Yen Slumps on BoJ Intervention

Japanese yenThe Japanese yen dropped heavily against everything on the Forex market today, following the currency intervention by the country’s central bank.

The yen declined most notably against the US dollar, demonstrating the biggest daily drop since October 2008. It also fell to the lowest rate against the euro since July 11 and reached the price minimum against the Great Britain pound since July 5.

The Bank of Japan followed the footsteps of the Swiss National Bank and intervened the currency market today, increasing the amounts of yen it purchases in order to hold down the currency appreciation:

    …to enhance monetary easing by increasing the total size of the Asset Purchase Program by about 10 trillion yen2 from about 40 trillion yen to about 50 trillion yen.

The market analysts believe that the success of this measure will depend on how persistent the country’s central bank will be. To keep the yen down, they’ll have to continue with similar measures. One-time event just won’t do it for something as bullish as the Japanese yen.

USD/JPY rose from 76.97 to 79.78 as of 12:37 GMT today, reaching as high as 80.23 (the maximum since July 12) earlier. EUR/JPY went up from 110.54 to 113.09. GBP/JPY advanced from 126.54 to 130.21 today.

If you have any questions, comments or opinions regarding the Japanese Yen, feel free to post them using the commentary form below.

Earlier News About the Japanese Yen:

    Yen Gains on Greece & US Debt Problems (2011-07-28)
    EU Summit Eases Need for Safety, Yen Drops (2011-07-22)
    Second Week of Gains for Yen, Will BOJ Intervene? (2011-07-16)
    Yen Declines as Chinese Economy Grows (2011-07-13)
    Growing China's Economy Saps Demand for Safety of Yen (2011-06-14)


This entry was posted on TopForexNews on Thursday, August 4th, 2011 at 12:39 pm and is filed under Japanese Yen. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allo

Rick Perry: I support constitutional amendments to ban gay marriage and abortion

posted at 5:25 pm on August 3, 2011 by Allahpundit

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Two caveats to his otherwise strict support for the Tenth Amendment, both of which happen to serve the agenda of social conservatives whose votes he’s depending on. He backed away from his “states’ rights” defense of legalizing gay marriage last week; here’s the inevitable climbdown on abortion too, which he described as a states’ rights issue a few days ago. Follow that last link and re-read the post to see why it was predictable. I’m surprised he didn’t anticipate the tension his Tenther rhetoric on these issues would cause with his base, which he could have defused by mentioning his support for the amendments straightaway. There’s nothing necessarily inconsistent in that position: You can be a strong federalist and still condone federal solutions for exceptionally grave evils like slavery which the states, for various reasons, can’t be trusted to police as diligently as they should. That’s the core of the pro-life argument for an anti-abortion amendment — it’s a matter, literally, of life and death. What’s Perry’s argument, though, for why gay marriage qualifies as an “exceptionally grave evil” warranting a nationwide ban? Is smoking, say, an evil sufficiently grave to require a constitutional amendment outlawing it? (Don’t answer that, liberals.) He’s not in a legal trap here but he is in a philosophical one. And a political one, of course, as the press will use this to throw him off his economic message. Specify, please, which behaviors are so pernicious that we can’t risk letting parochial state legislatures deal with them.

Incidentally, as with Fred Thompson four years ago, the media’s “Perry as GOP savior?” hype is already being replaced by the “Perry as overhyped flop?” counter-narrative. Here’s Politico’s new piece wondering whether a tea-party-flavored Bush soundalike can get traction with the current conservative base. (One state Republican chairman compares Perry to “Will Ferrell doing a George W. Bush imitation.”) And here’s CNN noting that Perry’s upcoming prayer event, which can accommodate 71,000 people, has had just 8,000 registrants thus far. I doubt Perry cares — the real audience for that event is in Iowa, not Texas — but they’ll build that counter-narrative with any available brick. Exit question via Democratic pollster PPP: Does the GOP need Romney to win?

Tea Party won the first skirmish of a long, long fight

posted at 2:05 pm on August 3, 2011 by Ed Morrissey
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Did anyone win in the recently concluded deal that reduced the upward trajectory of federal spending?  In my column for The Week, I argue that Barack Obama certainly was the big loser, having blown an opportunity that he himself cultivated for months to demonstrate leadership.  While the deal doesn’t feel like a win to Tea Party activists at the moment, I argue that they won an important opening skirmish:

    Reid gave up on tax hikes, not because he got tired of talking about them, but because there isn’t any appetite for tax hikes on Capitol Hill — thanks to the power and influence of the Tea Party. The cuts mandated in this compromise might be paltry, especially at first, but they represent a step in the right direction. For the first time in perhaps decades, Congress will approach budget shortfalls by looking at where spending can actually be reduced rather than where revenue can be raised.

    That is a remarkable paradigm shift, and one worthy of celebration after a decade of exploding deficits from Congresses controlled by both parties. Without the Tea Party, that paradigm shift would never have occurred. Indeed, without the Tea Party and their victorious candidates, the debt-ceiling increase would have been a routine vote noted only by a few bloggers and the back pages of most newspapers.

    Understandably, most Tea Party activists see this as business as usual and not the kind of transformative, instant change they envisioned. But just as Rome wasn’t built in a day, it will take much more than one vote or one budget to build the kind of limited, fiscally responsible America that these activists desire. The expansion of the federal government has gone on for decades, and it will take many battles and victories, small and large, to reverse it. This is a long journey, and the Tea Party helped push the nation into taking a step in the right direction.

There are two dangers in incremental victories, which are closely related to one another.  The first is that they tend to discourage activists who want big, unmistakable, validating victories.  However, those will only come with big, unmistakable majorities in Congress and a different President in the White House.  Given the relative weight of the Tea Party caucus on Capitol Hill in this Congressional session makes the win here even more remarkable. It’s very important to remember that our political system is heavily weighted against radical change in the short term, and that lasting change takes patience and long-term planning.

The second danger is that the activists will turn on each other and on their nominal allies.  If that happens, they will lose the ability to grow their standing in Congress.  Worse, they will alienate those who want to work towards the same general goals but who may differ on tactics and time lines.  That will bring incremental progress to a halt, while at the same time pushing activists into giving up altogether.  We need to avoid a “Mission Accomplished” mentality, but more importantly recognize that incremental progress is not futile.

Meanwhile, on the other end of the ledger, Barack Obama comes out as the biggest loser in this fight.  I give an explanation for that in my column, but two media reports today confirm this as a consensus position.  First, The Hill takes us inside the negotiations, where John Boehner apparently ordered the President out of negotiations at one point:

    GOP aides and lawmakers, speaking on background, portrayed Boehner as the calm negotiator who repeatedly exasperated President Obama.

    Boehner last month asked the networks to televise his response to Obama’s address to the nation, a request which infuriated the White House, Republican sources said.

    On July 23, they claim, the White House called Minority Leader Nancy Pelosi (D-Calif.), telling her not to participate on a call with Boehner, Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.). Pelosi informed Reid, who declined to participate, and the call was canceled, the Republican sources said. (A Pelosi spokesman could not be reached for comment.)

    Later that day, the four leaders met with Obama at the White House. At one point, GOP officials said, the Democratic and Republican leaders asked Obama and his aides to leave the room to let them negotiate.

Reid reneged on the agreement that was reached at that point under pressure from the White House, according to the Hill’s account based on their GOP sources.  Obama had to send Joe Biden into the final negotiations instead.  But it’s not just Republicans who are painting Obama as a bumbling negotiator, as the LA Times reports:

    Moreover, many Democrats — including some ordinarily sympathetic to the president — feel part of the problem is of Obama’s own making. …

    Given the acrimony and the high-stakes deadline, the impasse posed a severe test of Obama’s negotiating skills. On the fly he sought to improve his relationship with Boehner, inviting the speaker to play a round of golf early in the talks. But White House officials believe that personalities aren’t at the root of congressional paralysis. …

    Others are more critical, comparing Obama unfavorably with presidents who made broad use of their executive powers in times of crisis: Harry Truman, who nationalized the steel industry in 1952 in the face of a steel strike, for example, or John F. Kennedy, who denounced steel executives for price increases and threatened them with an antitrust investigation.

    “I am just sorely upset that Obama doesn’t seize the moment,” Sen. Tom Harkin (D-Iowa) said as the final deal was coming together. “That’s what great presidents do in times of crisis. They exert executive leadership. He went wobbly in the knees.”

The White House apparently hopes that the deal will eventually be popular enough for Obama to benefit, but the problem with that idea is that Obama had nothing to do with the eventual deal.  His only stated demand — higher taxes — got taken off the table more than a week before the compromise.  At the end, Obama ended up accepting a Congressional diktat rather than leading the path to a solution.  Obama ended up as little more than a spectator at his own leadership opportunity, and everyone knows it

zwysophia - 张玮夷

Siwss Franc Retreats From Maximums

Swiss francThe Swiss franc fell from its record high levels against the other major currencies today, as the country’s central bank takes extreme measures  against the franc’s appreciation.

The Swiss currency retreated from its record maximum levels against the US dollar, the euro and the Great Britain pound today. It also decreased from the 3-year high vs. the Japanese yen.

The currency reacted sharply to the Swiss National Bank decision to reduce the target range for the 3-month LIBOR from 0–0.75 percent to 0.0.25 percent. The central bank’s statement also says that the bank will “very significantly increase the supply of liquidity to the Swiss franc money market over the next few days” (that is, a currency intervention). The bank intends to increase its sight deposits from the current CHF30 billion to CHF80 billion. In addition, the statements cites the worsening of its global economic outlook:

    The Swiss National Bank (SNB) considers the Swiss franc to be massively overvalued at present. This current strength of the Swiss franc is threatening the development of the economy and increasing the downside risks to price stability in Switzerland. The SNB will not tolerate a continual tightening of monetary conditions and is therefore taking measures against the strong Swiss franc.

USD/CHF rose from 0.7646 to 0.7769 as of 8:56 GMT today. EUR/CHF went up from 1.0849 to 1.1083. CHF/JPY fell from 101.12 to 99.38.

If you have any questions, comments or opinions regarding the Swiss Franc, feel free to post them using the commentary form below.

Earlier News About the Swiss Franc:

    Swiss Franc on Record Against Everything (2011-08-01)
    New Record of Franc Against Euro (2011-07-18)
    CHF Reaches Record vs. USD, EUR & GBP (2011-07-14)
    New Worries Return Demand for Franc (2011-07-09)
    US Employment Improves, Reducing Need for Swissie (2011-07-07)


This entry was posted on TopForexNews on Wednesday, August 3rd, 2011 at 8:57 am and is filed under Swiss Franc. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowe

Awww: Obama campaign to blame debt negotiations for lower fundraising this summer

posted at 12:45 pm on August 3, 2011 by Ed Morrissey

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You know how it is when you keep putting off important tasks, like mowing the lawn, taking out the trash, and resolving budget standoffs with Congress. If you don’t handle them when you’re supposed to do so, they end up getting resolved at the most inconvenient times:

President Barack Obama’s campaign expects to raise tens of millions of dollars less this summer than it did in the spring because negotiations over the nation’s debt limit forced Obama to cancel several fundraisers.

Obama’s campaign said Wednesday it canceled or postponed 10 fundraisers involving the president, Vice President Joe Biden andWhite House chief of staff Bill Daley in the past month because of the debt talks, scrubbing events in California, New York and elsewhere.

Only weeks after the president’s campaign reported collecting a combined $86 million with the Democratic National Committee, Obama’s team is trying to lower expectations about its fundraising juggernaut while signaling to its army of volunteers and activists that they need to fill the void. Obama is coming off a bruising battle with congressional Republicans over raising the government’s debt ceiling and is expected to face a formidable challenge from Republicans in 2012 against the backdrop of a weakened economy.

“We’re going to raise significantly less in the third quarter than we did in the second quarter,” said Jim Messina, Obama’s campaign manager. “We will not be able to replace all of these events just because of his busy schedule. We always knew that he had his job and we had to do this around his schedule, and the truth is we just have to deal with canceling a month’s worth of events.”

Well, if Congress had addressed the debt ceiling and deficit reduction during 2010, Obama wouldn’t have had to spend three whole weeks in Washington negotiating with John Boehner. Democrats failed to pass a budget for FY2011 while they had large majorities in both chambers of Congress. Harry Reid refused to raise the debt ceiling in December during the lame-duck session, specifically because Reid wanted Republicans to get their hands dirty on the debt ceiling.

Obama doesn’t have any excuses, either. Almost as soon as Reid bailed on raising the debt ceiling, Obama’s team began raising the specter of default. What did Obama do to avoid the problem? In February, Obama submitted a budget request that increased the rate of deficit spending. When that flopped, Obama promised to produce a plan to reduce the deficit, using a national address in April to underscore the point. And then …. nothing. No plan, no specifics, just nothing until July, when Republicans offered plan after plan and Obama refused to accept them until utterly forced to do so.

If the President had done his job in February or even April, then none of this would have been necessary. Instead, Obama chose to lead from behind. If that caused him to miss fundraisers, it’s no one’s fault but his own. And that might be a much bigger reason for lower fundraising numbers this summer, fall, and winter

Biden to Gabby Giffords: “Welcome to the Cracked Head Club”

posted at 8:30 pm on August 2, 2011 by Allahpundit
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Via Breitbart TV. Since we’re grooving on insane left-wing double standards today, here’s the second thing this guy has said in the past 24 hours that would have become a national media scandal had his party affiliation been different. And before one of our three lefty readers wonders — no, this isn’t a Fox scoop. Other reporters heard Biden say it, including one from the Boston Globe. Which raises the question, what’s the dumbest part of this? That he’d joke about a cracked skull with Gabby Giffords, who may very well prove to be permanently disabled from having “joined the club”? Or that he found it amusing enough to share the anecdote with reporters later on? Free advice for conservatives and independents: Do not attempt this “joke.” Not only is it tone-deaf and callous, but you won’t get graded on the curve afterward. (“Oh, that Joe!”)

Giffords herself, you’ll be glad to know, is coming along well enough that Debbie Wasserman-Schultz thinks she can make it back to Congress. But reports early this morning that she’s planning to run for reelection turned out to be wrong. They’re hopeful that she’s well enough, but it’s still wait-and-see.

Ai Shinozaki take a bath

A little girl but boob.Ai Shinozaki take a bath in white bathtub with rose in that.She ware blue bikini do you known she is 18?.

Open thread: Senate to vote on House-passed debt deal at noon Update: Senate passes debt deal, 74-26 Update: President ends this saga, signs debt deal

posted at 11:20 am on August 2, 2011 by Tina Korbe

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After a dramatic night in the House of Representatives last night, the disappointment of a debt deal that passed the House heads to the Senate, where it faces seemingly fewer obstacles than it faced in the House.

But that doesn’t mean passage will be “easy.” Senate Majority Leader Harry Reid has said no amendments will be allowed and the plan requires a supermajority of 60 votes to pass. One notable “no” vote will come from Senate Budget Committee ranking member Sen. Jeff Sessions (R-Ala.). The senator who has been sounding the warning bell about an eleventh hour deal for months — and who has kept the count as to how many days the Senate has gone without passing a budget resolution (825!) — explains why he can’t support the deal:

“We’re getting pretty far away from the traditions of this body when you don’t publicly debate a budget, you create a committee of limited numbers of people to produce legislation that can’t be amended,” Sessions says in the video. “For those reasons, I feel like as a Senator and the ranking member on the Budget Committee who’s wrestled with this for some time, I would not be able to support the legislation. Though, I truly believe it is a step forward, and I respect my colleagues who’ve worked hard to try to bring it forward.”

Sen. Mike Lee (R-Utah), whose name has become almost synonymous with the push for a balanced budget amendment, is still a “no” vote, as is Sen. Ron Johnson (R-Wis.), while Senate Minority Leader Mitch McConnell (R-Ky.) and Sen. John McCain (R-Ariz.) remain “yes” votes, of course.

Senate Democrat opposition to the deal doesn’t rival Democrat opposition in the House, where Rep. Emanuel Cleaver created news by calling the deal a “sugar-coated satan sandwich” and House Minority Leader Nancy Pelosi implied it also features “satan fries on the side.” But I’ll keep an eye out for any likely “no” votes from the left side of the aisle.

Again, though, the bill is broadly expected to pass. Bill Hemmer just said the guidance Fox News has received suggests the Senate will give it at least 70 votes — so it won’t even be close. After that, attention will turn to the 12-member special commission.

Meanwhile, rumors of a downgrade despite the deal continue to circulate.

Update I: Reid is on the Senate floor right now, saying, “We were on the brink of disaster, but, one day before the deadline, we were able to avert that disaster. … There’s principally one winner through all of this: the American people. … The result of this Tea Party direction of this Congress has been very disconcerting. It stopped us from arriving at a conclusion much sooner. …”

Update II: Bill Hemmer just tweeted and AP reports that 60 senators have already voted “yes” for the deal, which means it passes. But the roll call continues. Guy Benson tweets that four Democrats have voted “no” so far: Sen. Frank Lautenberg (N.J.), Sen. Robert Menendez (N.J.), Sen. Tom Harkin (Iowa) and Sen. Bernie Sanders (VT).

Update III: The deal has passed, 74 to 26. Three more Dem “no” votes: Sen. Kirsten Gillibrand (NY), Sen. Jeff Merkley (Ore.) and Sen. Ben Nelson (Neb.). Now awaiting the president’s speech from the Rose Garden …

Update IV: In his Rose Garden speech, the president issued veiled instructions to the deficit-reduction joint committee created by the debt deal — instructions that amounted to, “Raise taxes.” For more, see my upcoming post in just a bit.

Update V: The president just signed the debt deal. Aaaannnddd … it’s over. For now.

New ObamaCare mandate: no co-pays on contraceptives

posted at 12:45 pm on August 2, 2011 by Ed Morrissey
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The ObamaCare bill has resulted in an explosion of ambiguity and arbitrary rulings, mainly focused at first on temporary waivers for some insurers and employers on requirements for meeting the threshold of payouts to premiums.  The Department of Health and Human Services stopped issuing waivers under pressure from Congress to explain their methodology, but a new ruling by Kathleen Sebelius will likely prompt even more protests.  The Obama administration ordered insurers to cover prescription contraceptives and a range of other “women’s wellness” services and products without co-pays:

    Health insurance plans must cover birth control as preventive care for women, with no copays, the Obama administration said Monday in a decision with far-reaching implications for health care as well as social mores.

    The requirement is part of a broad expansion of coverage for women’s preventive care under President Barack Obama’s health care law. Also to be covered without copays are breast pumps for nursing mothers, an annual “well-woman” physical, screening for the virus that causes cervical cancer and for diabetes during pregnancy, counseling on domestic violence, and other services.

    “These historic guidelines are based on science and existing (medical) literature and will help ensure women get the preventive health benefits they need,” said Health and Human Services Secretary Kathleen Sebelius.

    The new requirements will take effect Jan. 1, 2013, in most cases. Tens of millions of women are expected to gain coverage initially, and that number is likely to grow with time. At first, some plans may be exempt due to a complex provision of the health care law known as the “grandfather” clause. But those even plans could face pressure from their members to include the new benefit.

Let’s put this in its proper context.  Thanks to this new mandate, insurers will eat hundreds of millions or perhaps billions of dollars in additional costs each year.  Guess how they will recoup those costs?  Premiums will rise across the board, meaning that everyone will pay the additional cost as well as the specific patients getting the services and products.

Does this solve some sort of pressing gap in society?  Not really.  As the Huffington Post report notes, contraceptive use is already nearly universal.  The report quotes a government study that shows 90 million prescriptions for contraceptives are dispensed annually.  Clearly, there is no big gap in access due to having co-pays for the Pill.  If poor women had problems paying the additional cost, then HHS could have ordered Medicaid to end co-pays, a power that was already within their jurisdiction before ObamaCare’s passage.

So where does this end?  Do we next mandate an end to co-pays on Lipitor because cholesterol is a problem in American health?  I can tell you that the co-pays on that medication are higher than on most and probably represent more of a barrier to access than co-pays on the Pill, let alone access to breast pumps and counseling on domestic violence.

This is a preview of life under ObamaCare.  This edict got handed down from the mountain purely for political purposes.  The Obama administration wants to bolster its standing with women ahead of the next election; this mandate will probably get featured in an endless series of campaign ads.  “President Obama protects women!” the copy will read.  In the meantime, rational provider-patient cost sharing on non-critical products and services will be discarded, forcing the rest of us to eat the cost in higher premiums.  It’s the ultimate in arbitrary exercises in authority.

And people wonder why employers, who have to price the costs of adding positions, aren’t hiring any more.

Progressive caucus co-chair: There’s no way I’ll support this horrible deal; Update: Reid approves deal

posted at 5:15 pm on July 31, 2011 by Allahpundit
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I call upon these hardline, hostage-taking ideological fanatics to compromise for the good of America.

    “This deal trades peoples’ livelihoods for the votes of a few unappeasable right-wing radicals, and I will not support it. Progressives have been organizing for months to oppose any scheme that cuts Medicare, Medicaid or Social Security, and it now seems clear that even these bedrock pillars of the American success story are on the chopping block. Even if this deal were not as bad as it is, this would be enough for me to fight against its passage…

    Republicans have succeeded in imposing their vision of a country without real economic hope. Their message has no public appeal, and Democrats have had every opportunity to stand firm in the face of their irrational demands. Progressives have been rallying support for the successful government programs that have meant health and economic security to generations of our people. Today we, and everyone we have worked to speak for and fight for, were thrown under the bus. We have made our bottom line clear for months: a final deal must strike a balance between cuts and revenue, and must not put all the burden on the working people of this country. This deal fails those tests and many more.

    The Democratic Party, no less than the Republican Party, is at a very serious crossroads at this moment. For decades Democrats have stood for a capable, meaningful government – a government that works for the people, not just the powerful, and that represents everyone fairly and equally. This deal weakens the Democratic Party as badly as it weakens the country. We have given much and received nothing in return. The lesson today is that Republicans can hold their breath long enough to get what they want. While I believe the country will not reward them for this in the long run, the damage has already been done.

His proposed solutions? Either a clean debt-ceiling hike, which will do nothing to check the growth of spending that’ll eventually utterly destroy that “capable, meaningful government” he loves so much, or the Fourteenth Amendment option, which would add a constitutional crisis and total fiscal uncertainty to the country’s current basket of political goodies. Even so, it’s awfully nice of him to toss this grenade and complicate the Democrats’ messaging in case Boehner can’t get enough Republicans to push the deal through the House. Fun fact about the Congressional Progressive Caucus: It’s the largest on the left with fully 75 members, which means if they vote as a bloc tomorrow then Pelosi and Hoyer are already down to fewer than 120 Democrats who might be willing to help Obama out by voting with Boehner.

As for the GOP’s remaining core objection to the deal, it’s a byproduct of the progressives’ core demand highlighted above:

    Defenders of the plan will say that the defense cuts may never come about, or that if the committee makes some cuts but not enough, only the remainder would be subject to a 50-50 sequestration. This is no small consolation to House and Senate pro-defense lawmakers who fear that the committee won’t do its job and that draconian defense cuts will follow.

    Why would Republicans give so much on defense? An adviser close to the talks says: “This is the only thing Democrats are getting. It was more important than taxes.” If so, and national defense cuts are now a “get” for the Democratic Party regardless of our national security needs, this is shameful. And if Republican negotiators give in, then the Democrats are going to have to come up with lots and lots of votes to make sure the bill passes both houses.

According to HuffPo’s Sam Stein, all Democratic leaders had signed off on the deal as of 4:30 p.m. ET, which I guess means Pelosi thinks she really can deliver “lots and lots of votes.” She had better: Fox News’s Chad Pergram says he’s already hearing from conservative/tea party House members that they can’t support this deal either, which means Boehner will need a broad centrist coalition to get things done.

Stand by for updates, as usual.

Update: Reid’s office says he’s onboard, provided that the caucus approves the package. Bernie Sanders replies by calling it “grotesquely immoral” and “bad economic policy.” And here’s something fun from Chuck Todd: “The holdup on announcing the deal appears to be uncertainty of how House gets to 216.”

Update: In case you’re worried about the Super Commission recommending tax increases:

    Republicans favorable to the deal feel as though they have three safeguards against the committee recommending tax increases and Congress going along: 1) The members appointed by Boehner and McConnell, who will presumably not be Gang of 6 types (McConnell would be wise to appoint Kyl, Sessions, and Toomey); 2) a tax increase would not get through the House and probably not have 50 votes in the Senate; 3) the baseline dynamic mentioned earlier.

That doesn’t solve the problem with heavy defense cuts in the trigger, but presumably the GOP thinks it can undo those with separate legislation before the cuts kick in.

Update: Desperate times:

    Progressives and the CBC plan presser on Monday to ask Obama to invoke 14th Amendment to avoid debr crisis. 11 am.

Update: A GOP side explains to James Pethokoukis why it’ll be so hard for the Super Commission to try to raise taxes:

    It has an undefined mandate of deficit reduction but the way that is constructed would essentially make it impossible to raise taxes. Anything scored by CBO is based on current law. Current law assumes that taxes are going to go up by three-and-a-half trillion dollars next year [over ten years]. So anything you do to the tax code, unless it starts off with a $3.5 trillion tax increase, it’s going to be adding to the deficit … It’s almost impossible for them to touch taxes because if they do, almost anything will be scored as a tax cut, making it that much more difficult to reach the $1.5 trillion that they need to get to.

That’s the “baseline dynamic” mentioned in Rich Lowry’s post quoted above.

Progressive caucus co-chair: There’s no way I’ll support this horrible deal; Update: Reid approves deal

posted at 5:15 pm on July 31, 2011 by Allahpundit
printer-friendly

I call upon these hardline, hostage-taking ideological fanatics to compromise for the good of America.

    “This deal trades peoples’ livelihoods for the votes of a few unappeasable right-wing radicals, and I will not support it. Progressives have been organizing for months to oppose any scheme that cuts Medicare, Medicaid or Social Security, and it now seems clear that even these bedrock pillars of the American success story are on the chopping block. Even if this deal were not as bad as it is, this would be enough for me to fight against its passage…

    Republicans have succeeded in imposing their vision of a country without real economic hope. Their message has no public appeal, and Democrats have had every opportunity to stand firm in the face of their irrational demands. Progressives have been rallying support for the successful government programs that have meant health and economic security to generations of our people. Today we, and everyone we have worked to speak for and fight for, were thrown under the bus. We have made our bottom line clear for months: a final deal must strike a balance between cuts and revenue, and must not put all the burden on the working people of this country. This deal fails those tests and many more.

    The Democratic Party, no less than the Republican Party, is at a very serious crossroads at this moment. For decades Democrats have stood for a capable, meaningful government – a government that works for the people, not just the powerful, and that represents everyone fairly and equally. This deal weakens the Democratic Party as badly as it weakens the country. We have given much and received nothing in return. The lesson today is that Republicans can hold their breath long enough to get what they want. While I believe the country will not reward them for this in the long run, the damage has already been done.

His proposed solutions? Either a clean debt-ceiling hike, which will do nothing to check the growth of spending that’ll eventually utterly destroy that “capable, meaningful government” he loves so much, or the Fourteenth Amendment option, which would add a constitutional crisis and total fiscal uncertainty to the country’s current basket of political goodies. Even so, it’s awfully nice of him to toss this grenade and complicate the Democrats’ messaging in case Boehner can’t get enough Republicans to push the deal through the House. Fun fact about the Congressional Progressive Caucus: It’s the largest on the left with fully 75 members, which means if they vote as a bloc tomorrow then Pelosi and Hoyer are already down to fewer than 120 Democrats who might be willing to help Obama out by voting with Boehner.

As for the GOP’s remaining core objection to the deal, it’s a byproduct of the progressives’ core demand highlighted above:

    Defenders of the plan will say that the defense cuts may never come about, or that if the committee makes some cuts but not enough, only the remainder would be subject to a 50-50 sequestration. This is no small consolation to House and Senate pro-defense lawmakers who fear that the committee won’t do its job and that draconian defense cuts will follow.

    Why would Republicans give so much on defense? An adviser close to the talks says: “This is the only thing Democrats are getting. It was more important than taxes.” If so, and national defense cuts are now a “get” for the Democratic Party regardless of our national security needs, this is shameful. And if Republican negotiators give in, then the Democrats are going to have to come up with lots and lots of votes to make sure the bill passes both houses.

According to HuffPo’s Sam Stein, all Democratic leaders had signed off on the deal as of 4:30 p.m. ET, which I guess means Pelosi thinks she really can deliver “lots and lots of votes.” She had better: Fox News’s Chad Pergram says he’s already hearing from conservative/tea party House members that they can’t support this deal either, which means Boehner will need a broad centrist coalition to get things done.

Stand by for updates, as usual.

Update: Reid’s office says he’s onboard, provided that the caucus approves the package. Bernie Sanders replies by calling it “grotesquely immoral” and “bad economic policy.” And here’s something fun from Chuck Todd: “The holdup on announcing the deal appears to be uncertainty of how House gets to 216.”

Update: In case you’re worried about the Super Commission recommending tax increases:

    Republicans favorable to the deal feel as though they have three safeguards against the committee recommending tax increases and Congress going along: 1) The members appointed by Boehner and McConnell, who will presumably not be Gang of 6 types (McConnell would be wise to appoint Kyl, Sessions, and Toomey); 2) a tax increase would not get through the House and probably not have 50 votes in the Senate; 3) the baseline dynamic mentioned earlier.

That doesn’t solve the problem with heavy defense cuts in the trigger, but presumably the GOP thinks it can undo those with separate legislation before the cuts kick in.

Update: Desperate times:

    Progressives and the CBC plan presser on Monday to ask Obama to invoke 14th Amendment to avoid debr crisis. 11 am.

Update: A GOP side explains to James Pethokoukis why it’ll be so hard for the Super Commission to try to raise taxes:

    It has an undefined mandate of deficit reduction but the way that is constructed would essentially make it impossible to raise taxes. Anything scored by CBO is based on current law. Current law assumes that taxes are going to go up by three-and-a-half trillion dollars next year [over ten years]. So anything you do to the tax code, unless it starts off with a $3.5 trillion tax increase, it’s going to be adding to the deficit … It’s almost impossible for them to touch taxes because if they do, almost anything will be scored as a tax cut, making it that much more difficult to reach the $1.5 trillion that they need to get to.

That’s the “baseline dynamic” mentioned in Rich Lowry’s post quoted above.

Open thread: Senate to vote on debt bill at 1 p.m., or maybe not; Update: Reid’s bill filibustered, 50/49; Update: Deal all but done? Update: Reid signs off on debt ceiling agreement

posted at 12:09 pm on July 31, 2011 by Allahpundit
printer-friendly

They’re supposed to vote at 1 p.m., but according to Plouffe and another “Democrat familiar with the situation,” there’s still no bill. What’s the hold up? In all likelihood, they’re haggling over the “triggers” that’ll happen if the new Super Commission can’t agree on, or Congress won’t accept, new deficit reduction proposals later this year. Jen Rubin’s hearing the following from a Republican source on the Hill:

    The second tranche works like this: If a new congressional commission introduces a plan totaling at least $1.5 trillion in cuts by Thanksgiving and it’s passed by Christmas there are no across-the-board cuts. Or, if a balanced budget amendment is passed and sent to the states, then across-the-board cuts are avoided. However, if there is no commission package passed AND the BBA is not passed and sent to the states, then across-the-board cuts of $1.2 trillion including Medicare and defense (the details of which aren’t final) go into effect. If the across-the board-cuts go into effect, the debt ceiling is only raised $1.2 trillion (likely insufficient to keep the government operating for long), meaning “we could do this all over again, depending on economic growth.” In other words, if we went to sequestration the total debt ceiling increase would be $2.1 trillion in two doses.

So there’s the BBA concession: Democrats can avoid new cuts in the second stage entirely if they pass the amendment. As for the automatic Medicare/Pentagon reductions, that’s obviously designed to make both sides in Congress think twice before rejecting the Super Commission’s recommendations. The precise formula for that is still being negotiated too. According to Jake Tapper, the White House wants fully 50 percent of the automatic cuts to affect the Pentagon and 50 percent to be spread across various other discretionary programs. GOP hawks won’t go for that, especially since the only alternative might be approving a Commission package that includes new revenues.

As I write this, the Senate has just begun its session and Reid is insisting that they’re “cautiously optimistic” about a deal but not there yet. Here’s your thread for tracking today’s drama. Exit question: How many Republican and Democratic votes will this bargain get in the House? Progressives are reportedly already murmuring about balking because of the lack of revenue in the deal, which means Boehner will need a majority of his previous Republican majority on yesterday’s vote to get this through. (Here’s one vote forecast.) I wonder if they’ll do it on the first try or, a la TARP, if it’ll take a market panic and subsequent re-vote to get it done. Stand by for updates.

Update: The post-deal spin starts before the deal is even struck:

    “I don’t think we’ve been hurt at all,” McConnell said on CBS’ ‘Face the Nation’.

    “The American people wanted us to do something about out-of-control spending and … the debt ceiling is going to produce what many people would believe is a complete change in the trajectory of the federal government beginning to get spending under control,” said McConnell, who is likely to be largely responsible for any package that wins muster with Congress.

Update: John Bolton sounds the alarm for hawks:

    Every indication is that the debt-ceiling negotiations are leaving the defense budget in grave jeopardy. By exposing critical defense programs to disproportionate cuts as part of the “trigger mechanism,” there is a clear risk that key defense programs will be hollowed out.

    While the trigger mechanism comes into play only if the Congressional negotiators fail to reach agreement on the second phase of spending cuts, it verges on catastrophe to take such a national security risk.

    Defense has already taken hugely disproportionate cuts under President Obama, and there is simply no basis for expanding those cuts further. Republican negotiators must hold the line, since the Obama Administration plainly will not.

Update: Senate Republicans will huddle at 1:45.

Update: Turns out we did have a 1 p.m. vote after all. Now that there’s a deal in the works, Reid evidently decided that it wouldn’t panic markets if he introduced his current bill and let the GOP filibuster. Which they did: The vote was 50/49 (Reid voted no in order to preserve his right to reintroduce it, so they actually had 51 votes in favor.) Why he bothered forcing a vote, I simply don’t know. I guess it lets him use the “obstructionist Republicans” talking point for a few more hours, but that’ll evaporate as soon as there’s a deal. Oh well.

Stand by for the roll. At least two Dems voted no on this thing, intriguingly.

Update: Here we go. Via Fox reporter Chad Pergram, three Democrats voted no: Manchin, Ben Nelson, and of course Reid himself. So how’d they get to 50? Er, Scott Brown voted yes.

Update: Lefty Greg Sargent wonders how Republicans managed to use the threat of hitting the debt ceiling as leverage over Democrats when even most Republicans concede that it’s a scenario to be avoided at all costs.

Update: Ace is thinking about “trigger” gamesmanship down the line:

    Republicans let the automatic cuts happen, but then immediately propose reinstating most of the money to Defense.

    This winds up causing automatic cuts to domestic discretionary, but no big cuts to Defense; most Democrats would probably have to vote for this.

    But it has a bad effect: We’d have approved $2.1 trillion in debt ceiling increase while only (guestimating) cutting, say, $1.6 – $1.7 trillion in cuts.

I.e. the GOP could try a defense version of “doctor fix.” Assuming Medicare is also part of the trigger, though, Democrats would respond by demanding that that money be reinstated too — and Republicans would have to vote for it to block the left’s “Paul Ryan and his conservative friends want to kill your grandma” election messaging.

Update: Come to think of it, if Medicare’s part of the trigger, then Democrats will follow Ace’s scheme to reinstate that money later even if the GOP doesn’t try the same move for defense. (Again, they do this all the time in “doctor fix.”) And even if the GOP does try the same move, why would Democrats care? They want to protect entitlements much more passionately than they want to see the Pentagon’s budget slashed, so they’d agree to reinstate the Pentagon’s money as the price of reinstating Medicare. The fundamental problem here, as always, is that Democrats don’t care about cutting spending. If there’s nothing built into this deal that prevents reinstating the money that would be cut when the trigger kicks in — and I’m not sure how there could be procedurally — then the trigger isn’t worth much.

Update: Dick Durbin identifies another reason why Democrats aren’t crazy about this deal, especially the cuts up front.

Update: Even some tea partiers are ready for compromise.

Update: Tapper says they’ve almost got it worked out:

    The agreement looks like this: if the super-committee tasked with entitlement and tax reform fails to come up with $1.5 trillion in deficit reduction that passes Congress, the “neutron bomb” goes off, — as one Democrat put it — spending cuts that will hit the Pentagon budget most deeply, as well as Medicare providers (not beneficiaries) and other programs.

    If the super-committee comes up with some deficit reduction but not $1.5 trillion, the triggers would make up the difference…

    And the debt ceiling will be raised by $2.4 trillion in two tranches: $900 billion immediately, and the debt ceiling will be raised by an additional $1.5 trillion next year – either through passage of a Balanced Budget Amendment, which is unlikely, or with Congress voting its disapproval.

That’s the same as what Jen Rubin reported this morning. After the Super Commission announces its plan for deficit reduction, Congress has three options: (1) enact that plan, (2) pass a BBA and avoid any further immediate cuts entirely, or (3) do nothing and let across-the-board cuts go into effect, which would hit both Medicare and the Pentagon. That’s the last piece of this to be negotiated — how much of those cuts would be to defense specifically as opposed to being truly across-the-board? The harder the military would be hit, the more pressure the GOP will be under to avoid those cuts by passing the Super Committee plan, which could of course include taxes. And that’s not the only tax pressure: “Democrats say –- if tax reform doesn’t happen through the super-committee, President Obama will veto any extension of Bush tax cuts when they come up at the end of 2012, further creating an incentive for the super-committee to act.”

It sounds like the House will vote on this tomorrow before the Senate will. That struck me as backwards at first blush, since having the Senate rubber-stamp it first will put pressure on the House to follow suit. But since the House will have a harder time with this than the Senate, the thinking presumably is that the House needs to be free to tweak the bill to get the votes if need be.

Update: How many Democratic votes will this thing get in the House? Don’t answer until you’ve read this. Boehner may need his caucus to carry the load yet again. One key liberal objection, as Weigel notes, is that tax hikes aren’t one of the triggers that would kick in if Congress rejects the Super Committee. The GOP simply won’t agree to that, which is why Democrats are demanding heavy Pentagon cuts as a lesser substitute.

Update: Byron York on Obama’s nuclear weapon:

    As the hours to Tuesday’s deadline tick away, President Obama will have increasing leverage in his negotiations with Republicans. The president has a nuclear weapon which he has not used thus far in the crisis but will certainly use if the issue remains unresolved in the next 24 hours. That weapon is an address to the nation in which a sober-faced Obama reluctantly lays out what government spending will continue past the debt deadline and what spending will not continue. Many insiders, both Republican and Democrat, believe Obama has been badly overexposed at times in the debt battle, but that would be a speech everyone watches. The president would be the man dealing with disaster (even if it is one he helped create), while he dispatches aides and surrogates to blame it all on GOP radicalism.

True, one last eleventh-hour bid to panic the public might shake loose the last few votes they need to pass this thing. But see the previous update. I’m not so sure the GOP is his big problem this time.

Update (Tina Korbe): Fox News is now reporting that Harry Reid has signed off on the latest iteration of the debt ceiling increase agreement, pending caucus approval.

Open thread: Senate to vote on debt bill at 1 p.m., or maybe not; Update: Reid’s bill filibustered, 50/49; Update: Deal all but done? Update: Reid signs off on debt ceiling agreement

posted at 12:09 pm on July 31, 2011 by Allahpundit
printer-friendly

They’re supposed to vote at 1 p.m., but according to Plouffe and another “Democrat familiar with the situation,” there’s still no bill. What’s the hold up? In all likelihood, they’re haggling over the “triggers” that’ll happen if the new Super Commission can’t agree on, or Congress won’t accept, new deficit reduction proposals later this year. Jen Rubin’s hearing the following from a Republican source on the Hill:

    The second tranche works like this: If a new congressional commission introduces a plan totaling at least $1.5 trillion in cuts by Thanksgiving and it’s passed by Christmas there are no across-the-board cuts. Or, if a balanced budget amendment is passed and sent to the states, then across-the-board cuts are avoided. However, if there is no commission package passed AND the BBA is not passed and sent to the states, then across-the-board cuts of $1.2 trillion including Medicare and defense (the details of which aren’t final) go into effect. If the across-the board-cuts go into effect, the debt ceiling is only raised $1.2 trillion (likely insufficient to keep the government operating for long), meaning “we could do this all over again, depending on economic growth.” In other words, if we went to sequestration the total debt ceiling increase would be $2.1 trillion in two doses.

So there’s the BBA concession: Democrats can avoid new cuts in the second stage entirely if they pass the amendment. As for the automatic Medicare/Pentagon reductions, that’s obviously designed to make both sides in Congress think twice before rejecting the Super Commission’s recommendations. The precise formula for that is still being negotiated too. According to Jake Tapper, the White House wants fully 50 percent of the automatic cuts to affect the Pentagon and 50 percent to be spread across various other discretionary programs. GOP hawks won’t go for that, especially since the only alternative might be approving a Commission package that includes new revenues.

As I write this, the Senate has just begun its session and Reid is insisting that they’re “cautiously optimistic” about a deal but not there yet. Here’s your thread for tracking today’s drama. Exit question: How many Republican and Democratic votes will this bargain get in the House? Progressives are reportedly already murmuring about balking because of the lack of revenue in the deal, which means Boehner will need a majority of his previous Republican majority on yesterday’s vote to get this through. (Here’s one vote forecast.) I wonder if they’ll do it on the first try or, a la TARP, if it’ll take a market panic and subsequent re-vote to get it done. Stand by for updates.

Update: The post-deal spin starts before the deal is even struck:

    “I don’t think we’ve been hurt at all,” McConnell said on CBS’ ‘Face the Nation’.

    “The American people wanted us to do something about out-of-control spending and … the debt ceiling is going to produce what many people would believe is a complete change in the trajectory of the federal government beginning to get spending under control,” said McConnell, who is likely to be largely responsible for any package that wins muster with Congress.

Update: John Bolton sounds the alarm for hawks:

    Every indication is that the debt-ceiling negotiations are leaving the defense budget in grave jeopardy. By exposing critical defense programs to disproportionate cuts as part of the “trigger mechanism,” there is a clear risk that key defense programs will be hollowed out.

    While the trigger mechanism comes into play only if the Congressional negotiators fail to reach agreement on the second phase of spending cuts, it verges on catastrophe to take such a national security risk.

    Defense has already taken hugely disproportionate cuts under President Obama, and there is simply no basis for expanding those cuts further. Republican negotiators must hold the line, since the Obama Administration plainly will not.

Update: Senate Republicans will huddle at 1:45.

Update: Turns out we did have a 1 p.m. vote after all. Now that there’s a deal in the works, Reid evidently decided that it wouldn’t panic markets if he introduced his current bill and let the GOP filibuster. Which they did: The vote was 50/49 (Reid voted no in order to preserve his right to reintroduce it, so they actually had 51 votes in favor.) Why he bothered forcing a vote, I simply don’t know. I guess it lets him use the “obstructionist Republicans” talking point for a few more hours, but that’ll evaporate as soon as there’s a deal. Oh well.

Stand by for the roll. At least two Dems voted no on this thing, intriguingly.

Update: Here we go. Via Fox reporter Chad Pergram, three Democrats voted no: Manchin, Ben Nelson, and of course Reid himself. So how’d they get to 50? Er, Scott Brown voted yes.

Update: Lefty Greg Sargent wonders how Republicans managed to use the threat of hitting the debt ceiling as leverage over Democrats when even most Republicans concede that it’s a scenario to be avoided at all costs.

Update: Ace is thinking about “trigger” gamesmanship down the line:

    Republicans let the automatic cuts happen, but then immediately propose reinstating most of the money to Defense.

    This winds up causing automatic cuts to domestic discretionary, but no big cuts to Defense; most Democrats would probably have to vote for this.

    But it has a bad effect: We’d have approved $2.1 trillion in debt ceiling increase while only (guestimating) cutting, say, $1.6 – $1.7 trillion in cuts.

I.e. the GOP could try a defense version of “doctor fix.” Assuming Medicare is also part of the trigger, though, Democrats would respond by demanding that that money be reinstated too — and Republicans would have to vote for it to block the left’s “Paul Ryan and his conservative friends want to kill your grandma” election messaging.

Update: Come to think of it, if Medicare’s part of the trigger, then Democrats will follow Ace’s scheme to reinstate that money later even if the GOP doesn’t try the same move for defense. (Again, they do this all the time in “doctor fix.”) And even if the GOP does try the same move, why would Democrats care? They want to protect entitlements much more passionately than they want to see the Pentagon’s budget slashed, so they’d agree to reinstate the Pentagon’s money as the price of reinstating Medicare. The fundamental problem here, as always, is that Democrats don’t care about cutting spending. If there’s nothing built into this deal that prevents reinstating the money that would be cut when the trigger kicks in — and I’m not sure how there could be procedurally — then the trigger isn’t worth much.

Update: Dick Durbin identifies another reason why Democrats aren’t crazy about this deal, especially the cuts up front.

Update: Even some tea partiers are ready for compromise.

Update: Tapper says they’ve almost got it worked out:

    The agreement looks like this: if the super-committee tasked with entitlement and tax reform fails to come up with $1.5 trillion in deficit reduction that passes Congress, the “neutron bomb” goes off, — as one Democrat put it — spending cuts that will hit the Pentagon budget most deeply, as well as Medicare providers (not beneficiaries) and other programs.

    If the super-committee comes up with some deficit reduction but not $1.5 trillion, the triggers would make up the difference…

    And the debt ceiling will be raised by $2.4 trillion in two tranches: $900 billion immediately, and the debt ceiling will be raised by an additional $1.5 trillion next year – either through passage of a Balanced Budget Amendment, which is unlikely, or with Congress voting its disapproval.

That’s the same as what Jen Rubin reported this morning. After the Super Commission announces its plan for deficit reduction, Congress has three options: (1) enact that plan, (2) pass a BBA and avoid any further immediate cuts entirely, or (3) do nothing and let across-the-board cuts go into effect, which would hit both Medicare and the Pentagon. That’s the last piece of this to be negotiated — how much of those cuts would be to defense specifically as opposed to being truly across-the-board? The harder the military would be hit, the more pressure the GOP will be under to avoid those cuts by passing the Super Committee plan, which could of course include taxes. And that’s not the only tax pressure: “Democrats say –- if tax reform doesn’t happen through the super-committee, President Obama will veto any extension of Bush tax cuts when they come up at the end of 2012, further creating an incentive for the super-committee to act.”

It sounds like the House will vote on this tomorrow before the Senate will. That struck me as backwards at first blush, since having the Senate rubber-stamp it first will put pressure on the House to follow suit. But since the House will have a harder time with this than the Senate, the thinking presumably is that the House needs to be free to tweak the bill to get the votes if need be.

Update: How many Democratic votes will this thing get in the House? Don’t answer until you’ve read this. Boehner may need his caucus to carry the load yet again. One key liberal objection, as Weigel notes, is that tax hikes aren’t one of the triggers that would kick in if Congress rejects the Super Committee. The GOP simply won’t agree to that, which is why Democrats are demanding heavy Pentagon cuts as a lesser substitute.

Update: Byron York on Obama’s nuclear weapon:

    As the hours to Tuesday’s deadline tick away, President Obama will have increasing leverage in his negotiations with Republicans. The president has a nuclear weapon which he has not used thus far in the crisis but will certainly use if the issue remains unresolved in the next 24 hours. That weapon is an address to the nation in which a sober-faced Obama reluctantly lays out what government spending will continue past the debt deadline and what spending will not continue. Many insiders, both Republican and Democrat, believe Obama has been badly overexposed at times in the debt battle, but that would be a speech everyone watches. The president would be the man dealing with disaster (even if it is one he helped create), while he dispatches aides and surrogates to blame it all on GOP radicalism.

True, one last eleventh-hour bid to panic the public might shake loose the last few votes they need to pass this thing. But see the previous update. I’m not so sure the GOP is his big problem this time.

Update (Tina Korbe): Fox News is now reporting that Harry Reid has signed off on the latest iteration of the debt ceiling increase agreement, pending caucus approval.

U.A.E., Qatar, Bahrain and Saudi Arabia Cut Rates

The Gulf Cooperation Council The United Arab Emirates decided to cut their bank repository rate by 0.25% to 5.25%; Saudi Arabia decreased its benchmark rate for deposits also by 0.25% to 4.0%; Qatar and Bahrain reduced their deposit rates by the same amount — 0.25% to 4.0%. Kuwait refrained from changing the country’s interest rate, because they’ve already removed their currency’s peg to dollar back in May 2007.

This rate change followed the cut by U.S. Federal Reserve decision to lower the rate from 4.50% to 4.25% yesterday on December 11. Gulf countries, such as Saudi Arabia and U.A.E., started to peg their national currencies to dollar decades ago, and they have to maintain the similar interest rates to keep this peg up.

Lowering the interest rates goes against the general monetary policy of the Gulf countries in the way that it stimulates inflation, which is already very high due to the devalued dollar. Fighting inflation is an important task stated by the government of U.A.E. and this rate cut can only boost up the prices growth.

Although this step contradicts anti-inflation policy, it is almost doubtless that such a small rate change won’t hurt a lot. The possibly better side effect of this change would be another reason for consideration of the dollar peg abandonment by these oil countries.

This entry was posted on TopForexNews on Wednesday, December 12th, 2007 at 9:16 pm and is filed under Economic Indicators. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

U.A.E., Qatar, Bahrain and Saudi Arabia Cut Rates

The Gulf Cooperation Council The United Arab Emirates decided to cut their bank repository rate by 0.25% to 5.25%; Saudi Arabia decreased its benchmark rate for deposits also by 0.25% to 4.0%; Qatar and Bahrain reduced their deposit rates by the same amount — 0.25% to 4.0%. Kuwait refrained from changing the country’s interest rate, because they’ve already removed their currency’s peg to dollar back in May 2007.

This rate change followed the cut by U.S. Federal Reserve decision to lower the rate from 4.50% to 4.25% yesterday on December 11. Gulf countries, such as Saudi Arabia and U.A.E., started to peg their national currencies to dollar decades ago, and they have to maintain the similar interest rates to keep this peg up.

Lowering the interest rates goes against the general monetary policy of the Gulf countries in the way that it stimulates inflation, which is already very high due to the devalued dollar. Fighting inflation is an important task stated by the government of U.A.E. and this rate cut can only boost up the prices growth.

Although this step contradicts anti-inflation policy, it is almost doubtless that such a small rate change won’t hurt a lot. The possibly better side effect of this change would be another reason for consideration of the dollar peg abandonment by these oil countries.

This entry was posted on TopForexNews on Wednesday, December 12th, 2007 at 9:16 pm and is filed under Economic Indicators. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Loonie Declines as Economy Contracts

Canadian DollarThe Canadian dollar fell sharply against all of its major counterparts today, following the unexpected negative GDP report.

The loonie dropped to its July 19 level against the US dollar, the lowest value against the euro since July 8 and slid to March 18 rates against the Japanese yen today. The currency also decreased against the outsider of the day — the Australian dollar.

It’s quite clear that today’s bearish behavior is largely a result of Canadian GDP report that was released by Statistics Canada at 12:30 GMT. It showed a contraction of 0.3 percent in May 2011, which followed a zero change in April this year. The market economists forecasted the May value to be at 0.1 percent, positive.

The analysts also cite the poor US GDP growth as another factor that badly influenced the Canadian dollar (as the Canada’s economy is quite dependent on the one of the United States). Some of them also believe that June figures will be far from good too.

USD/CAD rose from 0.9489 to 0.9562 as of 17:03 GMT today. EUR/CAD went up from 1.3596 to 1.3748, while CAD/JPY dropped from 81.85 to 80.69, reaching low as 80.40 today.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Earlier News About the Canadian Dollar:

    CAD Sets New Multi-Year Record on US Crisis Expectations (2011-07-26)
    Canadian Inflation Slows, Loonie Retreats (2011-07-22)
    CAD Reaches Three-Year High vs. USD (2011-07-22)
    BOC Rate Statement Invigorates Loonie (2011-07-19)
    Canadian Dollar Looks More Attractive After EU Stress Tests (2011-07-15)


This entry was posted on TopForexNews on Friday, July 29th, 2011 at 5:06 pm and is filed under Canadian Dollar. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.