The 192 page 2011 Federal Budget was released on February 1, 2010.  In addition to the discretionary budget, the Obama Administration released details on how they planned to save more than $15 billion in discretionary spending by increasing efficiency through tactics like powering down computers ($700,000), using video conferencing ($3 million), and cutting C-17 aircraft production ($2.5 billion).  Like last year’s 2010 federal budget, the Online Forex Trading team has reviewed the details and explained it in a clean simple format. Here, you can find the 2011 Federal Budget explained in plain English.

On Thursday, The Federal Reserve offered a generally favorable assessment of the nation’s economy as the Federal Open Market Committee (FOMC) supported holding the central bank’s interest rates steady in a 9-1 vote.  Kansas City Federal Reserve Bank President Thomas Hoeing, who is opposed to the Fed’s sustained exceptionally low interest rate policy, registered the lone vote of dissent.

The FOMC statement lacked assurances about the strength of the recovery, instead offering carefully controlled suggestions of improvement. The pace of the recovery was described as “moderate for a time” and the overall recovery was depicted as “likely to remain weak.”

The Federal Reserve relies upon political independence to perform its duties as banker for the U.S. government.  Accordingly, there is often tension between Congress and The Fed.  In tough economic times, the tension boils over and a fair amount of finger pointing takes on political tones.

Ben Bernanke, the Federal Reserve Chairman, is the most recent recipient of that political finger pointing.  The Chairman’s appointment expires on January 31st and unless the political logjam clears, Bernanke will be out of a job come Monday morning.

As the FDIC continues shuttering U.S. banks, ominous signals are coming from Central Banks around the world and from Moody’s Investor Services.  The timely release of this information seems to support the legislative reform proposed by Representative Barney Frank on Tuesday. 

On Monday, Moody’s released a report that loan charge-offs suffered by U.S. banks are greater than those endured during the early years of the Great Depression.  During 2009, uncollectable loans have topped $116 billion or 2.9% of all outstanding loans.  As unemployment numbers continue to mount, loans failures will continue to rise.  Today, the Labor Department announced that another 520,000 Americans filed for new unemployment benefits last week.

Straight-talking, fast shooting and true to her word, FDIC gunslinger Sheila Bair pulled the trigger on seven more banks over the weekend.  The closings raised her agency’s annual total to 106 banks shuttered in 2009.  In August, the understaffed and under-funded FDIC identified 416 banks with total assets of $299.8 billion that were on the agency’s troubled bank list.  There is little doubt that bank closings will remain aggressive through 2011 and quite possibly well beyond.

Equity markets are rising.  Crude oil is on a tear.  And the euro has everyone worried.  From European central bankers to the regional exporter, even to the U.S. traveler looking at an even more expensive European getaway, people are paying attention when it comes to the Euro.  And why not?  The currency has skyrocketed higher against the US dollar in recent months, making an impressive 20 percent gain since hitting the 1.2500 support back in February.  The scary thing is, the gains may be more to come as the current momentum seems to be bent on some key factors.

Setting a triumphant tone against both the U.S. dollar and the Euro, the British pound gained significantly in the overnight over speculation of – yep, you guessed it, interest rates.  Although there is plenty of evidence of short covering from the previous sell off in recent days, the tone of momentum reeked of carry trade bets made on recent comments made by Bank of England Governor Mervyn King and a rather dovish minutes report.

We had the pleasure of interviewing National Futures Association Director of Communications and Education, Larry Dyekman about the future of the forex market.  He has helped to clear any lingering questions about recent NFA regulatory changes as well as discussed the NFA’s role in retail foreign exchange.

Equity investors expected Goldman Sachs to perform well.  The venerable investment bank did not disappoint.  Meanwhile, Citigroup’s loss was less than expected, but failed to fuel a further DOW Jones rally as equities slipped under the esteemed 10,000 mark.

On Wednesday  “JPMorgan set a high bar; a bar that is tough to beat for other banks,” said Tim Ghriskey of Solaris Asset Management.  Investors agreed that the 10,000 threshold might be difficult to sustain.  Goldman’s stellar earnings are tempered by public opinion polls that question the company’s bonus policies. 

Soft-spoken Kansas native and tough-minded Chairman of the FDIC, Sheila Bair, is gaining a reputation on Capitol Hill.  Unlike her fellow Treasury and Federal Reserve regulators, her strongly asserted positions do not reflect any political agenda.  This causes some concern with her co-workers and on Capitol Hill, but raises admiration from the once dubious banking industry.

For the time being, Bair has spurred government assistance in her attempts to keep her ailing banks and cash strapped FDIC afloat.  Her innovative request to the nation’s bankers that they prepay three years of FDIC fees will add $39 billion to the agency’s dwindling coiffures.  Bair has the authority and has reserved her right to tap a $100 billion credit line at Treasury but has chosen to keep that option as an action of last resort.