We’ve paid some attention lately to the fact that the US dollar is reacting positively to fundamentals, i.e. negative data is negative for the buck, positive data is positive for the buck. That’s a far cry from their tightly negative correlation at the height of riskappetite- dominated markets.
Over the years, especially in the bubble era, a common question to ask is: Do the fundamentals matter?
It may be a stretch to say China is now going to drain massive amounts of liquidity, having to pay penance for the error of its massive stimulus spending and subsidization ways (which it rightly accuses the West of the same). We have seen a degree of economic force feeding everywhere that usually wreaks havoc with the pseudo-market pricing system and leads to unintended consequences--usually the bad kind after the sugar-high wears off. Nothing new here -- we have seen it before and will see it again.
You’re only as good as your worst player ...
Or something like that. This is why the euro has been so bogged down by daily news citing Greek [debt] tradegy. Just how badly the rest of the Eurozone is set to perform remains a question.
The world's biggest investment funds are cutting exposure to US and UK government bonds amid fears that rising public debt and the withdrawal of central bank support for their economies could threaten global recovery. (FT)
How badly does Ben Bernanke want to keep his job?
Frankly, I’m surprised he’d even sign-up for all the responsibilities and criticisms that come with being Fed chairman; just seems like it’s not worth it.
But so it goes for so many politicians and power-mongers in the upper echelon of social influence.
