Today's News

PNC is buying National City. At least another FDIC intervention was averted.

UK's economy posted a third quarter 0.5% GDP decrease. US releases its figures next Thursday October 30. Economist consensus is -0.3%, but I think it will be much worse, between -0.5% and -1%.



Europe still hasn't figured out what it's doing about this mess. The central bank of Sweden cut its interest rate to 3.75%, a drop of a half percentage point. The Riksbank demonstrated that it is focusing on boosting the economy rather than inflationary problems. The cut was the second policy easing of the month, and the bank expects to decrease the rate by another half point during the next six months. Meanwhile, Denmark's central bank raised its benchmark lending rate from 5% to 5.5% to boost the krone. It seems like they are damned if they do (raise rates and the risk of recession skyrockets) and damned if they don't (and their currencies get clobberred). No wonder the US$ and the yen are looking like safe havens.


The yen rose to 94.77 per US dollar, the highest in 13 years. Of course, that means their trade surplus is getting hammered. I mean, really REALLY hammered. It was down 94% for September. That is not good for their export-driven economy. It seems they are also in a damned if you do, damned if you don't scenario.

As of last night's close Japan's Nikkei 225 index stands at 7649, a level not seen since 1981. So the conventional wisdom expedient of claiming that "stocks always outperform bonds over X years" is false, at least for X < 28.