Eric,
QE to infinity or the Fed is history.
Draining reserves during this administration is a sick joke.
Regards,
Jim
Program Will Pay Homeowners to Sell at a Loss
CIGA Eric
In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.
This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.
Classic. U.S. taxpayers not only own the bad loans of GM, AIG, GMAC, et. al, but also the collateral behind them. While the Fed speaks of draining liquidity from the system, the words are shattered by political necessity of infinite liquidity. There will be consequences to these actions.
Japense Yen
CIGA Eric
As the media debates various agendas, the markets resolve their own. No one, individual or group, is bigger than the market. Follow it, or get out of the way.
The Bank of Japan (BOJ) may be talking down the Yen, but the tape has yet to support it. That which cannot go down with force will reverse and attempt to go up with force. Looks as if two of the "three taps and out" have been booked.
Japanese Yen ETF (FXY) 
Treasuries Replace Munis as Brown Brothers Sees Value (Update3)
CIGA Eric
Muni bonds are losing favor as state and local governments raise taxes to fund the record $18.5 billion in budget gaps estimated in a National Governor’s Association survey.
Local municipalities have big budget holes to fill; some of these holes are "Greece-like" in size. The fact that no one wants to talk about it doesn’t mean that the problems go away.
Source: bloomberg.com
New Normal Becomes Old Normal as Exports Propel U.S. Recovery
CIGA Eric
The “new mix” is out to topple the “new normal” as the paradigm for America’s economic future.
The 5.9 percent annualized surge in fourth-quarter growth — the fastest since 2003 — was powered more by exports and business investment than the traditional drivers of consumption and housing. This new mix of demand will boost the economy by 3.7 percent in 2010 and pave the way for 3.5 percent annual average increases thereafter, said Joseph Carson, an economist at AllianceBernstein in New York, who coined the phrase.
Talk is cheap. Long-term export growth must be lead by investment rather than devaluation. A breakdown of GDP reveals that domestic private investment, though bouncing from extremely depressed levels in the fourth quarter, remains firmly entrenched within a secular down trend. The new normal of currency devaluation, coined beggar thy neighbor policies in the second Great Depression, fosters only temporary allocation shifts or the size of the slice within economic pie representing the global economy. It does little to grow the size of the pie for everyone.
Source: bloomberg.com
