Ever Growing Little Brother Country to the Rescue Early This AM – Update Big Sister Gets Into the Act Too

Central Bank of China

This morning Bloomberg scooped most media outlets with the news of the Central Bank of China discount reserve requirement loosening/lowering.

Along with many others, we have been watching closely our ever-growing little Brother country, as they have had their foot on the economic brakes in an attempt to slow growth, especially frothy property values (sound familiar.)

This morning at about 4 am EST, the Central Bank of China, just after their markets closed locally, announced they had reduced/loosened the bank reserve requirements by .50% to 20%, still about double the US requirements, but that is another story.

While not necessarily a foot on the gas, our ever-growing, and friendly little brother country, has certainly confirmed their foot is off the brake.

In a very nerdie way, as my wife would tell me, this is one item I would have taken as a present for the holidays. Maybe there are more to come!

UPDATE!

Wow, before I could even get this latest post off to you, saved for your 9 am hour, my next nerdie holiday present was received.

In a joint coordinated effort from the Big Sister countries (US Fed, Canada, Bank of England, ECB, and Swiss), are acting to also make liquidity easier, by lowering Swap rates.  With news moving so quickly and my day mostly on the road today, I will save greater details until we have had time to review the announcements. However, Timothy Geithner’s comments of “No Way” will the Euro fail in a recent public appearance seem to be more understood now.

I believe it is safe to say, “Big Sister” and “Little Brother” are getting serious about the global crisis. The joint effort is more important than the action, in our opinion, at this time!

Have a Great Day!

JK

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