Trade Balance TABLE

Exports YoY

Trade Balance (Jan)

Exports up over 16.6% year over year (supports GDP) – looks like a banana republic!

Trade balance lower than expected with crude up to much. Should keep working it’s way lower all year as non residents work to reduce their rate of accumulation of USD financial assets.

IBD/TIPP Economic Optimism (Mar)

Down, but a little bit better than expected.

ABC Consumer Confidence (Mar 9)

Could that be a bounce back?  Haven’t seen one in so long can’t remember….

(A response to a comment about Fed policy changes)

On Tue, Mar 11, 2008 at 9:46 AM, Mike wrote:

the dollar may be the buy of a lifetime here….

Right, especially if the Fed cuts less than expected next week, or not at all.

Vicious reversal of commodities, USD, short term rates, but bad day or two for stocks.

This expanded lending facility may also function to increase the supply of short Treasuries for money funds and narrow the Treasury/LIBOR spread and shut up the rocket scientists who say low rates on short term Treasuries are the market screaming for rate cuts.

Highlights:

Inflation continues to rip, and my guess is it remains underreported.

Fundamentally, this is not good for the value of the yuan, by definition, but timing is everything…

The Fed continues to show a deficiency in understanding monetary operations with the latest moves. While steps in the right direction, a better understanding of monetary operations would have meant funding ANY member bank asset at the FF rate and establishing an unlimited term lending facility for Treasury securities.

Meanwhile they seem to be trying to minimize further rate cuts and instead trying to target areas of illiquidity as per Friday and today’s announcements. They may have reached their inflation tolerance with crude at $109, the dollar continuously falling, and inflation expectations elevating.

Somewhat more troubling is the eurozone seemingly wanting dollar lines from the Fed. Not sure why, but borrowing external currency isn’t ordinarily a good sign.

>
>     On Tue, Mar 11, 2008 at 7:52 AM, Dave Vealey wrote:
>
>     1 yr bill auction in Italy looks to have failed to get enough bids for
>     paper. Avg yield was 3.80% and high yield was 4.50%….
>
>     DV
>

Not good! This is where the real systemic risk lies, as previously discussed.