I recorded the video segment below on on RT America on Wednesday night (Notice my green tie for St. Patrick’s Day!). The overall gist of the clip was that the currency battle now brewing between China and the U.S. is mostly a political confrontation. There are reasonable ways out of this that don’t include a [...]

UPDATE: 19 MAR 2010: Given the debate on China and its currency peg, I thought this post from November 2008 would be relevant. It called for a new world order centered around a new monetary system. This idea has gained some currency as it is a chief aim of the Chinese going forward.
One big [...]

Here is a good video from Marketplace Senior Editor Paddy Hirsch explaining the mechanics of the now infamous Lehman Brothers 105 transactions.
One or two tidbits, first. Even though Hirsch mentions Lehman undertook these transactions to pretty itself up during the credit crisis, evidence shows they had been doing these sale Repo agreements since 2001.  [...]

China and commodities bull Jim Rogers thinks the economy is going to eventually run out of gas by 2012. While he doesn’t call this a double dip, he does say that “the next time it’s going to be worse because we’ve shot all of our bullets.” With zero interest rates and huge government deficits all [...]

Notable quotes in this 5 minute segment:
"They don’t want to look in the mirror. America doesn’t have a China problem. It really has a savings problem. America has the biggest shortfall of national savings of any leading country in modern history. And when you don’t have saving you have to run current account deficits to [...]

In late 2007 the global economy began to stumble, slipping into the abyss of a deep recession and financial panic. We are only now recovering from this stumble, in large part due to an unprecedented level of fiscal and monetary stimulus. Yet, no sooner is daylight within reach, we start attacking each other, tearing each [...]

In reading Scott Sumner’s take on the China currency peg dilemma, I see that both he and Paul Krugman hit on the fundamental problem in the debate: reserves. Everyone is talking about the peg as if relaxing the peg will be the magic bullet to America’s current account problem. But this is clearly not the [...]

The video below from the Wall Street Journal gets at the heart of why the bailouts have been so toxic for the economy. Banks, still laden with existing bad loans to small businesses, are unwilling to make new ones. Businesses, unable to receive credit, cannot expand or must downsize. This in turn puts a squeeze [...]

John Hussman notes that the very large non-subprime Alt-A and Option ARM cohort interest-rate resets lie ahead of us and not behind us in his latest weekly market commentary. In my view, this is a very big problem for the US banking sector and economy because of the credit writedowns these resets will generate.
For his [...]

News reports are now surfacing that the Germans are open to IMF involvement in the Greece sovereign debt crisis.  This is a 180-degree turn for the German finance minister who has expressed vocal opposition to the IMF’s involvement in ‘internal’ European Union affairs.
Bloomberg reports Germany making the shift to avoid being boxed in by a [...]

Highlights
The US dollar is firmer against most major currencies.  The euro is trading near the week’s lows while the safe haven Swiss franc is up on the day amidst ongoing concerns about Greece.  That’s despite comments from EU Commissioner Barroso that countries including Germany stood ready to give Greece aid if asked and amidst talk [...]

Here’s how I see things playing out:

Congress looks at this report and concurs that the key to ending slower global growth is to correct global imbalances via a Chinese currency revaluation. Fair enough.
However, individual Congressmen, looking to reassure jobless constituents ahead of the midterm elections, will escalate by presenting bills to ‘punish’ China if [...]

Highlights
The US dollar is firmer against most major currencies. The euro, together with the Swiss franc and Swedish krona are the worst performers.  The euro failed to make a clear break above $1.38 yesterday and news reports suggesting Germany may have shifted its stance on Greece seeking IMF aid saw the euro slip back to [...]