- Europe Confidence Drops to Record Low, Adding to Arguments for Lower Rates (Bloomberg)
- Fed Says World Economy Weakening `Significantly,’ Warns of Deflation Risk (Bloomberg)
- New Zealand Lowers Interest Rate to a Record-Low 3.5% as Recession Deepens (Bloomberg)
Key Reports (WSJ):
8:30 a.m. Initial Jobless Claims For Jan 24 Week: Previous: +62K.
8:30 a.m. Dec Durable Goods Orders: Previous: -1.0%.
10:00 a.m. DJ-BTMU Business Barometer For Jan 16: Previous: +1.9%.
10:00 a.m. Dec New Home Sales: Previous: -2.9%.
10:30 a.m. EIA Natl Gas Inventories
"The wicked leader is he who the people despise. The good leader is he who the people revere. The great leader is he who the people say, ‘We did it ourselves.”
FX Trading – Scratching Our Heads on Stimulus; Plus, Sounding-Off on Wen at Davos!
A nice gesture – is that what the US government is hoping to pass under our noses with their most recent stimulus bill?
And listening to the Federal Open market Committee monetary policy statement yesterday (as with most of the FOMC announcements), it seemed as though they were just refraining from speaking reality; it’ll all be hunky dory eventually, they think.
With confidence numbers at dreadfully awful lows, it seems we’re getting extra large doses of lip-service these days. Back to the stimulus bill, it’s goal (or so we were told) is to reduce burdens on the US consumer and the US worker.
Pushing the $1 trillion envelope, this bill includes some items that could be seen as stimulative and appropriate once the funding reaches its target. Of course, the timeliness of this spending package is easily debatable. If my memory serves me correctly, it’s been said that only 8% of the proposed spending will occur in 2009.
Yes … I said 8% … this year.
But let’s not let that issue impede the dropping of this money bomb. Though when you start to look at some of the details of the spending targets, the proposal (now passed by the House) is littered … no, flooded … with myriad items that reflect zero in the way of job-creating (-saving) and consumer-bolstering initiatives.
So the timeliness and effectiveness is now in question. But apparently that doesn’t even matter. I only wonder, now that the somewhat laughable details are coming to light, what kind of reaction this will get if and when it’s passed through both houses of Congress.
Will confidence be restored? Will something that appears so unfocused and misguided give Americans that cozy feeling that the government is there for them; everything will be okay? From where I sit, the details of the stimulus package seem ridiculous. If such a thing is truly necessary to drag us out of recession and inevitable depression, this ill-constructed piece of work can’t possibly be the answer.
FX Trading – Chinese Sham! Mr. Orwell Call Your Office Immediately!
Attack those you need most and attempt to imbue them with unearned guilt! We’ve seen this game before, Mr. Commie-Thug Dictator; or shall we call you Mr. Wen?
Chinese Premier Wen Jiaboa took to the Davos stage yesterday to attack the US and the West; it borders on comical. But sadly, the elite gathered at Davos are foolish enough to lap it up like the simpering capitalist dogs Mr. Wen believes they represent, and for the most part he is probably right.
It is too fresh that Mr. Wen attacks the system that has helped his country pull millions from poverty and allowed for the transition of the Commies to represent a new happy face to the world even though their underlying intention of complete control of everything they touch, no matter how they must cheat and steal to achieve this goal, has never changed.
What has changed is the degree to which the Western business elites have been duped into thinking this is a regime they can really do business with. Which goes to the rotting core of the leadership of our multinational companies and political elites in the West; again Mr. Wen exploits this well. Think of the big hedge fund investments of the former politicos who along with the first-tier Western multinationals who hold vast Chinese asset investments. It is very much in their interest to pretend dealing with China is free trade. Interesting this same crowd represents the major funding for “think” tanks that get so much press and ink in order to spout the mantra of “free trade.” Lies flow from both sides–indeed.
If the dictator commie thug wasn’t so busy making sure any real dissent in his own country was stifled and the proper threats to the state dealt with, maybe he and his gang would have provided more domestic choices for his own people with all their wealth gained from dealing with the system he now supposedly finds so repugnant.
My musing on a bit of Wen self-dialogue; it might go something like this:
Heck, if we create a real domestic market it might increase citizens’ political power; we can’t have that … well, not yet.
We just don’t quite have enough internet monitoring equipment and software from Cisco, Yahoo, Microsoft, and Google (and other assorted tier-one western companies) to control 100%–but those dupes keep upgrading our ability to electronically enslave our people, so soon we can create a domestic market with Chinese “character.”
But since we are not there yet, let’s continue to play the export model game that has enriched us so well. You know the game: invite all the Western companies in to produce in China. We make it a quid pro quo–in order to gain access to our vast consumer market we make those greedy dupes produce here and transfer technology to us. We treat them pretty good and gain access to hundreds of billions worth of technology funded by Western shareholders. And of course we outright steal the gold teeth from all the second- and third-tier manufacturers we invite into the country. Those clowns don’t have well-funded think tanks to tell their story. No, instead those think tank dupes will continue to spout the mantra of “free trade” as we steal technology and jobs and hollow out Western manufacturing to boot. Gosh this is too easy.
And of course because we have built our machine on the export model, that is now collapsing before our eyes, instead of creating balanced growth and allowing our citizens some real political power that comes with domestic market development, I can stand before the Top-Notch-Dupes in Davos and blame the West for all our problems. And they are so stupid I bet I can get some of their taxpayers on the hook for a global solution to our problems. This is too easy.
Wen’s call for global action should be seen for what it is: China has milked the export model for years (granted low cost final goods have benefited to a degree, but recycling excess reserves is what created the asset bubbles and led Mr. Consumer to over indebtedness–it was not the other way around) and it is now crashing before their eyes; they’ve stolen Western technology for years to boost export prowess; they have suppressed their currency for years to make its final goods even cheaper in order to keep the export machine humming; and we all know China’s enrichment was built on the backs of the blue collar workers in all industrialized nations. We have allowed for the hollowing out Western manufacturing so the power elites and the heads of our multinationals can enrich themselves through China.
This is not “free trade” no matter what your average incentivized think tank economic expert spews onto the pages of some journal or C-Span; remember who funds this research. The average guy doesn’t need a darn PhD to understand that if one side cheats and steals and controls completely what comes into its country, and the other is basically wide open–that ain’t free trade. That is just stupid. But stupid for a reason–those who have major asset investments in China can enrich themselves and keep repeating the lie.
Mr. Orwell, call your office immediately!