Rate Impact of S&P Downgrade (part 3)

After parts 1 and 2 on the rate impact of S&P’s downgrade, here are a few new comments before Asian markets open. We’ll continue to discuss rate impacts as this situation plays out. – The first is not an additional comment but a repeat of what I said yesterday:  S&P is 100% correct that the

WeeklyBasis 7/10: Locking Rates In Volatile Markets

Rates were down .125% to end last week, regaining half of the .25% rise from the week before. As the last WeeklyBasis noted: “Jobs would have to be worse than already-low expectations” for rates to improve, and that’s exactly what happened, with only 18k non-farm payrolls created vs. 110k expectations. Safer assets like mortgage bonds

Linkage: Rest Of 2010 Economic Outlook

-How To Fix U.S. Job Market (Bill Gross, PIMCO) -Tea Party’s New Role Model: Mike Lee (Politico) -China Bears Are Dead Wrong: Jim Rogers (CNBC) -Banks Easing Terms On Loans Deemed As Risks (NYT) -How To Tell If Markets Freak Out About Debt Limit (WaPo) -John Mauldin’s Outlook on Second Half of 2010 (Minyanville) -Secrets

Linkage: Realtime Greek Austerity Vote Tracker

-BofA’s $8.5b Bad Loan Settlement (Bloomberg) -INFOGRAPHIC: Forex Market Basics (TradingHabits) -China’s Top Auditor Warns of Local Gov’t Defaults (Mish) -REAL TIME GREEK AUSTERITY VOTE TRACKER (ZeroHedge) -QE3 Advocate Krugman Sits Down With HousingWire (HousingWire) -A Word On Unemployment (MarginalRevolution via TheMoneyIllusion)

Monetary Policy 101: Exchange Rates

Over the next month I will examine monetary policy in my weekly pieces. To start, I am recycling this piece I wrote last July. Eternal thanks to economist Steve Hanke of Johns Hopkins University who’s taken the time to educate me on these matters. Money Supply and monetary policy are set by the Federal Reserve.