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Post by sometimeman on Sept 19, 2007 14:08:12 GMT -4
China's Ultimatum: Let Us Invade Taiwan Or We'll Dump The Dollar
Financial analyst says China could use huge dollar reserves as blackmail for beefing superpower status
Paul Joseph Watson
Prison Planet
Wednesday, September 19, 2007
The Fed's decision to cut interest rates again is likely to send the dollar tumbling to historic new lows, leading one financial analyst to predict that China's fury at the devaluation of its huge dollar reserves will provoke them into giving the U.S. government a terse ultimatum - let us invade Taiwan unopposed or we'll dump the dollar and bring about economic chaos.
China holds $1.3 trillion of dollar denominated assets and leading Communist Party officials have repeatedly threatened to use what the London Telegraph referred to as "the nuclear option," the liquidation of US treasuries if Washington imposes trade sanctions to force a yuan revaluation, the result of which would be an almost certain and immediate collapse of the dollar.
But according to Greg Zanetti of the Financial Network, an advisor for the McDonalds franchise, China may also be using economic threats as a means of greasing the skids for the unopposed invasion of Taiwan.
"So what is the end game?" writes Zanetti. "Well, there is now conjecture that China may willingly take the huge financial hit from the falling dollar… provided we don’t interfere with their claims to Taiwan."
"Their argument would be they acquired Hong Kong peacefully and that the envelopment of Taiwan would just be the finale of a 70 year civil war."
"Their gamble would be that Americans would not fall on their swords for Taiwan. Of course, if we agree to such a deal we have (for all intents and purposes) ceded regional hegemony to China. They would be considered the Asian power and we would begin our retreat as a global power."
Under the 1979 Taiwan Relations Act, the United States is mandated to provide support to Taiwan in the event of any hostile trade embargoes or military invasion on behalf of China.
The fact that the U.S. government, with the help of Alan Greenspan, have done their utmost to bring about a slow-paced economic meltdown by continually bad-mouthing the dollar suggests they would want to avoid the rapid decline that would be triggered if the Chinese were to dump their assets.
Though public sentiment in China and the majority of analysts think a Chinese invasion of Taiwan is unlikely, any warming of relations between Taiwan and the U.S. is usually subject to vocal rebuke.
Earlier this year, Chinese government leaders threatened to plan new war games and heighten military readiness in anticipation of any attempt by the U.S. to defend Taiwan should a Chinese invasion occur, or simply if Taiwan declares its independence, after President Bush shook hands with Taiwan's representative to the United States, Joseph Wu.
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Post by sometimeman on Sept 21, 2007 21:13:55 GMT -4
Fears of dollar collapse as Saudis take fright
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 10:14pm BST 21/09/2007
Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.
Fears of dollar collapse as Saudis take fright
Ben Bernanke has placed the dollar in a dangerous situation, say analysts
"This is a very dangerous situation for the dollar," said Hans Redeker, currency chief at BNP Paribas.
"Saudi Arabia has $800bn (£400bn) in their future generation fund, and the entire region has $3,500bn under management. They face an inflationary threat and do not want to import an interest rate policy set for the recessionary conditions in the United States," he said.
The Saudi central bank said today that it would take "appropriate measures" to halt huge capital inflows into the country, but analysts say this policy is unsustainable and will inevitably lead to the collapse of the dollar peg.
As a close ally of the US, Riyadh has so far tried to stick to the peg, but the link is now destabilising its own economy.
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The Fed's dramatic half point cut to 4.75pc yesterday has already caused a plunge in the world dollar index to a fifteen year low, touching with weakest level ever against the mighty euro at just under $1.40.
There is now a growing danger that global investors will start to shun the US bond markets. The latest US government data on foreign holdings released this week show a collapse in purchases of US bonds from $97bn to just $19bn in July, with outright net sales of US Treasuries.
The danger is that this could now accelerate as the yield gap between the United States and the rest of the world narrows rapidly, leaving America starved of foreign capital flows needed to cover its current account deficit - expected to reach $850bn this year, or 6.5pc of GDP.
Mr Redeker said foreign investors have been gradually pulling out of the long-term US debt markets, leaving the dollar dependent on short-term funding. Foreigners have funded 25pc to 30pc of America's credit and short-term paper markets over the last two years.
"They were willing to provide the money when rates were paying nicely, but why bear the risk in these dramatically changed circumstances? We think that a fall in dollar to $1.50 against the euro is not out of the question at all by the first quarter of 2008," he said.
"This is nothing like the situation in 1998 when the crisis was in Asia, but the US was booming. This time the US itself is the problem," he said.
Mr Redeker said the biggest danger for the dollar is that falling US rates will at some point trigger a reversal yen "carry trade", causing massive flows from the US back to Japan.
Jim Rogers, the commodity king and former partner of George Soros, said the Federal Reserve was playing with fire by cutting rates so aggressively at a time when the dollar was already under pressure.
The risk is that flight from US bonds could push up the long-term yields that form the base price of credit for most mortgages, the driving the property market into even deeper crisis.
"If Ben Bernanke starts running those printing presses even faster than he's already doing, we are going to have a serious recession. The dollar's going to collapse, the bond market's going to collapse. There's going to be a lot of problems," he said.
The Federal Reserve, however, clearly calculates the risk of a sudden downturn is now so great that the it outweighs dangers of a dollar slide.
Former Fed chief Alan Greenspan said this week that house prices may fall by "double digits" as the subprime crisis bites harder, prompting households to cut back sharply on spending.
For Saudi Arabia, the dollar peg has clearly become a liability. Inflation has risen to 4pc and the M3 broad money supply is surging at 22pc.
The pressures are even worse in other parts of the Gulf. The United Arab Emirates now faces inflation of 9.3pc, a 20-year high. In Qatar it has reached 13pc.
Kuwait became the first of the oil sheikhdoms to break its dollar peg in May, a move that has begun to rein in rampant money supply growth.
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Post by sometimeman on Sept 22, 2007 23:58:28 GMT -4
The Simple Truth 6For the past few days, the Fed has been trying to avoid a financial tail spin in the stock markets as the real estate market continues to crash. But, what really is going on? It's not just a failure in the real estate market. What we are witnessing is a systemic failure in our entire financial system. WHY? Quite simply - There's Not Enough Money on Earth to Satisfy all Outstanding Debts
And there never will be. Because ours is a debt-based financial system PLUS interest. And interest is NEVER issued. It's only charged. As a result, the Fed must continually pump "new money" into the economy just to keep it solvent. Where does all that money go? Into real estate. Into stocks. Into bonds. Into all sorts of commodities. Into ANY legal instrument concocted - no matter how exotic - that promises to "yield" a profit. The trouble is - the more money they pump into the system, the higher the prices climb. The higher the prices climb, the more money needs to be pumped into the system to keep it running - and to keep its "value" afloat (long enough for the kingpins to bail out, taking the value with them). And so on and so forth until the whole system reveals itself for what it really is - a path to self-destruction. Americans will never rid themselves of this financial tyranny until they learn how to pinpoint the source of the malignancy - interest and speculation (aka, usury and gambling) - fueled by a private banking cartel. Those two practices have destroyed civilizations before us and they are destroying us now. God warned us all about them - but, who will listen. _________________________________________ RELATED: asking VAMPIRES to donate BLOOD www.wakeupfromyourslumber.com/node/2938 |
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Post by sometimeman on Oct 8, 2007 21:11:51 GMT -4
Congressman: Dollar Could Collapse To Absolute Zero
Presidential candidate Ron Paul warns of coming global economic depression
Paul Joseph Watson
Prison Planet
Monday, October 8, 2007
Presidential candidate Ron Paul has made a dire prediction that the dollar could collapse to absolute zero - precipitating hyper inflation, soaring oil prices and a global economic depression if current policies are continued.
"Once they realize the American people have awakened to the con game that's been going on - I think those people running the banking and monetary system aren't going to be too happy," Paul told the Alex Jones Show on Friday.
The Texas Congressman forecasts that if current policies are prolonged, the dollar could crash all the way to nothing and be forced to start over.
(Article continues below)
"If Bush is foolish enough to start bombing Iran, that might precipitate such a crisis as oil going to $200 dollars a barrel and really dampening the enthusiasm of the whole dollar," said Paul.
"If they continue what they're doing, it's gonna go to zero, we're gonna have runaway inflation, all paper currencies eventually self-destruct and are ruined, and we're in uncharted waters right now - this is the first time in the history of man you've had no solid currencies around the world and this has been going on for 35 years."
Paul agreed that elitists would seize upon a global depression by posing as the saviors and offering more control, police state and big government as the solution.
"This was the whole thing that started in the last depression," said Paul, "Scare people to death instead of blaming the Federal Reserve for the depression and the financial bubble of the 20's, they said 'well capitalism failed, it was that stupid gold standard', therefore we have to have welfare and of course everything they did prolonged the depression."
Paul said his warnings about the impending collapse of the U.S. economy, which stretch back years, were helping his campaign gain credibility due to the unfolding crises in the market and the credit crunch.
"When the people understand how the Fed screws up the economy and causes all the bubbles and all the changes that have to come from that, I'm getting a lot more calls," said Paul.
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The Congressman also discussed the continued success of his campaign and the establishment's attempts to stifle its importance.
The presidential candidate said the reason that the Democrats and Republicans are trying to speed up the primaries is because they don't like competition from third party and grass roots candidates and are trying to prevent them from gaining traction.
"The move right now is to try to close the primaries - do you think they're sincere when they say they want to have a big tent and invite new people in? They can invite a lot of new people in but they don't want constitutionalists evidently because they want to make it tough to vote in a Republican primary," said the Congressman.
"It confirms the fact that the control of this whole system has been one party so to speak, it's one group of people that control both parties and right now I think the people are getting disgusted with it and they're starting to wake up," he added.
The Congressman stated that the popularity of his campaign outstripped even his expectations and slammed the establishment networks for attempting to skew Paul as a fringe candidate.
"It doesn't discourage our supporters, it enrages them," said Paul, "They always claimed that there were just a few of us out there that cared and that they were bloggers manipulating the Internet - well you can't manipulate to the point where you get 35,000 new donors who average about $40 dollars a piece and raise $5 million dollars and outpace many of the other candidates."
Paul said the other candidates had initially tried to ignore his platform, before ridiculing it, to the point where they are now being forced to adopt constitutionalist rhetoric in order to compete with his burgeoning popularity.
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Post by shortcircuit on Oct 26, 2007 21:10:12 GMT -4
Goodbye dollar, hello inflation
Published on Friday, October 26, 2007.
Source: Finance Trends Matter
The dollar is no longer the world's reserve currency. This is the statement you heard twice in one day if you were checking out the news on Bloomberg over the past 24 hours.
First, we heard it from economist Clifford Bennett of Sonray Capital, who said the Euro was the world's new reserve currency and that this idea was now universally recognized.
Next we heard it from investor Jim Rogers, who has been bearish on the dollar and the state of the US economy/fiscal outlook for quite some time.
What's notable about Rogers' latest call on the dollar is that he's once again backed his convictions with his actions; yesterday, Rogers announced that he is shifting his personal assets out of the dollar and into the Chinese renminbi.
Here's an excerpt from, "Jim Rogers Shifts Assets Out of Dollars to Buy Yuan".
"Jim Rogers, chairman of Beeland Interests Inc., said he is shifting all his assets out of the dollar and buying Chinese yuan because the Federal Reserve has eroded the value of the U.S. currency.
``I'm in the process of -- I hope in the next few months -- getting all of my assets out of U.S. dollars,'' said Rogers, 65, who correctly predicted the commodities rally in 1999. ``I'm that pessimistic about what's happening in the U.S.''
Rogers, delivering a presentation late yesterday at an investors' meeting organized by ABN Amro Markets in Amsterdam, said he expects the Chinese currency to quadruple in the next decade and that he is holding on to commodities such as platinum, gold, silver and palladium."
If you'd like to listen to an excerpt from Rogers' presentation to investors in Amsterdam, it is reproduced here courtesy of Bloomberg.
What's the rationale behind these calls for the dollar's eventual demise?
As Marc Faber recently noted in a lengthy interview with Bloomberg (and in seperate interviews with CNBC), the recent widespread bearishness might represent a contrarian buy signal for the dollar in the short-term, but this does not exactly cancel out the US currency's long-term problems.
In summary, expect continued deterioration in the dollar's purchasing power and increases in inflation over the longer term. Inflation will not be confined to the US; it has appeared and will continue to appear in countries across the globe.
Every government will try their damnedest to paper over their monetary inflation with ridiculous explanations and reconfigured price indexes which purport to show "low inflation". Still, worldwide inflation is here and it is only a question of which fiat currency will depreciate at the fastest rate against relatively hard currencies and gold.
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Post by shortcircuit on Oct 29, 2007 21:47:17 GMT -4
IMF: USD Due For Disorganized Fall
Published on Monday, October 29, 2007.
Source: Political Affairs
Washington - (Prensa Latina) IMF (International Monetary Fund) director, Rodrigo Rato, forecast that the dollar is due for a disorganized and pronounced fall.
In declarations to the press, Rato said that the greenback may continue to fall rapidly, which, he added, would complicate the credit crisis in the United States.
Rato said there was a possibility of a worldwide recession in 2008 but this would not be his most important forecast.
"There is another scenario. A lesser economic growth in the United States, which would have an impact on Europe and Japan," maintained Rato who is soon to leave his post in the IMF.
He also indicated that there is danger of a growing inflation as a result of the high oil prices, but also the hike in food product prices.
World markets suffered strong turmoil during the past two months from the mortgage risk in the United States.
"All these dangers come at a time when the world economy now confronts risks, unbalances, protectionism and high oil prices," Rato concluded.
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Post by sometimeman on Oct 31, 2007 15:38:50 GMT -4
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Post by shortcircuit on Nov 4, 2007 11:07:50 GMT -4
Everybody hates the dollar
Published on Friday, November 02, 2007.
Source: Reuters - James Saft
NEW YORK - There is a lot of uncertainty in financial markets, but there is one bet that almost everyone seems to be making: sell the dollar.
The U.S. dollar fell again on Friday against a basket of six major currencies (.DXY: Quote, Profile, Research), hitting levels not seen in that index's 30-year plus history. It has fallen more than 7.0 percent since the summer's financial ruckus started.
It is an unusually strong consensus, which is often an indicator to go the other way, but, well, there is a lot not to like.
The U.S. economy is likely to slow, if not contract, hurt by a deflating housing bubble, an excess of debt and a financial system that is hitting the lending brakes hard.
And while the Federal Reserve seemed to signal that this week's cut in rates might be the last for a while, if anything U.S. interest rates may decline faster and farther than those of most other major currencies, undermining support for the greenback even more.
This may be especially true if you believe, as do a vocal minority of analysts, that the U.S. will slide into recession, forcing the Fed to cut rates aggressively.
Others fear the reverse, that rising prices of energy, and the new phenomenon of inflation in China driving up prices at Wal-Mart, will drive up U.S. inflation, tying the Fed's hands and causing an unattractive mix of low growth and inflation, or stagflation.
In short, a lot of people doing the same thing for a lot of different reasons.
"In all the years I've been trading I've never seen such a one-sided position against the dollar," said Dennis Gartman, publisher of the Gartman letter, speaking at a Euromoney foreign exchange conference in New York on Thursday.
"It is absolutely shocking how overtly bearish the world is."
He also reports that classic sign of a market mania, a variation of the shoeshine boy giving stock tips, saying that a doctor had told him on the golf course that he'd opened an account in order to short the dollar.
Friday's U.S. jobs figure, showing 166,000 jobs created in October, double the expected figure, was a good example of how the dollar just can't catch a breeze.
Rather than rising on the data, which would seem to point to a more robust economy and higher interest rates, the dollar rose only briefly before hitting another record low against the euro.
Analysts said this was because reassuring data about the U.S. economy gave investors courage to put on risky trades, but nonetheless we end up with good economic news about the dollar driving the dollar lower.
And indeed if we are in a world where the U.S. economy is not falling apart, there are still better bets for growth and higher interest rates to be had in many emerging and commodity producing countries.
PAIN INDEX AT LIFETIME HIGH
Merrill Lynch calculates what it calls the PAIN Index, which correlates fund performance with currency moves, thereby giving insight into how investors are positioned on various currencies.
What Merrill's index shows, according to Steven Englander, head of G10 FX strategy, is that there is a remarkably strong bet against the dollar, the biggest in the year and a half the bank has been doing the calculations.
"The market is shorter dollars than at any time, against just about everything but yen" he said.
"People have gotten very short dollars, very quickly."
Nouriel Roubini, an economist and chairman of RGE Monitor, said he sees the dollar as sharply lower on a trade weighted basis in a year's time, expecting a fall of at least ten percent, accompanied by a Fed Funds rate of 3 percent, "if not below," as against 4.5 percent now.
"This is the worst housing recession in U.S history," he said, speaking at the same event.
"Excess supply of homes is like we have never seen it before."
Gartman too agreed that the U.S. economy may be heading for the rocks, if not already upon them. He thinks that the oversupply of housing will push the country into contraction and force the Federal Reserve to cut dramatically, perhaps to 2.5 percent or 3.0 in a year.
And even though he thinks the medium term direction of the dollar will be down, he thinks the sheer weight of people all betting the same way opens up the possibility of a vicious short covering rally, as the herd all get caught trying to get out of positions at the same time if sentiment against the dollar changes, even slightly.
"The public is always taken out behind the shed and given a good solid thumping."
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Post by sometimeman on Nov 4, 2007 23:32:27 GMT -4
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Post by sometimeman on Nov 5, 2007 21:19:30 GMT -4
Sinking Currency,
Sinking Country
By Pat Buchanan
11-6-7
The euro, worth 83 cents in the early George W. Bush years, is at $1.45.
The British pound is back up over $2, the highest level since the Carter era. The Canadian dollar, which used to be worth 65 cents, is worth more than the U.S. dollar for the first time in half a century.
Oil is over $90 a barrel. Gold, down to $260 an ounce not so long ago, has hit $800.
Have gold, silver, oil, the euro, the pound and the Canadian dollar all suddenly soared in value in just a few years?
Nope. The dollar has plummeted in value, more so in Bush's term than during any comparable period of U.S. history. Indeed, Bush is presiding over a worldwide abandonment of the American dollar.
Is it all Bush's fault? Nope.
The dollar is plunging because America has been living beyond her means, borrowing $2 billion a day from foreign nations to maintain her standard of living and to sustain the American Imperium.
The prime suspect in the death of the dollar is the massive trade deficits America has run up, some $5 trillion in total since the passage of NAFTA and the creation of the World Trade Organization in 1994.
In 2006, that U.S. trade deficit hit $764 billion. The current account deficit, which includes the trade deficit, plus the net outflow of interest, dividends, capital gains and foreign aid, hit $857 billion, 6.5 percent of GDP. As some of us have been writing for years, such deficits are unsustainable and must lead to a decline of the dollar.
A sinking dollar means a poorer nation, and a sinking currency has historically been the mark of a sinking country. And a superpower with a sinking currency is a contradiction in terms.
What does this mean for America and Americans?
As nations realize that the dollars they are being paid for their products cannot buy in the world markets what they once did, they will demand more dollars for those goods. This will mean rising prices for the imports on which America has become more dependent than we have been since before the Civil War.
U.S. tourists traveling to the countries whence their ancestors came will find that the money they saved up does not go as far as they thought.
U.S. soldiers stationed overseas will find the cost of rent, gasoline, food, clothing and dining out takes larger and larger bites out of their paychecks. The people those U.S. soldiers defend will be demanding more and more of their money.
U.S. diplomats stationed overseas, students and businessmen are already facing tougher times.
U.S. foreign aid does not go as far as it did. And there is an element of comedy in seeing the United States going to Beijing to borrow dollars, thus putting our children deeper in debt, to send still more foreign aid to African despots who routinely vote the Chinese line at the United Nations.
The Chinese, whose currency is tied to the dollar, and Japan will continue, as long as they can, to keep their currencies low against the dollar. For the Asians think long term, and their goals are strategic.
China - growing at 10 percent a year for two decades and now growing at close to 12 percent - is willing to take losses in the value of the dollars it holds to keep the U.S. technology, factories and jobs pouring in, as their exports capture America's markets from U.S. producers.
The Japanese will take some loss in the value of their dollar hoard to take down Chrysler, Ford and GM, and capture the U.S. auto market as they captured our TV, camera and computer chip markets.
Asians understand that what is important is not who consumes the apples, but who owns the orchard.
Other nations that have kept cash reserves in U.S. Treasury bonds and T-bills are watching the value of these assets sink. Not fools, they will begin, as many already have, to divest and diversify, taking in fewer dollars and more euros and yen. As more nations abandon the dollar, its decline will continue.
The oil-producing and exporting nations, with trade surpluses, like China, have also begun to take the stash of dollars they have and stuff them into sovereign wealth funds, and use these immense and growing funds to buy up real assets in the United States - investment banks and American companies.
Nor is there any end in sight to the sinking of the dollar. For, as foreigners demand more dollars for the oil and goods they sell us, the trade deficit will not fall. And as the U.S. government prints more and more dollars to cover the budget deficits that stretch out - with the coming retirement of the baby boomers - all the way to the horizon, the value of the dollar will fall. And as Ben Bernanke at the Fed tries to keep interest rates low, to keep the U.S. economy from sputtering out in the credit crunch, the value of the dollar will fall.
The chickens of free trade are coming home to roost.
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Post by sometimeman on Nov 6, 2007 4:35:49 GMT -4
Dear Mr. Bernaxke, Do you need more ink? Do you need more paper? WE NEED MORE MONEY HURRY!!
Markets fear banks have $1 trillion in toxic debt
By Sean O’Grady, Economics Editor
Published: 06 November 2007
A new phase in the credit crunch, one of “$1 trillion losses” seems to be dawning. The crisis at Citigroup and renewed doubts about some of the world’s leading banks disquieted stock markets on both sides of the Atlantic yesterday, with the fractious mood set to continue.
The FTSE 100 fell 69.2 to 6,461.4, with Alliance & Leicester (down 4 per cent) and Barclays (off 3 per cent, to a two-year low) singled out for punishment. In New York, Citigroup, down |4.9 per cent to multi-year lows, weighed on the Dow Jones index, which fell 51.7, or 0.4 per cent, to 13,543.4. Merrill Lynch, Goldman Sachs and Lehman Brothers also dropped on speculation they face more writedowns on top of the $40bn (£19bn) announced in the past four months.
Bill Gross, the chief investment officer of Pacific Investment Management, said US mortgage delinquencies and defaults would rise in 2008. “There are $1 trillion worth of sub-primes, Alt-As [self-certified] and basically garbage loans,” he said, adding that he expects some $250bn in defaults. “We’ve only begun to see the pain from rising mortgage payments,” he added. Brian Gendreau, an investment strategist at ING, commented: “Financials are 20 per cent of the S&P 500 and if that sector doesn’t do well all bets are off. People just don’t know what’s on the balance sheets.”
The banks remain unwilling to lend to each other, preferring to rebuild their balance sheets and “hoard liquidity” to buttress themselves against any shocks from repatriating off-balance-sheet losses from their special investment vehicles (SIVs). However, this tightening up has led to a vicious circle. Making credit tougher has exacerbated the problems of struggling mortgage holders in America; default rates then rise and make the banks even more exposed to losses as credit agencies downgrade their assets. This seems to be what happened at Citigroup. The admission that it was unable to assure investors that a potential $11bn write-down for sub-prime mortgages would not grow has led to this fresh fit of extreme nervousness. Huge write-downs by Merrill Lynch ($7.9bn) and UBS ($3.4bn) have not helped.
Samir Shah at Landsbanki Securities said: “People thought most of the bad news had been priced in. It seems we’re entering a second phase of the credit squeeze. We’re going back to a place where liquidity is drying up and volatility is increasing.”
Barclays has seen its shares savaged. “There is a concern about the extent of the debts among the banks generally and who will be left holding the debt,” Richard Hunter, of Hargreaves Lansdown, said. “There’s a read-across to Barclays Capital. People are concerned about the exposure it has.” Profit growth at its subsidiary was “strong”, the bank declared last month, though it offered no comment yesterday.
Alliance & Leicester also suffered from vague rumours that it had turned to the Bank of England for emergency funding. An A&L spokesman offered this reassurance: “Each week in recent months, including last week, Alliance & Leicester has successfully raised the funds it requires. We have also continued our share buy-back programme.”
The Chancellor, Alistair Darling, also pleaded for calm. “We are experiencing an unparalleled period of financial uncertainty caused by the problems in the US housing market,” he said. “I believe that we can get through that. Many banks in this country have very strong balance sheets after years of making very good profits.”
Meanwhile, on the continent, newspaper reports named two German banks – WestLB and a small specialised bank for professional people – as possible next victims of the crisis.
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Post by bubbadebubba on Nov 6, 2007 17:41:33 GMT -4
I'm gonna save my dollars and use for fuel. will last me all winter.
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Post by shortcircuit on Nov 6, 2007 23:11:54 GMT -4
Bubba if you have some extra dollars you don't need I'll be glad to take them off your hands. LOL.
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Post by sometimeman on Nov 7, 2007 18:17:49 GMT -4
7 Countries Considering Abandoning the US Dollar (and what it means)November 6th, 2007 Jessica Hupp It’s no secret that the dollar is on a downward spiral. Its value is dropping, and the Fed isn’t doing a whole lot to change that. As a result, a number of countries are considering a shift away from the dollar to preserve their assets. These are seven of the countries currently considering a move from the dollar, and how they’ll have an effect on its value and the US economy. www.currencytrading.net/2007/7-countries-considering-abandoning-the-us-dollar-and-what-it-means/
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Post by shortcircuit on Nov 7, 2007 20:03:03 GMT -4
Matt Egan
FOXBusiness
The Dow dropped 360 points as Wall Street felt pressure from all sides, including record lows for the dollar, oil flirting with $100 and a staggering $38 billion hit from the nation's largest automaker.
According to preliminary calculations, the Dow Jones Industrial Average dropped 360.92 points, or 2.64% to 13300.02, the Standard & Poor’s 500 index lost 44.62 points, or 2.94% to 1475.65 and the Nasdaq Composite Index fell 76.42 points, or 2.70%, to 2748.76. The consumer-friendly Fox 50 lost 28.89 points, or 2.65%, to 1059.88.
Reflecting the scope of the sell-off, all 30 Dow members declined on the day and all but 19 of the S&P 500 stocks fell.
“We’re getting hammered from all sides today," said Marc Pado, U.S. market strategist at Cantor Fitzgerald.
“We’ve had all of these same pressures for a while: higher oil, inflation and slowing corporate earnings. All of a sudden it seemed to matter more to us," said Steve Sachs, director of trading at Rydex Investments.
The U.S. dollar, which has fallen significantly since the Federal Open Market Committee cut the nation's key interest rate in September, once again fell against the major currencies.
The euro hit a new all-time high against the dollar at $1.4729 earlier on Wednesday.
Concerns that China may seek to diversify its investments in foreign currencies added to the dollar's troubles.
The falling dollar will be another factor the Fed will have to examine when deciding on interest rates in December.
“The real issue has become the dollar. It puts the Fed between a rock and a hard place now," said Pado.
Once again the financials took a pounding.
The biggest drag on the Dow was AIG (AIG: 57.90, -4.15, -6.68%), the insurance and financial giant. Shares of AIG fell by more than 6%.
AIG is expected to announce earnings of $1.62 a share, but the company is expected to also take a heavy hit from subprime mortgage exposure.
Meanwhile General Motors (GM: 33.95, -2.21, -6.11%) posted a massive third-quarter loss as the parent company of Chevrolet and Cadillac said it would take a $38.6 billion non-cash charge to the company's books this quarter. Shares of GM were down more than 4% as the automaker said it lost $68.85 a share
Excluding that huge hit, GM still posted a loss of $1.6 billion, or $2.80 a share, from its continuing operations. That is well below mean estimates of a loss of 25 cents a share from analysts polled by Thomson Financial.
Comments made by several Federal Reserve governors about interest rates did little to calm the markets.
"The Fed needs to be careful to do what is necessary, but not more," said William Poole, president of the St. Louis Federal Reserve Bank, according to Dow Jones Newswires.
Poole also said that the subprime mess would take years to recover.
“Those comments by Poole were sort of the death blow that knocked the market down another 100 points. He didn’t say it may take years, he said it will take years," said Pado.
Wall Street held its breath ahead of an expected 1.6 million barrel drop in U.S. oil supplies, but data showed a decline of only 800,000.
In New York, the price of oil fell 30 cents to settle at $96.40 a barrel.
"The GM thing sort of got it started. The dollar is not helping the situation. Oddly enough, as oil came in the stocks continued to sell-off," said Sachs.
Gold, which also has made massive gains the past two months, rose $11.10 to $834.50 an ounce.
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