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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (61364)	2/19/2010 6:40:34 PM
From: TobagoJack	Respond to of 217564

just in in-tray player 1: With the Discount Rate being raised to 75 basis points, does this then push up interest rates on US Treasuries? I note the big backup in rates on 2-Year notes form 0.80% to 0.90%. Because the spread has moved from 30 basis points over the Discount rate to 5 basis points before the selloff and is now at 15 basis points over the Discount Rate. Much harder to play the "steep" yield curve now for banks than before. I suspect that banks shrink their balance sheets further rather than take that money and extend it to real borrowers. Thoughts? player 2: The discount rate hike is really more a matter of symbolism and perception than anything else. there is barely any borrowing at the discount window anyway. It should in theory have no effect at all, except that it may change perceptions about the Fed's willingness to tighten. Note in this context a recent speech by Fed board member Thomas Hoenig, in which he admits to the utter futility and harm of money printing. He rightly points out that malinvested capital needs to be liquidated, and that even though a 10% unemployment rate is tough, there isn't really anything that can be done to alleviate it aside from allowing the market process to proceed. It was a remarkably clear-headed speech for a Fed official. He also insisted btw. that there would be no way the Fed would contemplate additional debt monetization to finance a burgeoning deficit. Of course, w.r.t. that, talk is cheap, and the decision will probably not be up to Hoenig, who was the lone dissenter at the recent FOMC board meeting ( he wanted to see the phrase about the duration of monetary accommodation altered in a more hawkish direction). The fact that he is suddenly in the limelight may be meaningful however. The social mood is clearly undergoing change once again. There is great public pressure to rein in deficit spending and the associated money printing. imo those Fed board members in favor of easier policy will require a justification for implementing it. Such a justification will no doubt arrive in due time (a renewed downturn in economic activity now that the monetary heroin dose has been lowerered, coupled with a commensurate increase in risk premia).

To: carranza2 who wrote (61364)	2/23/2010 4:19:02 PM
From: elmatador	Respond to of 217564

The new grouping was expected to serve as an alternative to the Organization of American States (OAS), which includes the North American neighbors and has been the main forum for regional affairs in the past half-century. Latin American, Caribbean bloc created without the US. Canada is also out. It was a move away from the traditional influence of the United States in the region, and was promoted by regional heavyweights Brazil and Mexico. Summit participants also united behind Argentina in a dispute over British drilling for oil around the Falkland Islands. google.com