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Reuters Article: PIMCO on tightening @
http://www.reuters.com
- Fed will have purchased over $1.25 trillion in MBS and $125
billion in agency debt at end of quantitative easing - Consumers are still constrained by high unemployment, minimal
spending, and credit reducing - The odds of another credit/consumption induced bubble seems slim
as the Fed takes unofficial tightening actions at end of QE, consumer
conditions have arguably worsened over time [particularly if you
consider that practically the only economic positive has been government
intervention] - El-Erian is predicting a "new normal" of disappointment in the
"recovery"
China Daily Article: Morgan Stanley defends CNY @ http://www.chinadaily.com.cn
- Complaints about undervalued Yuan contributing to US economic
hardship have risen over previous month - US has trading deficit with 90 trading partners
- Morgan Stanley analyst sees Yuan revaluation as protectionist and
negative to global growth - Note: There is no guarantee the Yuan would appreciate, especially
in the face of an enormous asset bubble, credit based construction, and
25% M2 YoY growth. Subscribers see China
Macro Discussion 2-4-10
Business Week Article: Latvian Government steps down @ http://www.businessweek.com
- Prime Minister Dombrovskis rejected economic rescue plan calling it
too "populist" to achieve success - The People's Party has walked out of parliament, putting future
implications for return from ruin on hold or shoving them aside - After failed bond auction, Latvia received €7.5 billion from IMF
in assistance, which has parliamentary election in six months - See As
I Warned Earlier, Latvian Government Collapses Exacerbating Financial
Crisis
ZH Article: Geithner implies state/muni bailout @ http://www.zerohedge.com
- Geithner feels there is no way the US can lose its AAA credit
rating - Romer and Geithner pledged implicit (for now) support for
state/municipal bailouts, as conditions continue to worsen - California CDS spreads have been wider than Kazakh spreads over
the past few weeks, New Jersey potentially to follow
