From Bloomberg:
The yen slumped the most since 2008 against the dollar as Japan stepped in to foreign-exchange markets to weaken the currency for the third time this year after its gain to a postwar record threatened exporters.
The yen fell against its 16 most-traded counterparts tracked by Bloomberg after Japan’s Finance Minister Jun Azumi ordered the intervention.
The yen weakened as Japan’s Azumi pledged to keep selling the currency after it climbed to the postwar record versus the dollar earlier today. Japan last intervened to weaken the yen in August, when it sold 4.51 trillion yen ($57.8 billion), the largest monthly amount since March 2004.
“I’ve repeatedly said that we’ll take bold action against speculative moves in the market,” Azumi told reporters today after the government acted unilaterally.
http://www.bloomberg.com/news/2011-10-31/yen-tumbles-4-as-japan-intervenes-to-sell-currency-third-time-this-year.html
From Zero Hedge:
Just in time for the MF Global news, we have what appears the latest Yentervention episode, as the USDJPY has just soared over 250 pips.We have no confirmation as of yet and could be merely a risk off move on the MF Global headlines. Or, potentially, was MF short a few yards of USDJPY and now that the end is in sight, is promptly unwinding all legacy positions?
http://www.zerohedge.com/news/yentervention-time
Monday, October 31, 2011
Sunday, October 30, 2011
“Blessed be the name of the Lord, for wisdom and power are his. He changes the times and the seasons; he sets kings up and takes them down. He gives wisdom to the wise and knowledge to the understanding. He reveals deep and mysterious things; he knows what is hidden in darkness, and yet light dwells with him.”
Daniel 2: 20-22
Daniel 2: 20-22
Could Korean Politics and Economy Be Saved by Some Crusaders?
As posted, an independent candidate Park Won Soon won the Seoul mayoral election. The Seoul mayoral election drew attention in several regards, e.g., a preview for political battles in the next year’s presidential election and the public’s dissatisfaction with the ruling party over critical issues such as growing social inequality and unemployment.
Park was backed by Ahn Chul Soo, the founder of a top software business and possible presidential candidate. The New York Times notes that “Mr. Ahn’s backing was crucial to the victory of Mr. Park. Mr. Park won more than twice as many votes among the people in their 20s, 30s and 40s as Ms. Na did.” (http://www.nytimes.com/2011/10/27/world/asia/vote-on-seoul-mayor-seen-as-having-wider-implications.html)
On the other hand, Na Kyung Won, a candidate from the ruling party was supported by Park Geun Hye, the governing party’s likely presidential candidate, a daughter of former President Park, who engineered Korea’s economic miracle.
Many of the problems Korea is facing are structural in nature, as discussed on more than a few occasions. Moreover, those problems are intertwined with the U.S. policies like the Fed’s QEs and the world’s central banks’ actions. Are the presidential candidates up to the challenge of tackling those problems? Do they have moral obligation in the first place?
Chosun Ilbo reports this election “could signal a paradigm shift in Korean politics.”
From Chosun Ilbo:
Pent-up frustration with the political establishment among voters in their 20 to 40s, who experienced the 1997 Asian financial crisis, youth unemployment and the growing gap between rich and poor, clearly manifested itself. The results reflect voters' hunger for broad political reforms.
http://english.chosun.com/site/data/html_dir/2011/10/27/2011102700544.html
중앙선데이로부터:
한국과 일본의 차세대 의원 모임인 ‘한•일미래구상’ 세미나 참석차 방일 중인 남경필•이혜훈•구상찬•김세연•홍정욱 등 5명의 의원은 28일 도쿄에서 ‘밤샘 혁신토론’을 벌였다. 이혜훈 의원은 “한나라당이 변하지 않으면 혁명을 당한다는 위기감 속에 당 혁신 방향을 논의했다”며 “대대적인 당 혁신을 요구할 계획”이라고 전했다.
-서울에서 크게 진 이유는 뭔가.
“기본적으론 20~40대가 성났기 때문이다. 이들이 정권과 한나라당의 구정치 행태를 심판했다. 삶이 고달프고 미래가 불안해 화가 났는데 한나라당은 그들의 불안을 덜어주기는커녕 상대 후보 비방론에 몰두했다. 그런 행태는 젊은이들 입장에서 보면 개념 없고 후진 짓이다. 게다가 우리 후보는 이명박과 오세훈으로 연결되고 동일시됐다. 1% 상류층, 한나라당의 구태 정치 이미지가 이어졌다. 정권과 낡은 정치 심판 구도를 스스로 만든 셈이다.”
-박근혜 대세론은 여전히 유효한가.
“서울에선 이미 깨졌다. 영남 등 일부 지방엔 남아 있는 것 같다. 이번 선거는 내년 대선의 예비 투표였다. 안철수 등장으로 모든 과정이 그렇게 진행됐다. 그런데 진 것이다. 안철수 교수를 개인으로 보면 안 된다. 야권 대선주자는 문재인 노무현재단 이사장이라고 보지만 안철수 교수든 손학규 대표든 야권은 후보군이 중창단으로 움직일 것이다.”
-한나라당은 어떤 대책이 있나.
“물론 현실적으론 박근혜 전 대표 외에 다른 대안이 없다. 그러니 박 전 대표가 변화를 주도하는 리더십을 보여줘야 한다. 그렇지 않으면 상황이 점점 더 어려워져 한나라당은 정말로 영남 자민련이 될 수 있다. 유권자로부터 경고 사인을 그토록 많이 받았지 않나. 이번 선거는 레드 카드다. 먼저 박 전 대표 스스로가 획기적으로 자신의 모습을 바꿨으면 좋겠다. 젊은이들은 지금 박 전 대표를 낡은 정치인, 구정치인의 한 사람으로 보고 있다. 서민의 생활과 삶에 대한 교감이 안 되는 사람으로 비춰진다. 박 전 대표가 돈을 벌어 봤느냐 하는 얘기들을 많이 하는 게 그런 뜻에서다. 또 폐쇄적이고 권위적이며 측근들에 둘러싸인 모습을 바꿔야 한다. 그래야 소수 특권층 이미지를 깰 수 있다. 그러려면 대다수 서민과 차단된 삶을 살아온 점이 투명하게 공개돼야 하고 서민들의 삶을 품을 수 있어야 한다. 폐쇄적이고 권위주의적인 측근 문제를 정리해야 한다.”
http://sunday.joins.com/article/view.asp?aid=23618
Park was backed by Ahn Chul Soo, the founder of a top software business and possible presidential candidate. The New York Times notes that “Mr. Ahn’s backing was crucial to the victory of Mr. Park. Mr. Park won more than twice as many votes among the people in their 20s, 30s and 40s as Ms. Na did.” (http://www.nytimes.com/2011/10/27/world/asia/vote-on-seoul-mayor-seen-as-having-wider-implications.html)
On the other hand, Na Kyung Won, a candidate from the ruling party was supported by Park Geun Hye, the governing party’s likely presidential candidate, a daughter of former President Park, who engineered Korea’s economic miracle.
Many of the problems Korea is facing are structural in nature, as discussed on more than a few occasions. Moreover, those problems are intertwined with the U.S. policies like the Fed’s QEs and the world’s central banks’ actions. Are the presidential candidates up to the challenge of tackling those problems? Do they have moral obligation in the first place?
Chosun Ilbo reports this election “could signal a paradigm shift in Korean politics.”
From Chosun Ilbo:
Pent-up frustration with the political establishment among voters in their 20 to 40s, who experienced the 1997 Asian financial crisis, youth unemployment and the growing gap between rich and poor, clearly manifested itself. The results reflect voters' hunger for broad political reforms.
http://english.chosun.com/site/data/html_dir/2011/10/27/2011102700544.html
중앙선데이로부터:
한국과 일본의 차세대 의원 모임인 ‘한•일미래구상’ 세미나 참석차 방일 중인 남경필•이혜훈•구상찬•김세연•홍정욱 등 5명의 의원은 28일 도쿄에서 ‘밤샘 혁신토론’을 벌였다. 이혜훈 의원은 “한나라당이 변하지 않으면 혁명을 당한다는 위기감 속에 당 혁신 방향을 논의했다”며 “대대적인 당 혁신을 요구할 계획”이라고 전했다.
-서울에서 크게 진 이유는 뭔가.
“기본적으론 20~40대가 성났기 때문이다. 이들이 정권과 한나라당의 구정치 행태를 심판했다. 삶이 고달프고 미래가 불안해 화가 났는데 한나라당은 그들의 불안을 덜어주기는커녕 상대 후보 비방론에 몰두했다. 그런 행태는 젊은이들 입장에서 보면 개념 없고 후진 짓이다. 게다가 우리 후보는 이명박과 오세훈으로 연결되고 동일시됐다. 1% 상류층, 한나라당의 구태 정치 이미지가 이어졌다. 정권과 낡은 정치 심판 구도를 스스로 만든 셈이다.”
-박근혜 대세론은 여전히 유효한가.
“서울에선 이미 깨졌다. 영남 등 일부 지방엔 남아 있는 것 같다. 이번 선거는 내년 대선의 예비 투표였다. 안철수 등장으로 모든 과정이 그렇게 진행됐다. 그런데 진 것이다. 안철수 교수를 개인으로 보면 안 된다. 야권 대선주자는 문재인 노무현재단 이사장이라고 보지만 안철수 교수든 손학규 대표든 야권은 후보군이 중창단으로 움직일 것이다.”
-한나라당은 어떤 대책이 있나.
“물론 현실적으론 박근혜 전 대표 외에 다른 대안이 없다. 그러니 박 전 대표가 변화를 주도하는 리더십을 보여줘야 한다. 그렇지 않으면 상황이 점점 더 어려워져 한나라당은 정말로 영남 자민련이 될 수 있다. 유권자로부터 경고 사인을 그토록 많이 받았지 않나. 이번 선거는 레드 카드다. 먼저 박 전 대표 스스로가 획기적으로 자신의 모습을 바꿨으면 좋겠다. 젊은이들은 지금 박 전 대표를 낡은 정치인, 구정치인의 한 사람으로 보고 있다. 서민의 생활과 삶에 대한 교감이 안 되는 사람으로 비춰진다. 박 전 대표가 돈을 벌어 봤느냐 하는 얘기들을 많이 하는 게 그런 뜻에서다. 또 폐쇄적이고 권위적이며 측근들에 둘러싸인 모습을 바꿔야 한다. 그래야 소수 특권층 이미지를 깰 수 있다. 그러려면 대다수 서민과 차단된 삶을 살아온 점이 투명하게 공개돼야 하고 서민들의 삶을 품을 수 있어야 한다. 폐쇄적이고 권위주의적인 측근 문제를 정리해야 한다.”
http://sunday.joins.com/article/view.asp?aid=23618
China Lays Out Conditions in EU Rescue
From Zero Hedge:
Naturally, being the biggest import partner for China's goods, the topic of providing vendor financing to Europe has always been a critical one.
According to the FT: "China is very likely to contribute to the eurozone’s bail-out fund but the scope of its involvement will depend on European leaders satisfying some key conditions, two senior advisers to the Chinese government have told the Financial Times." So what are the conditions: "Any Chinese support would depend on contributions from other countries and Beijing must be given strong guarantees on the safety of its investment, according to Li Daokui, an academic member of China’s central bank monetary policy committee, and Yu Yongding, a former member of that committee." Obviously, Europe will promise the latter. As for the former it could be a tad problematic because as observed previously Brazil has voiced against rescuing Europe in the form of non-IMF participation. But there are more conditions: "It is in China’s long-term and intrinsic interest to help Europe because they are our biggest trading partner but the chief concern of the Chinese government is how to explain this decision to our own people,” said Professor Li. “The last thing China wants is to throw away the country’s wealth and be seen as just a source of dumb money.” Alas, that is precisely how the entire world sees China. As for the final condition: "He added that Beijing might also ask European leaders to refrain from criticising China’s currency policy, a frequent source of tension with trade partners." And this is how you declare political check mate and shut up all voices that threaten to protest against mercantilist policies. And since it is only a matter of time before China will have to rescue the US, we hope Senate enjoys the time remaining in which it can debate whether or not China manipulates the CNY. That time is about to end.
http://www.zerohedge.com/news/china-lays-out-conditions-under-which-it-will-bail-out-europe-does-not-want-be-seen-source-dumb
Naturally, being the biggest import partner for China's goods, the topic of providing vendor financing to Europe has always been a critical one.
According to the FT: "China is very likely to contribute to the eurozone’s bail-out fund but the scope of its involvement will depend on European leaders satisfying some key conditions, two senior advisers to the Chinese government have told the Financial Times." So what are the conditions: "Any Chinese support would depend on contributions from other countries and Beijing must be given strong guarantees on the safety of its investment, according to Li Daokui, an academic member of China’s central bank monetary policy committee, and Yu Yongding, a former member of that committee." Obviously, Europe will promise the latter. As for the former it could be a tad problematic because as observed previously Brazil has voiced against rescuing Europe in the form of non-IMF participation. But there are more conditions: "It is in China’s long-term and intrinsic interest to help Europe because they are our biggest trading partner but the chief concern of the Chinese government is how to explain this decision to our own people,” said Professor Li. “The last thing China wants is to throw away the country’s wealth and be seen as just a source of dumb money.” Alas, that is precisely how the entire world sees China. As for the final condition: "He added that Beijing might also ask European leaders to refrain from criticising China’s currency policy, a frequent source of tension with trade partners." And this is how you declare political check mate and shut up all voices that threaten to protest against mercantilist policies. And since it is only a matter of time before China will have to rescue the US, we hope Senate enjoys the time remaining in which it can debate whether or not China manipulates the CNY. That time is about to end.
http://www.zerohedge.com/news/china-lays-out-conditions-under-which-it-will-bail-out-europe-does-not-want-be-seen-source-dumb
Norway’s Sovereign Wealth Fund Sold All U.S. MBS
From Bloomberg:
Norway’s $570 billion sovereign wealth fund sold all its holdings in U.S. mortgage-backed securities as part of a shift of its fixed-income portfolio.
The fund holds no mortgage bonds issued by Fannie Mae and Freddie Mac, the U.S.-controlled mortgage financiers, and an “insignificant” amount of private home loan-backed bonds, said Yngve Slyngstad, chief executive officer of Norges Bank Investment Management, today in an interview in Oslo.
“We’ve reduced our holdings of mortgage-backed securities,” he said. “MBS has been taken out of our internal policy benchmark. This means that we don’t have mortgage-backed securities issued by Freddie Mac and Fannie Mae any longer.”
http://www.bloomberg.com/news/2011-10-28/norway-s-sovereign-wealth-fund-sold-all-u-s-mortgage-bonds.html
Norway’s $570 billion sovereign wealth fund sold all its holdings in U.S. mortgage-backed securities as part of a shift of its fixed-income portfolio.
The fund holds no mortgage bonds issued by Fannie Mae and Freddie Mac, the U.S.-controlled mortgage financiers, and an “insignificant” amount of private home loan-backed bonds, said Yngve Slyngstad, chief executive officer of Norges Bank Investment Management, today in an interview in Oslo.
“We’ve reduced our holdings of mortgage-backed securities,” he said. “MBS has been taken out of our internal policy benchmark. This means that we don’t have mortgage-backed securities issued by Freddie Mac and Fannie Mae any longer.”
http://www.bloomberg.com/news/2011-10-28/norway-s-sovereign-wealth-fund-sold-all-u-s-mortgage-bonds.html
Wednesday, October 26, 2011
Korean Ruling Party’s Defeat in Seoul Mayoral Election
From Yonhap:
The ruling party's bruising defeat in Wednesday's by-election for Seoul mayor represents yet another blow to the unpopular party, a setback to its leading presidential contender and, more broadly, a punishment of the existing political establishment, analysts said.
With nearly all ballots counted, opposition-backed candidate Park Won-soon, a lawyer-turned-activist, defeated his rival Na Kyung-won of the ruling Grand National Party (GNP) to win the mayoralty with 53.3 percent of the vote against Na's 46.3 percent.
Though technically a small regional election, Wednesday's vote was considered a crucial test of voter sentiment ahead of next year's two big polls -- the parliamentary elections in April and the presidential vote in December. It will be the first time in 20 years that the two major elections happen in the same year.
The mayoral race was also closely watched as a test of whether GNP's leading presidential contender Park Geun-hye would be able to keep her previously near-unchallenged lead, now that prominent computer software entrepreneur Ahn Cheol-soo has emerged as a possible strong challenger to her in recent months.
Analysts and media dubbed this week's election a "proxy battle" between the two, as Park Geun-hye campaigned on behalf of her party's candidate Na -- an unusual move that breaks away from her usual hands-off approach to party affairs -- and Ahn gave up his mayoral bid to give way for Park Won-soon.
Ahn, a former medical doctor, gained fame in the 1990s after establishing South Korea's No. 1 anti-virus software firm. He is widely popular, especially among young Koreans, due largely to his clean and upright image.
After Ahn suggested he might run for Seoul mayor, he immediately took an unrivaled lead in opinion polls. But Ahn later decided not to run, saying he would instead back Park Won-soon. Even after he withdrew his mayoral bid, Ahn remained hugely popular.
http://english.yonhapnews.co.kr/national/2011/10/27/13/0301000000AEN20111027000100315F.HTML
The ruling party's bruising defeat in Wednesday's by-election for Seoul mayor represents yet another blow to the unpopular party, a setback to its leading presidential contender and, more broadly, a punishment of the existing political establishment, analysts said.
With nearly all ballots counted, opposition-backed candidate Park Won-soon, a lawyer-turned-activist, defeated his rival Na Kyung-won of the ruling Grand National Party (GNP) to win the mayoralty with 53.3 percent of the vote against Na's 46.3 percent.
Though technically a small regional election, Wednesday's vote was considered a crucial test of voter sentiment ahead of next year's two big polls -- the parliamentary elections in April and the presidential vote in December. It will be the first time in 20 years that the two major elections happen in the same year.
The mayoral race was also closely watched as a test of whether GNP's leading presidential contender Park Geun-hye would be able to keep her previously near-unchallenged lead, now that prominent computer software entrepreneur Ahn Cheol-soo has emerged as a possible strong challenger to her in recent months.
Analysts and media dubbed this week's election a "proxy battle" between the two, as Park Geun-hye campaigned on behalf of her party's candidate Na -- an unusual move that breaks away from her usual hands-off approach to party affairs -- and Ahn gave up his mayoral bid to give way for Park Won-soon.
Ahn, a former medical doctor, gained fame in the 1990s after establishing South Korea's No. 1 anti-virus software firm. He is widely popular, especially among young Koreans, due largely to his clean and upright image.
After Ahn suggested he might run for Seoul mayor, he immediately took an unrivaled lead in opinion polls. But Ahn later decided not to run, saying he would instead back Park Won-soon. Even after he withdrew his mayoral bid, Ahn remained hugely popular.
http://english.yonhapnews.co.kr/national/2011/10/27/13/0301000000AEN20111027000100315F.HTML
Wall Street Isn't Winning – It's Cheating
From Rolling Stone Blog:
At last count, there were 245 millionaires in congress, including 66 in the Senate. And we hate the rich?
Come on. Success is the national religion, and almost everyone is a believer. Americans love winners. But that's just the problem. These guys on Wall Street are not winning – they're cheating. And as much as we love the self-made success story, we hate the cheater that much more.
http://www.rollingstone.com/politics/blogs/taibblog/owss-beef-wall-street-isnt-winning-its-cheating-20111025
At last count, there were 245 millionaires in congress, including 66 in the Senate. And we hate the rich?
Come on. Success is the national religion, and almost everyone is a believer. Americans love winners. But that's just the problem. These guys on Wall Street are not winning – they're cheating. And as much as we love the self-made success story, we hate the cheater that much more.
http://www.rollingstone.com/politics/blogs/taibblog/owss-beef-wall-street-isnt-winning-its-cheating-20111025
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