Economic Reports 02/21/07
Summary: The Fed is doing an excellent job of "managing" inflation expectations by flat out lying to people...
of course what else can you do if the ship is taking on water, the bilge is gone and there aren't enough life boats to go around...
The BOJ raised and inflation or stagflation is still raging at 12-15% annual. Go to Shadowstats for some REALITY based numbers on CPI & M3.
The BOJ raised 25 bps to 0.50%, the 2nd hike in 7 years after raising 25 bps in July. The yen carry trade margin differential is now 4.75%.
Benny & The Feds partner in crime, Toshihiko Fukui, said the BOJ is "aware that extremely distorted movements in the financial market, including the yen carry trade, could eventually have a negative impact on the economy." Do ya think?
The reality is, it will take at least 4 months for the Bank of Japan to follow up with a subsequent tightening, thus, offering ample opportunity for traders to place fresh carry trades with a medium term horizon.
An emasculated manufacturing base and a plunging housing sector pose a formidable downside for the US economy, raising the odds of a late Q2 or early Q3 Fed rate cut.
This summer the Fed cuts and the BOJ raises, the carry trade margin gets cut by another 50 bps, which would still leave 4.25% margin in the deal.
...2 year note auction later today. FOMC Minutes to be released at 2PM EST.
Other news: Hewlett Packard (HPQ) reported a 26% jump in fiscal Q1 profit late yesterday. Doh!
But shares fell nearly 4%, due in part to a decline in the company's overall profit margin, which fell to 7.3% from 7.7%.
CPI Jan - +0.2% vs prior +0.4% Full Report
Inside the number: Despite energy prices declining 1.5%, gasoline & natural gas dropping 3%...
Core CPI Jan - +0.3% vs prior +0.1% and Airfares +2.1%, the most in 2 years.
Food +0.7%, the largest gain in 2 years. Vegetables +1.9%, fruit +1.5%, dairy +1.3%. Medical care +0.8%, the largest gain in 16 years.
Physicians services +1.2%, the largest gain in 26 years because Doctor's raised their fees based on the REAL rate of inflation 12-15% annual. 1.2% x 12 = 14.2% annualized.
of course what else can you do if the ship is taking on water, the bilge is gone and there aren't enough life boats to go around...
The BOJ raised and inflation or stagflation is still raging at 12-15% annual. Go to Shadowstats for some REALITY based numbers on CPI & M3.
The BOJ raised 25 bps to 0.50%, the 2nd hike in 7 years after raising 25 bps in July. The yen carry trade margin differential is now 4.75%.
Benny & The Feds partner in crime, Toshihiko Fukui, said the BOJ is "aware that extremely distorted movements in the financial market, including the yen carry trade, could eventually have a negative impact on the economy." Do ya think?
The reality is, it will take at least 4 months for the Bank of Japan to follow up with a subsequent tightening, thus, offering ample opportunity for traders to place fresh carry trades with a medium term horizon.
An emasculated manufacturing base and a plunging housing sector pose a formidable downside for the US economy, raising the odds of a late Q2 or early Q3 Fed rate cut.
This summer the Fed cuts and the BOJ raises, the carry trade margin gets cut by another 50 bps, which would still leave 4.25% margin in the deal.
...2 year note auction later today. FOMC Minutes to be released at 2PM EST.
Other news: Hewlett Packard (HPQ) reported a 26% jump in fiscal Q1 profit late yesterday. Doh!
But shares fell nearly 4%, due in part to a decline in the company's overall profit margin, which fell to 7.3% from 7.7%.
CPI Jan - +0.2% vs prior +0.4% Full Report
Inside the number: Despite energy prices declining 1.5%, gasoline & natural gas dropping 3%...
Core CPI Jan - +0.3% vs prior +0.1% and Airfares +2.1%, the most in 2 years.
Food +0.7%, the largest gain in 2 years. Vegetables +1.9%, fruit +1.5%, dairy +1.3%. Medical care +0.8%, the largest gain in 16 years.
Physicians services +1.2%, the largest gain in 26 years because Doctor's raised their fees based on the REAL rate of inflation 12-15% annual. 1.2% x 12 = 14.2% annualized.
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