Asian Inflation: It's Global This Time, Indeed...

Analysts are catching onto the fact that an inflating US Dollar does not make everyone a winner out there in the land of global commerce. One of the biggest losers, is the Asian consumer.

Asian currencies have been getting hammered, and we have been beating on the associated economic fallouts of that reality for the last 6 weeks in our sector portals. Many CFO's imply to us that were not prepared for this. Neither are sovereign governments who are dealing with heightened social unrest associated with importing currency inflation.

Below we have put together 5 year charts of all the major Asian countries we follow. Commodity oriented inflation may be dampening in this country, but we're going to export currency inflation to the world. This is a "Trend" that will continue to result in higher cost of capital, globally.


US Bank Failure Chart, Updated for #11 this week, Silver State Bank

One potentially important statistic to keep in mind: So far this year, the US banks that have failed held more than $1.12 Billion in deposits spread across 12,600 accounts which exceeded FDIC insurance limits. That means that almost 13,000 affluent account holders have received news that a portion of their deposits might be gone due to the failure of the bank they use.

Most of those people will ultimately be made whole by the banks which take receivership, but consider the implications for consumer confidence when 13,000 wealthy households (many that have already witnessed plunging a real estate market, weakening dollar and frozen auction rate funds) experienced the shock of learning that some of their savings may have simply evaporated overnight.

Andrew Barber

US Market Performance: Week Ended 9/5/08

Index performance:

Week Ended 9/5/08:
Dow Jones (2.8%), SP500 (3.2%), Nasdaq (4.7%), Russell2000 (2.8%)

2008 Year To Date:
Dow Jones (15.4%), SP500 (15.4%), Nasdaq (15.0%), Russell2000 (6.2%)

Early Look

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Eye on Russia and Chicken

More details regarding the importance of Russian exports to the U.S. chicken producers.

Volcker on the tape - he's an Obama boy now, dont forget!

John McCain has never been accused of being an economically intelligent man, and Paul Volcker never a dumb one. Volcker is speaking at a conference in Canada right now, issuing comments about the US financial system being "broken", and that US economic growth will slow to levels not seen since the Depression.

I don't disagree with this. Obama won't either. Expect this rhetoric to start running full steam ahead into the perpetually bullish Wall Street narrative. McCain better have his chin strap on – debating Warren Buffett and Paul Volcker on the economy won’t be a no contact sport.

Eye on Leadership... Moammar Kadafi?

Bizarre photo for the day. Now that Libya is back in good graces with the West, we will start seeing this cat in the news again. He looks like he is dressed for a Morris Day and The Time reunion show.

Andrew Barber