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2008-10-01 Home Front Economy

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Posted by lotp 2008-10-01 13:46|| || Front Page|| [3 views ] Top

#1 > the UK central bank offered two US dollar auctions on Wednesday morning, one overnight and one for a week, but found demand thin for both.

My initial thought was low demand for CB borrowing implies a cut in interest rates....

But then I read it was the BoE doing a USD auction?!? This implies low demand for dollars, i.e. America might RAISE it's interest rates!

Posted by Bright Pebbles 2008-10-01 14:36|| 2008-10-01 14:36|| Front Page Top

#2 The dollar is up again against the Euro. Their problems are worse than ours.

Posted by Nimble Spemble 2008-10-01 15:10|| 2008-10-01 15:10|| Front Page Top

#3 This implies low demand for dollars

Not quite. It implies that banks are scared to lend or borrow right now. These were dollar auctions because the European and UK banks are holding large amounts of dollar-denominated derivatives.

Posted by lotp 2008-10-01 15:10|| 2008-10-01 15:10|| Front Page Top

#4 Nope. There was a 630 billion currency swap yesterday.

Posted by Bright Pebbles 2008-10-01 15:34|| 2008-10-01 15:34|| Front Page Top

#5 Bush SHOULD HAVE WARNED US about this!

Posted by Besoeker 2008-10-01 15:38|| 2008-10-01 15:38|| Front Page Top

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