The MSCI Asia Pacific index fell 1.1% in early Monday trading on fears of a US Government shutdown at midnight because of the budget impasse in Washington.All 10 industry groups in the index retreated.*
Also looming in Washington is the conflict in Congress over raising the debt ceiling,which is necessary for the US Government to continue borrowing the money it needs to sustain itself.The decline in Asian stocks is really a matter of selling into the strength of the Asia Pacific index's 7% gain in September,in light of the impending double fiscal crisis in US Government finances.*
Both Hong Kong and mainland China markets will be closed Tuesday for a holiday,and mainland markets won't reopen till October 8.*
The HSBC-Markit Economics Performance Manufacturing Index for China came in at 50.2 in September versus 50.1 in August,missing the estimate.*
A comment by Gurbat on Bloomberg's website said the BSE Sensex is poised to increase its downward momentum.The only bright hope is the holiday season for the next six weeks.But given current dynamics the best you can hope for is a retest of highs this year.Added faintandfuzzy:Nice to see US politicians acting like children again...taking the rest of the world economy with them.*
About 19.6% of Hong Kong's citizens are now poor,a new report for the territory's Chief Executive said.Home prices there have doubled since 2009.A family of three has a median income of 23,100 Hong Kong/2979 US dollars per month,according to government figures.
Poverty affects Hong Kong's harmony and stability,thus affecting its long term competitiveness,Chief Executive Leung Chun-ying said Saturday.In 2012,the number of millionaires in Hong Kong rose 35.7%,to 114,000,a Cap Gemini-RBC report indicated.
Showing posts with label budget deficit. Show all posts
Showing posts with label budget deficit. Show all posts
Monday, September 30, 2013
Sunday, December 12, 2010
Leading Analyst Disturbed By D.C.'s Tax Cuts
To Ed Yardeni,the analyst who coined the term "bond vigilantes,"there seems to be a coincidence between today's rising bond yields and D.C.'s tax cut plans.D.C. is making it all too easy to increase the deficit by readily cutting taxes and hence decreasing revenue.As the deficit balloons,the government must pay more and more interest to skeptical investors who buy government bonds,which ultimately stresses the budget even more.
There's also a fear Federal Reserve Chairman Ben Bernanke may overshoot in his QE2 policy of buying Treasury bonds:another reason to lighten up on the bond holdings.The bond vigilantes have woken up in Europe,and are now waking up in the U.S.,Mr.Yardeni thinks.They're in the position to shut the bond market down unless the U.S. changes its policy.
Rising bond yields means retirement portfolios stuffed with bond funds will lose value,since bond prices fall as yields rise.
The U.K.'s making tremendous progress in cutting the deficit,and Europe's moving in the right direction,Mr.Yardeni said.He certainly doesn't like what he's been seeing in the U.S. recently,however,and neither do the bond vigilantes.
Bond vigilantes are big traders who insist on ever-higher interest rates to cover their risk as governments sink deeper into debt,making the cost of money increase even more.
Other observers disagree with Mr.Yardeni's assessment,saying the increase in bond yields is simply the bond market adjusting to better economic data and growing national debt,rather than the bond vigilantes waking up,and will not be disastrous.
Nonetheless,most financial advisors are urging their clients to move away from a bond market that is seen as being toppy now,and toward an improving stock market.
There's also a fear Federal Reserve Chairman Ben Bernanke may overshoot in his QE2 policy of buying Treasury bonds:another reason to lighten up on the bond holdings.The bond vigilantes have woken up in Europe,and are now waking up in the U.S.,Mr.Yardeni thinks.They're in the position to shut the bond market down unless the U.S. changes its policy.
Rising bond yields means retirement portfolios stuffed with bond funds will lose value,since bond prices fall as yields rise.
The U.K.'s making tremendous progress in cutting the deficit,and Europe's moving in the right direction,Mr.Yardeni said.He certainly doesn't like what he's been seeing in the U.S. recently,however,and neither do the bond vigilantes.
Bond vigilantes are big traders who insist on ever-higher interest rates to cover their risk as governments sink deeper into debt,making the cost of money increase even more.
Other observers disagree with Mr.Yardeni's assessment,saying the increase in bond yields is simply the bond market adjusting to better economic data and growing national debt,rather than the bond vigilantes waking up,and will not be disastrous.
Nonetheless,most financial advisors are urging their clients to move away from a bond market that is seen as being toppy now,and toward an improving stock market.
Sunday, August 8, 2010
Geithner At NYU:Comeback Confidence
Treasury Secretary Timothy Geithner expressed confidence in the nation's future at NYU's Stern School of Business recently.Mr.Geithner feels that America is coming back;the economy is healing.Typically,recoveries following a crisis are more moderate.You always face more headwinds.Businesses are starting to hire,but the U.S. needs to bring the fiscal deficit down.Economic growth needs confidence that the U.S. will cut debt.This debt reduction will be a difficult process.
We're seeing more stability in house prices,but we still have a lot to work through.The system we have today is not tenable for the future.Fannie Mae and Freddie Mac built up huge portfolios of mortgage-backed securities without the capital to back up the risk.
The government still has substantial capacity to respond to a future crisis,Mr.Geithner said,wearing a black suit,blue shirt and blue tie.He did not believe the U.S. is headed for Japanese-style deflation.Most countries wait too long to respond to crises.The President made it clear we were not gonna do that.We decided to act with force.The major firms are in a much stronger position because we forced them to disclose and raise more capital.Because of that,the world turned and the basic beginnings of recovery began.Mr.Geithner is very confident we're gonna avoid the Japanese fate.
We're seeing more stability in house prices,but we still have a lot to work through.The system we have today is not tenable for the future.Fannie Mae and Freddie Mac built up huge portfolios of mortgage-backed securities without the capital to back up the risk.
The government still has substantial capacity to respond to a future crisis,Mr.Geithner said,wearing a black suit,blue shirt and blue tie.He did not believe the U.S. is headed for Japanese-style deflation.Most countries wait too long to respond to crises.The President made it clear we were not gonna do that.We decided to act with force.The major firms are in a much stronger position because we forced them to disclose and raise more capital.Because of that,the world turned and the basic beginnings of recovery began.Mr.Geithner is very confident we're gonna avoid the Japanese fate.
Sunday, June 13, 2010
Peterson Foundation's Deficit Alarm
David Walker,President and CEO of the Peter G. Peterson Foundation,feels we have to learn from history and not repeat the mistakes others have made.In the short term,the U.S. is a flight to safety.In terms of public debt,however,we're 10 years away from being Greece.The oil spill shows us corporations do not have duties of loyalty to countries;they are loyal to shareholders.Washington is not the real world and,frankly,New York isn't,either.
The four factors that caused the subprime crisis exist for the government's own finances,Mr.Walker thinks.We're on the path to moving to where the Southern European countries are.The clock is ticking and time is not ticking in our favor.We cannot allow the extremes to polarize our political system.The American people are in the sensible center,and that's where you get things done.Eighty percent of the American people see the budget deficit as a priority,David Walker observed.
On June 26,the Peterson Foundation and others are holding a national town meeting on this subject.It's never been done before,Mr.Walker pointed out.
David M. Walker was Comptroller General of the United States from 1998 to 2008.As the nation's chief auditor,he was head of the Government Accountability Office,where he highlighted wasteful government spending.
The four factors that caused the subprime crisis exist for the government's own finances,Mr.Walker thinks.We're on the path to moving to where the Southern European countries are.The clock is ticking and time is not ticking in our favor.We cannot allow the extremes to polarize our political system.The American people are in the sensible center,and that's where you get things done.Eighty percent of the American people see the budget deficit as a priority,David Walker observed.
On June 26,the Peterson Foundation and others are holding a national town meeting on this subject.It's never been done before,Mr.Walker pointed out.
David M. Walker was Comptroller General of the United States from 1998 to 2008.As the nation's chief auditor,he was head of the Government Accountability Office,where he highlighted wasteful government spending.
Tuesday, May 6, 2008
New Jersey in the Red
New Jersey has one of the worst budget deficits in the nation,according to Governor Jon Corzine.Although the state is a center of the pharmaceutical,chemical and shipping industries,it is still plagued by red ink.This is because of twenty years of structural mismanagement,coupled with a recession,Mr.Corzine said.Mr.Corzine,a former chairman of Goldman Sachs(GS),is displeased by the risky attempt to close the state pension funding gap by taking on more debt in the form of pension bonds.That's the way he used to operate at Goldman Sachs,the governor observed.
Subscribe to:
Posts (Atom)