Thursday, January 06, 2011

Initial Jobless Claims: Survey 408k Actual 409 Prior 388 Revised 391

Initial Jobless Claims since 1970

“Beijing pursues European charm offensive”….China’s deputy premier is touring through

Europe this week and has made a bunch of comments over the last few days (on Wed he pledged that
China would continue to buy Spanish debt, both at auctions and in the secondary markets). The country’s
vice commerce minister Gao said that China has been increasing its holdings of EU gov’t debt. A report
in a European paper said that China will buy $8B worth of Spanish debt. – Financial Times
Bill Gross (PIMCO) latest monthly update – "Unlike Euroland or the United Kingdom, which
appear to have gone on an extreme fiscal diet, the American answer to a bulging waistline is always
“mañana.” Debt commission recommendations are tossed in the trashcan, tea party election rhetoric
eventually focuses on miniscule and merely symbolic earmarks, and both Democrats and Republicans
congratulate each other on their ability to reach a bipartisan agreement for the good of the nation…..
The problem is that politicians and citizens alike have no clear vision of the costs of a seemingly
perpetual trillion dollar annual deficit. As long as the stock market pulsates upward and job growth
continues, there is an abiding conviction that all is well and that “old normal” norms have returned. Not
likely. There will be pain aplenty"….US policymakers are focused on maintaining current consumption
as opposed to making the US more competitive in the global marketplace….warns that the dollar will
sink - "annual budget deficits in the trillions of dollars add a like amount to the stock of outstanding
dollars, resulting in currency depreciation, higher import inflation, and a degradation of dollar based
assets in global financial markets…. remember that all investors should fear the consequences of
mindless U.S. deficit spending as far as the mantis eye can see. Higher inflation, a weaker dollar and
the eventual loss of America’s AAA sovereign credit rating are the primary consequences" – Pimco – in
my opinion, this is one of Mr. Gross’ better pieces.