31. January 2010 by Dan Walkow, CFA, CMT.

Former US Fed Chairman, Paul Volcker speaks out on reforming the banking systems. It is time!

PRESIDENT OBAMA 10 days ago set out one important element in the needed structural reform of the financial system. No one can reasonably contest the need for such reform, in the United States and in other countries as well. We have after all a system that broke down in the most serious crisis in 75 years. The cost has been enormous in terms of unemployment and lost production. The repercussions have been international. Read the whole thing here.

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29. January 2010 by Dan Walkow, CFA, CMT.

Following on China’s lead the Central Bank of India is tigthening monetary policy and has indicated that there is more to come. As the old adage goes ” Don’t fight the FED”, of China and India that is.

Tighthing monetary policies such as raising bank reserve requirements and raising interest rates are tools Central banks use to slow down the economy and arrest inflationary pressures. Tends not to bode well for both equity and bond markets.

See the story here.

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19. January 2010 by Dan Walkow, CFA, CMT.

China has rattled financial markets by moving faster than expected to tighten its grip on liquidity as a strong recovery and rising asset prices threaten to cause overheating in the world’s third-largest economy.

Societe Generale said in a research note in the wake of Tuesday’s auction that the central bank’s wording of “flexible and targetted” was currently still tightening.

“The hike in the reserve requirement and the draining of liquidity while in fashion with the notion of flexibility and targetting, cannot be dismissed as anything other than tightening no matter how minor at this stage,” SG said.

China is leading again, this time putting the brakes on by raising interest rates and tightening bank reserve requirements to arrest runaway stock market and real estate speculation. Will the rest of the world follow?

Read  More here.

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18. January 2010 by Dan Walkow, CFA, CMT.

Noted economist and author Richard Duncan said that, faced with sluggish global growth and a tapped out U.S. consumer, there’s little hope that China can keep its factory-geared economy in motion much longer.

“China has followed an export-led growth model for the last 25 years, and it has just hit a brick wall when the U.S. economy went into crisis,” Bangkok-based Duncan said in an interview with MarketWatch.

Duncan is the former London-based head of global investment strategy at ABN Amro. In 2003 he authored “The Dollar Crisis,” which warned that imbalances in global trade would lead to a meltdown of the financial system.

See the full story here.

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17. January 2010 by Dan Walkow, CFA, CMT.

Gluskin Sheff & Associates’ chief economist David Rosenberg is well known for his sobering views on the economy and he makes some good points that up until now have fallen on deaf ears. The market has trumped his analysis so far, perhaps due to massive government monetary intervention into the economic system, but as central banks remove the economic stimulis perhaps its time to revisit what he has to say.

Read his thoughts at the Pragmatic Capitalist here.

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30. November 2009 by Dan Walkow, CFA, CMT.

According to the Center for Responsive Politics they are:

1. US Chamber of Commerce

2. Exxon Mobil

3. Pharmaceutical Research and Manufacturers of America

4. General Electric

5. Blue Cross/Blue Shield

For the whole list go here.

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15. November 2009 by Dan Walkow, CFA, CMT.

 Click here to go to live interactive map.

Moody’s at THE DISMAL SCIENTIST has a great interactive map which montiors the economic condition of economies around the world. There is a wealth of info on this site which not only provides a global perspective but you can drill down to a country or State.

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9. November 2009 by Dan Walkow, CFA, CMT.

Talk about long-term strategic planning! China is paying special attention to Africa. They are positioning for the next great consumer growth market after India.

China good will, financial support and investments in Africa garner access to vast raw materials, such as metals, energy and other materials on the one hand while at the same time building business ties to sell Chinese products to the growing African middle and upper class.

TIME has a piece that covers it well and supports the view that China is a strategic powerhouse out in front of most other countries. See it here.

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12. September 2009 by Dan Walkow, CFA, CMT.

Canada is no stranger to US protectionist policies, to witt; the ongoing bullying of Canada’s softwood lumber industry which has been under attack from special interest groups in the USA for decades now. Ongoing actions by the US have all but brought the Canadian forest product industry to its knees.

So it comes as no suprise that over the past few weeks the US administration has responded to constiuant demands and levied heavy import taxes and duties on China.

On September 9th the US Commerce department levied duties of up to 31% on steel pipe from China.

Yesterday President Obama responded to the tire lobby and imposed a duties on tires from China and the duty starts at 35%. Needless to say the Chinese are not happy.

These actions on top of the recent measure against Mexico where the USA will no longer allow Mexican truckers to operate in the USA.

The American bailout program and subsidies have got Brazil’s attention. In particular Brazil recently brought a case of American cotton subsidies to the WTO and won.

It would appear the labour lobby in the USA has the ear of the administration and these actions are extremely punitive to free trade and the overall economic recovery.

This is shaping up to be a major trade war with the USA against everybody else, expect retaliatory measures, this story is far from over and given what happened historically when protectionism and trades wars erupt the prognosis is not good.

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16. August 2009 by Dan Walkow, CFA, CMT.

Protectionist measures between Mexico, Canada and the USA are heating up. Last month the United States banned Mexican truckers from bringing goods into the United States. Mexico retaliates by slapping heavy import tariffs on 90 American made products.

Canadian truckers and exporters are apprehensive when they hear statements from the likes of U.S. Homeland Security Secretary Janet Napolitano  who said this week that Canada shouldn’t get different treatment when it comes to border issues.

This all started with the Obama administration’s Buy America Policy and is gaining momentum as we get into an ugly tit for tat trade war. Everybody is a loser in this game.

Consider:

The Mexican government carefully selected the products it raised tariffs on to create the maximum political impact. Members of Congress who supported the ban on Mexican trucks find that exporters in their states being directly targeted.

Canadian businesses are still at risk of being locked out by state and municipal procurement contracts because of protectionist provisions in stimulus spending packages.

On the immigration front, Canada now requires any Mexicans who want to come to Canada to have a visa. This blindsided the Mexican government and you can bet they are not overly pleased with Canada’s unilateral actions. What now, are Canadians going to have to get a visa to holiday in Mexico?

The North American Free Trade Agreement (NAFTA) appears to doomed as this trade war heats up. It is ironic that while the rest of the world is opening borders and promoting international free trade North America seems to be backsliding into the protectionist abyss.

For more see Tightening border alarms Ottawa, exporters at the Toronto Star.

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