Daily Archives: January 13, 2010 @ 8:55 am (Wednesday)

Greece Condemned

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That will teach them never to do that again…

Greece condemned for falsifying data

By Tony Barber

Jan. 12 (FT) — Greece was condemned by the European Commission on Tuesday for falsifying data about its public finances and allowing political pressures to obstruct the collection of accurate statistics. The Commission said figures from Greece’s were so unreliable that its budget deficit and public debt might be even higher than government had claimed last October. At that time Greece estimated its 2009 deficit would be 12.5 per cent of gross domestic product, far above 3.7 per cent predicted in April. “A substantial number of unanswered questions and pending issues still remain in some key areas, such as social security funds, hospital arrears, and transactions between government and public enterprises,” the Commission said. “These questions will need to be resolved, and it cannot be excluded that this will lead to further revisions of Greek government deficit and debt data, particularly for 2008, but possibly also for previous years.”


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CHINA RAISES BANKS’ RESERVE REQUIREMENT RATIO 50bps

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Seems everyone has this wrong? All reserve requirements do is raise the cost of funds for the banks, not the quantity of funds they can loan.

Stephen Green’s thoughts on China:

CHINA RAISES BANKS’ RESERVE REQUIREMENT RATIO 50bps: This is a significant move. Rrr hikes require state council to sign off so this signals that sc is on board with mild tightening earlier than most (incl us) had factored in. This move now is significant too as its a first shot across the banks bows in a very aggresive loan month, esp as excess reserves in the system are are at relatively low levels (around 2pc we believe). Banks need 1-2pc for settlement needs so that means this move will bite. Pboc also probably calculated that they had to move now before we get into second half jan, early feb, before the chinese new year, when pboc has to inject liquidity (since firms and households withdarw cash for presents etc). Markets will be in a bit of shock with this move. The next move is another rrr hike in march as they withdraw post hoiliday liqudity and then we believe 2 rates hikes.

Tina Zhang


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Quantitative Easing in action

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Looks like the economy could have used that 45 billion in lost interest income the Fed turned over to the tsy.

0 rates and QE don’t seem to be all their cracked up to be.

>   
>   (email exchange)
>   
>   On Tue, Jan 12, 2010 at 4:46 PM, wrote:
>   

In December, the Mortgage Brokers Association anticipated an already staggering 24% drop in mortgage originations, a mere month later they now see the drop to be 40%. And all this occurring with Q.E.’s MBS purchases set to expire in less than 3 months.

For November, the amount of job openings dropped back to 2009 lows, at 2.4 million, dropping by 156,000 from October. After hitting a previous low in July, and gradually showing a moderate improvement, the last two months have killed that inflection point.






From the BLS:

There were 2.4 million job openings on the last business day of November 2009, the U.S. Bureau of Labor Statistics reported today. The job openings rate was little changed over the month at 1.8 percent. The openings rate has held relatively steady since March 2009. The hires rate (3.2 percent) and the separations rate (3.3 percent) were essentially unchanged in November. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector by industry and geographic region.


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