The big economic news over the weekend is the surprise announcement by former Clinton Administration Treasury Secretary and Obama economic adviser Lawrence Summers that he no longer wished to be considered to replace Ben Bernanke as Federal Reserve chairman. Opposition to his appointment by Senate Democrats over his views on bank deregulation had grown to the point where his confirmation was uncertain.
As Secretary of the Treasury, Summers was a champion for bank deregulation, and implemented policy that allowed credit default swaps to be barely regulated at all; a major factor in the 2008 global financial collapse and subsequent taxpayer-funded bailout of mega-banks. Others who did not want to see an end to easy money policies also lobbied against Summers' nomination, with the expectation that Fed vice chairman Janet Yellen will get the job. Yellen is a well-known "dove" in monetary policy, with views very close to Bernanke's.
Gold and silver fell overnight before picking up in U.S. trading. Gold, silver, and platinum are all trading slightly above Friday's New York levels. Palladium is outshining the other precious metals today, on news that the Chinese government is implementing new air pollution control measures. The government was stung by pictures of their major cities enveloped in brown smog so think that visibility was near zero some days. Palladium is used in catalytic converters for gasoline-powered automobiles, which represent the majority of cars in China.
Wall St. was up on news of Summers withdrawing his name for consideration to head the Fed, as was European shares. Euro stocks hit a 5-year high. The dollar is solidly lower, also as a result of the common consensus of more easy money times ahead. Oil is lower on the seeming resolution of Syria's chemical weapons crisis.
In Asia, the Nikkei was closed for holiday Monday, but the Hang Seng rose 1.5% to a 17-week high. Shanghai stocks were down slightly, by 0.22%.
Of course, everyone is waiting for the economic "Star Chamber" that is the Federal Reserve Open Market Committee meeting to start tomorrow. The feeling in the markets right now is that, even if the Fed does taper this month, it will only be the first step in a long, drawn-out process if Yellen gets the top job.