<![CDATA[Hedgehogs.net: '' related content (page 2)]]> http://www.hedgehogs.net/tag/bank?offset=10 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11351733/just-so-were-clear-wall-street-is-really-just-a-nasty-revenge-of-the-nerds Fri, 01 Aug 2014 06:30:49 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11351733/just-so-were-clear-wall-street-is-really-just-a-nasty-revenge-of-the-nerds <![CDATA[Just So We're Clear, Wall Street Is Really Just A Nasty Revenge Of The Nerds]]> revenge of the nerds


http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11351727/theres-a-big-rumor-going-around-about-how-argentina-can-be-rescued Fri, 01 Aug 2014 06:02:06 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11351727/theres-a-big-rumor-going-around-about-how-argentina-can-be-rescued <![CDATA[There's A Big Rumor Going Around About How Argentina Can Be Rescued]]> Cristina Fernandez de Kirchner Argentina


http://www.hedgehogs.net/pg/blog/Nisha/read/11351685/swf-norway-cbank-will-not-make-any-fx-transactions-in-aug Fri, 01 Aug 2014 02:58:06 +0100 http://www.hedgehogs.net/pg/blog/Nisha/read/11351685/swf-norway-cbank-will-not-make-any-fx-transactions-in-aug <![CDATA[SWF :- Norway c.bank will not make any FX transactions in Aug]]> Article Link]]> 11351685 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11351658/central-bank-news-link-list-july-31-2014-boes-broadbent-says-edge-is-coming-off-uk-housing Thu, 31 Jul 2014 23:33:45 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11351658/central-bank-news-link-list-july-31-2014-boes-broadbent-says-edge-is-coming-off-uk-housing <![CDATA[Central Bank News Link List - July 31, 2014 - BOEâs Broadbent says âedge is coming offâ UK housing]]>
Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.

http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11351647/colombia-hikes-rate-for-4th-time-raises-growth-forecast Thu, 31 Jul 2014 22:43:41 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11351647/colombia-hikes-rate-for-4th-time-raises-growth-forecast <![CDATA[Colombia hikes rate for 4th time, raises growth forecast]]>      Colombia's central bank raised its benchmark intervention rate for the fourth time in a row, as expected, saying demand is strong, credit growth is rising and real interest rates are at levels that are driving up spending.
    The Central Bank of Colombia raised its policy rate by another 25 basis points to 4.25 percent and has now raised its rate by a total of 100 basis points since April to curb inflationary pressures.
    The central bank also raised its 2014 growth forecast to between 4.2 and 5.8 percent, with 5.0 percent the most likely figure, sharply up from its March forecast range of 3.3 to 5.3 percent, with likely growth of 4.3 percent.
    The increase in the growth forecast came after first quarter growth was higher than expected, partly due to consumption and investment in the construction of civil works and buildings, and the central bank expects this to continue the rest of the year.
    "Additionally, consumer confidence has improved, the slowdown in consumer credit has stopped, retails sales continue to show strong dynamism and the unemployment rate has shown a downward trend. All the suggests that real household spending will continue to remain dynamic this year," the central bank said.

    Colombia's Gross Domestic Product expanded by a higher-than-expected 2.3 percent in the first quarter from the previous quarter for annual growth of 6.4 percent, up from 5.3 percent.
    Colombia's headline inflation rate eased to 2.79 percent in June from 2.93 percent due to changes in food and regulated prices, but the central bank said inflation expectations one year ahead remain near or slightly above 3.0 percent.
    The central bank targets inflation at a midpoint of 3.0 percent in a range from 2.0 to 4.0 percent.

http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11351632/japan-exports-and-trade-balance-vs-the-yen-abenomics-in-review Thu, 31 Jul 2014 22:10:57 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11351632/japan-exports-and-trade-balance-vs-the-yen-abenomics-in-review <![CDATA[Japan Exports and Trade Balance vs. the Yen; Abenomics in Review]]>
$XJY Yen Monthly

click on any chart for sharper image

The Yen went on a tear from mid-2007 to mid-2011, rising from 80.55 to 132.18. Since then, the Yen declined to and 94.83 and is currently at 98.26. The Yen was in this general area, at times, in 2004, 2005, 2008, 2009, and 2014.

One intent of Abenomics was to devalue the Yen to aid exports. How did that work out?

Japan Left Behind

Bloomberg reports Japan’s Export-Champ Days Are Left Behind.
The CHART OF THE DAY shows the value of Japan’s exports is 23 percent below a March 2008 peak, even as those of South Korea, the U.S. and Germany have grown. The yen has lost 16 percent in value against the dollar since Prime Minister Shinzo Abe took office in December 2012. That hasn’t been enough to spur growth in outbound shipments.

Japan’s government and central bank have blamed weak overseas demand, especially in emerging markets, for export sluggishness. This weakness is negative for an economy that suffered a blow to domestic demand from an April sales-tax increase.

“Japan is being left behind in the export recovery mainly because Japanese companies accelerated the shift of production abroad when the yen appreciated after the Lehman shock,” said Toru Suehiro, a market economist at Mizuho Securities Co. in Tokyo. “The loss of global market presence by Japan’s companies, especially electronic appliance makers, is also a factor.”

The impact of the move overseas by Japanese companies is striking in the U.S. automobile market, said Suehiro. U.S. sales for Japanese automakers in the six months through June rose 6.2 percent from a year earlier to 3.04 million, according to researcher Autodata Corp. Auto exports from Japan to the U.S. for the same period were down 8.5 percent, according to finance ministry data.
No Export Recovery for Japan (Chart of the Day)

Abenomics Flame-Out

What about exports vs. imports, a measure of trade deficits or surplus? Wolf Richter provides the answer in The Flame-Out Of Abenomics, In One Crucial Chart. Richter reports ...
Abenomics, the new economic religion of Japan, has kept some of its promises: It created inflation while wages stagnated, thus whittling down real incomes, further squeezed by the broad consumption tax hike. It devalued the yen by 25%, thus vaporizing a quarter of the wealth of the Japanese without having to tell them directly. And to make up for the tax increase on consumers, Abenomics elegantly cut taxes for Japan Inc. Grudging respect is due Prime Minister Shinzo Abe for these noble accomplishments.

In other areas, his record is spotty. One of the goals of his policies was to fire up exports by making them cheaper overseas and reduce imports by making them more expensive to consumers and businesses at home. It would crank up Japan's manufacturing sector and lead to a trade surplus that would inflate GDP, make Abe a hero, and save Japan.

Exports and trade surpluses have been vital to the Japanese economy. And reconstituting them has been a cornerstone of Abenomics. But that plan has gone to heck.

Not step by step, gradually over time, but in monthly leaps, whose size surprised even Abenomics-cynics like me. And the Ministry of Finance rubbed it in today when it published the trade statistics for June.

Exports, instead of soaring due to the watered-down yen, dropped 2.0% from a year ago to ¥5.94 trillion. Imports, instead of dropping due to consumers being squeezed by higher prices and stagnating incomes, soared 8.4% to ¥6.761 trillion. The resulting goods trade deficit jumped to ¥822.2 billion.

It was the worst trade deficit for any June ever. It was over four times as bad as last year's "worst June deficit ever." In June 2012, Japan still had a surplus. Historically, June is one of the better months for Japanese trade. But that surplus in June 2012 was Japan's last. What followed were 24 months of relentlessly deteriorating trade deficits. The worst series in Japan's recorded history (far ahead of the second-worst, the 14-month period in 1979-1980).

For the first six months this year, compared to the same period last year, the trade deficit soared 57%!

Here is what the flaming success of Abenomics looks like, boiled down to one chart:

The debacle was spread across the board, starting with its largest trading partner, both in terms of exports and imports, China. Since about one-third of Japan's exports to China get transshipped through Hong Kong, I combine them. So exports to China and Hong Kong edged up 1.6%. But imports from them jumped 10.6%. And the trade surplus in 2013 of ¥57 billion turned into a trade deficit of ¥63 billion. That's a deterioration of ¥120 billion. Even exports to the US, its second largest trade partner, declined 2.7%, while imports from the US rose 6.8%.

The export declines were spread across the largest categories: transportation equipment (cars, trucks, etc., which account for nearly a quarter of all exports) dropped -0.6%; machinery (about a fifth of all exports) -0.4%; electrical machinery (semiconductors, audio-video equipment, batteries, etc.) -5.1%; manufactured goods (steel products, etc.) -0.2%.

And imports rose across the largest categories. Mineral fuels (petroleum, LNG, coal, etc.), which make up nearly one-third of all imports, rose 8.3%.
Spotlight on Energy and Food

In the wake of Japan's nuclear disaster at Fukushima that closed multiple reactors, Japan has been very reliant on energy imports.

A falling yen certainly does not help.

Spotlight on Food

According to the USDA, Japan imports about 60% of its food.

And some of what Japan does produce is contaminated, and will be for thousands of years. See the July 15, 2014 report: TEPCO Failed To Disclose Crops Over 20KM From Fukushima Were Contaminated

Richter notes "[Japanese consumer] purchasing power is down by 3.6% year over year, for all items, including services; Purchasing power is down 5.6% for goods.

Abe wanted higher prices and got them, but not where he wanted them. Abenomics was supposed to help exports (but didn't), job creation (but didn't), manufacturing output (but didn't), real wages (but didn't).

Simply put, Abenomics has been a huge failure from every angle. Yet, economists are in near-universal praise because prices are rising. That's Keynesian idiocy at its finest.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com ]]>
http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11351629/france-unemployment-new-high-output-down-15th-month-prices-drop-27th-month-activity-up-in-peripheral-europe-outlook-for-germany Thu, 31 Jul 2014 22:10:46 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11351629/france-unemployment-new-high-output-down-15th-month-prices-drop-27th-month-activity-up-in-peripheral-europe-outlook-for-germany <![CDATA[France Unemployment New High, Output Down 15th Month; Prices Drop 27th Month; Activity Up in Peripheral Europe; Outlook for Germany]]> Number of Unemployed in France Hits New High.
The number of unemployed people in France has hit a new high as the country grapples with the fallout of the financial crisis and a sluggish eurozone recovery, the Labour Department reported Friday.

At the end of June, there were 3.398 million people who were registered as being without a job in the eurozone‘s second-largest economy - 0.3 per cent more than in the previous month.

Compared to June of last year, the number of jobless was up 4 per cent.

In a glimmer of positive news, the number of unemployed youth was down compared to last year: those under 25 without a job decreased by 3.1 per cent to 535,000.

France‘s 10.1-per-cent unemployment rate is nearly twice as high as in neighbouring Germany, which registers a 5.1-per-cent rate.

French Private Sector Employment Contracts 9th Month

According to the Markit Flash France PMI, French private sector output contracts again, albeit at slower pace.
The latest flash PMI data signalled that France’s private sector remained in contraction at the start of the third quarter. Output was down for the third month in succession, although the rate of decline eased to a marginal pace that was the weakest in that sequence.

Driving the headline index higher was an improvement in the performance of the French service sector. Activity there increased for the first time in three months, albeit marginally.

On the other hand, the manufacturing sector sank further into contraction, with output falling at the sharpest rate in 15 months. New business received by French private sector firms decreased for a fourth consecutive month in July. Although moderate, the rate of decline was quicker than in June. Lower new work was signalled in both the services and manufacturing sectors, with the latter reporting the sharper fall.

Anecdotal evidence suggested that client budgets were under pressure, leading to a squeeze on new orders despite further reductions in prices charged by French private sector firms. Indeed, output prices fell for a twenty - seventh successive month in July , with the rate of decline accelerating since June. A number of panellists indicated that they had been forced to pare their margins in order to stem the loss of new business , with competitive pressures generally reported to be strong. Both service providers and manufacturers reported lower charges. In contrast, firms’ input prices continued to rise at a solid pace in July, with companies in both services and manufacturing signalling increases. There were reports from the survey panel of increased costs for labour and raw materials. Employment in the French private sector decreased for the ninth month running in July. That said, the rate of decline was marginal and the weakest since Marc h. Both service providers and manufacturers cut staffing levels
France Synopsis

  • Manufacturing down at sharpest rate in 15 months
  • New business down 4th month
  • Budgets under pressure
  • Input costs rising sharply
  • Output prices down 27th month and accelerating
  • Private sector employment down 9th month
  • Service sector activity improved slightly

Activity Picks up in Peripheral Europe

Meanwhile, things improve elsewhere in Europe. The Markit European Composite report makes this headline claim: Flash PMI signals rebound in Eurozone growth but French woes persist.
Eurozone economic growth rebounded in July, according to the „flash‟ estimate of Markit‟s Purchasing Managers‟ Index. The headline PMI, covering business activity across both manufacturing and services, rose from a six - month low of 52.8 in June to 54.0 in July. The latest reading matched the near - three year high seen back in April and exceeded the averages seen in the first two quarters of the year. Many companies reported that business had picked up again in July after an unusually high number of holidays and a knock - on effect of mild winter weather had depressed activity in prior months. However, growth of new orders slowed slightly in July amid signs that expansion , especially in manufacturing, is being subdued by geopolitical concerns, in particular the escalating crisis in Ukraine.

A lack of clarity on the economic outlook, as well as ongoing pressure to cut costs and boost competitiveness, meant employment rose only marginally once again in both sectors in July.

Output prices meanwhile continued to fall, with the rate of decline accelerating slightly on June. Average selling prices have now fallen continually since April 2012, although the rate of decline remains only modest and far weaker than that seen at the height of the financial crisis. A marginal rise in manufacturing factory gate prices was offset by a drop in charge s levied for services. Some rising cost pressures were evident. Average input prices in manufacturing rose for a second successive month, growing at the steepest rate for seven months, while service sector input costs also rose, albeit to a slightly lesser extent than June. Looking at the data by country, strong national divergences persisted, with France contracting while growth accelerated elsewhere.

Firms in France reported that output fell for a third month running after the brief return to growth seen in the spring. Although French service providers saw a marginal return to growth, output in the manufacturing sector fell at the steepest rate since April 2013.

Firms in Germany, in contrast, reported the strongest increase in business activity since April, with growth picking up sharply from the lull seen in June. Service sector activity picked up especially markedly, growing at the fast est rate for over three years.

Manufacturing output growth also revived in Germany, but remained much weaker than earlier in the year. Outside of France and Germany, the rest of the region recorded the largest monthly increase in business activity since August 2007. New orders also grew at the sharpest rate for seven years. Although manufacturers outside of France and Germany saw output growth moderate slightly, the pace of expansion in services hit a seven-year high.
Party is Over

The party is over (not that there was much of one outside the stock and bond markets) once German growth slows. And while the Markit report looks one way for Germany, other indicators don't.

Outlook for Germany

I side with Steen Jakobsen, chief economist for Saxo bank on the path for Germany, and it's not a pretty one.

Europe is not prepared for a German slowdown, but it is coming. France is obviously hopeless.

Mike "Mish" Shedlock
http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11351552/our-marginal-economy Thu, 31 Jul 2014 18:10:30 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11351552/our-marginal-economy <![CDATA[Our Marginal Economy]]> Before you buy another ticket for the Bull market bandwagon of "don't fight the Fed," perhaps you should take a look at the quality of the debt the Fed has enabled and the diminishing returns on all that debt.

The mainstream media is delighted to highlight positive economic data, but nobody ever asks about the quality of the borrowers who are behind the rosy numbers. Behind the rosy numbers, sales and profits are increasingly dependent on marginal buyers and borrowers: those buying on credit who would not qualify to borrow money in a system ruled by prudent risk-management.

These marginal borrower/buyers are last on, first off: they qualify for loans at the end of a credit expansion, when lenders throw caution to the winds to reap the profits from issuing new mortgages, auto loans, student loans, credit cards, etc. to marginal borrowers.

These marginal borrowers are the first to default, because they have insufficient income and collateral to support their loans.

This rising dependence on marginal borrowers/buyers leads to an economy of diminishing returns: ever-rising rates of debt expansion are required to generate ever-declining rates of expansion of sales, profits, GDP, etc.

The waterfall decline of the quality of debt-based sales is masked by the rosy headline numbers. Auto sales are soaring; nice, but does anyone ask how many of those vehicles were sold to marginal buyers, the kind of borrowers who are one paycheck away from insolvency and default?

How many issuers of junk bonds are one recession away from insolvency and default?

Let's look at a few examples of diminishing returns/dependence on rising debt for marginal returns. Once again, we must keep in mind the quality of the debt and the borrowers is not revealed in rosy headline numbers.

Anecdotally, I see plenty of people who defaulted/declared bankruptcy in previous downturns who are once again in hock to the hilt, and they know the drill: borrow and spend as much as you can, because all you have to do is stop paying.

Yes, your credit score will be lousy for a few years, but lenders and retailers are so desperate for sales that you won't have to wait long to start getting a flood of credit card offers in your mailbox. After all, anyone with a pulse can buy a car now.

Here's total credit and GDP: this screams "diminishing returns":

The Fed's "free-money for financiers" balance sheet and the S&P 500: once again, this screams "diminishing returns:"

Money velocity: diminishing returns:

Small biz: fading at the margins:

Federal student loans: this fairly screams, "go ahead and default, there is literally no risk management here":

The return on a college degree? Diminishing faster than you can say "default":

Labor participation and real median income: diminishing returns on all the outlandish money pumping and Federal deficit spending:

Fulltime employment: going nowhere after 5+ years of unprecedented expansion of central bank "free money for financiers" and Federal debt:

Real household income: declining for all but the top 5%:

Household income has declined significantly in real terms: Five Decades of Middle Class Wages (Doug Short).

Federal Reserve "free money for financiers" has greatly expanded wealth inequality:

So before you buy another ticket for the Bull market bandwagon of "don't fight the Fed," perhaps you should take a look at the quality of the debt the Fed has enabled and the diminishing returns on all that debt.

Get a Job, Build a Real Career and Defy a Bewildering Economy(Kindle, $9.95)(print, $20)
go to Kindle editionAre you like me? Ever since my first summer job decades ago, I've been chasing financial security. Not win-the-lottery, Bill Gates riches (although it would be nice!), but simply a feeling of financial control. I want my financial worries to if not disappear at least be manageable and comprehensible.

And like most of you, the way I've moved toward my goal has always hinged not just on having a job but a career.

You don't have to be a financial blogger to know that "having a job" and "having a career" do not mean the same thing today as they did when I first started swinging a hammer for a paycheck.

Even the basic concept "getting a job" has changed so radically that jobs--getting and keeping them, and the perceived lack of them--is the number one financial topic among friends, family and for that matter, complete strangers.

So I sat down and wrote this book: Get a Job, Build a Real Career and Defy a Bewildering Economy.

It details everything I've verified about employment and the economy, and lays out an action plan to get you employed.

I am proud of this book. It is the culmination of both my practical work experiences and my financial analysis, and it is a useful, practical, and clarifying read.

Test drive the first section and see for yourself.     Kindle, $9.95     print, $20

"I want to thank you for creating your book Get a Job, Build a Real Career and Defy a Bewildering Economy. It is rare to find a person with a mind like yours, who can take a holistic systems view of things without being captured by specific perspectives or agendas. Your contribution to humanity is much appreciated."
Laura Y.

Gordon Long and I discuss The New Nature of Work: Jobs, Occupations & Careers (25 minutes, YouTube) 

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Transformation Institute ($10), for your most generous contribution to this site -- I am greatly honored by your support and readership.Thank you, Karen H. ($25), for your much-appreciated generous contribution to this site -- I am greatly honored by your support and readership.

http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11351520/bnp-paribas-reports-huge-loss Thu, 31 Jul 2014 17:30:13 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11351520/bnp-paribas-reports-huge-loss <![CDATA[BNP Paribas Reports Huge Loss]]> 11351520 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11351519/czech-central-bank-to-keep-koruna-weak Thu, 31 Jul 2014 17:30:08 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11351519/czech-central-bank-to-keep-koruna-weak <![CDATA[Czech Central Bank to Keep Koruna Weak]]> 11351519