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Hallway Talks About The USD
Submitted by Nic Lenoir of ICAP
Apparently this is the word going around the FX community this morning:
there is talk of a sources report out on the street.. that saying ECB might start talking down the EUR... concerned that Obama wants a weak currency... Chinese are acquiescing to weaker usd.. and eur twi has appreciated 5%.. and cny has depreciated vs eur... do NOT think this is new news.. as pointed out this morning - Erik Nielsen thinks that comments earlier this week on the EUR by Trichet signaled a new material level of concern on the EUR, i.e. For the first time he expressed concern on the EUR-TWI (which hit a new high for the year last night again) and mentioned that discussions should take place with some Asian countries on letting their currencies appreciate more - This seems to be stronger than his normal stock responses on FX of "against brutal FX moves" & "My friends in the US want a strong-USD).."
Other people have been quoting a Medley report. Overall though, I think for now the Fed has expressed concerns about consequences of excess liquidity but has not done anything to back it up. Certainly trying to start draining before year-end could cause disruptions in the market. They will get criticized if they do and the funding markets panic, but they will get criticized if they do nothing. While I think they should start draining and show the world (which shows no respect) that they won't bend to fear indefinitely, the most likely scenario is that they won't do a thing until they are cornered by market conditions or when there is no doubt the economy has fully and sustainably recovered... but there will always be risks, and at some point you have to take some.
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Morning humor - video from the Onion
More Americans Outsourcing their own jobs ;)
http://www.fundmymutualfund.com/2009/10/onion-more-american-workers-outs...
Holy mother-lovin shit, you gotta freaking love The Onion.
F-ing brilliant.
http://www.entertonement.com/clips/ffxhdtltsw--Rooting-aimlesslyDale-Gri...
Trichet has been yapping about a strong Euro forever now. There's no reason the market will listen to anything he says - it never has before. Everyone knows the ECB won't do anything, and it all hinges on the thieves at the Fed for dollar protection. And we all know Banana Ben won't do anything to stop it either. He might even encourage dollar selling for all he's done.
So there's no reason to think anything will change. Sell USD until there's no reason to anymore.
anything to spur inflation...it's a global effort now.
selling cannot be manipulated.
Oh come on. There have to be theives and crooks
in Euro land just salivating over what they could grab
by debasing the Euro. Have they no Keynsians?
This what we get when we get pussies like Bernanke,
Summers, Geithner and Obama running a goddamn bubble.
Everything is just friggin great....but they're all
busy working on more stimulus and more printing up
the yazoo. What's wrong with this picture?
The problem is the ECB is never going out print the FED. Eventually the strong euro will kill off any hope of recovery in the eurozone, and it will be that which changes sentiment towards to the euro. Either that or the fragile banking system in Europe will start to unravel.
I seem to remember comments back in 2000
how a strong EUR/USD ( then at 0.86) would
be detrimental to the EU exports, but somehow
they have survived a rise to parity by 2002 and
then to 1.47 5 years later in 2007. I guessing
we'll see EUR/USD at 2.00 by 2014
Hot air comes out one end and usa currency comes out the other end.
Someone please explain to me how the EZ can devalue the Euro in light of the Federal reserve having so much of a head start on it? While there are certainly other currencies out there like the Yen (laugh!) and perhaps some ComDols, the only way to succeed in a Euro devaluation is to have the dollar rise significantly. Do you honestly think the ECB can outdo the Fed?
The US could join the EU ;)
Vampire squid siting:
http://www.politico.com/news/stories/1009/27947.html
Critics blast $3M mining handout'A mining company owned by Goldman Sachs and two private equity funds is in line to get a $3 million earmark for work at a rare earth elements mine in Mountain Pass, Calif'
Great catch. The EPA is working overtime to deny mining permits like never before in the US, and the Army Core of Engineers is (has been) in full stall mode for approving anything. But get GS involved...
Lots of predictions about REE for 'National Security' as a play. Funny to see it show up like this. I'd have to hand it to GS for getting in on this so quickly - if it wasn't GS.
General Molybdenum has been waiting forever for a Fed permit. Molybdenum is used in the manufacturing of solar cells, and they get no earmark and no permit. That's Congress at work, folks.
Should have been Army Corps, not Core. Been bugging me since I sent that and can't see an edit button lately.
Some sentiment reports puts the market at 97% bearish the dollar. No one ever thinks, how easy it would be to squeeze some of these dollar shorts (inverting the carry trade) with a little Central Bank "jawboning," and at the same time, maybe getting the Japanese or ECB to enter the forex market and buy some dollars on behalf of the Fed overnight. This is not to mention if Nic is correct and Trichet echoes that same. Prudence at this juncture in the dollar is warranted. Good profits have been made here. Good luck everyone.
i think the Fed has done some lite jawboning of late....seems to me warsh, hoenig , etc have been trying to give a little heads up that the fed could do some draining at a moments notice.
Well done AR. At least 3 of us are bullish on the dollar.
The market action is typical of every bubble before it. USD shorts and gold longs are near record.
When the whole market thinks they are right, it is usually the top. The newbie gold bugs and dollar bears are the equivalent of the old school Wall St shoe shine boys.
When the guy shining your shoes gives you stock tips. It's time to get the heck out of that trade.
A simple question, if the low dollar causes other countries to devalue their currencies intentionally by slashing rates, won't this lead to one of the biggest bubbles in world history? This seems crazy, but does this seem plausible to anyone.
"the most likely scenario is that they won't do a thing until they are cornered by market conditions or when there is no doubt the economy has fully and sustainably recovered..."
So in the former case, we're talking a hyperinflation scenario, correct? And in the latter case, possibly 3 to 10 years (in the U.S.)? So it appears that 0% lending from the Fed will be around for a bit.
Interesting. As a European, and not always hapy with the ECB at that, I still would rather take my pain now than later. If that involves a recession or depression I can live with that, as long as monetary policies bear some measure of normalcy. I have yet to find an example of a country which debased itself into prosperity. And yes, we do have ginormous problems, mainly at the edges (Eastern & Southern Europe, Baltics), but still I applaud the ECB for trying to navigate against countries hell-bent on devalueing against each other.
Here we go...the competitive currency debasement games begin in earnest.
Agreed. The race to the bottom has begun. Everyone is a loser.
Except those who own Gold.
I agree and I've been buying gold and silver for years. But I can't rescue all my assets with gold and silver. So while I will lose less than others, we all will still lose something.
+1 GG.
hey, this could be better than watching the freakin' olympics!
LOL yeah, at least I'll make money watching this unlike the stupid olympics.
To put it more bluntly, would you rather take some pain now or suck Chinese dick indefinitely? In the end it comes down to this question. Dignity can not be bought, but it can be sold.
What "draining" are we talking about? These guys have committed to low rates through the end of the year. They are doing $25 bil of POMO buys per week.
The discussion here is they will tighten the short end to aid the dollar but support the long end with POMO. This means that the Yield curve will flatten. A sure sign that the recovery will be muted.
Don't wait around for that tightening move. It is not going to happen for many months.
Yeah, free cash for everyone. I'm going to spend mine on gold.
As frustrating as stagflation is I think a period of time in economic purgatory might be good for the markets. Today's battle is In VS Dis flation. A flat curve just might be a calming balm for every one's fried nerves.
I do feel lucky on closing out the AMREITS (NLY, HTS) two weeks ago; I didn't expect this kind of move so soon. But there shouldn't be any arguing with what it's saying, especially if they fall another 5+%.
Trust the dollar? Trust the self-dealing bankers who own the Fed? The American people should have stuck with “In God We Trust” and kept control of the nation’s money supply.
Whether it’s the Fed issuing fiat dollars at home or issuing international fiat under its IMF hat as the world central bank, Greenspan and Bernanke increased the quantity of money past the crack-up boom stage that’s now causing the breakdown of the currency.
In their quest to flush out all dollars at home into their planned economy by deficit spending and credit expansion and to exercise “expansionist pressure on world trade,” these self-dealing investment bankers and their cheatin’ ways have destroyed the savings and purchasing power of the American people as well as of the nations they’d hoped to oversee in their rule of Keynesian world socialism. The nations, however, already are dissatisfied and don’t like their share, as could be expected, and are complaining of unfair treatment and opting out.
Well, so are we, the misused and financially abused American people—we, who’ve lost the value of our stored earnings and savings 100 percent during the century of the Fed.
To find the criminals, follow the money. Cui bono! But trailing those taxpayer bucks as they wend through the Federal Reserve System is pretty tough. First, there’s the problem of guessing just how much money is involved, what with today’s electronic keyboard printing, and the Fed paymasters’ misleading reports and the Treasury’s thespian performances in getting congressional approval.
Then, there’s the problem of finding just who or what nation got the trillions, whether from announced bailouts or midnight booster bucks. “Can’t say,” says the Fed’s resident wolf in sheep’s clothing, Gentle Ben.
Well maybe we can’t always follow the money, but we can certainly find out where it has been and where it is now. California legislator Jim Costa (D-Hanford) says unemployment in his district is running at 35 to 45 percent. So the money is long gone, then, from Kings County. Brand new bank Goldman Sachs, already the fifth largest and one of the fattest and the most obscene generators of wealth for itself on the planet, seems to have plenty of stash now, after having been in the Fed handout line only last year. I say, Representative Costa, do any of those Goldman bucks have King County, California’s name on them? Savers, earning 1.5 percent and paying $3,00+ at the pump, did you receive your fair value? Investors, do you feel you've been taken for a ride?
Who says, for the good of the U.S. economy, the financial industry needs to be guaranteed healthy at the expense of every other industry and every taxpayer? The financial industry, that’s who. And who says the Federal Reserve needs complete power and complete secrecy in order to benefit the economic stability of the nation? The financial industry, that’s who.
Every congressman who supports these lies is a co-conspirator in this theft of the people’s money. Audit the Fed, pull the Fed out of our country by its roots, but remove every single one of the members of Congress who have made these high crimes possible.
History will show that the Decline and Fall of the US empire started at the beginning of the Millenium with the Tech Crash and though stupidity and corruption was accelerated by the Crash of 2008. Matters were made worse by the hyper-printing of the FED that did nothing but temporarily propped up the markets.