The U.S. dollar is getting crushed again today.  I have been waiting to see if and when it hits parity with the Swiss Franc. Today’s action brings us that much closer. The dollar is losing ground against the dollar bloc (Kiwi, Aussie and Loonie) as well as against the Franc and Euro.

What gives? Allegedly, [...]

I just received notice that the FDIC Board has approved the phase out of the Temporary Liquidity Guarantee Program (TLGP) in a first clear sign that the U.S. Federal Government has started policy normalisation.
The FDIC Board today adopted a Notice of Proposed Rulemaking (NPR) that reaffirms the expiration of the debt guarantee component of the [...]

Refining margins have been absolutely decimated, especially for refiners of heavy, sour crude like Valero Energy (VLO) and Tesoro Petroleum (TSO).  This is taking a toll on profits in the oil and gas sector, with both oil majors highly leveraged to downstream operations like ConocoPhillips (COP) and independent refining outfits showing steep falloffs in operating [...]

Over the past week, America’s banks have had a bumper earning season, in part courtesy of the Federal Reserve’s accommodative monetary policy. Even before this week, a number of market pundits (including me) began to wonder aloud whether the Fed had any strategy with which to remove all of the excess liquidity it has created [...]

On numerous occasions you will have heard me use the term ‘monetizing debt’ to describe what happens when the central bank creates money out of thin air in order to increase reserves in the banking system. The central bank is certainly increasing the monetary base in this regard, but are they really monetizing the debt [...]

I have highlighted comments by famed Columbia University economist Jagdish Bhagwati before (see “Jagdish Bhagwati: Obama is a protectionist”).  Bhagwati has since gotten with the program and sees Obama in a much more favourable light.  However, he is sceptical because Obama has not said boo about free trade.
Now Bhagwati is turning his attention away [...]

Of late, there have been a lot of worries about he potential for inflation in the U.S.  Marc Faber is the most noted pundit in this regard. Over-the-top comments he made back in May about hyperinflation in the U.S. may have been a catalyst for all of the inflation talk. See my post Marc Faber: [...]

The real worry right now should be deflation, as we have not yet beaten back all of the ill deflationary effects of the financial crisis.  Nevertheless, a growing number of market participants see inflation as a longer term worry.  With unemployment high, a cost-wage push will not be part of that equation.  Nevertheless, increases in [...]

It seems a Q3 recovery is the new consensus of professional economists.  First, we hear Paul Krugman saying this, now Richard Berner and David Greenlaw are singing the same tune.
The deepest post-war recession likely will end by mid-to-late summer, a bit sooner than we’ve been expecting.  The improvement in financial conditions and incoming data has [...]

Nearly a month ago, back on May 5th, I highlighted some testimony by Federal Reserve Chairman Ben Bernanke before congress in a post labelled, “Bernanke expects recovery later this year“.  In his testimony, Bernanke used the phrase ‘Scylla and Charybdis’ to describe the Federal Reserve’s policy challenge regarding deflationary and inflationary forces.  I would like [...]