Friday, November 24, 2006
Testing the ice
Partly via Nouriel Roubini
Reuters
[In very thin trading,] The dollar plunged against major currencies on Friday, pulling the rug from under European stocks as the euro soared and sending investors scuttling into selected safe havens.European stock indexes sank more than 1 percent, raising questions about exporters' future earnings and sparking concerns about whether the steady rises in global equities and general lack of volatility across financial markets had hit the skids.
Reuters
The ABC News/Washington Post Consumer Comfort Index fell to 0 [i.e., perfectly neutral, neither optimistic nor pessimistic] in the week ending Nov. 19, one point below the prior week's near four-year record high on the scale of +100 to -100.
Bloomberg
People's Bank of China Vice-Governor Wu Xiaoling said East Asia needs to reduce its reliance on dollar inflows because of the risk of a further slump in the currency. China's foreign- exchange reserves exceed $1 trillion, the world's largest. Wu's comments were released today in an article circulated during a press conference in Beijing. ``China holds most of its reserves in the dollar and these comments may lead to speculation they will sell,'' said Tohru Sasaki, strategist in Tokyo at JPMorgan Chase & Co. and a former chief currency trader at the Bank of Japan. ``Diversifying reserves always puts downward pressure on the dollar.''
It's premature to say whether this signifies a bearish breakthrough. What is inarguable is that the bill for six years of reckless economic policies and crackpot politics will have to be paid eventually.
More blogs about politics.
