Easter Weekend News Update

Reggie Middleton's picture

Canadian Dollar Too Strong? Bloomberg.com:

  • Minority opposition in Canadian Parliament is growing over
    strengthening Loonie
  • Leaders fear fallout in exports from CAD nearly at parity with USD
  • CAD strength is directly tied to Chinese commodity demand (is the
    CAD bubblicious, too?)

Relevant BoomBustBlog content (we gave you an explicit warning of this
in early January): China's
Most Expensive Export: Price Inflation

Ukraine is dangerously close to the brink Bloomberg:

  • Ukraine is about to use up the remainder of a $16.4 billion IMF
  • Premier Mykola Arazov has applied for another loan to "reform the
    economy" (what the hell did they do with the first $16.4 billion?)
  • Ukraine has needed assistance to make good with about 20 lenders

We have went through this in exquisite detail, both in the public
sections of the blog and particularly in the subscriber-only content.
See The
Depression is Already Here for Some Members of Europe, and It Just
Might Be Contagious!
Professional and institutional subscribers
should carefully reference "Banks Exposed to CEE & SEE" while all paying
subscribers should review the "Greek Banking Industry Tear Sheet".

  • Greece's external debt is 147% of GDP (think Domino effect) and
    66% of that is public sector debt
    Given most of the issues facing Greece involve public sector
    generosity, solutions must come from the public sector in the form of
    more revenue, less expenditures, or both
    Banks have become increasingly reliant on ECB for short term liquidity

New Normal in Australia? From absolutereturn-alpha.com:
Is Australias luck about to run out

  • Australian housing prices have doubled in the past decade, and
    export prices have done even better
  • Loans to Deposits are at 120%, bank risk is growing, and the
    government continues to offer home purchasing incentives to prop up
  • Australia is potentially a triple risk threat: double dip in US
    destroying the risk trade, Chinese construction collapsing driving
    export prices down, or the Australian housing bubble bursting with

Subscribers, see China
Macro Discussion 2-4-10
. Non-subscribers, reference:

Borat Bests Cailfornia.....Again from the Financial

  • California's inability to cut debt, tighten/reform pension
    liabilities, and large rate of dependency have driven CDS spreads wider
    (don't worry, they tried to blame it on the squid too)
  • Kazakh demographics are favorable in comparison to CA, and has
    access to a $25 billion rainy day fund
  • The Californian response of trying to kill the messenger is
    dangerously similar to Europe and the PIIGS, muni risk continues to
    climb under the nose of the marketplace

For more on my take on Muni-risk, dating back to the spring of 2008 when
I told everyone several states were bound to have their finances
collapse, see "Here's
Another "I Told 'ya So" for the Muni Buyers

Employment Recovery?  Or just the Census? From Businessweek:

  • US payrolls grew by 162,000 workers, according to BLS estimates of
    the U-3 rate
  • The data includes nearly 50,000 temporary government
    employees, mostly Census hires
  • Earnings per hour fell (stagflation hint? Oil & other input
    prices are currently going up!) and the amount of people working part
    time that could not find full time jobs continues to rise

For more on this, see "Are
the Effects of Unemployment About To Shoot Through the Roof?
" where
we get into the nitty gritty of the unemployment numbers, the empirical

Timmy Two Faced Geithner and the Chinese Revaluation, From Bloomberg.com

  • After a few weeks of bitching about the undervalued Chinese Yuan,
    nothing notable is done, and Secretary Geithner is headed to China for
    damage control
  • With a potential trade deficit for China for the month of March,
    25% YoY M2 growth, and explosive credit growth, the Yuan
    appreciating from a float is not a sure bet
  • The Yuan debate may be the first big step toward a large US/Asian
    trade war, as the only reason the US cares about the CNY exchange rate
    is generate manufacturing jobs domestically, no matter the cost
  • Subscribers, see "The
    Potential Effects of Remnibi Appreciation on China's Economy

Is this Really News?  Italian Swap Losses Increase From Bloomberg:

  • Swaps have continued to sour to the tune of .07% of GDP in Italy
  • No word on the underwriter of the swaps
  • Italian has nearly 3x in the sovereign CDS market as Greece

All readers should reference "Once
You Catch a Few EU Countries "Stretching the Truth", Why Should You
Trust the Rest?
" as wells as Smoking
Swap Guns Are Beginning to Litter EuroLand, Sovereign Debt Buyer
and Lies,
Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!
Subscribers should also see  Italy
public finances projection
and  Italian
Banking Macro-Fundamental Discussion Note

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Joe Davola's picture


zenon's picture

Relax Reggie! It's all good.

Did you get a load of that new Ipad?