BEIJING (Reuters) - After blasting to recovery from the global financial crisis, China will enter next year wrestling with unwelcome expectations for it to shoulder a bigger role in insulating the world economy against more turmoil. China is set to overtake Japan as the world's second-biggest economy in 2010, and calls are likely to grow for it to cash in more of its accumulated wealth and influence to address trade imbalances, currency friction and diplomatic disputes. Yet while some see China as a super-power confidently limbering up for a sprint to the lead, its leaders see it as facing domestic and external risks that demand cautious plodding. In the traditional Chinese calendar, next year is the year of the tiger. But expect Beijing to keep behaving in economic diplomacy like this year's talismanic animal, the ox: steady, sometimes frustratingly so for some, and resistant to prodding.
BEIJING (Reuters) - After blasting to recovery from the global financial crisis, China will enter next year wrestling with unwelcome expectations for it to shoulder a bigger role in insulating the world economy against more turmoil.
China is set to overtake Japan as the world's second-biggest economy in 2010, and calls are likely to grow for it to cash in more of its accumulated wealth and influence to address trade imbalances, currency friction and diplomatic disputes.
Yet while some see China as a super-power confidently limbering up for a sprint to the lead, its leaders see it as facing domestic and external risks that demand cautious plodding.
In the traditional Chinese calendar, next year is the year of the tiger. But expect Beijing to keep behaving in economic diplomacy like this year's talismanic animal, the ox: steady, sometimes frustratingly so for some, and resistant to prodding.
Dec. 19 (Bloomberg) -- New York Stock Exchange trading surged to a record 3.15 billion shares as derivatives expiration and changes to the Standard & Poor's 500 Index lifted volume to more than double this year's average. Yesterday was the last day of trading for December futures and options on U.S. indexes and stocks. The expiration, a quarterly event known as "quadruple witching," boosts volume because investors and dealers must buy and sell stocks and derivatives to move positions into future months and make corresponding trades to hedge, or cancel out, their risk of loss. Visa Inc. was among five companies that joined the S&P 500 yesterday, forcing funds that track the index to buy shares. U.S. trading has slowed as the S&P 500 rebounded from a 12- year low in March, with average monthly volume falling 36 percent. Fewer than 7.87 billion shares changed hands each day on U.S. exchanges during November, the lowest month average since August 2008, Bloomberg data show. Analysts including Mary Ann Bartels at Bank of America Corp. say the slowdown in volume was a bearish sign following the S&P 500's 63 percent surge.
Dec. 19 (Bloomberg) -- New York Stock Exchange trading surged to a record 3.15 billion shares as derivatives expiration and changes to the Standard & Poor's 500 Index lifted volume to more than double this year's average.
Yesterday was the last day of trading for December futures and options on U.S. indexes and stocks. The expiration, a quarterly event known as "quadruple witching," boosts volume because investors and dealers must buy and sell stocks and derivatives to move positions into future months and make corresponding trades to hedge, or cancel out, their risk of loss. Visa Inc. was among five companies that joined the S&P 500 yesterday, forcing funds that track the index to buy shares.
U.S. trading has slowed as the S&P 500 rebounded from a 12- year low in March, with average monthly volume falling 36 percent. Fewer than 7.87 billion shares changed hands each day on U.S. exchanges during November, the lowest month average since August 2008, Bloomberg data show. Analysts including Mary Ann Bartels at Bank of America Corp. say the slowdown in volume was a bearish sign following the S&P 500's 63 percent surge.
i was worried for a while that wall st would have a christmas out in the cold.
must be nice to know the full faith and power of the state is behind you when the next crash comes, and that unborn generations will pick up the tab on your losses, and let you keep the wins... hell, nice to know you own the only people who could change the situation.
happy revelling! it'll be a good year for moet and chandon. ~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
The UK is providing a lesson the US badly needs to learn, that push comes to shove, regulators hold the whip, and have to be willing to use it when necessary. Given how intransigent the financial services industry has become, the time for discipline has come. .... In response to a 50% bonus supertax, bankers in the UK are threatening to decamp, as if that will move the authorities to relent. They are not blinking. And with good reason. The idea that everyone ensconced in a large financial firm can decamp to a hedge fund or a private equity fund, or start their own boutique is wildly exaggerated. Even though many traders like to cast themselves as solo producers, they have tremendous advantages by operating in a large firm, namely, access to concentrated capital and information flows, and in many cases leverage that either cannot be obtained at all in a smaller firm format or would be far more costly. Similarly, a lot of supposed "talent" in other businesses depends on the firm franchise to a greater degree than they fancy. .... The Guardian tells us that Bank of England officials are telling unhappy bankers that they are free to take a hike, and England may well be better off without them. By contrast, every time US banks have gotten themselves all worked up (the list seems endless, plain vanilla products, mortgage cramdowns, usury ceilings, exiting the TARP so they can pay high bonuses) the US officialdom has caved. And this behavior simply encourages the banks to escalate their demands. A senior bank of England official said that bankers moving overseas to avoid the bonus supertax could be price worth paying to achieve lasting reform of the sector. Andy Haldane, the bank's head of financial stability, also said that banks had become too big and was sharply critical of a culture where bankers could take huge risks in the knowledge that the taxpayer would bail them out. In an interview with the BBC World Service, Haldane said: "Some of the downsides of carrying around a big financial system are now evident to all. "If some of that were to migrate overseas that would be unfortunate but given the costs of carrying that financial system around, it may be a price worth paying."
....
In response to a 50% bonus supertax, bankers in the UK are threatening to decamp, as if that will move the authorities to relent. They are not blinking. And with good reason. The idea that everyone ensconced in a large financial firm can decamp to a hedge fund or a private equity fund, or start their own boutique is wildly exaggerated. Even though many traders like to cast themselves as solo producers, they have tremendous advantages by operating in a large firm, namely, access to concentrated capital and information flows, and in many cases leverage that either cannot be obtained at all in a smaller firm format or would be far more costly. Similarly, a lot of supposed "talent" in other businesses depends on the firm franchise to a greater degree than they fancy.
The Guardian tells us that Bank of England officials are telling unhappy bankers that they are free to take a hike, and England may well be better off without them. By contrast, every time US banks have gotten themselves all worked up (the list seems endless, plain vanilla products, mortgage cramdowns, usury ceilings, exiting the TARP so they can pay high bonuses) the US officialdom has caved. And this behavior simply encourages the banks to escalate their demands.
A senior bank of England official said that bankers moving overseas to avoid the bonus supertax could be price worth paying to achieve lasting reform of the sector. Andy Haldane, the bank's head of financial stability, also said that banks had become too big and was sharply critical of a culture where bankers could take huge risks in the knowledge that the taxpayer would bail them out. In an interview with the BBC World Service, Haldane said: "Some of the downsides of carrying around a big financial system are now evident to all. "If some of that were to migrate overseas that would be unfortunate but given the costs of carrying that financial system around, it may be a price worth paying."
Andy Haldane, the bank's head of financial stability, also said that banks had become too big and was sharply critical of a culture where bankers could take huge risks in the knowledge that the taxpayer would bail them out.
In an interview with the BBC World Service, Haldane said: "Some of the downsides of carrying around a big financial system are now evident to all.
"If some of that were to migrate overseas that would be unfortunate but given the costs of carrying that financial system around, it may be a price worth paying."
The party line is that Ben Bernanke's confirmation for a second term as Fed chief is a shoe-in, although he might face an unseemly amount of roughing up, like having to step down briefly if the senators who plan to put a hold on his vote succeed in delaying it beyond the end of January. And then there is also that wee inconvenience that Congress has woken up to the fact that the electorate is seriously unhappy about bailouts without accountability and reform, and the Fed allowed the Treasury to circumvent normal budget approval processed (as Willem Buiter has put it, the Fed acted as a "quasi-fiscal agent" of the Treasury). So a little, perhaps a lot, of curtailment of the Fed's expanded role is in the offing. But the sands are shifting against Bernanke. A mere month ago, the idea that he would face a filibuster was inconceivable. Similarly, no one would have thought he would have 30% of the Senate Banking Committee vote against his confirmation. But what is particularly telling is that sentiment is continuing to erode. From Politico: Six Republicans and one Democrat on the Senate Banking Committee voted Thursday against Ben Bernanke's nomination to a second four-year term as chairman of the Federal Reserve -- signaling to some Fed watchers that President Barack Obama's pick could be in more trouble than previously thought. "It's not the foregone conclusion it was a couple of weeks ago," said Brian Gardner, a bank analyst with Keefe, Bruyette & Woods. Two aspects of the two-hour debate that preceded the committee vote struck Gardner as worrisome for Bernanke: the unenthusiastic -- even apologetic -- tone from some of the senators who voted yes and a dispute over the Fed's refusal to release documents about the bailout of insurance giant American International Group to senators on the committee. Sens. Jim Bunning (R-Ky.) and David Vitter (R-La.), in particular, complained about the Fed's lack of transparency. In the case of AIG, some banking committee staffers were allowed access to documents, Bunning said, but individual senators and the public were not allowed to see the information because the Fed said it was "protected." That spat could have legs, Gardner said, and if it resonates with a public already fuming at the Fed, it could sway the votes of yes-leaning senators.
But the sands are shifting against Bernanke. A mere month ago, the idea that he would face a filibuster was inconceivable. Similarly, no one would have thought he would have 30% of the Senate Banking Committee vote against his confirmation.
But what is particularly telling is that sentiment is continuing to erode. From Politico:
Six Republicans and one Democrat on the Senate Banking Committee voted Thursday against Ben Bernanke's nomination to a second four-year term as chairman of the Federal Reserve -- signaling to some Fed watchers that President Barack Obama's pick could be in more trouble than previously thought. "It's not the foregone conclusion it was a couple of weeks ago," said Brian Gardner, a bank analyst with Keefe, Bruyette & Woods. Two aspects of the two-hour debate that preceded the committee vote struck Gardner as worrisome for Bernanke: the unenthusiastic -- even apologetic -- tone from some of the senators who voted yes and a dispute over the Fed's refusal to release documents about the bailout of insurance giant American International Group to senators on the committee. Sens. Jim Bunning (R-Ky.) and David Vitter (R-La.), in particular, complained about the Fed's lack of transparency. In the case of AIG, some banking committee staffers were allowed access to documents, Bunning said, but individual senators and the public were not allowed to see the information because the Fed said it was "protected." That spat could have legs, Gardner said, and if it resonates with a public already fuming at the Fed, it could sway the votes of yes-leaning senators.
"It's not the foregone conclusion it was a couple of weeks ago," said Brian Gardner, a bank analyst with Keefe, Bruyette & Woods.
Two aspects of the two-hour debate that preceded the committee vote struck Gardner as worrisome for Bernanke: the unenthusiastic -- even apologetic -- tone from some of the senators who voted yes and a dispute over the Fed's refusal to release documents about the bailout of insurance giant American International Group to senators on the committee.
Sens. Jim Bunning (R-Ky.) and David Vitter (R-La.), in particular, complained about the Fed's lack of transparency. In the case of AIG, some banking committee staffers were allowed access to documents, Bunning said, but individual senators and the public were not allowed to see the information because the Fed said it was "protected."
That spat could have legs, Gardner said, and if it resonates with a public already fuming at the Fed, it could sway the votes of yes-leaning senators.
