Currency Wars China Targeted in Currency Manipulation by US

Currency Wars China Targeted in Currency Manipulation by US

ECONOMY VIDEO – “Currency Wars” China warns US currency bill might harm ties China Targeted in Currency Manipulation by US Democratic Congress Currency Manipulation Video on “USA vs China” and the currency standoff. SMF St Trader highlights the current issues regarding “trade wars” and “currency manipulation. China owns over $1 Trillion dollars of US Debt and if they pull their card we’ll see what happens. “china currency peg”

The House has approved legislation that would allow the U.S. to seek trade sanctions against China and other nations for manipulating their currency to gain trade advantages.The 348-79 vote Wednesday sends the measure to the Senate, where its prospects are unclear. Senate supporters hope to get a vote on a similar proposal after Congress returns following the November congressional elections.Supporters said the bill would allow the Obama administration to pressure China on an issue that they say has led to the loss of more than 2 million manufacturing jobs in the U.S. over the past decade.The vote came as lawmakers scrambled to wrap up unfinished business so they can hit the campaign trail with a little over a month before the Nov. 2 elections. Polls show that the state of the economy and an unemployment rate that remains stuck at 9.6 percent are the top concerns of voters.The measure was passed by a wide margin with 99 Republicans joining Democrats to vote yes.

Those in opposition included 74 Republicans and five Democrats.American manufacturers contend that China’s currency is undervalued by as much as 40 percent against the dollar. That makes Chinese products cheaper and more competitive in the United States and American products more expensive in China.The legislation would allow the imposition of stiff sanctions on Chinese imports. It would expand the definition of improper government subsidies to include a government’s manipulation of its currency to gain trade advantages. Currently, the Commerce Department does not consider currency manipulation as a government subsidy for which it can impose trade sanctions.During the House debate, supporters cited studies that they said show the legislation would boost American exports and create more manufacturing jobs in this country.

“Some credible estimates are that we could return a million American jobs to this country,” said Rep. Xavier Becerra, D-Calif., in urging support for the legislation. “We can either take bold steps or we can take baby steps.”Opponents said the legislation would boost the cost of clothing, toys and other goods that American consumers buy and also ran the risk of sparking retaliation by China against American exports.”The available evidence is that the price of many of these Chinese goods will go up 10 percent, a pair of shoes that a mother needs for her child to go to school … toys at Christmas, all become more expensive,” said Rep. Jeb Hensarling, R-Texas.Supporters rejected that argument, saying it is critical in hard economic times to protect U.S. jobs.”Without a job, you can’t buy goods at any price.

This bill is about jobs,” said Ways and Means Committee Chairman Sander Levin, D-Mich.Passage of the proposal was cleared when Levin led an effort to craft a compromise proposal that supporters believe will be better able to withstand a challenge before the World Trade Organization, the Geneva-based group that oversees the rules of world trade.Before the House vote, Chinese officials in Beijing reiterated that they support exchange rate flexibility but offered no new indications that they plan to accelerate the revaluation of their currency, the yuan.

In June, Beijing promised a more flexible exchange rate but since that time the yuan has risen by only about 2 percent in value against the dollar.Treasury Secretary Timothy Geithner told Congress earlier this month that the administration stands ready to find a more effective strategy for pressuring China. He said the administration is not only focused on the currency issue but on such topics as rampant copyright piracy of U.S. products and various barriers the Chinese have erected to U.S. goods. China warns US currency bill might harm ties “Currency Wars”

Understanding Economics US Economy: Consumers Lose Confidence Where are the Jobs?

Understanding Economics US Economy: Consumers Lose Confidence Where are the Jobs?

Understanding Economics US Economy, U.S. Economy: Consumers Lose Confidence “Where are the jobs”? Mounting gloom over the outlook for jobs and wages caused American consumers to lose confidence in September, indicating spending will take time to recover.

The Conference Board’s sentiment index declined to 48.5 this month, lower than the median forecast of economists surveyed by Bloomberg News and the weakest level since February, according to figures from the New York-based private research group today. Another report showed home prices cooled, hurt by a slump in sales following the end of a government tax incentive.

Household purchases, which account for about 70 percent of the world’s largest economy, may be constrained by a jobless rate this is projected to average more than 9 percent through 2011. Best Buy Co. is among companies planning to use promotions to spur sales during the year-end holidays in order to overcome shoppers’ somber moods.

Consumers “certainly are worried about jobs,” said David Sloan, a senior economist at 4Cast Inc. in New York. They “are facing considerable headwinds.”

The median forecast of 75 economists surveyed projected the index would drop to 52.1. Estimates ranged from 48 to 55. The gauge averaged 96.8 during the economic expansion that ended in December 2007.

Home prices in 20 cities rose at a slower pace in July from a year earlier, a report from S&P/Case-Shiller showed. The group’s index of property values increased 3.2 percent from July 2009, the smallest year-over-year gain since March.

Credit’s Influence

The gauge is a three-month average, which means the July data are still being influenced by transactions in May and June that may have benefitted from a tax break worth as much as $8,000. Sales contracts had to be signed by the end of April and initially closed by June in order to qualify for the credit. The closing deadline has since been extended to the end of this month.

Unemployment, a lack of confidence and mounting foreclosures will probably weigh on the housing market for the rest of the year.

“Now that we’re getting data that’s starting to show some post-tax credit information, we’re beginning to see some weakness on the surface,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in Washington. “Sales have come off and the concern is that you’re going to see prices follow.”

Stocks rose, erasing losses sustained after the reports, as investors speculated the Federal Reserve will buy debt to buoy the economy. The Standard & Poor’s 500 Index climbed 0.4 percent to 1,147.7 at the 4 p.m. close in New York. The yield on the 10- year Treasury note declined to 2.46 percent from 2.53 percent late yesterday.

Income Outlook

The Conference Board’s measures of present conditions and expectations for the next six months both dropped, today’s report showed. Fewer respondents thought more jobs would become available and the share of those who expected incomes to rise fell to the lowest since February.

Best Buy, the world’s largest consumer-electronics retailer, said mobile phones, Internet-connected televisions and tablet computers such as Apple Inc.’s iPad will be among its top-selling items this holiday season.

The Richfield, Minnesota-based company released its predictions today after conducting an online survey of almost 1,000 people in August. Best Buy plans to spur sales of phones with a promotion that will run on Fridays, starting Oct. 1, Mike Vitelli, executive vice president, told reporters in New York.

“We know it is a tough environment out there,” Chief Executive Officer Brian Dunn told reporters. “It will be hard fought.”

Less Optimistic

There is reason for consumers to worry about jobs. U.S. chief executive officers turned less optimistic in the third quarter as fewer projected sales and hiring will improve, a survey showed. The Business Roundtable’s economic outlook index fell for the first time since the beginning of 2009.

“This is, and will continue to be, somewhat of a long and uneven recovery,” Ivan G. Seidenberg, chairman of the Business Roundtable and chief executive officer of New York-based Verizon Communications Inc., said today in a teleconference. “We’re not seeing a lot of major momentum develop here.”

The economy is a top issue for voters in the November congressional elections, and polls show the public is increasingly skeptical of President Barack Obama’s performance.

The economy grew at a 1.6 percent pace in the second quarter, down from the 3.7 percent annual rate posted in the first three months of the year. Economists surveyed this month forecast growth will average 2.1 percent from July through December.

Fed’s View

“The pace of recovery in output and employment has slowed in recent months,” Federal Reserve policy makers said in their statement last week after meeting on interest rates.

Opening Bell VIX.X Fear Index vs S&P 500 Index Chart Trend

Opening Bell VIX.X Fear Index vs S&P 500 Index Chart Trend

Opening Bell VIX.X Fear Index vs S&P 500 Index Chart Trend Trade Understanding Stock Market Volatility (VIX) CBOE Indicator Greed Indicator CBOE Indicator Buy Bear Funds VIX S&P 500 Index Chart ^VIX CBOE Volatility Index. 3rd Trading day of options expiration week. We will be analyzing the CBOE volatility index. When we were shorting the markets in April of 2010 when we told people to go to cash. The upper end of the S&P 500 Resistance Level where up here. Basically what you want to see is when you had the big breakout move here we were putting in the tops for the VIX. We came down early in 2010 when we saw historical lows on the VIX. We’ve rallied up to these triple tops. We were adding S&P 500 Index Shorts. We’re going into a major earnings season in October.

Since we’ve had the S&P Rally complacency is setting up once again. We’re going to have a lower growth rate. You can get net long on the VIX which goes higher when there is fear in the markets. When we were shorting the market here, we look at both bull & bear instruments to trade against each other when we see the counter trends. It’s all about how do you short the S&P 500 at the right time and shorting the VIX through Put Options at the right time. We’ll be buying VIX calls up and “out of the money” based on our mathematical trading formulas.

We’ll be setting up a trade as we build out the position. We’re readjusting our “trade management” both long and short when the markets start increasing the volatility. We’re in an “options expiration week” the back half of September can get ugly for some bulls. This is a set up on the VIX that says if we don’t go lower we will looking for the VIX to go higher if support levels hold. What the banking sector will or won’t do, who cares, we’ll be gaging these markets and be sure if we are long we’ll protect ourselves to the downside.

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