"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Thursday, February 22, 2007

The Federal Open Market Committee meets March 20/21st - Federal funds rate to rise 1/4%

.....these factors were expected to prove largely transitory ..... price inflation in December ..... labour market exhibited continued strength Output of manufacturing industries rose noticeably in December ... sizeable gains in the production ....Real consumer spending rose briskly in November and December .....sizeable increases in outlays for non-auto consumer goods ....Real disposable income posted solid gains in October and November and likely rose further in December.

...... further declines in energy prices .... consumer sentiment moved up at the end of last year and held steady in early 2007.

.... Construction in the multifamily sector, ...... rose sharply in December to the upper end of the range that has prevailed over the past decade. Sales inched up in both months. Inventories ..... ticked down in December for the second straight month. ......real investment in equipment and software fell in the fourth quarter.

....Economic activity in the advanced foreign economies appeared to have accelerated .....consumption spending in Japan apparently rebounded last quarter ...... expansion in the United Kingdom\''s economy strengthened ..... In China, the most recent evidence suggested that growth had remained strong..... can growth be sustained .... capitalism hits the buffers.... real lending starts

Year-over-year increases in average hourly earnings ..... rose at a moderate rate in the three months ending in December..... inflation pressures seemed likely to moderate over time......both inflation and economic growth, as implied by incoming information.

...yields over those of comparable-maturity Treasury securities moved down .... equity indexes edged higher. ..... dollar against other major currencies rose, on balance, particularly versus the yen.... market ready to dive .... dive , dive , dive

......contraction in housing activity expected to abate this year .....some upward revision to its estimate of output growth in the fourth quarter and perhaps a slight downward revision to its forecast for the current quarter....The BOJ voted 8 to 1 to raise the overnight call money rate to 0.5 % from 0.25 % .... Asia shakes as real money required real rates ... China to follow ....

..anecdotal reports presented a mixed picture...significant wage pressures being reported ...concern about the outlook for inflation......did not yet see a downtrend in core inflation as definitively established ... pressures in labor and product markets and the behavior of inflation expectations ..... some inflation risks remained and note that additional policy firming was possible....

....sub-prime lending business in meltdown .... credit crunch is coming ....nail bangers out of work ...... empty properties.... sellers pulling out of the market as equity goes negative ... mortgage quality gets highlighted .... sub - prime guys hit hard ....

... and Mr King and his courtiers to beat Mr Bernanke and his banking barons to it ?

UPDATE 22/3/07 11.00 EST

Sorry folks, got the wrong call there or maybe the OMC did... just diggin' a deeper hole for us all. The longer the boom ( well ..let) the bigger the BANG.

the NYT says " Fed Weighs Words About Its Next Move" The text of the fed's statement is here. The IHT is similiarly gnomic - "Fed leaves rate unchanged but weighs its words"

Seeking alpha makes a very jumbled fence sitting analysis "Inflation or Recession? Parsing the Fed Statement" ... watch out fed rates are going UP ... or maybe well, they are going down.

Meanwhile just watch those bottom feeding Private Equity jocks crusing around the desperate sub-prime lenders.

Citadel LP, which runs one of the world's largest hedge funds (founded Nov. 1, 1990 with $4.2 Mn.)has taken a 4.5 % stake in Accredited Home Lenders Holding Co. (LEND.O - what a ticker !), San Diego-based subprime lender.

Citadel now holds 1,132,738 shares in Accredited. Forbes says they manage at least $12 billion, and 30 odd something founder , Harvard educated Kenneth Griffin, is worth about $1.7 billion- Forbes says 204th richest American (paid himself US$240 Mn last year) . His 36 yr old wife of 2 years Anne (Dias)-Griffin is a managing partner of Chicago based Aragon Global Management which she founded (She cut her teeth on Goldman Sachs, Fidelity and Soros Funds)

In October 2006 they both gave US$19 Mn to the Chicago Art Institute to celebrate a date. They are both active in Chicago based philanthropy and work with Bill Gates on educational projects.

Almost simultaneously Accredited got a five-year, $200 million loan from a San Francisco hedge fund, Farallon Capital Management LLC. Farallon has a 6.9 % stake in Accredited.

Mkaes you wonder where those stakes HSBC and Barclays have in the sub prime mortgage market are going to end up. Maybe Kenny and his computers know a better way to run loans on double wides and run down city blocks than they do.

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