-up scare. Markets will test highdebt states as they try to roll over bonds – €200bn (£191bn) for Italy and €40bn for Greece. Spain's corporate debts will turn bad.
Germany's economy will contract by 3pc as exports collapse, and the delayed effects of the strong euro and tight money feed through. Angela Merkel's (pictured below) Left-Right coalition will be haunted by its failure to tackle the crisis earlier. The neo-Marxist Linke party and the hard-Right will muscle in. The country will start to look ungovernable. This will at least divert attention from the Club Med mess, making a North-South split in the eurozone less likely. After sterling's sudden death, the euro will face slow death. The pair will refind their accustomed level.
Authoritarian regimes will fare badly. Those that depend on perma-boom to hold power will fray. Repression will escalate in China as an inflammatory cocktail of migrant workers and jobless graduates vent their anger in riots. Massive fiscal spending will buy time.
Analysts will be shocked by the ferocity of the downturn across Asia, where the strategy of export-led growth will be called into question. It will become clearer that Asia's boom has been a leveraged play on the West, and leverage works both ways. Some Pacific tigers will try to resist the denouement by holding down currencies. Such beggar-thy-neighbour policies will lead to tit for tat responses. The US and Europe will tire of holding the ring for free trade. The WTO will look ever more like the League of Nations.
By late 2009, the massive monetary and fiscal stimulus will feed through. Angst will start to switch from deflation back to the risk of incipient inflation. Equities, oil, and gold will rally. Bonds will falter, and then crash.
At that point it will become clear that reflation is just as dangerous as deflation in a world of debt. We will find that there is no way out. But that, perhaps, can wait until 2010.
Obama's America will shine. The country will reemerge as undisputed top dog, the only one with real demographic, scientific, and strategic depth. As first into the crisis, it will be the first to hit bottom. Those expecting the dollar to collapse will have to wait.
The damage to core Europe will take longer, but run deeper. Belgium will face a break-up scare. Markets will test highdebt states as they try to roll over bonds – €200bn (£191bn) for Italy and €40bn for Greece. Spain's corporate debts will turn bad.
Germany's economy will contract by 3pc as exports collapse, and the delayed effects of the strong euro and tight money feed through. Angela Merkel's (pictured below) Left-Right coalition will be haunted by its failure to tackle the crisis earlier. The neo-Marxist Linke party and the hard-Right will muscle in. The country will start to look ungovernable. This will at least divert attention from the Club Med mess, making a North-South split in the eurozone less likely. After sterling's sudden death, the euro will face slow death. The pair will refind their accustomed level.
Authoritarian regimes will fare badly. Those that depend on perma-boom to hold power will fray. Repression will escalate in China as an inflammatory cocktail of migrant workers and jobless graduates vent their anger in riots. Massive fiscal spending will buy time.
Analysts will be shocked by the ferocity of the downturn across Asia, where the strategy of export-led growth will be called into question. It will become clearer that Asia's boom has been a leveraged play on the West, and leverage works both ways. Some Pacific tigers will try to resist the denouement by holding down currencies. Such beggar-thy-neighbour policies will lead to tit for tat responses. The US and Europe will tire of holding the ring for free trade. The WTO will look ever more like the League of Nations.
By late 2009, the massive monetary and fiscal stimulus will feed through. Angst will start to switch from deflation back to the risk of incipient inflation. Equities, oil, and gold will rally. Bonds will falter, and then crash.
At that point it will become clear that reflation is just as dangerous as deflation in a world of debt. We will find that there is no way out. But that, perhaps, can wait until 2010.
Monday, January 5, 2009
Predictions 2009 Joseph Trevisani fxsol.com
Prediction is a dangerous game, particularly for currency analysts. But in honor of the year end we will dignify a few guesses about 2009 with the term long term analysis. This one time in the year we will ignore the honored analyst’s dictum: provide a price or a date but never both.The European Central Bank (ECB) has again succumbed to the seductive belief that the EMU economies live in a parallel universe. It is a universe where the United States and Japan can fall off the economic cliff but the Europeans can dance on the edge. Recent talk from the ECB governors has been all about inflation. The ECB refinance rate is at 2.5% while the American and Japanese rates are effectively zero and negative in real terms. The European governors are hoping that their economies will not collapse and that their rhetoric will forestall inflationary union wage settlements. But hope is not an economic policy and recession and deflation will dampen union wage demands without assistance from the ECB governors. There is no logical reason to believe that the EMU economies will not perform as badly or worse than their industrial counterparts around the world. If the US and Japan see the need for zero rates, how can the ECB board stop at 2.5%? Fact is they probably won’t. The ECB is not finished cutting rates no matter what Jurgen Stark may say. But by letting the market see their reluctance to lower rates further the governors risk setting up the same type of market reaction that we saw in July. Perhaps a much weaker euro is desired by the governors? It was the mid-July admission by ECB president Trichet that EMU economic growth would be much weaker than predicted that sparked the vast sell off in the euro and the yen crosses. Until mid-summer Trichet had been steadfast in maintaining that inflation was the problem and that the US financial crisis would stay on the western side of the Atlantic . Judging by the euro rate against the dollar in late June most currency traders must have believed him. By returning to their anti-inflation rhetoric are the ECB governors deliberately prepping the euro for a fall? Probably not. Inflation talk from the ECB boosts the euro so even if there were a surprise rate cut the currency will just have that much farther to fall. The unease of the ECB board members with an avowed rate cutting policy is of a piece with the bank’s charter and its stabilizing role in the EMU. But any recovery in the euro based on a rate disparity of 2.00% or more with US or Japanese rates is doomed to disappointment. Do the ECB governors think they can put a floor on European rates at 2.00%? Again probably not. But for the ECB there is no cost to keeping up inflation appearances. The only folks likely to be harmed are currency traders who, as in July, believed the governors’ words rather than economic facts and may have gone long the euro at year-end. Japan and the United States have embarked on rate and fiscal policies almost unprecedented in modern times. Nominal base rates in both countries are close to zero; real rates are negative. The American government and the incoming Obama administration are planning the largest fiscal stimulus package in history. This enormous increase in government spending is aimed not at the private sector but at government jobs, it is essentially a huge increase in government payrolls. These twin rate and fiscal policies are not quite unprecedented. They have been tried once before and they were largely a failure. In the early part of the decade the Bank of Japan kept interest rates at zero percent for more than five years. The Japanese government enacted stimulus package after stimulus package pumping billions of yen into the economy. But the economy refused to recover. Japan too had a banking crisis. Banks were unable to lend because of the vast burden of bad property loans leftover from an earlier property bubble. The problem with government spending is twofold: first it is limited in duration, and second it creates nothing. Jobs on the government payroll are jobs totally dependent on government largesse. Government appropriation means taxes or in this case borrowing. When the jobs program ends no firm has been established to continue employment. It is the private economy that creates sustainable expansion because only it creates firms and products that when successful provide permanent employment. No amount of government spending can compensate for a moribund private sector. Government jobs are essentially make work jobs, not that they might not perform needed tasks but when those tasks are done, unless government spending is to continue at the same rate the jobs are lost. Workers then have to repair to the private sector to find permanent employment. Government borrowing also crowds out private sector funding. Every penny of the one trillion or more dollars that the Obama administration will probably spend on economic stimulus will have to be borrowed from the market. Lenders will have a choice; give money to relatively risky private ventures at a premium rate or to the US government at a very low and safe rate. In the current environment many will choose to lend in safety to the federal government. The economic effect is that some or many private ventures will not get funded. The jobs that they might have created will never arrive. But despite these issues the United States is at least addressing its economic problems. The ECB and the national governments on the continent are not. The ECB in particular may sustain its inflation reputation but in the long run its credibility as a central bank will suffer far more from a prolonged recession. The trust so painstakingly assembled over the past decade as the custodian of European prosperity could be seriously damaged. And wither the ECB so the euro.And this brings us back to the predictions. The market will hear the ECB inflation rhetoric and then see the ECB rate cuts and likely traders will punish the euro for the deception. EMU economic recovery will be delayed by the very late start of the ECB in cutting rates and the paltry economic stimulus programs of the states; the European recession will keep the euro down. The euro will reach 1.2000 by mid-year and 1.1000 by year end. If this comes true please write, if not, please forebear
Fed has abandoned monetary policy, critic says
http://www.cnbc.com/id/28486593/for/cnbc/
The Fed's balance sheet has more than doubled in size to over $1.2 trillion in recent months as it has tried to shield the U.S. economy from the worst financial crisis since the Great Depression by supporting key credit markets.
This has included direct purchases of mortgage-backed bonds by the Fed and support for top-rated non-financial borrowers in the crucial commercial paper market, as well as hundreds of billions of dollars lent to banks on the basis of collateral
Taylor said the U.S. Congress has a legitimate right to demand a say in who the Fed lends money to. The outcome would be "radical reform" that would risk monetary policy independence, he said
"We are blurring the institutional arrangements a little," Bullard said. "I am concerned about independence. Fed independence is very important," he told reporters.
The Fed's balance sheet has more than doubled in size to over $1.2 trillion in recent months as it has tried to shield the U.S. economy from the worst financial crisis since the Great Depression by supporting key credit markets.
This has included direct purchases of mortgage-backed bonds by the Fed and support for top-rated non-financial borrowers in the crucial commercial paper market, as well as hundreds of billions of dollars lent to banks on the basis of collateral
Taylor said the U.S. Congress has a legitimate right to demand a say in who the Fed lends money to. The outcome would be "radical reform" that would risk monetary policy independence, he said
"We are blurring the institutional arrangements a little," Bullard said. "I am concerned about independence. Fed independence is very important," he told reporters.
Economy May Be Worse A Year From Now: Feldstein
http://www.cnbc.com/id/28470517
Feldstein said the current economic downturn is the worst since the end of World War II and mandates a different approach that even goes beyond the hundreds of billions the government already has poured into the system.
"I think we'll be lucky if by this time next year we see the economy having hit the bottom and starting up, and that's still going to leave us at a very low level of economic activity even if the turn has come at that pointGovernment will have to change the tax structure for capital gains and corporations while also exercising caution against inflation, added Feldstein, an economist at Harvard and president emeritus of the National Bureau of Economic Research.
American households have lost more than $10 trillion of net worth in the stock market and housing prices. They are cutting back on their spending...Where's the demand going to come from?"
"long-term structural changes" will solve the economy's many woes.
Asian Stocks Hit 2-Month High as Risk Returns
http://www.cnbc.com/id/28495790
Asian stocks hit a two-month high Monday, with investors betting the global economy will start to recover later this year by shedding some of their big holdings of safe-haven government bonds.
The Australian dollar
cnbc_comboQuoteMove('popup_AUD-TN_ID0EPC15839609');
[AUD-TN 0.7097 -0.0012 (-0.17%) ]
cnbc_quoteComponent_init_getData("AUD-TN","WSODQ_COMPONENT_AUD-TN_ID0EPC15839609","WSODQ","true","ID0EPC15839609","off","false","inLineQuote");
pushed to a three-month high against the U.S. dollar as investors embraced higher-yielding currencies, taking heart from calmer financial markets and expectations for big government stimulus spending packages in coming weeks to revive growth. The dollar edged up across the board, mainly getting a boost as the euro
cnbc_comboQuoteMove('popup_EUR-TN_ID0EOH15839609');
[EUR-TN 1.3683 -0.0236 (-1.7%) ]
cnbc_quoteComponent_init_getData("EUR-TN","WSODQ_COMPONENT_EUR-TN_ID0EOH15839609","WSODQ","true","ID0EOH15839609","off","false","inLineQuote");
stumbled. Traders said the single currency's surge in December was due more to factors such as investors repatriating funds before year-end and was likely overdone. Commodity prices generally firmed, with oil prices
cnbc_comboQuoteMove('popup_US@CL.1_ID0EOEAC15839609');
[US@CL.1 47.45 1.11 (+2.4%) ]
cnbc_quoteComponent_init_getData("US@CL.1","WSODQ_COMPONENT_US%40CL.1_ID0EOEAC15839609","WSODQ","true","ID0EOEAC15839609","off","false","inLineQuote");
climbing above $47 a barrel on increased tensions in the Middle East, Russia and Ukraine.
RELATED LINKS
Current DateTime: 02:31:46 05 Jan 2009LinksList Documentid: 28495804
Oil Rises Toward $47 on Gaza, Russia Gas Row
Dollar Hits 3-Week High vs Yen as Stocks Gain
Dow Tops 9,000 Amid New Year Optimism
Euro Shares Rise; Swiss Banks Gain
More Asia Pacific News
Japan's Nikkei 225 Average
cnbc_comboQuoteMove('popup_NIKKEI_ID0EJMAC15839609');
[NIKKEI 9043.12 183.5606 (+2.07%) ]
cnbc_quoteComponent_init_getData("NIKKEI","WSODQ_COMPONENT_NIKKEI_ID0EJMAC15839609","WSODQ","true","ID0EJMAC15839609","off","false","inLineQuote");
began 2009 on a strong note, closing 2.1 percent higher in a shortened session and hitting a two-month high on hopes this year will be better than last, the worst in the Nikkei's history. Honda Motor and other exporters climbed on a weaker yen
cnbc_comboQuoteMove('popup_JPY-TN_ID0ELBAE15839609');
[JPY-TN 93.01 1.19 (+1.3%) ]
cnbc_quoteComponent_init_getData("JPY-TN","WSODQ_COMPONENT_JPY-TN_ID0ELBAE15839609","WSODQ","true","ID0ELBAE15839609","off","false","inLineQuote");
. Resource-linked firms such as trading houses surged as oil jumped more than 3 percent, after an Iranian military commander reportedly called on Islamic countries to cut oil exports to supporters of Israel over Israel's ground offensive in the Gaza Strip to stop Hamas rocket attacks.
Seoul shares gained 1.4 percent with banks including KB Financial rallying on expectations of a rate cut, while auto makers advanced on strengthening views their earnings may not be as bad as feared.
Australian stocks finished down 0.7 percent as banks gave up early gains, precious metal miners fell on lower gold prices and investors sold offshore earners likely to be hurt by a stronger Australian dollar.
More From CNBC.com
Get After-the-Bell Dow 30 Quotes
Credit Spreads and Libor Data
Futures and Pre-Market Data
Currency Data
Hong Kong shares rose 3.5 percent, with China Mobile rising for a second day on hopes that Chinese telecom operators will soon be issued licences to offer third generation (3G) services. China's Lenovo Group climbed after the Chinese magazine Caijing said the world's No.4 personal computer maker was set to announce a major restructuring plan on Jan. 8 including changes of its top management. Aluminum Corp of China jumped 9.5 percent, tracking similar gains in its Shanghai listed scrip on hopes that it would benefit from the government's infrastructure building plans.
Singapore's Straits Times Index rose 5.2 percent. Shares of plantation firms such as Golden Agri and Wilmar International rose on higher palm oil prices. Benchmark palm oil prices in Malaysia rose 1.5 percent after crude oil climbed on worries over supplies after an Iranian military commander reportedly called for an oil boycott.
China's Shanghai Composite Index rose 3.3 percent, with industrial metal producers leading the gains on hopes they would benefit from the government's infrastructure building plans. Coal producers also outperformed, partly because of a surge in global oil prices due to tensions in the Middle East. Shenhua Energy gained.
© 2009 CNBC.com
Asian stocks hit a two-month high Monday, with investors betting the global economy will start to recover later this year by shedding some of their big holdings of safe-haven government bonds.
The Australian dollar
cnbc_comboQuoteMove('popup_AUD-TN_ID0EPC15839609');
[AUD-TN 0.7097 -0.0012 (-0.17%) ]
cnbc_quoteComponent_init_getData("AUD-TN","WSODQ_COMPONENT_AUD-TN_ID0EPC15839609","WSODQ","true","ID0EPC15839609","off","false","inLineQuote");
pushed to a three-month high against the U.S. dollar as investors embraced higher-yielding currencies, taking heart from calmer financial markets and expectations for big government stimulus spending packages in coming weeks to revive growth. The dollar edged up across the board, mainly getting a boost as the euro
cnbc_comboQuoteMove('popup_EUR-TN_ID0EOH15839609');
[EUR-TN 1.3683 -0.0236 (-1.7%) ]
cnbc_quoteComponent_init_getData("EUR-TN","WSODQ_COMPONENT_EUR-TN_ID0EOH15839609","WSODQ","true","ID0EOH15839609","off","false","inLineQuote");
stumbled. Traders said the single currency's surge in December was due more to factors such as investors repatriating funds before year-end and was likely overdone. Commodity prices generally firmed, with oil prices
cnbc_comboQuoteMove('popup_US@CL.1_ID0EOEAC15839609');
[US@CL.1 47.45 1.11 (+2.4%) ]
cnbc_quoteComponent_init_getData("US@CL.1","WSODQ_COMPONENT_US%40CL.1_ID0EOEAC15839609","WSODQ","true","ID0EOEAC15839609","off","false","inLineQuote");
climbing above $47 a barrel on increased tensions in the Middle East, Russia and Ukraine.
RELATED LINKS
Current DateTime: 02:31:46 05 Jan 2009LinksList Documentid: 28495804
Oil Rises Toward $47 on Gaza, Russia Gas Row
Dollar Hits 3-Week High vs Yen as Stocks Gain
Dow Tops 9,000 Amid New Year Optimism
Euro Shares Rise; Swiss Banks Gain
More Asia Pacific News
Japan's Nikkei 225 Average
cnbc_comboQuoteMove('popup_NIKKEI_ID0EJMAC15839609');
[NIKKEI 9043.12 183.5606 (+2.07%) ]
cnbc_quoteComponent_init_getData("NIKKEI","WSODQ_COMPONENT_NIKKEI_ID0EJMAC15839609","WSODQ","true","ID0EJMAC15839609","off","false","inLineQuote");
began 2009 on a strong note, closing 2.1 percent higher in a shortened session and hitting a two-month high on hopes this year will be better than last, the worst in the Nikkei's history. Honda Motor and other exporters climbed on a weaker yen
cnbc_comboQuoteMove('popup_JPY-TN_ID0ELBAE15839609');
[JPY-TN 93.01 1.19 (+1.3%) ]
cnbc_quoteComponent_init_getData("JPY-TN","WSODQ_COMPONENT_JPY-TN_ID0ELBAE15839609","WSODQ","true","ID0ELBAE15839609","off","false","inLineQuote");
. Resource-linked firms such as trading houses surged as oil jumped more than 3 percent, after an Iranian military commander reportedly called on Islamic countries to cut oil exports to supporters of Israel over Israel's ground offensive in the Gaza Strip to stop Hamas rocket attacks.
Seoul shares gained 1.4 percent with banks including KB Financial rallying on expectations of a rate cut, while auto makers advanced on strengthening views their earnings may not be as bad as feared.
Australian stocks finished down 0.7 percent as banks gave up early gains, precious metal miners fell on lower gold prices and investors sold offshore earners likely to be hurt by a stronger Australian dollar.
More From CNBC.com
Get After-the-Bell Dow 30 Quotes
Credit Spreads and Libor Data
Futures and Pre-Market Data
Currency Data
Hong Kong shares rose 3.5 percent, with China Mobile rising for a second day on hopes that Chinese telecom operators will soon be issued licences to offer third generation (3G) services. China's Lenovo Group climbed after the Chinese magazine Caijing said the world's No.4 personal computer maker was set to announce a major restructuring plan on Jan. 8 including changes of its top management. Aluminum Corp of China jumped 9.5 percent, tracking similar gains in its Shanghai listed scrip on hopes that it would benefit from the government's infrastructure building plans.
Singapore's Straits Times Index rose 5.2 percent. Shares of plantation firms such as Golden Agri and Wilmar International rose on higher palm oil prices. Benchmark palm oil prices in Malaysia rose 1.5 percent after crude oil climbed on worries over supplies after an Iranian military commander reportedly called for an oil boycott.
China's Shanghai Composite Index rose 3.3 percent, with industrial metal producers leading the gains on hopes they would benefit from the government's infrastructure building plans. Coal producers also outperformed, partly because of a surge in global oil prices due to tensions in the Middle East. Shenhua Energy gained.
© 2009 CNBC.com
Sunday, January 4, 2009
economic war
Are you saying we need to fight the crisis with inflation?
A Unfortunately, you have to create inflation to get rid of the debt. The only way to get housing to go up again is through inflation, by reducing the value of the mortgages. The only way to get the consumer back purchasing things is to get rid of their debts and that can only be done through inflation. I'm not somebody who believes in inflation. I think it's an awful thing, but there's no alternative. Does this mean you are not satisfied with the solutions tabled so far?
A Absolutely, I never underestimate the stupidity of mankind, which is based on greed and fear and what they do when they are afraid or too greedy. When the emotions rule, you can be sure it will lead to some form of stupidity of one form or another. The idea of saving GM [General Motors Corp.] is the dumbest thing in the world. Let it go bankrupt, let it go renegotiate its wages and put them on the comparable level paid by its competitors. What we need is common sense, logic, rationality, putting aside politics and fighting the common enemy. What worries me is the proroguing of Parliament and losing two months to tackle the problems. I've been trying to tell the politicians for Christ's sake, don't do something politically stupid. This is economic war!
A Unfortunately, you have to create inflation to get rid of the debt. The only way to get housing to go up again is through inflation, by reducing the value of the mortgages. The only way to get the consumer back purchasing things is to get rid of their debts and that can only be done through inflation. I'm not somebody who believes in inflation. I think it's an awful thing, but there's no alternative. Does this mean you are not satisfied with the solutions tabled so far?
A Absolutely, I never underestimate the stupidity of mankind, which is based on greed and fear and what they do when they are afraid or too greedy. When the emotions rule, you can be sure it will lead to some form of stupidity of one form or another. The idea of saving GM [General Motors Corp.] is the dumbest thing in the world. Let it go bankrupt, let it go renegotiate its wages and put them on the comparable level paid by its competitors. What we need is common sense, logic, rationality, putting aside politics and fighting the common enemy. What worries me is the proroguing of Parliament and losing two months to tackle the problems. I've been trying to tell the politicians for Christ's sake, don't do something politically stupid. This is economic war!
Friday, January 2, 2009
Stocks to Post Big Gains, Economy to Rebound: Pros
http://www.cnbc.com/id/28464602Stocks are expected to score double-digit gains in 2009, and the economy should show signs of a rebound by the third quarter, according to the majority of money managers, strategists and economists surveyed by CNBC in the final two weeks of the year.
The Fed funds rate, now effectively at zero, is expected to stay that way in 2009 by 18 percent of respondents. But the majority see it moving higher. Twenty-nine percent expect it to be at 0.25. Another 14 percent see it at 0.50 percent, and 18 percent expect it to be 1 percent. Just 15 percent expect it to be higher than 1 percent.
The Fed funds rate, now effectively at zero, is expected to stay that way in 2009 by 18 percent of respondents. But the majority see it moving higher. Twenty-nine percent expect it to be at 0.25. Another 14 percent see it at 0.50 percent, and 18 percent expect it to be 1 percent. Just 15 percent expect it to be higher than 1 percent.
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