Fed on Track to Spend the Whole $600 Billion

General Motors IPO Oversubscribed—By a Six Fold (CNBC via Reuters) There is once again something to feel good about in Detroit: Investors submitted orders for $60 billion of GM common stock—although General Motors only filed with regulators to sell about $10 billion in equity. The article goes on to say: " The robust demand suggests that GM's IPO will likely price around the top end of the $26 to $29 per share range and that the full overallotment option—additional shares underwriters can sell to help stabilize the stock after it begins trading—will be exercised, the sources said." Is it too late to hope that the old adage "What's good for General Motors is good for the country" still holds true?


Fed on Track to Spend the Whole $600 Billion (Reuters) The U.S. Federal Reserve appears to be setting a course to spend all of this round's stimulus. In fact, weakness in the economy may be pushing the Fed toward spending more rather than less. There is now even speculation about QE3. But a chorus of opposition in the U.S. and abroad—as well as the far more relevant "hawkish tilt" among the current members of the Federal Open Markets Committee—makes another round of easing far from a certainty.

Trade Imbalances Larger than They Seemed, due to Decline in Aggregate Trade (New York Times) What appeared to be a lessening of the trade imbalance was, in fact, only a weakening of trade. Not sure which part of that equation you ought to feel worse about? I don't know either.

This Week meets a Weak End (Business Week) "Stocks slid, extending the biggest weekly slump in three months for U.S. benchmark indexes, and commodities dropped amid speculation China will lift interest rates. Irish and Portuguese bonds rose as Group of 20 officials said they’re working on ways to resolve the debt crisis."

China Rate Rumors Drive Down the Price of Oil (Bloomberg) Speculation that the Chinese Central bank may hike interest rates, due to fears of inflation and an overheating economy, are being cited as the cause of a 3.3 percent decline in the price of oil futures. "'Anything that provides evidence of a slowing Chinese economy is likely to be reflected in oil-demand estimates,'" said Adam Sieminski, chief energy economist at Deutsche Bank AG."

Or Is the Price of Oil Going up? (Business Week) Some analysts believe that a weakening dollar—in concert with QE2—may cause the price of oil to rise. Some even project a price of $100 a barrel by next year. As usual: Much depends on OPEC's price targets, and willingness to ramp up supply in the event of rising market prices.