• The ECB and BOE are not expected to change course

    The ECB and BOE Meet Today, but What Will Change?

    The dollar is mixed on the day, but moves have been modest ahead of the ECB meeting. The Euro recovered to trade just above the $1.25 area and sterling is hovering just around $1.5950. The Australian and New Zealand dollars are outperforming at $0.8610 and $0.7740, respectively. 

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  • Is raising the minimum wage a real solution to a country's economic woes?

    Can the Price of a Big Mac in Denmark Explain the Living Wage?

    Bob Trebilock, editor of the Supply Chain Management Review, sent me an interesting email today that poses an interesting set of questions.

    Bob writes:

    “A friend sent me an email today with a link to a column by Peter Morici, a well-known conservative economist and writer (you see him on Xerox commercials wearing a bow tie) titled: Lift Vocational Education, not Minimum Wage, to Fight Inequality."

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  • Life Satisfaction Plateau Above a Specific Level of GDP Per Capita

    Is There a Better Economic Growth Measure than GDP?

    [quote] The day is not far off when the economic problem will take the back seat where it belongs, and the arena of the heart and the head will be occupied or reoccupied, by our real problems – the problems of life and of human relations, of creation and behaviour and religion. [/quote]

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  • Prison reforms in place need improvement so says Republicans and Democrats

    Democrats and Republicans unite in calls to rebuild brutal US penal system

    The US has a quarter of the world’s prisoners, but only 5% of the world’s population, so the “tough on crime” approach of the past 40 years has not worked. It has left a trail of social and economic destruction, creating broken families, alienating working-class black communities and producing high levels of recidivism. The time for reform is now.

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  • The Federal Reserve and Another Taper-Tantrum

    U.S. Treasury Rally on the Second 'Taper-Tantrum'

    The prospects that the Federal Reserve would begin slowing its purchases sparked a market meltdown in 2013. The "taper tantrum", as it was dubbed, destabilized the capital markets. Now it is as if the markets have had a second tantrum, but this time US Treasuries rallied.  

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  • Spox FX AUD, GBP, and EUR retracing recent gains

    Looking beyond rate rises as 2015 looms

    Despite a point in mid-week when it looked like the dollar might finally be in for a real correction, the dichotomy of economic performance between the US and most of the rest of the world appears to be growing once again.

    The notes from the Federal Markets Open Committee on Wednesday caused a real retracement in the dollar across several currencies, the like of which has not been seen in several months. Over the course of an hour, the pound gained 128 pips against the dollar; AUD gained 91 and the yen 52. The euro managed to gain 89 pips in just over 30 minutes.

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  • Energy Companies That Met Their Demise

    Energy Companies not to Big to Fail

    Running a multi-billion dollar energy company isn't easy. Just ask the executives in the corner suites of some of the energy companies that have gone bust over the years. Some, like Enron, were brought down because of insider malfeasance. A few, like ATP, blamed damaging government policies, while others went off the rails due to market forces that left the company and its shareholders flat-footed, deep in debt, and eventually broke. Here are the bankruptcies that will be etched into the tombstones of failed energy fortunes for time immemorial. 

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  • Secretary Lew has been clear about a strong dollar policy

    The U.S. Strong Dollar Policy Remains Intact

    Many participants seem confused. Despite the talk about the dollar by different Fed officials, dollar policy is set by the US Treasury. Secretary Lew has been clear. 

    First he reiterated the 20-year old mantra of a strong dollar being in US interest. Despite the polemical tactics to reduce this claim to absurdity, it does indeed have real and important significance. Proof is consider the impact of the opposite. If Lew would have said something to the effect that a strong dollar no longer served US interests the destabilizing impact would be immediately evident.

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  • The FOMC Meets and the Tone is Dovish

    Dovish FOMC Minutes Signal Some Push Back Against the Hawks

    The dovish FOMC minutes have pushed the consolidative tone into a dollar correction.  Asia and European markets extended the dollar decline.  These losses brought the greenback near initial retracement objectives or technical targets.    

    The euro approached $1.2800 before running out of steam.  Sterling poked through $1.6200 but has steadied ahead of the 20-day moving average near $1.6240.  The dollar fell to JPY107.60, holding above support pegged in the JPY107.30-50 area.  

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  • Will the Fed Minutes Change the Dollar's Direction?

    How will the Dollar React to the Fed Minutes?

    Corrective forces continue to grip the foreign exchange market.  Many expect the dollar's downside correction/consolidation to end today.  Technically-inspired short-term participants often see 3-4 day counter-trend moves to be typical of market moves.  Fundamentally-inspired traders expect the FOMC minutes, which will be released in the North American afternoon, to be read by the market participants with a hawkish bias.  

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