QE2 finally pulls into port

Almost eight months ago, the Federal Reserve announced their intention to launch a second round of “quantitative easing,” otherwise known as printing money. In the absence of policies that promote economic growth, the Fed used the one tool they had to encourage investment and enhance exports, which was to devalue the dollar in a way that discouraged cash hoarding. That project comes to an end today, and the Washington Post notes that the results are less than appealing:


The effort, which became known in financial circles as the second round ofquantitative easing, or QE2, was the Fed’s effort to avert a slip into another recession and toward deflation, or falling prices. As it ends, it shows more than anything the limits of the power of monetary policy to correct what ails the U.S. economy.

Economic growth is set to be somewhere around a 2 percent pace in the first half of 2011, when the QE2 bond purchases took place. That is slower than the economy’s long-term growth path and nowhere near enough to dig out of the nation’s deep economic hole.

It’s not that QE2 had no impact. Inflation was well below the Fed’s unofficial target of around 2 percent last summer, and the chance that deflation, or falling prices, might take hold seemed real. That risk is now minuscule, and inflation is roughly in line with the Fed’s target. …

“If you come at it from the point of view that you think deflation risk was significant last summer and you want to avoid that, QE2 was a success,” said Michael Gapen, senior U.S. economist at Barclays Capital. “If you look at it from the point of view that you wanted to make the recovery stronger and more durable, you would have a lingering bad taste in your mouth.”

How successful has QE2 been? Let’s look at the meta numbers for the economy. In 2010Q3, the annualized GDP growth rate was 2.6%, and in Q4 just before the purchases began, it was 3.1%. The QE2 purchases began in January, and the final 2011Q1 number is 1.9% and Q2 is looking at falling below that.

Employment numbers don’t look very good, either, although it’s not as bad at the GDP series. In November 2010, the unemployment rate was 9.8%, which equaled a high for the year. That fell a full percentage point by March, but has since risen again to 9.1%. We have added about 160,000 jobs a month since November, which barely exceeds what is needed to keep up with population growth. Meanwhile, the latest indicators suggest that we’re going to start shedding jobs and may be tipping perilously close to recession.

Some will argue that the problems in 2011 are more external, with gas prices soaring. But that’s part of QE2. One of the motives of the Fed was to encourage exports at the expense of imports by weakening the dollar. The US imports most of its oil, which means that a weaker dollar makes fuel more expensive, leading to inflation in retail markets as well. A few people predicted this very outcome when the Fed announced its QE2 project — one of whom was Sarah Palin, who got roundly ridiculed for her prediction, which turned out to be all too accurate.

The Post notes that the stock market did well during QE2, which is true enough. It’s also true that the rise isn’t as impressive because of the weakened dollar. Artificially inflating the dollar means that price rises don’t indicate a real increase in value, since the dollar doesn’t have the same buying power. On January 1, when the Fed began its QE2 spree, the Dow Jones was at 11670.75; it’s now at 12261.42 as of yesterday’s close. That’s an increase of 5% in six months, which is decent but not terribly impressive, considering the inflation conducted by the Fed to boost it. Now that QE2 has come to an end, we’ll see how much of that momentum continues; I’m betting on not much.

It’s not the Fed’s fault that this didn’t work, and it’s still worth noting that the Fed mainly wanted to avoid deflation, which it did succeed in preventing. The Fed has no other tools left in its bag to boost the economy. The money policy is as loose as it could possibly be at the moment. The problem with the economy is not the money supply, but the economic and regulatory policies of the Obama administration. Until those change, we won’t pull out of the stagnation cycle we’ve seen for the past two years.

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8:31 AM | 0 comments

QE2 finally pulls into port

Almost eight months ago, the Federal Reserve announced their intention to launch a second round of “quantitative easing,” otherwise known as printing money. In the absence of policies that promote economic growth, the Fed used the one tool they had to encourage investment and enhance exports, which was to devalue the dollar in a way that discouraged cash hoarding. That project comes to an end today, and the Washington Post notes that the results are less than appealing:


The effort, which became known in financial circles as the second round ofquantitative easing, or QE2, was the Fed’s effort to avert a slip into another recession and toward deflation, or falling prices. As it ends, it shows more than anything the limits of the power of monetary policy to correct what ails the U.S. economy.

Economic growth is set to be somewhere around a 2 percent pace in the first half of 2011, when the QE2 bond purchases took place. That is slower than the economy’s long-term growth path and nowhere near enough to dig out of the nation’s deep economic hole.

It’s not that QE2 had no impact. Inflation was well below the Fed’s unofficial target of around 2 percent last summer, and the chance that deflation, or falling prices, might take hold seemed real. That risk is now minuscule, and inflation is roughly in line with the Fed’s target. …

“If you come at it from the point of view that you think deflation risk was significant last summer and you want to avoid that, QE2 was a success,” said Michael Gapen, senior U.S. economist at Barclays Capital. “If you look at it from the point of view that you wanted to make the recovery stronger and more durable, you would have a lingering bad taste in your mouth.”

How successful has QE2 been? Let’s look at the meta numbers for the economy. In 2010Q3, the annualized GDP growth rate was 2.6%, and in Q4 just before the purchases began, it was 3.1%. The QE2 purchases began in January, and the final 2011Q1 number is 1.9% and Q2 is looking at falling below that.

Employment numbers don’t look very good, either, although it’s not as bad at the GDP series. In November 2010, the unemployment rate was 9.8%, which equaled a high for the year. That fell a full percentage point by March, but has since risen again to 9.1%. We have added about 160,000 jobs a month since November, which barely exceeds what is needed to keep up with population growth. Meanwhile, the latest indicators suggest that we’re going to start shedding jobs and may be tipping perilously close to recession.

Some will argue that the problems in 2011 are more external, with gas prices soaring. But that’s part of QE2. One of the motives of the Fed was to encourage exports at the expense of imports by weakening the dollar. The US imports most of its oil, which means that a weaker dollar makes fuel more expensive, leading to inflation in retail markets as well. A few people predicted this very outcome when the Fed announced its QE2 project — one of whom was Sarah Palin, who got roundly ridiculed for her prediction, which turned out to be all too accurate.

The Post notes that the stock market did well during QE2, which is true enough. It’s also true that the rise isn’t as impressive because of the weakened dollar. Artificially inflating the dollar means that price rises don’t indicate a real increase in value, since the dollar doesn’t have the same buying power. On January 1, when the Fed began its QE2 spree, the Dow Jones was at 11670.75; it’s now at 12261.42 as of yesterday’s close. That’s an increase of 5% in six months, which is decent but not terribly impressive, considering the inflation conducted by the Fed to boost it. Now that QE2 has come to an end, we’ll see how much of that momentum continues; I’m betting on not much.

It’s not the Fed’s fault that this didn’t work, and it’s still worth noting that the Fed mainly wanted to avoid deflation, which it did succeed in preventing. The Fed has no other tools left in its bag to boost the economy. The money policy is as loose as it could possibly be at the moment. The problem with the economy is not the money supply, but the economic and regulatory policies of the Obama administration. Until those change, we won’t pull out of the stagnation cycle we’ve seen for the past two years.

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8:30 AM | 0 comments

Does Durbin need a refresher course on the Constitution?

I never thought I’d long for the days of Robert Byrd and his “pocket Constitution,” but alas, Dick Durbin has managed to eke out that much nostalgia after his DREAM Act gaffe yesterday. Real Clear Politics and Doug Powers at the Boss Emeritus’ site caught this tender moment from Durbin as he addressed school-age “undocumented” aliens and promised that his DREAM Act would allow them to become tomorrow’s Congressmen, Senators, and … Presidents?


“When I look around this room, I see America’s future. Our doctors, our teachers, our nurses, our engineers, our scientists, our soldiers, our Congressman, our Senators and maybe our President.”

I know that reading the Constitution has fallen out of fashion on Capitol Hill; Democrats pitched a fit when the new Republican majority in the House wanted to start the 112th Session by reading it aloud. But Durbin might want to read Article II, Section 1 of the founding document, as it’s pretty clear on eligibility for the nation’s top executive position:

“No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President.”

Durbin’s Constitutional illiteracy explains a lot, including his DREAM Act.

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8:24 AM | 0 comments

Does Durbin need a refresher course on the Constitution?

I never thought I’d long for the days of Robert Byrd and his “pocket Constitution,” but alas, Dick Durbin has managed to eke out that much nostalgia after his DREAM Act gaffe yesterday. Real Clear Politics and Doug Powers at the Boss Emeritus’ site caught this tender moment from Durbin as he addressed school-age “undocumented” aliens and promised that his DREAM Act would allow them to become tomorrow’s Congressmen, Senators, and … Presidents?


“When I look around this room, I see America’s future. Our doctors, our teachers, our nurses, our engineers, our scientists, our soldiers, our Congressman, our Senators and maybe our President.”

I know that reading the Constitution has fallen out of fashion on Capitol Hill; Democrats pitched a fit when the new Republican majority in the House wanted to start the 112th Session by reading it aloud. But Durbin might want to read Article II, Section 1 of the founding document, as it’s pretty clear on eligibility for the nation’s top executive position:

“No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President.”

Durbin’s Constitutional illiteracy explains a lot, including his DREAM Act.

Read More

8:24 AM | 0 comments

Weekly jobless claims remain flat

When I first looked at the weekly report from the Department of Labor on initial jobless claims, it didn’t look like news to me. The number remained virtually unchanged from last week, going from 429,000 to 428,000, which barely qualifies as statistical noise:


In the week ending June 25, the advance figure for seasonally adjusted initial claims was 428,000, a decrease of 1,000 from the previous week’s unrevised figure of 429,000. The 4-week moving average was 426,750, an increase of 500 from the previous week’s unrevised average of 426,250.

The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending June 18, a decrease of 0.1 percentage point from the prior week’s revised rate of 3.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending June 18 was 3,702,000, a decrease of 12,000 from the preceding week’s revised level of 3,714,000. The 4-week moving average was 3,703,500, a decrease of 11,250 from the preceding week’s revised average of 3,714,750.

The near-equality of the claims number to the weekly average speaks to the consistency seen in the numbers since early April. Claims rose as the second quarter began, with a significant spike from the Q1 range of 380K and spiked upward to over 470K before settling in around 425K. As I noted last week, the data is as consistent and predictable as anything we’ve seen over the last six months.

So, it’s not really news, or it wasn’t — until news outlets decided to spin the results a little, as Steve Eggleston caught. The AP didn’t try making this week’s numbers look good or overstate the miniscule drop of 1,000 claims, but the outlet did spin the Q1 level:

Applications had fallen in February to 375,000, a level that signals sustainable job growth. They stayed below 400,000 for seven of nine weeks. But applications then surged to an eight-month high of 478,000 in April and have shown only modest improvement since that time.

The four-week average, a less volatile measure, has been stuck at about 426,000 for a month.

Reuters was even worse:

It was the 12th straight week that claims have been above 400,000, a level that is usually associated with a stable labor market. Employment stumbled badly in May, with employers adding just 54,000 jobs — the fewest in eight months.

No, the 375K level does not signal sustainable job growth, and the 400K level doesn’t signal job-market stability, either. I covered this in last week’s analysis, where I used actual DoL data to determine what initial jobless claims level was associated with growth and stability. The only time we’ve gotten to 400K before Obama took office was when we were heading into unemployment crises. And periods associated with sustainable job growth had averages and medians at the 325K level, not the 375K level:

Take a look at the historical series of weekly claims between December 2005 and December 2007, the last time we really had “stability” in the labor force. The highest number in that period was 355,000 in a week, and that was in December 2007 when the economy slid into recession. In fact, between January 2004 and January 2008, we had only two weeks of 400K-level weekly claims, both in September 2005, and they were very much the exception. The average for that four-year span is 326,735, and the median number is 324,000 — which is why I usually use the 325K number in my analyses. We actually didn’t get to the 400K level until July 2008, at which point no one considered the labor market “stable.” …

Think I’m fudging those baseline expectations by using the supposedly “overheated” Bush economic expansion? Well, take a look at the same series for the four years between 1996 and 1999. The average number of initial jobless claims per week in that period was 321,986, and the median was 317,500. There was exactly one week of 400,000 or more claims in a week, and that took place in January 1996.

Perhaps if the AP and Reuters used actual data rather than listen to White House shills on economics, they wouldn’t have to use “unexpectedly” in their reports so often.

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8:21 AM | 0 comments

Weekly jobless claims remain flat

When I first looked at the weekly report from the Department of Labor on initial jobless claims, it didn’t look like news to me. The number remained virtually unchanged from last week, going from 429,000 to 428,000, which barely qualifies as statistical noise:


In the week ending June 25, the advance figure for seasonally adjusted initial claims was 428,000, a decrease of 1,000 from the previous week’s unrevised figure of 429,000. The 4-week moving average was 426,750, an increase of 500 from the previous week’s unrevised average of 426,250.

The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending June 18, a decrease of 0.1 percentage point from the prior week’s revised rate of 3.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending June 18 was 3,702,000, a decrease of 12,000 from the preceding week’s revised level of 3,714,000. The 4-week moving average was 3,703,500, a decrease of 11,250 from the preceding week’s revised average of 3,714,750.

The near-equality of the claims number to the weekly average speaks to the consistency seen in the numbers since early April. Claims rose as the second quarter began, with a significant spike from the Q1 range of 380K and spiked upward to over 470K before settling in around 425K. As I noted last week, the data is as consistent and predictable as anything we’ve seen over the last six months.

So, it’s not really news, or it wasn’t — until news outlets decided to spin the results a little, as Steve Eggleston caught. The AP didn’t try making this week’s numbers look good or overstate the miniscule drop of 1,000 claims, but the outlet did spin the Q1 level:

Applications had fallen in February to 375,000, a level that signals sustainable job growth. They stayed below 400,000 for seven of nine weeks. But applications then surged to an eight-month high of 478,000 in April and have shown only modest improvement since that time.

The four-week average, a less volatile measure, has been stuck at about 426,000 for a month.

Reuters was even worse:

It was the 12th straight week that claims have been above 400,000, a level that is usually associated with a stable labor market. Employment stumbled badly in May, with employers adding just 54,000 jobs — the fewest in eight months.

No, the 375K level does not signal sustainable job growth, and the 400K level doesn’t signal job-market stability, either. I covered this in last week’s analysis, where I used actual DoL data to determine what initial jobless claims level was associated with growth and stability. The only time we’ve gotten to 400K before Obama took office was when we were heading into unemployment crises. And periods associated with sustainable job growth had averages and medians at the 325K level, not the 375K level:

Take a look at the historical series of weekly claims between December 2005 and December 2007, the last time we really had “stability” in the labor force. The highest number in that period was 355,000 in a week, and that was in December 2007 when the economy slid into recession. In fact, between January 2004 and January 2008, we had only two weeks of 400K-level weekly claims, both in September 2005, and they were very much the exception. The average for that four-year span is 326,735, and the median number is 324,000 — which is why I usually use the 325K number in my analyses. We actually didn’t get to the 400K level until July 2008, at which point no one considered the labor market “stable.” …

Think I’m fudging those baseline expectations by using the supposedly “overheated” Bush economic expansion? Well, take a look at the same series for the four years between 1996 and 1999. The average number of initial jobless claims per week in that period was 321,986, and the median was 317,500. There was exactly one week of 400,000 or more claims in a week, and that took place in January 1996.

Perhaps if the AP and Reuters used actual data rather than listen to White House shills on economics, they wouldn’t have to use “unexpectedly” in their reports so often.

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8:20 AM | 0 comments

PM blames Thaksin, Hun Sen for conflict [A bad workman blames his tools]

Amid political war of words, armies on both sides deny they have any intention to trigger border clashes

The dispute between Thailand and Cambodia over Preah Vihear Temple is spreading into wider political arenas as Prime Minister Abhisit Vejjajiva shifts blame on the Pheu Thai Party and its de-facto leader Thaksin Shinawatra, as well as Cambodian premier Hun Sen, who has personal relations with Thaksin.


Democrat leader Abhisit said yesterday that Hun Sen wanted Thai voters to change the government and end the dispute with Cambodia because the Cambodian leader has good ties with Thaksin.

"But I want the voters to choose the Democrats as we protect the territory, although it is against the wishes of a leader in a neighbouring country," Abhisit told reporters while campaigning in Samut Sakhon.

Abhisit earlier blamed Thaksin's associates, including former foreign minister Noppadon Pattama and the opposition Pheu Thai Party, for his failure to block Cambodia's ambitions to restore and repair the Preah Vihear Temple. He said Thaksin's group has close relations with Cambodia and supports its plan for the temple.

The war of words through the media has gone international after Thailand and Cambodia crossed swords over the temple's inscription at the 35th session of the World Heritage Committee in Paris last week.

Cambodian premier Hun Sen reportedly accused Thailand of using the dispute for domestic political gains.

The Thai military yesterday dismissed reports of planning to launch an attack on neighbouring Cambodia, using the border conflict at the Preah Vihear Temple as a pretext, to jeopardise the July 3 election.

Army chief Prayut Chan-ocha has issued a clear policy instruction not to invade other countries, said First Army Region Commander Lt-General Udomdej Sitabutr. "We will retaliate only when attacked."

Local media has reported over the past days that the border is highly tense after Thailand announced its withdrawal from |the World Heritage Convention.

Military officials and politicians contesting the election were speculating on the threat of a military clash along the border with Cambodia, alarming residents along border areas.

Udomdej said the Cambodian military has moved some infantry units closer to Sa Kaew, but there has been no report of a large reinforcement of armoured vehicles and heavy weapons.

However, the commander who visited the border province yesterday ordered Thai troops to step up security measures, including a strict check on people and vehicles at border checkpoints and is seeking negotiations with Cambodian counterparts to ease problems.

"There is plenty of rumour in both countries now, but we are very careful to prevent such talk from affecting our relations with a neighbouring country," Commander Udomdej said. "Now relations are normal and we are engaging with our Cambodian counterparts at all levels," he said.

Abhisit Vejjajiva said his caretaker government would not exploit the conflict with Cambodia as an excuse to delay the election.

"We have proved before the international community several times that we did not trigger the military conflict and we do not have a policy to encroach into any country," Abhisit said.

As Thailand walked out of the session after failing in the diplomatic struggle to block Cambodia's move to restore the temple, the focus moved more to the military front.

On Monday, the Thai Second Army Region's spokesman Colonel Prawit Hookaew said that there was some redeployment and reinforcement of Cambodian troops along the border in reaction to the outcome in Paris.

However, Cambodia's Defence Ministry on Tuesday rejected the report of any movement of troops and weapons, China's Xinhua news agency reported.

"The Royal Cambodian Armed Forces absolutely rejects this fabrication by Thai troops to slander Cambodia and to prepare a scenario to confuse and lie to national and international communities," the ministry said in a statement.

"This fabricated information by Thai troops is just a groundless argument, aimed at future attacks and invasion of Cambodian territory," it added.

However, Col Prawit yesterday softened his tone saying there was only a minor rotation of Cambodian troops near Si Sa Ket province, and there was no significant shift of power in the border area.

"[But] we are ready and standing by in our stations," he said. "If anything happens, we will definitely be able to protect our border."

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8:14 AM | 0 comments

PM blames Thaksin, Hun Sen for conflict [A bad workman blames his tools]

Amid political war of words, armies on both sides deny they have any intention to trigger border clashes

The dispute between Thailand and Cambodia over Preah Vihear Temple is spreading into wider political arenas as Prime Minister Abhisit Vejjajiva shifts blame on the Pheu Thai Party and its de-facto leader Thaksin Shinawatra, as well as Cambodian premier Hun Sen, who has personal relations with Thaksin.


Democrat leader Abhisit said yesterday that Hun Sen wanted Thai voters to change the government and end the dispute with Cambodia because the Cambodian leader has good ties with Thaksin.

"But I want the voters to choose the Democrats as we protect the territory, although it is against the wishes of a leader in a neighbouring country," Abhisit told reporters while campaigning in Samut Sakhon.

Abhisit earlier blamed Thaksin's associates, including former foreign minister Noppadon Pattama and the opposition Pheu Thai Party, for his failure to block Cambodia's ambitions to restore and repair the Preah Vihear Temple. He said Thaksin's group has close relations with Cambodia and supports its plan for the temple.

The war of words through the media has gone international after Thailand and Cambodia crossed swords over the temple's inscription at the 35th session of the World Heritage Committee in Paris last week.

Cambodian premier Hun Sen reportedly accused Thailand of using the dispute for domestic political gains.

The Thai military yesterday dismissed reports of planning to launch an attack on neighbouring Cambodia, using the border conflict at the Preah Vihear Temple as a pretext, to jeopardise the July 3 election.

Army chief Prayut Chan-ocha has issued a clear policy instruction not to invade other countries, said First Army Region Commander Lt-General Udomdej Sitabutr. "We will retaliate only when attacked."

Local media has reported over the past days that the border is highly tense after Thailand announced its withdrawal from |the World Heritage Convention.

Military officials and politicians contesting the election were speculating on the threat of a military clash along the border with Cambodia, alarming residents along border areas.

Udomdej said the Cambodian military has moved some infantry units closer to Sa Kaew, but there has been no report of a large reinforcement of armoured vehicles and heavy weapons.

However, the commander who visited the border province yesterday ordered Thai troops to step up security measures, including a strict check on people and vehicles at border checkpoints and is seeking negotiations with Cambodian counterparts to ease problems.

"There is plenty of rumour in both countries now, but we are very careful to prevent such talk from affecting our relations with a neighbouring country," Commander Udomdej said. "Now relations are normal and we are engaging with our Cambodian counterparts at all levels," he said.

Abhisit Vejjajiva said his caretaker government would not exploit the conflict with Cambodia as an excuse to delay the election.

"We have proved before the international community several times that we did not trigger the military conflict and we do not have a policy to encroach into any country," Abhisit said.

As Thailand walked out of the session after failing in the diplomatic struggle to block Cambodia's move to restore the temple, the focus moved more to the military front.

On Monday, the Thai Second Army Region's spokesman Colonel Prawit Hookaew said that there was some redeployment and reinforcement of Cambodian troops along the border in reaction to the outcome in Paris.

However, Cambodia's Defence Ministry on Tuesday rejected the report of any movement of troops and weapons, China's Xinhua news agency reported.

"The Royal Cambodian Armed Forces absolutely rejects this fabrication by Thai troops to slander Cambodia and to prepare a scenario to confuse and lie to national and international communities," the ministry said in a statement.

"This fabricated information by Thai troops is just a groundless argument, aimed at future attacks and invasion of Cambodian territory," it added.

However, Col Prawit yesterday softened his tone saying there was only a minor rotation of Cambodian troops near Si Sa Ket province, and there was no significant shift of power in the border area.

"[But] we are ready and standing by in our stations," he said. "If anything happens, we will definitely be able to protect our border."

Read More

8:14 AM | 0 comments

John Lennon … Reagan Republican?

Second look at John Lennon? If his last personal assistant is to be believed, we may have to imagine John Lennon as a Reaganite. Fred Seaman told a filmmaker compiling anecdotes about the four Beatles that the former radical had begun debating people on the Left and soured on Jimmy Carter:


In new documentary Beatles Stories, Seaman tells filmmaker Seth Swirsky Lennon wasn’t the peace-loving militant fans thought he was while he was his assistant.

He says, “John, basically, made it very clear that if he were an American he would vote for Reagan because he was really sour on (Democrat) Jimmy Carter.

“He’d met Reagan back, I think, in the 70s at some sporting event… Reagan was the guy who had ordered the National Guard, I believe, to go after the young (peace) demonstrators in Berkeley, so I think that John maybe forgot about that… He did express support for Reagan, which shocked me.["]

Lennon met Reagan on Monday Night Football, actually, as Frank Gifford recalled. This would have taken place a few years (December 1974, farther back than Giffords’ recollection) before Seaman started working for Lennon. I read an account about this meeting in another book, which described the interaction as friendly and gracious on the part of both men. That telling squares with the account at this site, although the post there offers no supporting citations.

While I’m a fan of the music of the Beatles, I found Lennon’s solo career to be too preachy for my taste. I especially didn’t care for “Imagine,” a treacly pseudo-philosophical nihilist rant dressed up as a ballad. According to Seaman, I wasn’t alone in that assessment:

“He was a very different person back in 1979 and 80 than he’d been when he wrote Imagine. By 1979 he looked back on that guy and was embarrassed by that guy’s naivete.”

Even so, I have trouble imagining Lennon as a Reagan Republican, but it’s certainly interesting to try. I suspect that there’s a more nuanced explanation for this; Lennon was always an iconoclast, and he may have just been contrarian in that period for the sake of being contrarian. The tragedy is, of course, that Lennon isn’t still around for us to debate and for him to entertain, regardless of his politics.

Update (AP): C’mon. Wasn’t it obvious?

Update II (Ed): The Nation makes a pretty good case that Lennon wasn’t exactly a supply-sider when he was murdered:

What exactly were Lennon’s political views at the end of 1980? Late that November, Lennon spoke out on behalf of striking workers in L.A. and San Francisco. (The story is told in my book “Come Together: John Lennon in his Time.”) The strike was against Japan Foods Corporation, a subsidiary of the Japanese multinational Kikkoman, best known for its soy sauce. The US workers, primarily Japanese, were members of the Teamsters. In L.A. and San Francisco, they went on strike for higher wages. The shop steward of the LA local, Shinya Ono, persuaded John and Yoko to make a public statement addressed to the striking workers:

“We are with you in spirit. . . . In this beautiful country where democracy is the very foundation of its constitution, it is sad that we have to still fight for equal rights and equal pay for the citizens. Boycott it must be, if it is the only way to bring justice and restore the dignity of the constitution for the sake of all citizens of the US and their children.

“Peace and love, John Lennon and Yoko Ono. New York City, December, 1980.”

That was Lennon’s last written political statement. It doesn’t seem to be the work of a “closet Republican.”

Jon Wiener also reminds people that Seaman was found guilty of stealing Lennon’s belongings, including his diaries, and got sentenced to five years’ probation. Like I said, I expect that Lennon may have been contrarian, but I find the notion of him being a Reagan Republican a little unlikely. Let’s face it — if being disenchanted with Jimmy Carter was the only qualifier, everyone in America would have been in the GOP.

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5:22 AM | 0 comments

Great news: Obama has no idea what to do with captured terrorists

Say, anyone have any idea how to handle a captured terrorist? Apparently not anyone in the White House, even after more than two years of running the war on terror, according to Vice Admiral William McRaven’s confidence-builder in yesterday’s testimony to the Senate Intelligence Committee. While Leon Panetta told Congress a few months ago that the Obama administration had a process figured out, they seem to have kept it from the people doing the capturing:


The top military official involved in the raid that killed Osama bin Laden said Tuesday that the Obama administration has no clear plan for handling terrorist leaders if they are caught alive outside a war zone.

Vice Adm. William H. McRaven told a Senate panel that contingency plans for detaining terrorism suspects are developed on an ad hoc basis and approved by the White House, but that there are no set rules. “That is always a difficult issue for us,” he testified. “No two cases seem to be alike.”

Panetta said earlier this year that if the US captured Osama bin Laden or Ayman al-Zawahiri, the terrorist masterminds would likely be taken to Guantanamo Bay. That’s news to McRaven, who told Senator Kelly Ayotte that Gitmo is still “off the table.” Rendition is off the table, too, at least not to the countries most likely to have originated the terrorists — Somalia, Yemen, Pakistan, and Afghanistan — because of “political resistance.”

So what do we end up doing? Oh, you’ll love this plan, emphases mine:

In response to senators’ questions, McRaven said that “in many cases” prisoners captured in secret operations by Navy SEALs or the Army’s Delta Force are taken to a U.S. Navy ship until they can be tried in a U.S. court or transferred to the custody of an allied country. But if neither option turns out to be feasible, the prisoner is ultimately let go, he said.

“If we can’t do either one of those, then we will release that individual,” McRaven said in response to a question from Sen. Lindsey O. Graham (R-S.C.). “I mean, that becomes the unenviable option, but it is an option.”

And so we get to the back-door plan to close Gitmo and end military commissions for captured terrorists. If the Obama administration can’t try a terrorist in criminal court, it just lets the terrorist go rather than use the military commission system created and authorized by Congress to deal with them. Who cares if the terrorist goes on to kill Americans? Hey, at least we didn’t use that awful Gitmo — the one we’re still using, and that Panetta thought was good enough for bin Laden and Zawahiri just four months ago.

Perhaps the Senate can get more information on the Terrorist Catch and Release Plan. How many times have we had to use the “unenviable option” already? Has any of the released terrorists conducted any attacks afterward? Did we lose any Americans in capturing released terrorists? When exactly did the war on terror transform into a sport-fishing expedition?

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11:23 AM | 0 comments

Obamateurism of the Day

While traveling out of the country last week, I pondered whether to add the Win A Date With Tad Hamilton President Obama $5 fundraiser to the list of OOTDs. The problem wasn’t so much that of the principle, as politicians offer dinners as fundraising opportunities all the time. Turning it into a raffle for a finster is a rather new wrinkle for the Leader of the Free World, though, but in the end other events arose.


And that turned out to be a wise decision, because later on, the White House cinched this as an OOTD entry by offering a two-for-one sale:

I just got an unexpected update about the “Dinner with Barack” contest we kicked off last week that I think you’ll want to hear.

The President wanted to tell you the news himself, so he recorded a short video with the new details.

I can’t tell you anything more than that — but let’s just say if you haven’t yet thrown your name in the hat for this thing, I have a feeling this announcement might change that.

So this isn’t so much “Dinner with Barack” anymore, as it is “Dinner with Barack and Joe.”

Am I to understand that sales are going so badly for the Obama dinner that the White House had to throw Joe Biden in as a deal-sweetener? Actually, I don’t mind putting Obama and Biden up for clearance. Let’s just price them to move.

Got an Obamateurism of the Day? If you see a foul-up by Barack Obama, e-mail it to me at obamaisms@edmorrissey.com with the quote and the link to the Obamateurism. I’ll post the best Obamateurisms on a daily basis, depending on how many I receive. Include a link to your blog, and I’ll give some link love as well. And unlike Slate, I promise to end the feature when Barack Obama leaves office.

Illustrations by Chris Muir of Day by Day. Be sure to read the adventures of Sam, Zed, Damon, and Jan every day!

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11:09 AM | 0 comments

Korea’s Won Jumps on Inflation Forecast

The South Korean won climbed today as outlook for higher consumer prices growth compared to the previous estimates increased appeal of the nation’s assets.


According to the statement of the presidential office, the growth of the consumer-price inflation will reach 4 percent this year, compared to the official target of 3 percent. It looks like the Asian nations fare much better than western countries these days and that attracts investors to the region. Currently, markets in the ”risk-on mode” and such sentiment also help Asian currencies, including the won.

USD/KRW fell to 1,077.00 from 1,083.30 as of 13:00 GMT today.

If you have any questions, comments or opinions regarding the South Korean Won, feel free to post them using the commentary form below.

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10:17 AM | 0 comments

Canadian Dollar Rebounds vs. Greenback on Stocks & Oil

The Canadian dollar gained versus the US dollar today, after reaching yesterday the lowest level in more than three months, as crude oil slowed its decline and stock advanced.
Futures for delivery of crude oil in August slumped as much as 1.7 percent to $89.61 per barrel in New York, before rebounding to $90.81 a barrel, resulting in the 0.4 percent loss. The Standard & Poor’s 500 Index gained 0.9 percent, the first advance in four days. The MSCI World Index climbed 0.5 percent.
The US and Canadian policy makers decreased their growth forecasts, reducing bets that the Bank of Canada will raise its interest rates next month. The negative expectations lead the Canadian currency to the potential monthly decline by 1.8 percent, following the drop by 2.4 percent in the previous month.
USD/CAD dropped to 0.9850 from 0.9858 today as of 1:51 GMT after it jumped yesterday to 0.9911, the highest level since March 17. EUR/CAD traded near 1.4093, following the advance on yesterday’s session from 1.4000 to 1.4086. CAD/JPY traded at 81.93 after it climbed yesterday from 81.32 to 81.97.
If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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3:00 AM | 0 comments

US Dollar Rallies Ahead of Vote in Greek Parliament

The US dollar gained against most of its major counterparts as the concerns about the outcome of Greece’s vote for the bailout. The hopes for Greece among some investors allowed the euro to bounce after the decline.

The European Union leaders approved the €78 billion package for Greece, but now the Greek parliament should accept the measures necessary to get the loan. Many investors don’t believe that the austerity will pass the vote and such outlook drives them to the safety of the greenback. Yet other traders hope for the better and currencies fluctuate as one or another sentiment gets upper hand.

EUR/USD climbed from 1.4191 to 1.4238 as of 14:14 GMT today after it dropped to 1.4101 earlier. USD/JPY climbed from 80.30 to 80.89.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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7:29 AM | 0 comments

Pound Regains Strength After Week of Losses

June 27th, 2011

The Great Britain pound rose today against most major currencies, following the significant drop last week, on the speculation that the decline was overdone and the state of the UK economy isn’t bad enough to warrant such sell-off.

Analysts expect that tomorrow’s government report will show that Britain’s current account deficit narrowed from £10.5 billion to £5.0 billion in the first quarter of this year. The final revision of the UK GDP is expected to show a growth by 0.5 percent in the Q1 2011, following the 0.5 percent decline in the Q4 2010. The pound currently falling after initial jump. The currency retreated against the US dollar, but kept gains against the Japanese yen.

EUR/JPY rose from 128.16 to 128.81 today as of 12:32 GMT after posting the intraday high of 129.21. GBP/USD traded near 1.5944 after it rallied from 1.5961 to 1.6007.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

Earlier News About the Great Britain Pound:

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7:25 AM | 0 comments

Week of Worries — Week of Gains for Franc

The Swiss franc gained almost every day against other currencies this week, resulting in an impressive weekly gain for the safe currency.
Last week the franc was loser even as market participants were worried about Greece and the upcoming vote of confidence. The Prime Minister won the vote and behold: the concerns intensified and the franc rallied unstoppably. This twist can be explained by the future vote for the austerity measures that is even more important and many investors don’t believe that this vote will end with positive outcome.
The Swiss trade balance surplus widened from 1.44 billion to 3.31 billion. On the negative side, the ZEW Economic Expectations dropped from -11.5 to -24.3 in June. Yet even this report wasn’t totally negative for the Swiss currency as it said that “any expectations for a cooldown in the economy are tempered by the persistently very strong assessment of the current economic situation”. The good economic situation in Switzerland and the economic problems of the European Union and the US allowed the Swiss franc to gain 8.4 percent against 10 currencies of the developed nations, making the currency the best performer.

USD/CHF dropped from 0.8490 to 0.8333. EUR/CHF tumbled from 1.2123 to 1.1821. CHF/JPY jumped from 94.32 to 96.41.
If you have any questions, comments or opinions regarding the Swiss Franc, feel free to post them using the commentary form below.

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8:46 AM | 0 comments

Thai Baht Weak Ahead of Elections

The Thai baht fell today on the concerns about the coming elections and on the negative influence of the economic situation in the European Union.
  Market participants are afraid that the election on July 3 will increase the political instability in the country. The baht declined 1.2 percent this month. That’s the worst performance against 10 major Asian currencies.  USD/THB rose to 30.67 from 30.64 today as of 13:49 GMT.  If you have any questions, comments or opinions regarding the Thai Baht, feel free to post them using the commentary form below.

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7:09 AM | 0 comments

Canadian Dollar Flat After Decline, Gains vs. US Dollar June 24th, 2011

The Canadian dollar traded sideways after it fell yesterday as crude oil declined on the Federal Reserve cut its US growth forecast. The currency attempted to rally against the US dollar.

Crude oil dropped after the International Energy Agency announced its plan to release oil from its strategic reserves and on prospects of higher output from Saudi Arabia. August futures for delivery of oil fell to $5.72 to $89.69 per barrel in electronic trading, before climbing to $92.35. MSCI World Index slumped 1.4 percent.
The loonie attempted to gain versus the greenback on rumors that the European leaders approved Greece’s austerity plans. Renewed hopes for a positive resolution of the European debt issues helped the Canadian currency to stop its drop against the yen, but haven’t helped to gain much.
USD/CAD fell today to 0.9781 today as of 4:36 GMT after rising yesterday from 0.9735 to 0.9787. EUR/CAD traded near 1.3949, following the drop from 1.3978 to 1.3952. CAD/JPY traded at about 82.25 after previous session’s decline from 82.41 to 82.21.
If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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7:07 AM | 0 comments

Euro Falls as EU Leaders Discuss Greece June 24th, 2011

The euro went down before the end of the summit in Brussels today. The European Union leaders discussed the bailout for Greece and traders are uncertain about the possible decision.
The European finance ministers will decide on July 3 whether Greece has done enough to receive aid. To get next part of the rescue planned rescue package the country should implement budget cuts and other measures to fix the economic imbalances. The problem is that the Greek officials should vote for the austerity measures and many economists believe that the politician won’t perform such unpopular step.
There are some hopes for Greece among Forex market participant and the euro started rising on yesterday’s trading session, but the rally wasn’t enough to erase losses. At today’s trading session the currency trades almost flat.
EUR/USD traded at 1.4244 today as of 1:51 GMT after falling yesterday from 1.4355 to 1.4255. EUR/JPY traded near 114.68 after it dropped on the previous trading session from 115.27 to 114.80. EUR/CHF traded at about 1.1950, following the decline from 1.2045 to 1.1954.
If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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7:03 AM | 0 comments

Pound Falls as Retail Sales Decline Thursday

The Great Britain pound dropped today for the second day as the retail sales retreated to the lowest level this year, supporting the outlook that the Bank of England maintain stimulus.

The CBI’s Distributive Trades Survey posted the balance of -2 percent, the first negative value in a year. The expected reading was 11 percent. Reading above zero indicates growth of sales, below zero signals about decline. Together with yesterday’s BoE minutes the report creates bearish case for the sterling.
GBP/USD slumped from 1.6069 to 1.5984 as of 11:51 GMT today after posting the intraday low of 1.5974, the lowest level since April 1. GBP/JPY fell from 129.01 to 128.81.
If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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9:05 AM | 0 comments

Rand Weakens with Commodities on US Growth Forecast June 23rd, 2011

The South African rand fell today for the second day as commodities weakened after the Federal Reserve slashed its US growth forecast.
The Standard & Poor’s GSCI Index of raw materials fell for the first day in three and gold and platinum, which makes up 20 percent of the South African exports, dropped. The FTSE/JSE Africa All Share Index, the nation’s benchmark stock index, went down 0.8 percent. The Fed estimated this year’s growth to be 2.7 percent to 2.9 percent, compared to the April forecast of 3.1 percent to 3.3 percent.
USD/ZAR rose from 6.7610 to 6.8220 today as of 10:47 GMT.
If you have any questions, comments or opinions regarding the South African Rand, feel free to post them using the commentary form below.

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9:04 AM | 0 comments

Canada’s Dollar Fluctuates After Carney Statement June 23rd, 2011

The Canadian dollar fluctuated after the dovish statement of the Federal Reserve and the speech of Mark Carney, Bank of Canada Governor. The speech of the Governor left mixed feelings, while the Fed statement was moderately negative for the currency.

Crude oil, the biggest export of Canada, dropped $1.11 to $94.30 per barrel on NYMEX after the Fed released its statement. Earlier, crude gained by $1.24 to $95.41 as the US stockpiles declined.
Carney was quite pessimistic about Canada’s economic growth in the near future in his statement:

In the short term, economic growth in Canada is expected to slow to modest rates, due to a number of temporary factors. These include the supply chain disruptions that will dampen automotive production, as well as the drag from adjusting to higher energy prices on consumer spending in Canada and the United States.

Looking further ahead, the Governor was more optimistic, saying:

The Bank expects a re-acceleration of growth in the second half of the year, consistent with a renewed narrowing of the output gap.

USD/CAD traded at 0.9727 today as of 00:17 GMT, falling after yesterday’s jump from 0.9710 to 0.9736. EUR/CAD slipped from 1.3978 to 1.3932. CAD/JPY rose to 82.65 after it fell on the previous trading session from 82.54 to 82.41.
If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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9:01 AM | 0 comments

Pound Falls as Minutes Signal About More Stimulus

The Great Britain pound dropped today as the minutes of the Bank of England monetary policy meeting showed that most of the policy makers voted to keep lending rates unchanged and suggested that further easing may be possible.
Seven of the Monetary Policy Committee members voted to keep the rates stable, while only two voted for an increase. On the previous meeting three members voted for higher interest rates. The minutes said that “the current weakness of demand growth was likely to persist for longer than previously thought” and ”further asset purchases might become warranted”.

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6:49 AM | 0 comments

Kiwi Fluctuates, Can Become Stronger on Current Account

The New Zealand dollar fluctuated today after it rose yesterday as the nation’s current account deficit shrank more that was predicted by economists.

The New Zealand current account deficit (seasonally adjusted) decreased by $1.1 billion from the fourth quarter of 2010 to $1.8 billion in the first three month of 2011. The net international liabilities fell by $10.4 billion from Q4 2010 to $148.2 billion in March quarter of 2011.
The kiwi, as the New Zealand currency is commonly nicknamed, fluctuated against the greenback and the yen and gained versus the euro. The currency can gain as the Greek Prime Minister won a confidence vote, weakening risk aversion sentiment on markets. On the other hand, trades can be sluggish today as market participants will likely be reluctant to actively trade ahead of the important monetary policy decision by the US Federal Reserve today. The Fed is expected to keep maintain stimulus.
EUR/NZD fell from 1.7718 to 17670 today as of 3:12 GMT after rising to 1.7751. NZD/USD traded near its opening level of 0.81223 and NZD/JPY was flat at 65.15.
If you have any questions, comments or opinions regarding the New Zealand Dollar, feel free to post them using the commentary form below.

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6:46 AM | 0 comments

Sheqel Gains on Interest Rates Swaps

The Israeli New Sheqel rose today as the difference between Israel’s and the US interest rates attracted investors to the currency.

The Bank of Israel raise the key interest rate four times this, boosting the rate by 125 basis points to 3.25 percent. The last interest rates hike was on May 23, when the central bank increased the benchmark rate by quarter percentage point. The next policy meeting will be on June 27 and the bank is expected to keep the rates unchanged this time.
USD/ILS fell to 3.4125 from 3.4412 today as of 12:51 GMT after posting the intraday low of 3.4085.
If you have any questions, comments or opinions regarding the Israeli New Shekel, feel free to post them using the commentary form below.

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8:01 AM | 0 comments

Australian Dollar Falls on Monetary Policy Minutes

The Australian dollar weakened today after the minutes of the Reserve Bank of Australia monetary policy meeting indicated that there’ll be no increase of the interest rates in the near future.

The minutes explained the difficulties of the Australian economy, including the declining GDP and the ”soft” housing market, as well as influence of the foreign problems. The minutes said that “further tightening in monetary policy would be necessary at some point”. But the central bank’s policy makers remained rather dovish for the near future and concluded that “the flow of data over the past month had not added any urgency to the need for an adjustment to policy”.
EUR/AUD rose from 1.3513 to 1.3567 today as of 10:48 GMT after climbing to 1.3594. USD/AUD traded at 1.0579, near the opening rate of 1.0580, after falling to 1.0531.
If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

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7:59 AM | 0 comments

Loonie Gains vs. Greenback on Fundamentals, Falls vs. Euro

The Canadian dollar advanced versus the US dollar on the good outlook for today’s Canadian macroeconomic reports, while fell against the euro as promises of resolution of the Greek crisis bolstered Europe’s shared currency.

Analysts estimated, before the report from Statistics Canada, that the Canadian retail sales rose 0.6 percent in April. The core retail sales increased 0.5 percent, following the drop by 0.1 percent in April. The growth of the leading index was estimated to be 0.6 percent in May, following the growth by 0.8 percent in the month before.
Despite talks about resolution of the Greek debt problems, the optimism for the European economy, as well as the global economy, can evaporate very quickly unless some real progress in the battle with credit issues would be evident. The euro’s strength is already waning. The loonie can gain versus the 17-nation currency, but by the same token can weaken versus “safety currencies”, including the greenback.
USD/CAD dropped from 0.9797 to 0.9788 todays as of 2:19 GMT. EUR/CAD traded at about 1.4030 after it jumped from 1.4015 to 1.4065.
If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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7:57 AM | 0 comments

US Dollar Falls as Traders Expect Fed Would Maintain Stimulus

The US dollar weakened on today’s trading session as analysts say that this week’s reports will show weakness of the US housing market. The unfavorable fundamentals will likely prompt the Federal Reserve to keep interest rates near zero, undermining the dollar.

Today’s report from the National Association of Realtors is expected to show that existing home sales fell from 5.05 million to 4.82 million in May. New homes sales slipped from 323,000 to 311,000 last month, according to the estimates of analysts. The Federal Reserve will make a decision on the monetary policy on June 22 and market participants expect that the Fed will keep the borrowing costs unchanged.
Morgan Stanley stays optimistic for the future of the greenback this year as the increases in the Asian countries will slow the global economic growth and will increase demand for safer currencies. Ian Stannard, the head of European foreign-exchange strategy at Morgan Stanley, explained:

We’re looking for the dollar to regain some stability over the second half of the year. We’ll see the global investment environment turn less favorable as liquidity conditions start to change at a macro level.

EUR/USD rose from 1.4302 to 1.4346 today as of 00:42 GMT after climbing to 1.4338. GBP/USD advanced from 1.6200 to 1.6227. USD/JPY went slightly down from 80.25 to 80.18.
If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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7:56 AM | 0 comments

South African Rand Falls on Greek Crisis, Trims Losses June 20th, 2011

The South African rand dropped today as the disagreement of the European Union leaders about the bailout for Greece reduced appeal of riskier currencies, but erased most of its losses after the European politician assured that they will help Greece.

Jean-Claude Juncker, the Prime Minister of Luxembourg, said that the sovereign-debt crisis won’t spread to Italy. According to Juncker, George Papandreou, Prime Minister of Greece, claimed that he’ll do any measures necessary to receive the aid. Anyway, renewed concerns the debt crisis sapped strength of higher-yielding currencies, including the rand.
USD/ZAR traded near 6.7510 as of 16:41 GMT today after surging from 6.7430 to 6.8040.

If you have any questions, comments or opinions regarding the South African Rand, feel free to post them using the commentary form below.

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11:22 AM | 0 comments

Greece’s Bailout Delayed, Swiss Franc Jumps June 20th, 2011

The Swiss franc advanced today as the European Union leaders considered withholding half of the €12 billion portion of the Greek aid, increasing demand for safety of the Swiss currency.

This measure was intended to encourage Greece to perform necessary reforms. Half if the rescue package should be enough to support the country in the short term, but pressure to continue spending cuts will remain. Elena Salgado, the Minister of Economy and Finance of Spain, thought that the aid should be provided in full, stating after the four-hour discussion: “You can’t divide it.”
USD/CHF fell from 0.8490 to 0.8427 today as of 14:36 GMT. EUR/CHF dropped to 1.2063 from 1.2133 after posting the intraday low of 1.2016.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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11:18 AM | 0 comments

Week Ended Positively for Euro

The situation with Greece’s debt was hurting the euro during this week, but by the end of the week traders glimpsed a light in the end of the tunnel. New hopes for Greece emerged and that helped the European currency to erase losses.

The beginning of the week didn’t bode well for the shared 17-nation European currency. The European Union leaders were divided on their views about measures to tackle the debt problems of Greece and the Greek government was in the face of collapse. The euro was trying to rise at first, but than abruptly dropped.
The end of the week brought unexpected, but welcomed, change to the Greek story. German Chancellor Angela Merkel and French President Nicolas Sarkozy reached an agreement, the International Monetary Fund provided a loan to Greece and German banks may participate in the bailout for Greece. Investor sentiment towards the euro improved and the currency rebounded. It hasn’t been able to erase losses against some of its most-traded peers, but at least the losses were reduced.
EUR/USD closed at 1.4310, almost unchanged from 1.4322, after going as high as 1.4497 and falling as low as 1.4072 during this week. EUR/JPY slipped from 115.03 to 114.54, while EUR/CHF rose from 1.2078 up to 1.2137.
If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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9:34 AM | 0 comments

Australia’s Dollar Suffers from Europe’s Problems

The Australian dollar weakened as the unending troubles in Europe drove stocks and commodities to the downside, reducing appeal of currencies linked to economic growth.

The Standard & Poor’s 500 Index dropped 0.4 percent. The MSCI World Index fell as much as 1.1 percent. The Thomson Reuters/Jefferies CRB Index of raw materials declined 0.6 percent, following the drop by 2.3 percent yesterday, the biggest slump in five weeks.
Takuya Kawabata, the researcher Gaitame.com Research Institute Ltd., explained the performance of the Australian currency:

The risk-off mood is dominant in the markets because of concerns over Greece and a slowdown in the U.S. growth, sending stocks and commodities lower. In this environment, money wouldn’t find its way into commodity currencies such as the Aussie and kiwi.

AUD/USD traded at 1.0555 today as of 1:49 GMT after falling yesterday from 1.0575 to 1.0557. EUR/AUD traded near 1.3441, following the advance from 1.3400 to 1.3449. AUD/JPY traded at about 85.08 after yesterday’s drop from 85.60 to 85.13.
If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

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3:46 AM | 0 comments

Australia’s Dollar Suffers from Europe’s Problems

The Australian dollar weakened as the unending troubles in Europe drove stocks and commodities to the downside, reducing appeal of currencies linked to economic growth.
The Standard & Poor’s 500 Index dropped 0.4 percent. The MSCI World Index fell as much as 1.1 percent. The Thomson Reuters/Jefferies CRB Index of raw materials declined 0.6 percent, following the drop by 2.3 percent yesterday, the biggest slump in five weeks.
Takuya Kawabata, the researcher Gaitame.com Research Institute Ltd., explained the performance of the Australian currency:
The risk-off mood is dominant in the markets because of concerns over Greece and a slowdown in the U.S. growth, sending stocks and commodities lower. In this environment, money wouldn’t find its way into commodity currencies such as the Aussie and kiwi.
AUD/USD traded at 1.0555 today as of 1:49 GMT after falling yesterday from 1.0575 to 1.0557. EUR/AUD traded near 1.3441, following the advance from 1.3400 to 1.3449. AUD/JPY traded at about 85.08 after yesterday’s drop from 85.60 to 85.13.
If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

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3:42 AM | 0 comments