Economic Reports This Week
There are a few major reports this week that one needs to keep their eye on. The CPI and PPI will be important as the concern over money printing is causing fear about inflation. China has already seen problems with inflation over the weekend, and their language is getting stronger about currency wars - i.e., the wars can cause inflation in China.
If inflation is steady (or lower) this will reinforce Mr. Obama's and Dr. Bernanke's notion that the Feds can continue to provide extraordinary measures to stimulate the economy into eternity.
Retail Sales this week are expected to continue growing while earnings have contracted.
The consumer confidence index is expected to be up even in the face of all the negative news items. Perhaps, Dr. Bernanke is correct in suggesting a higher stock market is all that is required to boost confidence and spending.
You can find economic report summaries at http://www.bloomberg.com/markets/economic-calendar/ If you want to read more you can sign up with econoday http://www.econoday.com/
China
As noted, the Chinese data that printed this last weekend shows inflation. However, retail sales and manufacturing were up (if only slightly). There was weaker fixed asset investment. Inflation is a problem for the Chinese economy, but they wanted to boost domestic demand. That seems to me when one boosts demand prices go up.
All in all, the Chinese numbers were mixed. It caused the European investors to wonder about what is next, but in the US this morning, the markets are up up up.
Aussie $$
The Aussie $$ is tied (in investors minds) to the Chinese economy. Even the thought of a slowdown in China has substantial downside for the Aussie. The investors (world-wide) are discounting the good news in Australia's economy, while pricing in downside based on China.
Canada $$$
Canada's labor report was a good as the US'. Not only that they saw their housing starts rebound in February. The Loonie has been very weak, and maybe it will get some love now. This morning it is up (albiet not extremely strong). Canada will be tied to the US until the US solves the debt ceiling problem coming up.
Club Med and the Euro
Before the European Union, Greece, Italy, Spain and even Portugal were labeled Club Med... This was the group of countries (with their own currencies) who continued to default on their debt, and start over. Today, Spain's parliament will meet to form a government, and maybe that will help the Eurozone. I hope so.
Fitch downgraded Italy to BBB -- while expected, this is not a good thing. Interest rates have a probability of escalating, and causing all kinds of problems (as Greece fully understands).
Federal Reserve Exit Strategy?
What Exit strategy? Dr. Bernanke last month asserted that the Federal Reserve does not ever have to sell the trillions of dollars in bonds it holds. Wow... Gentle reader... if the economy improves and they do not liquidate (because they have no exit strategy), you are looking at another historic event. That has never happened in the USA before.
Stay tuned... Weird financial and political stuff coming from the Federal Reserve.
Identity Theft...
I'm negotiating a contract to design and build some new security software (starting with open-source software that already exists). I'll team up with the Black Hat group. So, I thought I would caution you about the problems out there.
The story listed in this link http://www.montgomeryadvertiser.com/article/20130209/NEWS01/302070052/ID-theft-victim-details-ordeal Has been posted all over the internet. Mr. Purdy was earning a middle-class salary working for a defense contracting company when his identity was stolen. Angeline Austin of Montgomery Alabama was a data entry operator that stole Mr. Purdy's identify and 100s of other people's identity. She was sentenced to 65 months in Federal Prison for stealing from Troy Hostpital's database and selling the information to a tax fraud ring.
This ring was experts in manufacturing "synthetic identities. A typical fraud ring will charge immediately as soon as she/he gets access to the victim's account. Over time, the ring builds up a synthetic identification. This is accomplished by opening bank accounts, starting fake businesses, and applying for personal and business credit cards. In many cases, they also take out loans on homes and autos. In the beginning they pay bills and establish a superior credit rating. However, at some point, they take all they can, and stop paying.
NBC has reported that synthetic identity thieves in New Jersey stole at least $200 million dollars over 6 years. They stole utility bills, pilfered Social Security cards, hacked people's computers on-line and then used all that to create fake credit identities.
It has been reported that the FBI determined that the criminals manufactured 7,000 synthetic identities, of which they used to remove $60M in goods and services.
Did you know that the law allows everyone a free review of her credit reports once per year? That is good, as it use to be very difficult (and sometimes expensive) to get that information. However, in today's world, that is not nearly often enough.
Did you know that the way the fraudsters work, that they could be using your identity and your credit score is still outstanding? That is because they are opening new accounts and keeping the bills up to date.
LifeLock http://www.lifelock.com/ is a company that will help protect your identity. You will receive alerts if you sign up, and costs as low as $10 per month. (I'm not a sales rep for these folks, and this is only information for you to look into).
Equifax www.equifax.com is another service that can monitor your identity.
If you don't have the correct protections in place, research into Lifelock, Equifax, TransUnion and so-on. Make sure they notify you of when new accounts (credit cards, banks, loans, and so-on) are opened.
WARNING: IT is very very very very very difficult to remove problems with your credit if your identity is stolen. Read Mr. Purdy's account. It is a sad situation he and his family now have.
To BIG TO FAIL....
Attorney General Eric Holder said, “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute – if we do bring a criminal charge – it will have a negative impact on the national economy, perhaps even the world economy.” He also said, “I think that is a function of the fact that some of these institutions have become too large.”
Oh Yea? Wow
Senator Vitter said, “It’s another glaring example that ‘too big to fail’ is alive and well. If megabanks have a decided, quantifiable market advantage on the order of $83 billion a year, and if megabanks are so big the Justice Department, as enunciated today, will think twice and three and five and ten times about prosecuting them in a way they never would for other institutions, I think the American people’s reaction to that is, these banks are not just ‘too big to fail’ or ‘too big to prosecute’ – the bottom line is they’re just too big.”
Seems like I read somewhere that Dodd-Frank ended the Too-Big-To-Fail? Wait, Dodd-Frank was published, passed and so-on, but "WE" did not know what was in there, and so it is still being written.
OK Thomas Curry Comptroller of Currency says that the HSBC smack down shows "too big to jail" doesn't exist -- except that HSBC pays a fine and bypasses jail.
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