Don’t Write Off Hong Kong’s Umbrella Movement Just Yet
The Hong Kong Umbrella Movement, the city’s first significant and sustained extra-legal protest, provided a number of valuable lessons for the future.
Category: Economics
After the SNB Decision, the Reverberations Continue
Saying the US dollar had a good week even though it lost 18.5% against the Swiss franc may be a bit like the old joke about asking Mrs. Lincoln, “besides that, how was the play?”
The Swiss National Central Bank’s unexpected decision to abandon it cap will be a day recorded in foreign exchange history, ranking up there with Nixon’s closing of the gold window and the UK leaving the ERM. In all three cases, officials balked at the costs/risks of pursuing their national strategies.
Swiss Currency Cap Abandoned on Fears of a Euro Collapse
The Central Bank of Switzerland has abandoned a cap on the Swiss franc, causing it to soar in value against the euro.
The Swiss franc rose 17.5% against the euro and 15.7% against the US dollar on Thursday after the bank announced it would decouple the currency from the euro, seeing weakness in the European economy and the likelihood in a fall in the euro’s value in the near term.
Swiss and Indian Central Bank Surprises Rile Financial Markets
Seemingly, out of the blue, the Swiss National Bank abandoned its cap in the Swiss franc (euro floor) and moved deeper into negative interest rates. This has seen the Swiss franc rocket higher against the euro and dollar. It sent the euro briefly below $1.1600.
The SNB lowered its 3-month LIBOR target to between -0.25% and -1.25%. The charge for sight deposits over the exemption threshold to -0.75%. Previously the LIBOR target range was -0.25% and -0.75%.
Retail Sales Plummet as Jobless Claims Unexpectedly Rise
Retail sales fell 0.9% as jobless claims rose to a four-month high.
The Department of Commerce reported Wednesday that retail sales fell 0.9% month-over-month on a seasonally adjusted basis in December, representing a 3.2% year-over-year increase from December 2013, unadjusted for price differences.
Retail trade sales were down even lower, with a 1.1% decline from November, representing a 2.6% year-over-year rise.
Are EMU Debtors Getting the Upper Hand Over Creditors?
The key axis in Europe is between creditors and debtors. Each pushes their own interests. The regime of austerity in Europe indicates that the creditors have had the upper hand. However, two developments in the last two days suggest the tide is turning.
Does Maximizing Shareholder Wealth Accomplish Anything Else?
Modern capitalism has a massive structural flaw in one of the cornerstones of its existence. The corporations which form the predominant business structure and which are the main instrument for dividing wealth have been operating on a false premise.
U.S. Earnings Season Begins; Sweden, China and Japan also in the Economic News
Brent oil is off another 3% today, taking its decline since the end of last year to 20%. This is overshadowing other macro-economic forces. With the Federal Reserve among the least likely central banks to respond, the dollar is firm, even if within recent ranges.
Why American Workers are Unlikely to obtain a Raise in 2015
Although the end of 2014 was brimming with some positive articles about the improving state of the United States economy despite Obamacare, the Dept. of the Interior, and the EPA holding back millions of Americans from improving their lives, some experts remain skeptical about whether America has overcome all of its financial problems.
The Week in Review: Volatility High, Prices Low
U.S. equities saw a fall and recovery amidst greater uncertainty about falling prices in Europe and in the U.S.
The S&P 500 saw three straight days of steep declines before reviving at the end of this week, leaving the index down nearly 1.3% for 2015. The tumult in prices caused the volatility index, or VIX, to peak near 23 before closing at 17.01 on Thursday afternoon. Treasuries also saw mixed movements, with the 10-year Treasury yield dipping below 2% on continued fears of disinflation, only to recover to 2.01% by the end of Thursday.
