January 6th, 2011 16:25:18 GMT.

US Sen.Schumer: House GOP Fiscal Plans ‘Dead’ in Senate


–Senate Democrats Scorch House GOP Budget Rules as ‘Gimmickry’
–House Speaker Boehner: Debt Hike Must be Linked by Spending ‘Action’

By John Shaw

WASHINGTON (MNI) – Sen. Chuck Schumer and Senate Majority Whip Dick
Durbin Thursday blasted House Republicans for changing budget
calculating rules that could exempt up to $1 trillion in tax cut costs
from budget calculations.

Schumer and Durbin also scorched the GOP plan as gimmickry that
could drive an already huge deficit even higher.

Schumer made it clear Senate Democrats will not agree to the kind
of fiscal policies that are likely to come from the House.

“Republican fiscal policies are dead on arrival,” he said at a

Schumer ridiculed Republicans for passing new rules Wednesday that
exclude costly items for their budget calculations, and said financial
markets will see through this approach — and punish it.

The bond market, he said, “looks at the deficit number period,”
Schumer said.

Meanwhile, House Speaker John Boehner said in a statement that
congressional votes to increase the debt ceiling must be linked to
“meaningful action” on controlling spending.

The House rules package, drafted by the new Republican majority,
overhauls the pay-as-you-go budget enforcement system in a fundamental
way. The previous system required offsets for new entitlement programs
and tax cuts. The new GOP process does not require offsets for tax cuts.

The new rules package also gives the House Budget Committee power
to set the discretionary spending level for the rest of the 2011 fiscal

Any spending and tax measures that the House approves must also be
approved by the Senate and accepted by President Obama. Most lawmakers
expect a vigorous battle over spending will unfold in the coming months.

On a related matter, Durbin said he is worried that House
Republicans will try to “starve” funding from the SEC and CFTC
enforcement programs as a backdoor way to undermine the Dodd-Frank
regulatory reform law.

** Market News International Washington Bureau: (202) 371-2121 **

[TOPICS: M$U$$$,MFU$$$,MCU$$$]


January 6th, 2011 16:10:53 GMT.

DXY doing major technical damage


The dollar index has broken its seven month downtrend as well as resistance drawn off a series of recent tops. The next hurdle is the area of resistance around 81.18.

1-6 dxy


January 6th, 2011 16:04:43 GMT.

US to sell boatloads of debt next week


The US will sell $66 bln in coupon debt and a total of $145 bln including short-term Treasury bills next week.

$32 billion will be three-year notes, $21 bln will be 10-year notes and $13 bln will be 30-year bonds.

As a general rule, Wall Street tends to push up yields ahead of auctions in order to buy the government paper at low prices/high yields…


January 6th, 2011 16:01:11 GMT.

House Speaker: US cannot default on debt but cannot borrow recklessly”


Newly elected House speaker John Boehner says that the US cannot default on its debt (by failing to raise its borrowing limit) but it also cannot continue to borrow recklessly.

Expect House Republicans to pressure the administration to agree to minor spending cuts in exchange for a hike in the debt limit…


January 6th, 2011 15:53:18 GMT.

Gone Baby, Gone


Stops below below the 1.3050 level are falling like dominoes as EUR/USD extends losses to the 1.3032 level. Look for sellers now in the 1.3050/60 area on bounces and again toward 1.3080/90.

1.3000 barriers are the next focus.

The falling EUR is helping drive European sovereign spreads wider (and vice versa), a vicious spiral…


January 6th, 2011 15:39:24 GMT.

Sovereign debt spreads widening again


Spanish spreads over 10-yr bunds are bow at 251 bp versus 246 bp when last we checked an hour or so ago. (Isn’t China a big buyer of that stuff?) .

Portugal is steepening even more, out to 411 bp, 23 bp wider on the day.

EUR/USD is testing support in the 1.3055 as a result, eying stops and barriers at 1.3050.


January 6th, 2011 15:30:26 GMT.

New Hedge Fund Regulation in Bermuda


Bermuda’s new Investment Funds Amendment Act 2010 was signed on December 22, 2010 amended the Investment Funds Act 2006.    The amendment introduced several new provisions for the regulation of hedge funds in the Caribbean jurisdiction.     The aim of the Amendment Act is to strike a balance between securing appropriate protection for investors in Bermuda funds, while not imposing an undue regulatory burden on the hedge fund industry.  

The Key Changes include: 

Definition of Service Provider:   The definition of “service provider” has been extended to include auditors appointed to a fund.    The previous definition applied only to a fund’s custodian, administrator, investment manager or registrar (and any person to whom a service provider delegated part or all of its function).    As a result of the amendment, auditors are now required to comply with the “fit and proper” tests set out elsewhere in the Act.

Service Provider Disclosure for Exempted Funds:   The operator of an exempted fund and its service providers are required to be “fit and proper persons to act as such”.   Funds are now required to have a recognized fund administrator, an auditor and a Bermuda resident officer or trustee or resident representative who has access to the books and records of the investment fund. Exempted funds are also required to appoint an investment manager, registrar, custodian and/or prime broker. Continue Reading →


January 6th, 2011 15:17:10 GMT.

EUR/USD slide reaches 1.3062


Stops below 1.3070 have been tripped off and we’ve been as far as 1.3062. Technical support lies at 1.3055 while barriers are rumored at 1.3050. Expect heavy stop-loss sales below 1.3050.

Small sellers are eyed at 1.3080/85 near-term.

UPDATE: Fresh lows at 1.3060 hit at 15:17 GMT.

1-6 eur

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