Ce zic "Centralele" acum

[Barbones]

ECB's Nowotny Sees Risk Of 'Lost Decades' In Europe

 

 

Deflation poses a greater risk than inflation, said European Central Bank Governing Council Member Ewald Nowotny.

 

"I see a greater risk [than inflation] is in the development of a phenomenon that in Japan is called the 'two lost decades'--low growth and no or low inflation. That would greatly affect the younger generation's chances. One must fight against that," Nowotny said in an interview published Saturday in the Austrian daily Vorarlberger Nachrichten.

 

The rate decision maker said he saw no risk of inflation but added that energy prices were the main driver of inflation.

 

The comments suggest that Nowotny sees no need for the ECB to raise interest rates, even against the backdrop of inflation that remains stubbornly above the ECB's benchmark of just below 2%. Annual inflation in the euro zone was 2.6% in March. Some commentators are calling for the central bank to lower its main rate below the current record low of 1% against a backdrop of austerity-stricken economies in southern Europe.

 

Nowotny, who is also Austria's central bank governor, said he feared rating agencies have not lost their influence and that they could cause uncertainty to bubble up in the markets again.

 

"I fear that now is the calm before the storm," he said, referring to the more than 100 European banks Moody's placed on rating review. The rating review is expected around May.

 

"It can't be excluded that that could lead to a certain uncertainty in Europe," he added.

 

Nowotny also said that Italy and Spain should be given time to allow reforms to take effect. Portugal and Ireland have shown that improvement is possible, he said.

 

The central banker repeated earlier comments that the euro as a currency would continue to exist. In five years time, he said it was possible that "intensive discussions" could occur with countries such as Poland and Denmark about joining the currency bloc.

Copyright © 2012 Dow Jones & Company, Inc.

[Barbones]

Banca Cetrala a Germaniei spune clar ca Germania este foarte bine. Doar Spania ce da fiori. Cum Germania este "inima" Euro, merg pe mana ei.

 

Canada are sanse sa ridice rata dobanzii in Iunie. Nu ma mir. Cad ul este preferat de multi. Ma intreb de atunci in colo cat se va mai aprecia.

Editat Aprilie 17, 2012 de Barbones

[Barbones]

Deutsche Bank strategists say the range-bound trading in the currency markets could be ending.

 

The currency markets have seen extremely low volatility lately despite a spate of political events and economic reports - but the strategists at Deutsche Bank [DB 43.69 -1.67 (-3.68%) ] say we are about to live in interesting times once again.

 

"Looking back over the last 12 years, there have only been five episodes where a lack of trend across all 42 G-10 crosses has persisted for more than the current period," they wrote in a note to clients. And just in case you've been lulled into thinking that this time is different, the strategists point out that "central banks are coming back into play" and indicating clear direction shifts, like the Bank of Canada's increased hawkishness and the potential for easing from the Reserve Bank of Australia. Also, emerging market currencies seem to follow a pattern, they say: "May and June both tend to provide above-average returns for trend-following strategies."

 

So how do you play this potential shift?

 

The strategists are bearish on the euro, [EUR=X 1.3181 0.0027 (+0.21%) ] dollar, [.DXY 79.22 -0.15 (-0.19%) ] and the yen, [JPY=X 80.97 -0.19 (-0.23%) ] expecting their year-to-date underperformance to continue. So they suggest selling those against other currencies, like the British pound, [GBP=X 1.614 0.0016 (+0.1%) ] Canadian dollar, [CAD=X 0.9899 -0.0007 (-0.07%) ]

[Apollo]

Barbones, visai ca vine o stire cum ca creste Euro. Mi-aduc aminte ca era vorba de o crestere de primavara, aprilie-mai. Cum lunile astea la noi au trecut, cred ca din 2013 putem vedea un uptrend. O luam si pe urma mamei Omida

[Barbones]

Nu visam, doar speram intr-o redresare in primavara. Acum, nu avem decat de asteptat un anunt de la FED sau BCE. Dar nici macar ele nu au libertatea de miscare fara o intelegere politica clara in UE. Dupa cum vezi, chiar la noi se duc lupte crancene intre Populari si Socialistii Liberali,

Realitatea este asta: Popularii sunt pe final de mandat, ceea ce inseamna ca, daca pierd majoritatea in Parlamentul European, planul de austeritate impus de Merkel va fi inlocuit de Planul de Crestere Economica impus de Holande.

Abia dupa ce se clarifica majoritatea se poate sa avem si decizie "Federala" Europeana,

Pana atunci nu te opreste nimeni sa intri tehnic, scalp pe TF uri micicu targete mici.

[Apollo]

Tare faza. Ma refeream la faptul ca am visat eu , dar in Oltenia a la prazul, se foloseste perfectul simplu : facui, vazui, mancai, visai, fusei etc .

Oricum, bune observatiile tale.

[Apollo]

Barbones, saptamana viitoare asteptam un trend hotarat la lira ? http://clip2net.com/s/2c2u8 . Centralele ce chicotesc?

[Barbones]

La vale cu dolarul.

[Barbones]

• Fed Chairman Ben Bernanke, an expert on the Great Depression, understands the ravages of debt deflation and his every action has been to prevent it from occurring. It is one of the reasons why, on September 13th, 2012 the Fed included an explicit inflation target in its policy statement for the first time.
• Greater care must be taken in the future to ensure that our fiat based, fractional reserve system does not run amok. This is why regulators are demanding that banks raise capital, reduce their proprietary trading activities, and shift their business models closer to a utility-style model.
• The Fed is the only game in town – awaiting anxiously, and building a bridge to, a time when Washington will devise solutions to the many economic challenges facing the United States.

http://www.pimco.com/EN/Insights/Pages/Pottersville.aspx

[Barbones]

Barack Obama‘s decisive victory over Mitt Romney in the presidential elections has cemented the future path of monetary policy under Ben Bernanke. After unveiling a fourth round of long-term asset purchases, or quantitative easing, and a new threshold-based guidance, the Federal Reserve has put itself on a path of unlimited purchases of Treasuries and residential mortgage-backed securities (RMBS) until the unemployment rate falls. The FOMC’s natural rotation will only strengthen the Chairman’s control of the committee, while an Obama Presidency and a Democratic Senate guarantee a continuation of current policies, either under Bernanke or Vice Chair Janet Yellen.

 

Thus, interest rates will remain repressed through 2013, the U.S. dollar should depreciate moderately, and stock markets will continue to receive masses of liquidity.

 

 

Bernanke and several of his central bank colleagues around the world have unleashed a new era of monetary policy, marked by zero-bound nominal interest rates coupled with unprecedented and massive balance sheet expansion. In this post-financial crisis world, the Fed has taken a Keynesian edict and turned it on its head: instead of the government stepping in after a crisis to make up for the loss of aggregate demand from the private sector, it has fallen to central banks.

 

Through that process, the Federal Reserve has become the most important market participant, flooding markets with liquidity and owning more than a third of the Treasury market by the end of next year, according to Barclays’ economics team. The latest iteration of their asset purchases, or QE4, consists of $40 billion a month in RMBS purchases and $45 billion in unsterilized Treasury purchases, meaning the Fed’s balance sheet will grow at a rate of $85 billion until the Fed sees a substantial improvement in labor markets.

 

The Fed is set to turn even more bullish in 2013, as its natural rotation sees two centrists and Jeffery Lacker, head of the Richmond Fed and a lone dissenter in the FOMC, replaced. In their place will come Esther George of the Kansas City Fed (a moderate hawk, which means she’s mildly opposed to more accommodation) and James Bullard of the St. Louis Fed (who has the potential to be a dissenter, according to Barclays), along with ultra-doves Charles Evans and Eric Rosengren. Furthermore, Minneapolis Fed chief Narayana Kocherlakota, a former dissenter, has quietly moved to a more dovish stance, adding further support for the Chairman.

 

One can’t blame Bernanke for trying to spark growth in an economy that has struggled to get off the ground since the 2008 financial implosion. A divided government has created artificial threats like the fiscal cliff, while the fear of fiscal unsustainability has increased calls for austerity. After interest rates fell to zero, Bernanke and the FOMC pushed down longer-term rates through asset purchases. Flattening the yield curve, the Fed has sought to ease credit conditions. The intention is to help homeowners re-finance mortgages at lower rates, allow consumers cheaper financing to buy cars, and give firms favorable borrowing rates.

 

Bernanke’s low rates have effectively “helped housing and the auto industry,” according to Raymond James’ chief economist Scott Brown. Automakers like General Motors and Ford have seen sales recover, while homebuilders like KB Home and Lennar have been on a tear this year. But the Fed’s ultra-accommodative stance has been “a mixed bag for banks.” Major names like JPMorgan Chase and Wells Fargo have access to cheap money, but their lending margins end up being squeezed by a narrower spread between long- and short-term rates.

 

Detractors of the Fed have argued it has distorted market action. And indeed it has, interest rates have been at record lows for years, with yields on 10-year Treasuries hovering near all-time lows. The issue of the Fed’s exit strategy has been raised on several occasions, as observers note a balance sheet approximating $4 trillion (if asset purchases continue through all of 2013) has to be unwound at some point. Goldman Sachs’ research team estimates that economic growth will pick up in the second half of 2013, sparking a “gradual but steady rise in bond yields” that takes real rates on 10-year Treasuries to 2.2% by the end of 2016 and 3.75% by 2016.

 

The Fed’s current strategy consists of both zero-bound rates and asset purchases. In their latest FOMC meeting, the committee agreed to set numerical thresholds for rate hikes, which are necessary but not sufficient conditions: the unemployment rate must fall to 6.5% or below, and the one-to-two year inflation projection should be at or below 2.5%. The Federal Reserve expects joblessness to fall to those levels by mid-2015; Barclays estimates unemployment to hit 7.5% by mid-year and 7% in the fourth quarter of 2013. They also expect the Fed to end its Treasury purchases by July, completing its RMBS program in December.

 

Bernanke’s term is set to expire in early 2014, and there’s speculation he may step down. The public opinion is divided; a report by Andrew Ross Sorkin indicated the Chairman isn’t too sure about a third term, while Raymond James’ Brown believes the Bernanke will stay around to finish the job. If he doesn’t stay on board, Vice Chair Yellen is expected to take the helm, Barclays’ team suggests, as the political balance will remain unchanged until the mid-term elections of late-2014.

 

The Fed has been one of the main players in global markets over the past few years. Since the financial crisis, Bernanke has taken a proactive role, first to avert a global meltdown and then to support a frail economic recovery. He’s won himself much praise, and as much criticism, but has held steady. Many questioned whether the Fed had the firepower. Bernanke always claimed he did, and he’s clearly put his money where his mouth is. The real question now is, will it finally work?

 

http://www.forbes.com/sites/afontevecchia/2012/12/20/2013-is-bernankes-year-unlimited-qe-and-total-control-of-the-fed/#comment_reply