AndrewBaker

Wall Street Breakfast: Must-Know News

The dollar won't slide catastrophically because there is no other currency to replace it right now, not because it's intrinsically worth holding more than other currencies, but it will decline over time, just as the British pound did from the beginning of the last century and for most of it.

A weaker dollar helps exporters and tourism, which is good, but hinders the growth of emerging economies, which may slow them down a little, but won't stop the trend.

On balance, the US needs a weaker currency to support trade which will help real businesses recover. Not so many people will currently be insistent on spending money on foreign goods or looking to increase their overseas vacationing, so any extra cost there won't hurt much. Imports will be more costly, but the US has a wide internal market that can supply most needs anyway.

Overall, a drop in the dollar will likely be beneficial. Better that than rampant inflation which will destroy value over many years to come, and which worries me will be the result of quantitative easing. If a weaker dollar reduces that process, I will be satisfied.

Wall Street Breakfast: Must-Know News

New jobless up more though total jobless down, and retail sales down but only by 0.1% when expected to have picked up by 0.7%. Something for everyone here: bears will say jobless up and sales down, whilst bulls will say total jobless down whilst sales down by less and nearly went up! However, we are still ignoring the facts and the momentum is on the side of the bulls; so I'll stay there for now and see what happens. Join me for a short while: it could be profitable, providing you can sell in time.

Wall Street Breakfast: Must-Know News

Greenspan is only saying now what a lot of us have known all along: the financial system is not sound, the banks will need more money, and the only thing that is truly going up now is the hype. Let the markets determine their own levels in accordance with reality and not political and self-serving spin. That will lead to a market fall, but then when the recovery does really start, we can all believe in it, and not be checking for smoke and mirrors everywhere. The present action means that we will all suffer for a lot longer. I'd prefer to take it on the chin now, and feel afterwards that now it will really get better, sooner.