Some Thoughts On Brazil

By Win Thin Local Brazil analysts are saying that new measures to curb currency appreciation are basically ready to go. Finance Minister Mantega has reportedly not decided yet if he is going to release details today or not, and that he is working closely with central bank chief Tombini to tailor the package. According to

Flow of Funds indicates businesses have stopped deleveraging

The Federal Reserve released the quarterly flow of funds report which allows one to see the debt levels outstanding in the U.S. economy. From the looks of it, deleveraging has not continued apace. UBS’ Andy Lees writes: The Fed Z1 flow of funds report for Q4 just released. Total nonfinancial sector debt grew by 5.1%

Zaiteku and China’s January inflation

It turns out, according to most interpretations of the SAFE report, that the speculators creating the hot-money inflows are not the much-vilified foreign hedge funds – surprise, surprise – but Chinese businessmen bringing money into the country in dribs and drabs. Of course this wouldn’t have surprised anyone who has actually seen how hot money works. The most destabilizing hot-money flows are almost always those generated by local businessmen, who understand better how to navigate the rules and constraints and who have a better sense of changes in risk and return. Hedge funds matter in certain kinds of markets, but their only important role in a country like China is to serve as the scapegoats when China begins to see severely destabilizing outflows

They Missed the Money

Frederick J. Sheehan is the author of Panderer to Power: The Untold Story of How Alan Greenspan Enriched Wall Street and Left a Legacy of Recession  (McGraw-Hill, 2009) and "The Coming Collapse of the Municipal Bond Market"(Aucontrarian.com, 2009) The Federal Crisis Inquiry Commission (FCIC) had as much chance of satisfying the public as the Warren

How big is Chinese GDP?

By Michael Pettis

Most of this week’s newsletter was about the release last week of China’s fourth quarter GDP growth numbers by the National Bureau of Statistics (NBS). You can find the full NBS report on their website, but here is the key paragraph:

According to preliminary estimation, the gross domestic product (GDP) for the year 2010 was 39,798.3 billion yuan, up by 10.3 percent at comparable prices, or 1.1 percentage points higher than that in the previous year. In terms of growth by quarters, it was up 11.9 percent for the first quarter, 10.3 percent growth for the second quarter, 9.6 percent for the third quarter and 9.8 percent for the last quarter.

This places China’s official GDP for 2010 at a nice, round $6.0 trillion. There is of course a lot more interesting stuff in the NBS report.

The real cost of Chinese NPLs

by Michael Pettis Once again I am starting to hear investors tell me that they have been advised by bank analysts not to worry too much about the impact of a banking crisis in China.  According to this argument, China has developed a very efficient and low-cost way to address banking crises, and the proof

Lawrence White on Friedrich von Hayek

I caught this video along with the Keynes video I just profiled. Look at this as a rebuttal to some of the themes Lord Skidelsky went through in that previous video. Lawrence White explains the genesis of the Austrian Theory of Boom and Bust in two parts. The two run fifteen minutes in total, concentrating

Jamie Dimon on CNBC

Jamie Dimon’s 17-minute interview by Maria Bartiromo below was done earlier in the week before JPMorgan Chase released their numbers. The numbers were good, showing quarterly profits of $4.8 billion or $1.12 a share. Dimon expects to resume a dividend of 75 cents a share when his firm gets the green light to do so.

Monetary Tightening In Asia Continues With PBOC Move

By Win Thin It’s all about monetary tightening in EM today. PBOC hiked reserve requirements another 50 bp today, effective January 20, and has hiked a total here of 350 bp since starting in January 2010. This comes after the Christmas hike in policy rates that took the 1-year lending rate to 5.81% for a

Fed Beige Book Supports Cautious Optimism

This from today’s Fed Beige Book survey: Reports from the twelve Federal Reserve Districts suggest that economic activity continued to expand moderately from November through December. Conditions were said to be improving in the Boston, New York, Philadelphia, and Richmond Districts. Activity increased modestly to moderately in the Cleveland, Atlanta, Chicago, St. Louis, Kansas City,

China’s lending quota?

By Michael Pettis This year to everyone’s surprise the PBoC failed to announce 2011’s lending quota. Instead it announced a series of new polices aimed at monitoring the banks. According to an article in Thursday’s People’s Daily: The People’s Bank of China (PBOC), the country’s central bank, will check credit and capital levels of commercial

The Conundrum of Central Bankers

by Annaly Capital Management An interesting recent piece by Reuven Glick and Kevin J. Lansing of the San Francisco Fed looks to explain changes in the savings rate over time. On an aggregate level, the authors point out that the savings rate is mostly a function of: 1. Wealth – if I’m already wealthy, I