Dollar Rebound in 2008: A Fairy Tale? Written By: Eben Esterhuizen 2008-03-11 00:49:03
Several analysts expect the U.S. dollar to rebound in the second half of the year. A slowing U.S. economy always affects the rest of the world with a delay, they say, and most of the bad news may already be priced into the greenback. "For Euroland, historically, the delay has been one or two quarters," notes Stephen Roach at Morgan Stanley. Analysts like Mr. Roach argue that central banks that proactively cut rates to bolster growth (like the Fed) will now see their currencies rally, and central banks that don't cut rates will see their currencies weaken. The implication here is that investors will move money away from yield and turn their focus to areas of growth. Going by this logic, the U.S. dollar should benefit from the Fed's amplified focus on growth.
Photo:Thomas Hawk, Creative Commons, Flickr
Five Reasons to Save the Dollar Written By: Eben Esterhuizen 2008-03-03 00:38:12 Photo:VaguelyArtistic, Creative Commons, Flickr
Financial firms have so far announced losses totaling around $160 billion, and UBS feels there could be a total of $600 billion in losses triggered by the subprime collapse. There is more bad news to come and central bankers know it. If UBS is correct we've only seen the tip of the subprime iceberg, and central bankers will have to remain flexibile to effectively deal with upcoming challenges. I don't doubt that the dollar's long term trend is down, but coordinated intervention to give the U.S. dollar a short-term (2-5 years) lift may be an interesting idea for central banks to consider.
Greenback Intervention Ideas Inspired by NyQuil Written By: Eben Esterhuizen 2008-04-17 00:48:39
"Since our last meeting, there have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability," says the statement from this weekend's G7 meeting.
James Grant wrote an article in Saturday’s Wall Street Journal wondering “Why No Outrage?” from the public concerning Wall Street’s reckless behavior during the credit boom and the assistance they’ve received from their government enablers.
Inflation and the M3 Money Supply Written By: Jeanne Roberts 2008-07-29 11:59:40
I’m no financier and I don’t trade stocks, but the one thing I do know about is the M3 money supply.
