The violence in Gujarat in 2002 was extremely serious; it went on for months. If you travel in the hinterland of Gujarat, what is more serious is the absence of a healing process. Modi’s problem is very real. Modi has to evolve.
—Mahesh Rangarajan, professor of modern Indian history at Delhi University
A strange old man
Stops me,
Looking out of my deep mirror
—Hitomaro
On the shingle
Beaten by waves
He sleeps with his head
Amongst the rocks
—Hitomaro
Rexroth – 100 Poems from the Japanese.
as I understand his proposal, it’s a proposal designed to increase the use of the IMF’s special drawing rights. And we’re actually quite open to that suggestion.
—Tim Geithner at CFR, commenting on a question about China Governor Zhou Xiaochuan’s proposal to alter the composition of IMF SDRs
The dollar slides 1.3% in ten minutes against the Euro
I’d like to ask one final question, in effect on behalf of the market. Let me ask the question this way. Do you see any change over the foreseeable future in the basic role of the dollar as the world’s key reserve currency?
—Roger Altman, founder of Evercore Partners Inc, former member of the Treasury under Clinton
I think the dollar remains the world’s dominant reserve currency.
—Tim Geithner’s response
Month-to-month changes in the geographic mix of sales activity explain most of the unexpected rise in rpices in January…the data suggest that if one were to remove those effects, the change in home prices in January, while still positive, would have been far less dramatic.
—FHFA: Monthly Home Price Index, calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac.
China is a hostage. China is America’s bank and America basically says there’s nothing you can do to me. If I go down you don’t get paid.
—Andy Xie, former Morgan Stanley’s chief Asia economist.
Chinese officials and academics always felt they had the upper hand psychologically in negotiating with the U.S., as they could easily threaten not to buy U.S. Treasuries any more. Now, that bargaining chip has been taken away. [Reserves] are such a big chunk that it’s too difficult to turn them around.
Chinese leaders are likely to articulate their concern to their U.S. counterparts strongly and ask for specific measures.
—Li Xiangyang, Chinese Academy of Social Sciences
Central bank Governor Zhou Xiaochuan yesterday urged the International Monetary Fund to create a “super-sovereign reserve currency.”
The basket of currencies forming the basis for SDR valuation should be expanded to include currencies of all major economies, and gross domestic product may also be included as a weighting
—Zhou Xiaochuan, Chinese Central bank Governor on shifting the composition of Special Drawing Rights through the IMF to include more currencies and weight their resepctive share by GDP — perhaps a way toward the super reserve currency and a shift away from the USD
The world economic landscape has been changed since the establishment of the SDR 40 years ago. Specifically, no such reserve currency would make sense without the yuan being included.
—Ha Jiming, chief economist at China International Capital
This rally may have some more legs
The risk is that the economic recovery disappoints in the second half and that equity markets need to revisit their lows in the next few months and maybe go through them.
—David Hudson, BlackRock, manager of the Asset Allocation Alpha Fund
Geithner is all about fixing the banks and that is an essential first step in fixing the economy. This is a bear-market rally. Describing it as a beginning of a bull run is extremely premature.
—Richard Lacaille, chief investment officer at State Street Global Advisers
Questions remain. I’m not convinced the plan is the complete end game for what ails us in the financial sector.
—Bill Dinning, head of investment strategy, Aegon Asset Management, $61.6b AUM
And this incapacity for independent action this moral stupidity, this infirmity of the will, this unwillingness to cheerfully catch hold and lift, are the things that put pure Socialism so far into the future. If men will not act for themselves, what will they do when the benefit of their effort is for all.
the real legacy of the crisis has been an enormous contraction in long-term flows, with a corresponding increase in the United States reliance on short-term financing….It may not be financial deglobalization, but it certainly is a major slowdown in financial globalization.
He goes on to outline three trends:
I have been waiting for months for someone in authority to give a straight-talk speech to the American people about how we got into this mess and how we’re going to get out of it. Maybe the Fed chairman is not the most natural choice, but someone had to do it.
—Alan Blinder on Bernanke’s interview on 60 Minutes
What happened? Banks borrowed money from lenders around the world. The bankers then kept a big chunk of that money for themselves, calling it “management fees” or “performance bonuses.” Once the investments were exposed as hopeless, the lenders — ordinary savers, foreign countries, other banks, you name it — were repaid with government bailouts.
—David Leonhardt on a paper by George Akerlof and Paul Romer on bailouts and looting
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