I have abandoned free-market principles to save the free- market system
—Bush on a CNN internview
It is highly unlikely that China will reverse its course. The export sector can and should be helped by means other than devaluation. Why should China do something that is not in its long-term interests and whose impact in the short-run is uncertain?
I regard the recent devaluation as just a blip. Of course, many people here are happy to see the yuan devalue. However, I do not think a devaluation of the yuan can do much to shrink China’s trade surplus. More importantly, China should be happy to see a more balanced trade account.”
—Yu Yongding, a bloomberg interview, December 5th
That is why Yu Yongding, a former adviser to the central bank, says it’s time for the government to let go and test the real value of the yuan.
If China’s stimulus spending is implemented correctly, it will create enough growth momentum to offset the macro impact of the global slowdown. There should be no problem for the Chinese economy to maintain growth as high as 8 percent next year.
—Yu Yongding, December 10th
I have never changed my opinion on the renminbi, that it will keep gaining value. Look at China’s trade and balance of payments and you’ll find out whether the currency is going up or down.
And I have always believed that China has been overly dependant on foreign demand, which is a major factor to blame for our economic troubles. In the future we need be more reliant on domestic demand. This should be the direction for our policies.
—Yu Yongding, December 12
The depreciation this time is a measure to cope with the financial crisis and the changed macro economy. Without this factor, the Chinese currency has plenty of room to continue appreciating, as China is still in a period of fast-growth. Besides, its appreciation helps the global currency system to diversify, especially at a time when the US subprime mortgage crisis has led to global financial trouble and everyone has been condemning the dollar-dominated international currency system.
As long as China maintains a surplus in its current accounts and its foreign reserves are accumulating, the renminbi will appreciate.
—Peng Xingyun, Peng Xingyun, director of the monetary theory and policy department of the Institute of Finance and Banking, December 12 in The Economic Observer. Peng did not answer a subsequent question about the depreciation helping Chinese industry.
The availability of Fed credit might deter private credit. The lender of last resort becomes the lender of only resort.
The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.
—The Fed hits uncharted waters
This is the farewell kiss, you dog…This is from the widows, the orphans and those who were killed in Iraq!
—Muntadar al- Zeidi shouted in Arabic
All I can report is it is a size 10
—Bush, in response
Iraqis Protest Detention of Shoe-Tossing Journalist
Hitting someone with a shoe is considered the supreme insult in Iraq. It means that the target is even lower than the shoe, which is always on the ground and dirty. (NYT)
Early in the Clinton days, the hallmark of policy was if you did this, how would it affect the bond market. Every time I would talk to someone they would say ‘you can’t do that, it will freak the bond market out.’ I said ‘goddamn, whoever the bond market is, these bastards are powerful.
—James Carville, in Bloomberg interview last year
We will be very lucky if we reach the bottom in 2009
Letting Lehman fail was supposed to restore market discipline by showing that not all large firms would be saved. Paradoxically, since Lehman, everybody has been bailed out, everybody has been saved or merged out of existence with taxpayer help.
—Dino Kos, a former senior Fed official and now a managing director at Portales Partners in New York, on the failure of ideology over pragmatism
We won’t get the contraction for a great depression. We know enough to avoid that, but we don’t know nearly enough about getting growth back.
—Simon Johnson, former chief economist for the International Monetary Fund who’s now at the Peterson Institute for International Economics in Washington.
We’re facing a once-in-a-century problem. The global scale and magnitude of it is much greater than those we’ve seen before. We’re going to face a deep downturn and slow recovery no matter what we do. The challenge now is to contain it to a couple of years and not a decade.
You still have a massive paranoia in the marketplace and you’ve got that safety-at-any-cost mentality. People are not buying Treasury bills because they think the yields are attractive. They are buying them because they are afraid to put money anywhere else.
—Jay Mueller, who manages about $3 billion of bonds at Wells Fargo Capital Management in Milwaukee
This is not about return and yield and value; investors are functioning out of raw fear. This is fabulous for the Treasury because they are borrowing at virtually nothing.
—Barr Segal, a managing director at Los Angeles-based TCW Group Inc., which oversees $90 billion in fixed-income assets
Bloomberg Survey ================================================================= Release Period Prior Median Indicator Date Value Forecast ================================================================= Empire Manu. Index 12/15 Dec. -25.4 -27.3 Ind. Prod. MOM% 12/15 Nov. 1.3% -0.8% Cap. Util. % 12/15 Nov. 76.4% 75.6% NAHB Housing Index 12/15 Dec. 9 10 CPI MOM% 12/16 Nov. -1.0% -1.3% Core CPI MOM% 12/16 Nov. -0.1% 0.1% CPI YOY% 12/16 Nov. 3.7% 1.5% Core CPI YOY% 12/16 Nov. 2.2% 2.1% Housing Starts ,000’s 12/16 Nov. 791 735 Building Permits ,000’s 12/16 Nov. 730 700 Current Account $ Blns 12/17 3Q -183.2 -179.0 Initial Claims ,000’s 12/18 Dec. 13 573 555 Cont. Claims ,000’s 12/18 Dec. 6 4429 4375 LEI MOM% 12/18 Nov. -0.8% -0.4% Philly Fed Index 12/18 Dec. -39.3 -40.0 =================================================================
We’re just going into the teeth of this recession. It’s a very deep recession, a worldwide recession. Not the Great Depression, that’s hyperbole, but possibly the worst since World War II.
A lot of [the car companies] may not be in business in 10 years, anyway. On the other hand, we’re going around handing out checks left and right. It’s just very hard to tell unions to go jump in the lake.
Stilltitled 