Archive for November, 2008

Good evening. It's a great pleasure to be here. When I last spoke in Nova Scotia three years ago – almost to the day – I discussed the Bank of Canada's role in strengthening the country's financial system to make it resilient to shocks so as to limit damage from inevitable economic and financial storms.

On November 25, 2008, the Fed stepped in with reinforcements for consumers directly. This is a noteworthy action because over the past sixteen months Fed intervention has been directed to support financial institutions and the workings of the financial system. The Fed announced two programs amounting to new assistance of $800 billion. (1).

This is undoubtedly the toughest Pre-Budget Report (PBR) that labour has had to deliver since it took office in 1997.

Sterling has fallen sharply in the past year, down by 20% on the trade-weighted index. The fall against the dollar and the euro has been as deep or deeper, with depreciation of 29% and 16%, respectively.

The effective federal funds rate on November 13 was 0.35%. Monetary policy will be tight if the effective federal funds rate returns close to the target federal funds rate.

The week ahead in financial markets will see a modest quantity of data that will hit the tapes largely on Thursday and Friday. The major market moving events will be the Friday release of the October advance retail sales data and the Thursday release of the US Trade Balance, Jobless Claims and the US Budget Statement. On Friday in Frankfurt Germany, Fed Chair Bernanke and ECB President Trichet will lead a cast of global central banking all-stars that will address monetary policy within the current global financial crisis.

 

Slowing economic growth and falling inflation is leading to record low interest rates? Interest rates are being cut aggressively around the world as economic growth slows and as price inflation either falls back from recent peaks or is set to fall sharply in the months ahead. A worsening of the credit crisis since the failure of Lehman Brothers two months ago, has noticeably hit expectations for growth and inflation.

The week ahead in financial markets will see a modest quantity of data that will hit the tapes largely on Thursday and Friday.

Dear Trader,

TSG Stock Market Letter
Week Ending November 7, 2008
Topics Discussed This Week:

* Bounce still in play?
* Leaders move up
* Q3 earnings - a little better but still deteriorating
* Manufacturing plummets, jobs losses mount
* So have we hit bottom?
* The Big Bubble Bust - How smart are attempts to stop it?

Last week we had a pre-election ...

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