Poor Tim Geithner.
Pushed by angry U.S. legislators anxious to brand China as a "currency manipulator," the U.S. Treasury secretary tried to strong-arm China into revaluing the yuan - all because of an assumption that the Asian giant wasn't allowing its currency to appreciate.
Unfortunately for Geithner, those efforts were stymied by a flood of data that actually demonstrates that China's currency has significantly appreciated against the already-wheezing greenback.
Tim Geithner
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The Greek Debt Crisis Will Slow the Yuan's Advance
To find why China should not revalue the yuan, please read on...
The Winners and Losers in the 'Commodities New World Order'
In the "commodities new world order," commodity producers will be king.
Investors who need proof need only consider recent events. Iron ore prices are at record levels, and the annual-price-setting arrangement has broken down. Venezuela President Hugo Chávez has signed "dark side" agreements with Russian Prime Minister Vladimir Putin for Russian companies to develop Venezuela's oil-and-mineral resources. China may have invested $1 trillion or so in U.S. Treasuries, but the Asian giant's only truly successful investment so far has been the 17% stake it took in Canadian-resources player Teck Resources Ltd. (NYSE: TCK).
Welcome to the commodities new world order. These events serve notice that - as we put the global financial crisis behind us - the commodity "haves" will set the agenda ... while the commodity "have nots" will fall farther and farther behind.
Investors who need proof need only consider recent events. Iron ore prices are at record levels, and the annual-price-setting arrangement has broken down. Venezuela President Hugo Chávez has signed "dark side" agreements with Russian Prime Minister Vladimir Putin for Russian companies to develop Venezuela's oil-and-mineral resources. China may have invested $1 trillion or so in U.S. Treasuries, but the Asian giant's only truly successful investment so far has been the 17% stake it took in Canadian-resources player Teck Resources Ltd. (NYSE: TCK).
Welcome to the commodities new world order. These events serve notice that - as we put the global financial crisis behind us - the commodity "haves" will set the agenda ... while the commodity "have nots" will fall farther and farther behind.
To discover the identities of the new-world-order winners – and losers – please read on...
U.S. Treasury To Sell Citigroup Shares to Reduce the Bank's Government Reliance
The U.S. Treasury Department today (Monday) announced it would start selling up to 1.5 billion shares of Citigroup Inc. (NYSE: C) - a big step in removing government support for bailed out banks.
The Treasury owns 7.7 billion shares of Citigroup common stock, giving it 27% ownership of the bank. The sale will leave the government holding just under 22% of shares outstanding, with the rest of the shares being sold later this year.
The move brings the government closer to completely exiting the controversial and publicly criticized $700 billion Troubled Asset Relief Program (TARP).
"We're putting TARP out of its misery," Treasury Secretary Timothy F. Geithner said in an interview with CNN.
The Treasury owns 7.7 billion shares of Citigroup common stock, giving it 27% ownership of the bank. The sale will leave the government holding just under 22% of shares outstanding, with the rest of the shares being sold later this year.
The move brings the government closer to completely exiting the controversial and publicly criticized $700 billion Troubled Asset Relief Program (TARP).
"We're putting TARP out of its misery," Treasury Secretary Timothy F. Geithner said in an interview with CNN.
China May Let Yuan Appreciate Despite First Trade Deficit in Six Years
China's imports pushed higher in March, which may cause the Asian economic powerhouse to post its first trade deficit in six years. But even though the deficit bolsters its argument for keeping the yuan pegged to the dollar, it appears Beijing will let its currency appreciate in the near future.
Rising commodity prices probably led imports to outpace exports by $390 million in March after a $7.6 billion trade surplus the previous month, according to the median estimate in a Bloomberg News survey of 26 economists.
Nevertheless, a change in China's currency policy is "imminent", and may occur in the next few weeks, Ben Simpfendorfer, a Hong Kong- based economist at Royal Bank of Scotland Group Plc (NYSE ADR: RBS), said Friday on Bloomberg Television.
Rising commodity prices probably led imports to outpace exports by $390 million in March after a $7.6 billion trade surplus the previous month, according to the median estimate in a Bloomberg News survey of 26 economists.
Nevertheless, a change in China's currency policy is "imminent", and may occur in the next few weeks, Ben Simpfendorfer, a Hong Kong- based economist at Royal Bank of Scotland Group Plc (NYSE ADR: RBS), said Friday on Bloomberg Television.
Geithner's China Jaunt May Signal Easing of Tensions on Yuan
In a surprise move, Treasury Secretary Timothy Geithner will meet with Chinese Vice Premier Wang Qishan in Beijing today (Thursday), as speculation increases that China is considering letting its currency, the yuan, rise against the dollar.
The unexpected meeting was arranged on-the-fly after Geithner's scheduled trip to India, and may be a sign that both countries are seeking to defuse the currency issue ahead of Chinese President Hu Jintao's trip to Washington next week.
The move follows the Treasury Department's decision last weekend to delay a decision on whether to label China a "currency manipulator."
"[China is] becoming more open to the world, and with that, you're going to see the [yuan] take on a broader role internationally," Geithner said in a Bloomberg Television interview in Mumbai as he finished preparations for the previously unscheduled visit to China. "That's a healthy, necessary adjustment."
The unexpected meeting was arranged on-the-fly after Geithner's scheduled trip to India, and may be a sign that both countries are seeking to defuse the currency issue ahead of Chinese President Hu Jintao's trip to Washington next week.
The move follows the Treasury Department's decision last weekend to delay a decision on whether to label China a "currency manipulator."
"[China is] becoming more open to the world, and with that, you're going to see the [yuan] take on a broader role internationally," Geithner said in a Bloomberg Television interview in Mumbai as he finished preparations for the previously unscheduled visit to China. "That's a healthy, necessary adjustment."
U.S., Britain Say EU Proposals Will Damage Hedge Fund Industry
The European Union (EU) on Thursday defended its sweeping hedge-fund reform proposals against criticism from the United States and Britain.
British Prime Minister Gordon Brown met with French President Nicolas Sarkozy Friday in hopes of compromising on the proposed regulation.
Many EU countries are determined to change the hedge fund industry, which is often murky. The use of derivatives, such as credit-default swaps have been linked to the downfall of Lehman Bros. and exacerbating Greece's sovereign debt difficulties.
British Prime Minister Gordon Brown met with French President Nicolas Sarkozy Friday in hopes of compromising on the proposed regulation.
Many EU countries are determined to change the hedge fund industry, which is often murky. The use of derivatives, such as credit-default swaps have been linked to the downfall of Lehman Bros. and exacerbating Greece's sovereign debt difficulties.
Plans to Hide Commercial Real Estate Losses Won't Avert a Double-Dip Downturn
Sooner or later, mounting losses on commercial real estate could crash through the market's 2009 optimism and send the economy and stocks into a double-dip downturn.
The major problem is that lawmakers and regulators are setting up investors into believing that commercial real estate (CRE) losses are being effectively addressed. The truth is that escalating losses are being hidden as part of a campaign of optimism in a desperate gamble that a robustly reviving economy will save the day.
To protect yourself from another investment beating, here's what you need to know.
The major problem is that lawmakers and regulators are setting up investors into believing that commercial real estate (CRE) losses are being effectively addressed. The truth is that escalating losses are being hidden as part of a campaign of optimism in a desperate gamble that a robustly reviving economy will save the day.
To protect yourself from another investment beating, here's what you need to know.
To find out how to avoid the commercial-real-estate implosion, please read on...
Geithner's Fed Pressured AIG to Keep Quiet on "Back Door Bailouts"
The Federal Reserve Bank of New York, while headed by current Treasury Secretary Timothy Geithner, pressured American International Group Inc. (NYSE: AIG) to withhold information about payments it made to banks during the peak of the financial crisis, according to a report by Bloomberg News yesterday (Thursday).
A series of emails between the Federal bank and AIG lawyers show that the insurer was told to delete details from public disclosures about payments it made on credit default swaps to such banks as Goldman Sachs Group Inc. (NYSE: GS) and Deutsche Bank AG (NYSE: DB), which were settled for 100 cents on the dollar.
The swap payments, which totaled $62 billion and have been characterized as "back door bailouts" by some lawmakers, are at the center of allegations that Geithner failed to negotiate a better deal for taxpayers.
A series of emails between the Federal bank and AIG lawyers show that the insurer was told to delete details from public disclosures about payments it made on credit default swaps to such banks as Goldman Sachs Group Inc. (NYSE: GS) and Deutsche Bank AG (NYSE: DB), which were settled for 100 cents on the dollar.
The swap payments, which totaled $62 billion and have been characterized as "back door bailouts" by some lawmakers, are at the center of allegations that Geithner failed to negotiate a better deal for taxpayers.
Investment News Briefs
AOL to Cut One-Third of Workforce; Geithner Rebuffs Calls for Resignation; Oil Follows Equities' Decline; Leading Indicators Hit Two-Year High; U.S. Making Plans for New Iran Sanctions; DirecTV Won't Rule Out Possible Takeover;
Investment News Briefs
WSJ: Motorola to Sell Network Business; Macy's Shares Fall After Forecast Misses Estimates; China's Prices Fall, Trade Surplus Grows; Gold Price Records Continue; iPhone Posts Strong Sales After Debut on Second U.K. Carrier; Britain's Central Bank Open to More Asset Purchases; Geithner: U.S. Wants Strong Dollar, Lower Deficit; AIG CEO Threatens to Leave Amid Pay Frustration; H-P Buys 3Com for $2.7 Billion in Cash
Is Timothy Geithner A Roadblock to Regulatory Reform?
Financial disclosure forms revealed last week that some of U.S. Treasury Secretary Timothy F. Geithner’s closest aides earned millions of dollars a year working for top Wall Street firms. That finding alone would not likely be enough to cast doubt over Geithner’s ability to take the lead in reforming the financial system. But this isn’t […]
The New Banking Bailout Plan Reconstitutes Some of the Same Ingredients That Touched Off the Financial Crisis
By relying on asset-backed securities, large amounts of leverage and unregulated hedge funds as its key elements, the U.S. Treasury Department's overhaul of the banking-system bailout plan is essentially relying on some of the same ingredients that caused the financial crisis in the first place.
This time around, someone should take the punch bowl away before the party even gets started. Otherwise, as Yogi Berra once said, it will be "Déjàvu all over again."
The only difference this time around is that the U.S. Treasury Department is calling the plays.