USA vecka 39

fredag 

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Fed Panics! - Era of Global Financial Market Instability

Fed action to lower interest rates cannot solve the credit market problems, but it would help the economy: by stimulating the demand for housing, autos and other consumer durables; by encouraging a more competitive dollar to stimulate increased net exports; by raising share prices to increase both business investment and consumer spending; and by freeing up spendable cash for homeowners with adjustable-rate mortgages".

What? So Feldstein wants rate cuts even though he admits that "lower interest rates cannot solve the credit market problems" but will just stimulate more wasteful "consumer spending"?!?

That's not a cure, Martin. That's just more Greenspan snake oil.

http://onlinejournal.com/artman/publish/article_2444.shtml

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The Bank loses a game of chicken
By Philip Stephens

In a game of chicken, the loser is the player who swerves first out of the way of the other driver's car. Since the Bank is concerned about the health of the economy, while the banks are concerned only about their survival, the former is at a huge disadvantage. Apparently, the banks told the authorities they would not lend to their weaker brethren until the Bank opened its wallet. The threat was credible and the Bank swerved.

http://www.ft.com/cms/s/0/96de68b6-67da-11dc-8906-0000779fd2ac.html 

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 Picture of the week

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Ron Paul lectures Bernanke about Moral Hazard...

http://www.youtube.com/watch?v=qmr6qzuK3zM

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Angående räntan är historisk låg  # 0

Here are a few charts from the St. Louis Federal Reserve som visar att räntorna är låga historisk

10-Year Treasury

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2

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3

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4

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Inlägget är redigerat av författaren.

5

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Och mest intressant av alla:

Here is a chart from the St. Louis Federal Reserve that shows how dependent the US economy is on foreigners purchasing US government debt:

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Glöm inte

Food Prices Edge Up in Lastest Report

USAgNet - 09/20/2007

The most recent numbers out from the Bureau of Labor Statistics indicate food prices increased 4.2 percent in the 12 months ended in July. That compares with a rise of 2.2 percent in 2006. The consumer price index for food, which includes groceries and dining out, is forecast to increase 3.5 percent to 4.5 percent this year, according to the Agriculture Department.

Although the number is likely being driven primarily by higher transportation costs, you can expect higher prices for corn to continue to take some heat for consumers increased spending, even though it is only one small contributor.

"Although food makes up only about 13 percent of total household spending, higher food costs worry economists who say that for every extra dollar spent on groceries, a dollar less will be spent on discretionary items like clothes and entertainment -- purchases that fuel overall economic growth. And at a time of uncertainty over the housing market, stock market and jobs, consumers are more acutely aware of such price increases," the Department of Ag says.

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Dollar Remains at Low Ebb

In practical terms, the recent drop in the dollar?s value is making Boeing jetliners and Manhattan pieds-à-terre a lot cheaper for Europeans and Canadians, while Americans will have to pay more while on vacation in Paris or when buying snowmobiles made in Quebec.

http://www.nytimes.com/2007/09/21/business/worldbusiness/21cnd-dollar.html?em&ex=1190606400&en=009caca103c95198&ei=5087

bild om Boeing

Lägg märke till att aktien steg inte när Fed sänkte räntan i tisdags

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Lower U.S. rates damp dollar demand

Two of Italy's top executives said Friday that the strong euro was threatening to curtail exports and economic growth. The Fiat chairman, Luca Cordero di Montezemolo, urged the ECB to halt the currency's advance and Paulo Scaroni, the chief executive officer of the oil company Eni, said the strong euro is hurting the Italian economy.

http://www.iht.com/articles/2007/09/21/news/bux.php

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Castro: Alert in New Video

Backing up the assertion, Castro mentioned recent prices of oil and the value of the euro against the dollar. He also discussed an essay he signed that was published in state media on Wednesday.

"Yesterday the euro was at US$1.41. Oil I think about US$84 a barrel," Castro said.

He also held up a copy of the new book by former U.S. Federal Reserve chairman Alan Greenspan, "The Age of Turbulence: Adventures in a New World." At one point he quoted from it, reading excerpted passages in very large type instead of using the book itself.

http://www.breitbart.com/article.php?id=D8RQCKO00&show_article=1

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Global Markets Face Protracted Adjustment

https://www.internationalmonetaryfund.org/external/

eller

The report, prepared by the IMF's Monetary and Capital Markets Department twice a year, said the turbulence could impact global economic growth. "Although the dislocations, especially to short-term funding markets, have been large, and in some cases unexpected, the event hit during a period of above-average global growth. Our assessment is that credit losses and the liquidity constriction experienced to date will [nevertheless] likely slow the global expansion,"

...

The GFSR noted that systemically important financial institutions began this episode with adequate capital to absorb the likely level of credit losses. "Corporations, have, for the most part, been able to secure the financing they need to maintain their operations. However, the adjustment period is continuing and if the intermediation process stalls and financial conditions deteriorate further, the global financial sector and real economy could experience more serious negative repercussions," the report added.

http://www.imf.org/External/Pubs/FT/GFSR/2007/02/pdf/chap1.pdf

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IMF Webcasts

Global Financial Stability Report - Video Clip
Monday, September 24, 2007 11:00 AM

http://www.imf.org/external/mmedia/view.asp?eventID=876

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För att förstå subprime läs följande text:-))

Lessons from Subprime Turbulence

The speed with which delinquency and default rates have risen for the 2006 vintage of loans has been striking. The first sign of trouble was the high volume of "early payment defaults," (EPDs) in which the borrower misses one or two of the first three monthly payments, which has been followed by rising delinquency rates. Fraud also appears to have played a key role in accelerating the deterioration, which resulted in the failure of a number of originators in 2006-07 as securitizers exercised "put-back" options?forcing lenders to take back delinquent mortgages.

http://www.imf.org/external/pubs/ft/survey/so/2007/RES0823A.htm

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Federal Reserve Vice Chairman Donald Kohn defended the central bank's aggressive interest-rate cut, saying it was driven by concerns about the broader economy rather than an interest in protecting investors or the value of housing.

And fellow Fed Governor Kevin Warsh said the Fed's next move depends on economic events, rather than on financial markets. "The goal of our policy...is not to look at any particular asset class" but instead is to watch "what's happening in the real economy," Mr. Warsh said after a speech at the State University of New York at Albany. "We are going to stay very closely focused on real-time indicators and forward indicators."

 Vänta och se:-))

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Sänker räntan igen? 

Fed to Cut Rates Again Before January, History Shows

The economy's mortgage-related problems are ``not behind us today and they're not going to be behind us for a long time to come,'' Hunt said. ``This rate reduction was first of what we think will be quite a few over the next couple of years.''

http://www.bloomberg.com/apps/news?pid=20601109&sid=a5XiMQI6nAHk&refer=home

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Men en rundringning som nyhetsbyrån Bloomberg gjort tyder på att många förvaltare och analytiker är optimister, ja faktiskt mer optimistiska än vad de varit sedan år 2000.

Till exempel Wells Capital Management och MFS Investment Management, som tillsammans förvaltar 375 miljarder dollar, tror på aktier eftersom lägre räntor och växande ekonomier i Asien och Europa kommer att öka företagens vinsttillväxt.

Kreditoron är alltså överdriven, enligt många förvaltare som menar att de amerikanska husägare som inte kan betala sina räntor inte kan sänka hela den globala tillväxten och den rekordstora efterfrågan på produkter och tjänster som är ett faktum inom så gott som alla sektorer..

"Hussektorn har helt enkelt ingen betydelse för S&P. Punkt", säger en strateg på UBS till Bloomberg.

Men inflationen då? Vissa anser ju att de sänkta räntorna riskerar att sätta fart på inflationen om kanske tre till fyra år?

"Jag är orolig, men vafan. Det är ju fyra år dit", säger strategen James Swanson på MFS, som förvaltar 200 miljarder dollar, till Bloomberg. Själv tankar han aktier i stora teknikbolag och banker.

http://www.affarsvarlden.se/art/183811

=)

Skönt att få se hur de stora tänker på pränt. :) 

och inte bara en massa obskyra intervjuer med olika traders och konsulter

Mvh Corpsee

Inlägget är redigerat av författaren.

Nåt annat

Ahmadinejad grilled in Columbia Q&A

But, as promised, Bollinger took Ahmadinejad to task. He did not refrain from name-calling in his noticeably hostile introduction. Bollinger defended his decision to allow the Iranian leader to speak at the forum, but criticized Teheran's human rights record, its calls for Israel's destruction and the president's denial of the Holocaust as a myth.

"Mr. President, you exhibit all the signs of a petty and cruel dictator," Bollinger said, to loud applause.

---

He denied he had questioned the existence of the Holocaust, and defended the rights of scholars to continue to "investigate everything."

"I'm not saying it didn't happen, but granted this happened, what does it have to do with the Palestinian people?" he asked.

http://www.jpost.com/servlet/Satellite?c=JPArticle&cid=1189411476127&pagename=JPost/JPArticle/ShowFull 

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Plosser Says Fed's Rate Cut Carries Inflation Risks: Video

http://www.bloomberg.com/index.html?Intro=intro3

STOCKHOLM (Direkt) Förra veckans räntesänkning från
Federal Reserve riskerar att leda till högre inflation och det
kan bli aktuellt att ändra kurs om ekonomin skulle visa sig
växa mer än väntat.

Det sade Fed-chefen i Philadelphia, Charles Plosser, på
tisdagen enligt Bloomberg News.

"Att sänka fed funds-nivån har potentialen att förvärra
inflationen, det är ingen tvekan om det". Om inflationen eller
inflationsförväntningarna skulle stiga kommande månader så
kommer "utsikterna att påverkas och policyn kanske måste
justeras", sade han.

Han sade att de potentiella inflationsriskerna finns
kvar.

"Oljepriset är fortfarande mycket högt. Löneökningarna
är fortfarande mycket höga. Likviditeten är fortfarande mycket
hög. Och förväntningarna är höga. Alla dessa saker har
potential för att bidra till inflation", sade han.

Han sade att räntesänkningen var "lämplig" givet en
inbromsning i jobbtillväxten och fallande huspriser, men att
det inte bör leda till fler ränteåtgärder om inte statistiken
blir "mycket svagare".

"Jag skulle inte bli överraskad över att se svagare
statistik. Men svagare siffror kommer inte att få mig att
revidera mina utsikter eller min uppfattning om den lämpliga
räntenivån, om de inte är mycket svagare än vad som redan
antagits och summerar tillräckligt för att skapa ytterligare
en nedrevidering av mina utsikter", sade han.

Han sade att en svagare ekonomi innebär att realräntorna
måste sjunka för att få tillstånd en lämplig justering för att
återskapa tillväxt.

"Med hänsyn till det anser jag att förra veckans
agerande att sänka fed funds var lämpligt", sade han.

Han sade att nedrevideringen av sysselsättningssiffrorna
för juni och juli var bekymmersamma och visar att
arbetsmarknaden kanske inte är så stram eller robust som de
tidigare trott. Men samtidigt finns det en möjlighet att
tillväxten kommer att återhämta sig snabbare än väntat.

"Om så är fallet, och utsikterna revideras uppåt, måste
de policyansvariga ompröva den lämpliga nivån på fed funds-
nivån", sade han.

Charles Plosser framhöll att prisstabilitet är och måste
vara det primära målet för penningpolitiken. De
policyansvariga måste motstå frestelsen att reagera på
kortsiktiga, övergående störningsfaktorer, om de inte påverkar
Feds långsiktiga mål.

Han sade också att riskerna på grund av räntesänkningen
understryker behovet av att ha ett offentligt, numeriskt
inflationsmål. Det är inte den exakta siffran som är
avgörande, utan idén att Fed har ett uttryckligt "åtagande",
sade han.

Charles Plosser sade också i sitt anförande att ekonomin
kan växa med cirka 2,75 procent per år de kommande åren utan
att elda på inflationen. Han bedömde också att den långsiktiga
produktivitetstillväxten kommer att ligga på något under 2
procent./MS

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The weekly figures from Investors Intelligence 

The percent bullish came in at 55.6 (versus 53.9 last week)

The percent bearish registered 25.6 (versus 27.0 last week)...

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Central banks? actions fail to calm money market

The pattern is likely to trigger unease among policy makers since it suggests the mood in the global money markets remains nervous, irrespective of the emergency actions taken by central banks in recent days.

http://www.ft.com/cms/s/0/756fe446-6b9c-11dc-863b-0000779fd2ac.html

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BOSTON (MarketWatch) Analysts at Goldman Sachs  on Wednesday lowered their earnings forecasts for Merrill Lynch to reflect "an extremely challenging operating environment" in the third quarter. "These estimates include a multi-billion dollar write-down due to weakness in mortgages, leveraged loans, and [collateralized debt obligations," they wrote in a research note. Goldman Sachs "significantly" cut its third-quarter and 2007 estimates for Merrill Lynch and "marginally" lowered its 2008 and 2009 forecasts, and reduced its price target on the stock to $94 from $108. Merrill Lynch "appears to be caught in the cross hairs of a number of headwinds in the quarter -- leveraged loan losses, mark-to-market losses on their CDO exposure, and deteriorating mortgage fundamentals," the analysts said. Merrill Lynch's shares were down 2% at $70.70 at last check in afternoon trading Wednesday

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Bilderna visar Hur en del sektorer utvecklades sedan Fed sänkte först Discount Rate den 17 augusti och sedan räntan och discount den 18 september

bild 1

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bild 2

 Ni kan se hur technology aktier  gillar  sänkningen av räntan:-))

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Inlägget är redigerat av författaren.

bild 3 

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Nåt att tänka på för oss alla...

A Beloved Professor Delivers
The Lecture of a Lifetime

Dr. Pausch's speech was taped so his children, ages 5, 2 and 1, can watch it when they're older. His last words in his last lecture were simple: "This was for my kids." Then those of us in the audience rose for one last standing ovation.

http://online.wsj.com/public/article/SB119024238402033039.html

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STOCKHOLM (Direkt) Banker lånade i genomsnitt 88
miljoner dollar i Federal Reserves diskontofönster under
veckan till och med onsdag den 26 september, rapporterar
Bloomberg News.

Utlåningen minskade därmed från ett genomsnitt på 2,2
miljarder dollar föregående vecka. På onsdagen hade utlåningen
sjunkit till noll, vilket var en minskning från 1,1 miljarder
dollar onsdagen den 19 september.

Den kraftiga nedgången kan vara en indikation om att
marknadens behov av nödkrediter har minskat efter Federal
Reserves räntesänkning tisdagen den 18 september, och den
ökade riskaptiten som följde på det beskedet.

På torsdagen tvingades dock Federal Reserve tillföra
mycket likviditet till marknaden för att pressa ned Fed
fundsräntan i linje med målet på 4,75 procent, och för att
lätta på trycket på dollarlån över kvartalsskiftet. Fed
tillförde totalt 38 miljarder dollar i fyra olika operationer,
den största volymen sedan den 10 augusti.

Analytiker kopplade torsdagens stress på
penningmarknaden i första hand till det förestående
kvartalsskiftet, men trycket betraktas ändå som en indikation
på att marknadsoron i högsta grad lever./

----------------------------------------

Angående börsen : Lägg märke till att volymen i USA igår var det lägsta kanske i år

Varför trots att vi befinner oss i ett slut skedd av kvartalet ( window dressing)

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LONDON, 27 (UPI) -- Former U.S. Treasury Secretary Lawrence Summers warns the United States may be heading into recession, a British newspaper reported.

Summers issued his warning as the financial markets prepared to begin a new week -- following two weeks of volatility sparked largely by what analysts have variously characterized as a credit freeze or a liquidity freeze. The U.S. stock market had stabilized somewhat by the end of trading last week.

"It would be far too premature to judge this crisis over," said Summers. "I would say the risks of recession are now greater than they've been any time since the period in the aftermath of (Sept. 11, 2001)."

Summers? comment came as Germany?s state bank SachsenLB -- which The (London) Telegraph called the biggest victim to date of the sub-prime mortgage debacle -- was sold after reportedly accumulating $80 billion in risky assets through a series of Irish funds that the newspaper said had been kept off the balance sheet.

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Dollar Falls to Record Low Against Euro Before U.S. Reports

Sept. 28 (Bloomberg) -- The dollar fell to a record low against the euro before economic reports that may add to evidence the U.S. economic slowdown is deepening, suggesting the Federal Reserve may lower interest rates again this year.

The dollar declined against 15 of 16 most-actively traded currencies today as personal income growth is forecast to slow in August and consumer confidence to stay at a one-year low. The U.S. currency traded near an all-time low against a basket of six major peers as reduced interest rates made dollar-denominated assets less attractive to international investors.

The dollar declined to a record low of $1.4190 per euro and last traded at $1.4185 at 7:33 a.m. in New York, setting a record for a seventh day, from $1.4153 yesterday.

``The U.S. economic outlook is pointing to the dollar falling further,'' said Daragh Maher, senior currency strategist at Calyon in London. ``There's reluctance to buy the dollar even though the dollar is looking undervalued.''

The New York Board of Trade's dollar index fell to 78.134, the weakest since the index began in 1973. The Fed's trade- weighted index comparing the dollar with major currencies fell on Sept. 25 to the lowest since its inception in 1971.

Former Federal Reserve Chairman Alan Greenspan reiterated today in a BBC Radio 4 interview the probability that a recession will hit the U.S. is higher now than a few months ago.

Fed policy makers on Sept. 18 reduced the target rate for overnight loans between banks by a half percentage point to 4.75 percent. The European Central Bank's main rate is 4 percent.

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The following chart is courtesy of CIGA Ursus Terribilis.

http://www.jsmineset.com/cwsimages/Miscfiles/5247_DXVLT.pdf 

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