posted on Dec, 10 2009 @ 12:10 PM
FTSE closed up 40.48 (0.78%) at 5244.37
DOW currently up 69.99 (0.68%) at 10407.04
US trade gap narrows unexpectedly as exports surge
The US trade deficit unexpectedly narrowed in October as exports rose to their highest level in almost a year, official figures have shown. The
deficit fell to $32.9bn (£20.2bn), 7.6% lower than September's downwardly revised $35.7bn figure.
Helped by the weaker value of the dollar, US exports increased by 2.6% to $136.8bn, led by civilian aircraft, cars and computer chips. Imports rose
0.4% to $169.8bn. Analysts had expected the deficit to widen. On average, analysts had predicted the deficit to expand to $36.8bn.
The value of US exports was the highest since November 2008, the figures from the Commerce Department showed. The trade deficit is now expected to
widen again in 2010 as the US economy continues to recover and consumers buy more imported goods...
... The US's closely-watched deficit with China widened by 2.5% in October to $22.7bn, the highest level in almost a year. This came despite US
exports to China hitting an all-time high, as Chinese-made goods coming in the other direction also continued to rise...
Something (mostly) positive for once: maybe this is a real glimmer of light! (Pity it's surrounded by a black hole.)
Normally at this stage in the economic cycle I'd say there would be a strong case for the US accepting a weaker dollar in order to go for an
export-led recovery. The problem is, so many manufacturers are either on their knees or bust, and the 'recovery' is so fragile that the investment
needed to rekindle an expansion in production is just not going to be forthcoming on the scale needed - certainly not in the near future.
In the short-to-medium term it would appear there are only two real choices for many of the large economies:
1) stop inflating the economy by printing money, thereby taking the consequences of what the banks have done on the chin and accepting a lower
standard of living until the economies can be properly restructured, or
2) keep pretending 'quantitive easing' / massive increases in foreign debt can make the financial crisis magically disappear so as to keep the
charade going as long as possible
You are left wondering whether any of the major western economies is governed by politicians with the mettle to take the medium-to-long term interests
of its nation to heart.
(Pulling the wool over peoples' eyes is certainly the easier option.)
[edit on 10/12/09 by pause4thought]