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COFER --Q2 Reserves

September 30, 2009
The most authoritative source of reserve data, the IMF's COFER data was just released for the second quarter. Central banks are rebuilding their reserves. Reserves peaked in Q2 08 at about $6.96 trillion. In Q1 09 they had fallen to $6.49 trillion and in Q2 they rose to $6.80 trillion.
COFER --Q2 Reserves COFER --Q2 Reserves Reviewed by magonomics on September 30, 2009 Rating: 5
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China, Russia, Middle East and Treasuries

September 29, 2009
Perhaps one of the most noteworthy developments at the recent G20 meeting is what wasn't said. There was no major call for a new international monetary regime or a new international reserve asset, like the Chinese and others pushed for at the previous G20 meeting. Similarly there were no calls from US or European officials for a renewed yuan a…
China, Russia, Middle East and Treasuries China, Russia, Middle East and Treasuries Reviewed by magonomics on September 29, 2009 Rating: 5
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Irish Referendum Oct 2: Yes, This Time

September 29, 2009
Ireland goes back to the polls Friday to approve the Lisbon Treaty after rejecting it in June 2008. Irish voters have been subject to a full court press, with even the EU, under the guise of simply informing voters, has seen to be weighing in heavily. All the lobbying and reassurances appear to be yielding the desired outcome. Polls out in recent …
Irish Referendum Oct 2: Yes, This Time Irish Referendum Oct 2: Yes, This Time Reviewed by magonomics on September 29, 2009 Rating: 5
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The United States and Norway

September 28, 2009
It is a study of contrasts. About midway through the 24-hour trading day on Wednesday, 23 September, the Norwegian central bank announced that although it had considered raising its key rates, it decided not to. A few hours later, the Federal Reserve announced that not only would rates be left on hold, it anticipates the economic conditions that w…
The United States and Norway The United States and Norway Reviewed by magonomics on September 28, 2009 Rating: 5
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Mundell: Fix Euro-Dollar Exchange Rate--Fat Chance

September 24, 2009
Nobel prize winning economist Robert Mundell has renewed his call for fixing the euro-dollar exchange rate. Although he has advocated this before, this time he has added it to the Chinese call to increase the role of the SDRs. He argues that by fixing the euro-dollar exchange rate, the new economic zone would represent 45%-48% of the world economy…
Mundell: Fix Euro-Dollar Exchange Rate--Fat Chance Mundell: Fix Euro-Dollar Exchange Rate--Fat Chance Reviewed by magonomics on September 24, 2009 Rating: 5
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Canadian Reserves Are Illustrative of a Number of Points

September 24, 2009
Canada reports its international reserves on a weekly basis. It just reported its reserves as of Sept 13. They stood at $57.9 bln, up about $635 mln in the past week, which appear largely to be a reflection of valuation. The swings in currency valuation often are overlooked when talking about changes in reserves. Another interesting point is that …
Canadian Reserves Are Illustrative of a Number of Points Canadian Reserves Are Illustrative of a Number of Points Reviewed by magonomics on September 24, 2009 Rating: 5
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Aussie Coming Under Pressure

September 24, 2009
The Australian dollar was faring better than most currencies against the US dollar today, but has come under some pressure after European markets closed. In addition to weaker commodity stories, one of the weights on the Australian dollar may be in a story in the Australian press suggesting that contrary to what Chinese officials have said, the bi…
Aussie Coming Under Pressure Aussie Coming Under Pressure Reviewed by magonomics on September 24, 2009 Rating: 5
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Fed As Expected--Dollar Falls as Event Risk Passes

September 23, 2009
The greenback was treading water today awaiting the FOMC statement. The FOMC statement did not contain any surprises and the dollar has sold off in its aftermath. If anything the FOMC statement was a somewhat more dovish than some might have seeming to be more concerned about deflation. It did upgrade its assessment to the economy, which is not…
Fed As Expected--Dollar Falls as Event Risk Passes Fed As Expected--Dollar Falls as Event Risk Passes Reviewed by magonomics on September 23, 2009 Rating: 5
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Foreign Policy Association: US and Global Economic Outlook Foreign Policy Association: US and Global Economic Outlook Reviewed by magonomics on September 23, 2009 Rating: 5
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Preview FOMC: Two Key Issues

September 21, 2009
The FOMC meets Tues and Wed this week. With no expectation of a change in the Fed funds target, the key focus is on the assessment and guidance the Federal Reserve provides.
Preview FOMC: Two Key Issues Preview FOMC: Two Key Issues Reviewed by magonomics on September 21, 2009 Rating: 5
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Of Structures and Cycles

September 18, 2009
As the third quarter draws to a close, the U.S. dollar is under pressure, falling to the lowest level in a year against a wide swathe of major and emerging market currencies alike. After putting in a strong performance from the middle of 2008 through the first quarter of 2009, the greenback has surrendered a significant proportion of those gains.

S…
Of Structures and Cycles Of Structures and Cycles Reviewed by magonomics on September 18, 2009 Rating: 5
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US Household Net Worth Snaps 6 Quarter Slump

September 18, 2009
US household net worth rose by $2 trillion in Q2, which is more than the annual GDP of Canada or any of the BRICs, but one (China) or the combined GDP of 6 euro zone members (Portugal, Finland, Ireland, Belgium, Greece and Austria). At $53.1 trillion, US household net worth is still a little more than $11 trillion off the peak recorded in Q3 07.
US Household Net Worth Snaps 6 Quarter Slump US Household Net Worth Snaps 6 Quarter Slump Reviewed by magonomics on September 18, 2009 Rating: 5
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Sanctity of Contracts?

September 16, 2009
A year ago or so there was much consternation about the encroachments into the sanctity of contracts in the United States, especially if judges could modify private mortgage contracts. Then again in the bankruptcy of GM and Chrysler the sanctity of contracts, and in particular the rights of senior debt holders, was arguably undermined.
Sanctity of Contracts? Sanctity of Contracts? Reviewed by magonomics on September 16, 2009 Rating: 5
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China

September 16, 2009
Part and parcel with its overall slide, the US dollar has fallen to its lowest level against the Chinese yuan since late May. Even within the narrow ranges that have prevailed this year, there is scope for additional albeit minor dollar losses against the yuan. Still, there is no sign that Chinese officials are going to let the yuan resume its f…
China China Reviewed by magonomics on September 16, 2009 Rating: 5
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Poland Inflation Freezes Central Bank

September 15, 2009
The Polish zloty has stabilized today after yesterday's trade-deficit induced slide. The higher than expected August consumer price increase reinforces ideas that the Poland has reached the end of its easing cycle and that the next move will be higher rates, though we envisage this to be a few quarters away. Hungary, Turkey and Russia are stil…
Poland Inflation Freezes Central Bank Poland Inflation Freezes Central Bank Reviewed by magonomics on September 15, 2009 Rating: 5
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Retail Sales Stellar

September 15, 2009
August retail sales data was much stronger than the consensus expected, even excluding the cash-for-clunker induced auto sales. The 2.7% increase in the strongest in 3-year and excluding autos, the 1.1% rise is the best showing in six months. Retail sales excluding auto, gasoline and building materials which feeds into calculations of GDP rose 0.7…
Retail Sales Stellar Retail Sales Stellar Reviewed by magonomics on September 15, 2009 Rating: 5
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Kazakhstan and the Larger Issue of Central Bank Reserves

September 15, 2009
The central bank has Kazakhstan announced its intentions to reduce its US dollar holdings in reserves over the long-term. The central bank has reserves of just below $17 bln at the end of July. The Kazakh central bank, like others, says there is simply no alternative to the US dollar, but over the next 10-15 years there will be.
Kazakhstan and the Larger Issue of Central Bank Reserves Kazakhstan and the Larger Issue of Central Bank Reserves Reviewed by magonomics on September 15, 2009 Rating: 5
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Foreign Policy Association: Making Sense of the Dollar - Exposing Dangerous Myths about Trade and Foreign Exchange Foreign Policy Association: Making Sense of the Dollar - Exposing Dangerous Myths about Trade and Foreign Exchange Reviewed by magonomics on September 15, 2009 Rating: 5
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Obama's Speech on the Anniversary of Lehman's Demise

September 14, 2009
U.S President Obama is scheduled speak in NY near midday. He speech is expected to focus on the economy and the financial situation. As policy makers move from triage to reform, stark contrasts are emerging between the US and European approaches.
Obama's Speech on the Anniversary of Lehman's Demise Obama's Speech on the Anniversary of Lehman's Demise Reviewed by magonomics on September 14, 2009 Rating: 5
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Foreign Currency Bonds

September 14, 2009
Every so often, a pundit or economist will put forward the idea that the US may chose or have to issue foreign currency bonds. It is understood as a sign of weakness. And yet few have noted that that the Swiss National Bank, whose country enjoys among the the largest current account surpluses among the advanced industrialized countries has issued …
Foreign Currency Bonds Foreign Currency Bonds Reviewed by magonomics on September 14, 2009 Rating: 5
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Financial Sense News Hour: Making Sense of the Dollar Financial Sense News Hour: Making Sense of the Dollar Reviewed by magonomics on September 12, 2009 Rating: 5
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Best Performers in the Long Term Best Performers in the Long Term Reviewed by magonomics on September 11, 2009 Rating: 5
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The Dollar in the Year since Lehman’s Demise

September 11, 2009
The Stage is Set The U.S. dollar has been trending lower since late 2000, around the time the U.S. Treasury last authorized intervention and that was in conjunction with other major countries to support the euro. This trend should be understood, at least in parts, as the unwinding of the dollar’s gains, which some argue were overshoot, from the sec…
The Dollar in the Year since Lehman’s Demise The Dollar in the Year since Lehman’s Demise Reviewed by magonomics on September 11, 2009 Rating: 5
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ECB's Nowotny: No Dollar Shortage in Europe Anymore

September 10, 2009
Often disputes over the past are really disputes over the present and future. This seems true about the dollar now. One camp argues that the dollar's rally in H2 08 and Q1 09 was a function of safe haven flows. As the acute phase of the crisis abated, the safe haven was not needed and the dollar has generally weakened in Q2 and through Q3 as t…
ECB's Nowotny: No Dollar Shortage in Europe Anymore ECB's Nowotny: No Dollar Shortage in Europe Anymore Reviewed by magonomics on September 10, 2009 Rating: 5
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China Update and Preview

September 10, 2009
The combination of broad based US dollar weakness, especially pronounced since the start of the month, and expectations that China's export contraction is bottoming is helping send 12-month non-deliverable forward to its best level in 3 months this week. The PBOC has been fairly generous in their money market operations, providing net injectio…
China Update and Preview China Update and Preview Reviewed by magonomics on September 10, 2009 Rating: 5
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Watch for US Trade Dispute Decisions

September 09, 2009
The US Commerce Dept is expected to announce its decision regarding oil and gas pipe imports from China later today. US steel workers and US Steel have joined forces with US affiliate of Russia's second largest steel producer and Wheatland Tube, a Pennsylvania-based steel company to file formal complaints again Chinese steel pipe imports. US s…
Watch for US Trade Dispute Decisions Watch for US Trade Dispute Decisions Reviewed by magonomics on September 09, 2009 Rating: 5
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Greenspan on the Expansion

September 09, 2009
Former Fed chief Greenspan is speaking in NY today. While warning that there still are excessive inventories, the pieces are falling into place for a recovery, which he suggests could be "fairly pronounced."
Greenspan on the Expansion Greenspan on the Expansion Reviewed by magonomics on September 09, 2009 Rating: 5
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Germany's CDU/Merkel Lose the Mo'

September 03, 2009
Germany holds national elections on Sept 27. It has long been anticipated that the grand coalition of CDU and SPD would end with the CDU possibly forming a coalition with the FDP. However, the recent polls and last weekend's elections warn that of a risk that a grand coalition may be the only logical outcome.
Germany's CDU/Merkel Lose the Mo' Germany's CDU/Merkel Lose the Mo' Reviewed by magonomics on September 03, 2009 Rating: 5
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Interesting look at Euro, Yen, Volatility, and S&P 500

September 03, 2009
Risk on. Risk off. The markets are moving together. Risk on trades are thought to be short U.S. dollar, yen, and bonds; long equities, commodities, and EM. There is nothing cast in stone about these patterns and in the past the pattern was different. In the late 1990s and again in the 2002-2004 period, the euro and the S&P 500, for example, we…
Interesting look at Euro, Yen, Volatility, and S&P 500 Interesting look at Euro, Yen, Volatility, and S&P 500 Reviewed by magonomics on September 03, 2009 Rating: 5
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US Farm Subsidies Gradually Coming Under Pressure at WTO

September 02, 2009
Agriculture subsidies by Europe and the US sticks in the craw of many developing countries. It can distort prices, spur excess production and retard development. In recent years US corn subsidies and EU sugar subsidies have been challenged. The World Trade Organization has succeeded the GATT, which some believe stood for the General Agreement to T…
US Farm Subsidies Gradually Coming Under Pressure at WTO US Farm Subsidies Gradually Coming Under Pressure at WTO Reviewed by magonomics on September 02, 2009 Rating: 5
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Auto Sales

September 02, 2009
Stronger than expected US auto sales point to an constructive August retail sales report, when it is released on Sept 15. However, the risk is that due to lighter back-to-school traffic, sales excluding autos and gasoline may be somewhat softer than the headline.
Auto Sales Auto Sales Reviewed by magonomics on September 02, 2009 Rating: 5
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Shanghai Composite is Not a Main Driver

September 01, 2009
With China contributing mightily to the world economy, many investors are casting a watchful eye on the Shanghai Composite, the largest of the Chinese equity markets. It fell more nearly 22% in Aug, leaving it about 46.5% higher than the start of the year. There seems to be a tendency to exaggerate the significance for other markets.
We looked at …
Shanghai Composite is Not a Main Driver Shanghai Composite is Not a Main Driver Reviewed by magonomics on September 01, 2009 Rating: 5
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Forbes Business Visionary: Growing Out of Debt Forbes Business Visionary: Growing Out of Debt Reviewed by magonomics on September 01, 2009 Rating: 5
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What August G10 Price Action May Mean for September

September 01, 2009
FX trading was particularly difficult in the month of August. The most commonly traded currency pair the euro and the dollar were essentially unchanged on the month. The euro eked out a 0.27% gain or about 4/10 of a penny. The Swedish krona (+0.22%) and the Australian dollar (-0.07%) were for all practical purposes flat. The best performing G10 cu…
What August G10 Price Action May Mean for September What August G10 Price Action May Mean for September Reviewed by magonomics on September 01, 2009 Rating: 5
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