Norwich Bulletin Interview
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Daily Archives: October 8, 2010 @ 6:53 pm (Friday)
Maybe Greenspan has finally read Soft Currency Economics?
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> (email exchange)
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> On Fri, Oct 8, 2010 at 9:28 AM, Eileen wrote:
>
> Greenspan comments from last night. Of course, he hasn’t said that loans create deposits,
> but he’s finally acknowledging excess reserves. Reported by BBG TV:
>
> “If you add to excess reserves and they just sit there, you’ve merely gone through an
> interesting bookkeeping calculation. It has no, I mean zero, economic effect. You need
> commercial bank A to lend to steel company B.”
>
very good!
Payrolls
Karim writes:
Headline near consensus and also very consistent with trend of recent months; but details on soft side
- Headline payrolls -95k; private payrolls +64k; payrolls ex-census workers -20k
- The 83k drop in state and local govt payrolls likely skewed by seasonals related to education (-50k jobs)
- Avg weekly earnings unch and hours worked unch; so personal income will be soft in Sep (though it was strong in prior mths)
- Unemployment rate 9.579% from 9.642%
- Notable swings by sector: construction -52k; manufacturing -22k; leisure/hospitality +18k; Retail +8k
- Median duration of unemployed up from 19.9 to 20.4; U6 measure up from 16.7% to 17.1%
- Diffusion index drops from 54.1 to 49.8 (first month below 50 since January).
Data consistent with moderate growth which is not enough to materially lower unemployment rate and as such, further lowers the bar for more aggressive LSAPs in November.
Census jobs still being lost. State and local cuts will also probably continue.
Also, 65,000 private sector jobs is about 100,000 short of what I’d guess will be the norm with initial and continuing claims now drifting lower.
GDP growing faster than jobs indicates productivity still doing well, which is positive for profits.
Lower interest rates also continuing to support valuations.
Bullard on CNBC shows FOMC still not up to speed on monetary operations.
China sells off Japanese debt
Interesting and unusual headline.
China doesn’t care about exports to Japan and may be ‘helping them’ by selling some of its yen reserves?
They may know Japan is going to get serious about keeping the yen weaker with direct intervention so China is front running them?
China sells off Japanese debt
By Michiyo Nakamoto
October 8 (FT) — China sold a record Y2,000bn ($24.3bn) in short-term Japanese bills in August, suggesting that their hefty buying earlier this year was not aimed at diversification into the yen as some had speculated. Chinese investors had bought a net Y2,300bn in Japanese bills and bonds between January and July. Chinese investors were slight net buyers of medium- to long-term Japanese bonds in August, to the tune of Y10.3bn. Coupled with their record net selling of short-term bills, Chinese investors’ total net buying of Japanese bills and bonds so far in 2010 fell to Y297.6bn. That is still slightly above the annual record for Chinese net buying of Japanese debt, of Y255.7bn, recorded in 2005.