• FT article on former Fed chairman speaking. As I wrote few days ago, this is very unfortunate that a former central banker gives views which contradict his successor views.
  • NYT article on labor shortages in Europe. Many companies, including Siemens are struggling to hire engineers, but there is no supply. Other companies are moving offshore, to Asia, Brasil.
  • Morgan Stanley’s Steven Jen writes that yen carry trade impact is exaggerated, I remember that Wachovia wrote a note with similar conclusions. Recently also Japanese officials commented that Japanese investors would continue to buy foreign assets (ie. selling yen and buying foreign currencies).
  • Fed Governor Randall Kroszner speech on liquidity and monetary policy, which concludes that, quote: “The forces behind currency competition that have bolstered incentives for central banks to maintain low inflation and so have helped anchor inflation expectations are likely to persist and perhaps strengthen. The ease with which funds move across capital markets should continue to ensure that the responses to inflationary central bank policies will be swift and significant. The resulting incentives provided by currency competition should continue to foster relatively low far-forward nominal interest rates in many countries. As long as capital markets remain open and people remain aware of the costs of high inflation policies, I believe that the forces behind the low level of long-term interest rates and hence the general flatness of yield curves around the globe will tend to persist for some time.”