Telegraph Blogs : Business : Ambrose Evans-Pritchard : October 2007

Telegraph Blogs : Business : Ambrose Evans-Pritchard : October 2007: "The sky has already fallen Posted by Ambrose Evans-Pritchard on 25 Oct 2007 at 12:36 Tags: Economics, Business, Goldman Sachs, us dollar, Subprime market, credit crunch, Global markets, Currencies If you are a bear, you must accept that you will always be wrong in polite society, and you will continue to be wrong all the way down to the bottom of recession. That is the cross that bears must bear. Night sky It's gone, whatever sceptical colleagues may say Over the last three months we have seen a rolling collapse of speculative debt and real estate across half the global economy, yet friends still come over to my desk at the Telegraph, with that maddening look of commiseration on their faces, and jab: “so when is the sky going to fall then, eh”? Well, excuse me. The sky has fallen. The median price of new homes in the US has crashed from a peak of $262,6000 in March to $238,000 in September. (Commerce Department). This is a 9pc drop nationwide. The slide in existing homes is catching up. They have come down from $229,200 to $211,700 in three months. (National Association of Realtors). Yet we have barely begun to see the default hurricane as Teaser rates contracted in 2005 and 2006 on floating mortgages kick up venomously over the winter, "

TRADING PLACES

TRADING PLACES: "TRADING PLACES TRADER: SAC MADE ME TAKE FEMALE HORMONES By PAUL THARP and RODDY BOYD CLICK TO ENLARGE CLICK TO ENLARGE PrintEmailDigg ItRedditPermalinkStory Bottom October 11, 2007 -- One of the world's richest and most secretive hedge funds is telling its traders to swallow female hormones to trade better, a lawsuit claims. The bizarre twist on how to get wealthy fast swept across Wall Street's trading desks amid ribald laughter and groans after revelations yesterday of the shocking claims involving SAC Capital. The firm, a powerful $10 billion hedge fund, is run by superstar trader Steven A. Cohen, one of Wall Street's most prolific players who regularly takes home $500 million a year. It was alleged that one of Cohen's top bosses at SAC chided traders for being too aggressive - and that they must use a soft feminine touch to score in their trading pitches. One junior trader claimed that the boss, Ping Jiang, a key producer at the big hedge fund, demanded that the young trader take female hormone pills to help erase his aggressive male ways so he could be more effeminate in his trading style. Eventually, the hormones caused the junior trader to start wearing dresses, avoid his wife's touches altogether and allegedly begin a sexual relationship with his boss, the trader claims."

Bloomberg.com: News

Bloomberg.com: News: "Foreclosures Doubled in September as Loan Rates Rise (Update5) By Dan Levy Enlarge Image/Details Oct. 11 (Bloomberg) -- U.S. home foreclosures doubled in September from a year earlier as subprime borrowers struggled to make payments on adjustable-rate mortgages, RealtyTrac Inc. said. There were 223,538 foreclosure filings last month, including default and auction notices and bank repossessions, an 8 percent decline from August. California had the most with 51,259 filings and Florida was second with 33,354. The national foreclosure rate was one for every 557 households. Foreclosures are deepening the U.S. housing recession by pushing more homes onto a market where sales and prices are dropping. There's a 10-month supply of unsold homes, the highest in at least eight years. As many as half of the 450,000 subprime borrowers whose mortgages will re-set through November may lose their homes because they can't afford the higher payments, according to a report by Credit Suisse Group. ``The truth of the matter is that borrowers are going into default as soon as they hit their adjustments,'' said Rick Sharga, executive vice president of marketing at Irvine, California-based RealtyTrac. The company sells foreclosure information and has a database of more than 1 million properties from 2,500 U.S. counties."

Bloomberg.com: Commodities

Bloomberg.com: Commodities: "Gold Rallies to 27-Year High, Silver Gains as Dollar Declines By Pham-Duy Nguyen Oct. 11 (Bloomberg) -- Gold rose to the highest price since 1980 as a decline in the value of the dollar boosted the appeal of the precious metal as an alternative investment. Silver also gained. The price of gold has rallied 17 percent this year as the dollar touched an all-time low versus the euro. Five of the past six bear markets for the U.S. currency have led to gains in gold, which has more than doubled since 2002. ``Gold is gearing up for another rally,'' said Paul McLeod, vice president of the precious-metals department at Commerzbank Securities in New York. ``It's moving with the dollar, but it's also gathering its own momentum.'' Gold futures for December delivery rose $10.80, or 1.4 percent, to $756.80 an ounce at 1:36 p.m. on the Comex division of the New York Mercantile Exchange. A close at that price would be the biggest gain since Sept. 6. The metal earlier reached $759.30, the highest for a most-active contract since Jan. 22, 1980, the day after the price reached a record $873."

Two top US economists present scary scenarios for US economy; House prices in some areas may fall as much as 50% - Housing contraction threatens a bro

Two top US economists present scary scenarios for US economy; House prices in some areas may fall as much as 50% - Housing contraction threatens a broader recession: "US homes may lose as much as half their value in some US cities as the housing bust deepens, according to Yale University professor Robert Shiller. Meanwhile, Martin Feldstein of Harvard University says that experience suggests that the dramatic decline in residential construction provides an early warning of a coming recession. The likelihood of a recession is increased by what is happening in credit markets and in mortgage borrowing. Feldstein says that most of these forces are inadequately captured by the formal macroeconomic models used by the Federal Reserve and other macro forecasters. “The examples we have of past cycles indicate that major declines in real home prices — even 50 percent declines in some places — are entirely possible going forward from today or from the not too distant future,” Shiller said in a paper presented last Friday at the Federal Reserve Economic Symposium in Jackson Hole, Wyoming."

Six Reasons a Noted Economist Is Less Bullish - Markets - Economy - BSC

Six Reasons a Noted Economist Is Less Bullish - Markets - Economy - BSC: "Six Reasons a Noted Economist Is Less Bullish By Doug Kass RealMoney Silver Contributor 10/4/2007 12:38 PM EDT Click here for more stories by Doug Kass This blog post originally appeared on RealMoney Silver on Oct. 4 at 8:12 a.m. EDT. The Most Read Stories From TheStreet.com 1. Navteq Deal Guts Garmin 2. Top Rocket Stocks for the Week of Oct. 1 3. Apple's Mac Shows Muscle 4. Top 10 Short-Squeeze Computer Stocks 5. High Bar Hits RIM Sign Up Free Trading Center Charles Schwab Zecco.com Fidelity Investments E*TRADE FINANCIAL Global Forex TD AMERITRADE As we all know, contrary (bearish) thinking has its limitations, as the crowd usually outsmarts the remnants. What is significant, though, is when a previously bullish observer turns more cautious -- or vice versa. Such was the case this week, as Bear Stearns (BSC - Cramer's Take - Stockpickr) Chief Economist David Malpass grew less bullish on the economy. Malpass has been with the brokerage house for almost 15 years. Prior to his association with the firm, he held a number of economic roles in the Reagan and Bush administrations. I have always found Malpass to be a force of reason. Malpass believes that the August credit seizure 'marked a major downward inflation point in growth p"

Blog about US housing

Here is a blog about US housing bubble:
http://thehousingbubbleblog.com/?p=3530

Price growth stalls in 'prime' homes market: Financial News - Yahoo! Finance

Price growth stalls in 'prime' homes market: Financial News - Yahoo! Finance: "Price growth stalls in 'prime' homes market Friday October 5, 9:00 pm ET By Jim Pickard, Property Correspondent The surge in prices for 'prime' homes in central London that began a year ago is finally running out of steam, according to data published by estate agents Knight Frank. Price growth in the city's most exclusive markets fell to 1.2 per cent in September; its slowest rate since August 2006. Knight Frank's Prime Central London index, which includes areas such as Knightsbridge, Belgravia and Mayfair, is up by 36.5 per cent since this time last year."

Recap: A new breed of investor is buying art - Yazzy's at www.williamverdult.com - Yazzy's at WilliamVerdult.com Features - Yazzy's | Williamverdult.c

Recap: A new breed of investor is buying art - Yazzy's at www.williamverdult.com - Yazzy's at WilliamVerdult.com Features - Yazzy's | Williamverdult.com Official Website, Orginals, Lithographs, : "Recap: A new breed of investor is buying art - Yazzy's at www.williamverdult.com Tow The MarkGOING, going, gone. Sotheby's set a record total for a contemporary art auction this month, raising $254.9m in one night, including the highest amounts ever paid for 15 individual artists. But within 24 hours that figure was smashed by Christie's, its rival, with a $384.7m buying binge, including 26 artist records. “There's a mood of speculation that I have never seen before in my 50 years in the business,” says Richard Feigen, a veteran Manhattan art dealer. An Andy Warhol piece, Green Car Crash (Green Burning Car I), fetched four times the previous high for a work by the mop-headed guru, set just last November. One way of looking at high art prices is as part of a global wave of liquidity that is pushing up asset prices everywhere. “From Indian antiquities to modern Chinese art; from land in Panama to Mayfair; from forestry, infrastructure and the junkiest bonds to mundane blue chips; it's bubble time,” says Jeremy Grantham of GMO, a fund-management group."

FT.com / World - Darling warns credit squeeze ‘will hit UK’

FT.com / World - Darling warns credit squeeze ‘will hit UK’: "Darling warns credit squeeze ‘will hit UK’ By George Parker and Chris Giles in London Published: October 4 2007 22:01 | Last updated: October 5 2007 12:03 Britain’s economy will be hit by the global credit squeeze, forcing the government to downgrade its growth forecasts ahead of a possible general election, the chancellor of the exchequer admitted on Thursday. Alistair Darling told the Financial Times the squeeze that started in the US would “undoubtedly” hit the British economy, leading to an expected cut to his 2.5-3 per cent growth projection for next year. Credit squeeze: What next? Mohamed El-Erian Q&A: Mohamed El-Erian answers your questions The slowdown will have an effect on Britain’s tight public finances, and the more gloomy economic outlook comes just as Gordon Brown, prime minister, decides whether to call a November election. Mr Brown’s aides spent Thursday playing down expectations of a snap poll, after this week’s highly successful party conference for David Cameron, leader of the opposition Conservatives, although they stressed that no decision had been taken."

FT.com / Companies / Financial services - N Rock borrows another £2.9bn

FT.com / Companies / Financial services - N Rock borrows another £2.9bn: "N Rock borrows another £2.9bn By Chris Giles, Gillian Tett and Jane Croft in London Published: October 5 2007 03:00 | Last updated: October 5 2007 03:00 Northern Rock borrowed another £2.9bn ($5.9bn) last week from the Bank of England, it emerged yesterday. Meanwhile, financiers close to Chris Flowers, the former Goldman Sachs banker, indicated yesterday that his buy-out group is intensifying efforts to bid for the stricken bank. Three weeks after Northern Rock went to the Bank for support, it owes nearly £11bn, equal to 45 per cent of its deposit base at the end of June. One bank analyst who did not want to be named said he was surprised that Northern Rock had reached this level of borrowing from the Bank so quickly. Analysts estimated that Northern Rock had £14bn of short and medium-term notes which need to be refinanced in the second half. It is possible that up to £2bn of retail savings deposits have also left the bank in the past three weeks. The scale of Northern Rock's debts to the Bank has not deterred Mr Flowers. His group, JC Flowers, is approaching senior British banking and former government figures to run the venture. The buy-out group has raised more than £15bn. In addition to this finance, Mr Flowers also plans to use money from a fu"

Fed's Kohn: housing, credit woes bode weakness ahead: Financial News - Yahoo! Finance

Fed's Kohn: housing, credit woes bode weakness ahead: Financial News - Yahoo! Finance: "Fed's Kohn: housing, credit woes bode weakness ahead Friday October 5, 9:41 am ET PHILADELPHIA (Reuters) - Federal Reserve Vice Chairman Donald Kohn said on Friday moderate growth should return to the U.S. economy after a period of weakness due to a prolonged housing slump and higher borrowing costs. ADVERTISEMENT click here 'Once we get through the near-term weakness caused by the extra downleg from the housing contraction and any spillover from tighter credit conditions, I am looking for moderate growth with high levels of employment,' Kohn told the Greater Philadelphia Chamber of Commerce. The Fed's half-percentage point interest rate cut was necessary to offset tighter credit conditions and encourage moderate growth but will not prevent further softness in parts of the economy, Kohn said. 'Our policy action will not be able to avert all of the weakness in the economy that may be in train for the next several months,' he said. 'In particular, housing markets are likely to remain depressed in coming months.' Some of the most disrupted financial markets have shown signs of improvement since the Fed's September 18 meeting, Kohn said. But recent market turmoil will raise the cost and constrain the availability of credit for households and businesses, even after market functioning improves, he said."

FT.com / World / US & Canada - Dallas Fed chief warns on inflation

FT.com / World / US & Canada - Dallas Fed chief warns on inflation: "Dallas Fed chief warns on inflation By Krishna Guha in Washington Published: October 5 2007 01:57 | Last updated: October 5 2007 01:57 The president of the Federal Reserve Bank of Dallas has cautioned against ignoring the inflation represented by rising food and energy prices, revealing a continuing debate inside the US central bank over how best to evaluate price pressures. Richard Fisher on Thursday said the increases in food and energy prices over recent years could represent “longer-lived trends rather than transitory blips”. If this was the case “the arguments made for excluding food and energy prices” from core inflation, the Fed’s traditionally preferred measure, “would be on shaky ground”. The Dallas Fed chief cited Bank of England chief economist Charles Bean, who argues that core inflation captures the benefit of globalisation and the rise of China in the form of cheaper manufactured goods, but ignores the cost in terms of upward pressure on food and energy prices. Mr Fisher said he preferred the Dallas Fed’s trimmed mean measure, which excludes only those goods and services that rise most or least in a given month. On this measure, the underlying rate of US inflation is 2.1 per cent year on year, although Mr "

Merrill Takes a Mammoth Hit - News & Analysis - Brokerages/Wall Street - BSC - C

Merrill Takes a Mammoth Hit - News & Analysis - Brokerages/Wall Street - BSC - C: "Merrill Takes a Mammoth Hit By Mark DeCambre TheStreet.com Senior Writer 10/5/2007 9:24 AM EDT Click here for more stories by Mark DeCambre Merrill Lynch (MER - Cramer's Take - Stockpickr - Rating) said third-quarter profits will be wiped out by a huge writedown tied to this summer's credit crunch. The Most Read Stories From TheStreet.com 1. High Bar Hits RIM 2. Verizon Turns iPhone Killer Loose 3. Top 10 Stocks With Big Insider Buying, Buybacks 4. Top Dividend Stocks From Buffett, Soros and Icahn 5. Macau Stocks Get Mashed Sign Up Free Trading Center Zecco.com TD AMERITRADE Global Forex E*TRADE FINANCIAL Fidelity Investments Charles Schwab The New York-based brokerage firm said it expects to lose 50 cents a share for the quarter, reversing the year-ago $2-a-share profit and falling well short of analysts' $1.24-a-share profit forecast. Merrill will take $4.5 billion in writedowns on its holdings of collateralized debt obligations and subprime mortgages. It will also write off $967 million worth of leveraged lending commitments. The charges mean that Merrill has taken the biggest hit on Wall Street from this summer's turmoil in the credit markets. Last month's writedowns at rivals Goldman Sachs (GS - Cramer's Take - Stockpickr - Rating), Lehm"

Bloomberg.com: Worldwide

Bloomberg.com: Worldwide: "U.S. Payrolls Rose 110,000 in September; Jobless Rate at 4.7% By Joe Richter Enlarge Image/Details Oct. 5 (Bloomberg) -- U.S. employment accelerated in September and revised figures for August showed an unexpected gain, easing concern the economy was headed toward recession. Payrolls grew by 110,000 after an 89,000 increase in August, the Labor Department said today in Washington. Revisions added 118,000 workers to payroll figures previously reported for July and August. More jobs and rising wages will help consumers weather falling home values, sustaining the spending that accounts for more than two-thirds of the economy. The report may raise speculation that Federal Reserve policy makers won't need to lower interest rates again later this month. ``If the foundation of employment is still underneath us, then we have a good chance of nursing the expansion into the new year,'' Carl Tannenbaum, chief economist at LaSalle Bank in Chicago, said before the report. ``This will change the perception of the economy.'' The jobless rate rose to 4.7 percent from 4.6 percent the previous month."

Koizumi to return to power by spring, says Rheinwald - General - FinanceAsia.com - The network for financial decision makers

Koizumi to return to power by spring, says Rheinwald - General - FinanceAsia.com - The network for financial decision makers: "Koizumi to return to power by spring, says Rheinwald By Dan Slater | 20 September 2007 CLSA analyst Stefan Rheinwald predicts a return to power for Koizumi by spring 2008 and the Nikkei to hit 23,000 points. CLSA analyst Stefan Rheinwald predicted the demise of Yasuo Fukuda at the general election and a triumphant return to politics for Junichiro Koizumi at the third day of the CLSA forum in Hong Kong on Wednesday. Koizumi served as leader of the Liberal Democratic Party (LDP) and prime minister of Japan between 2001 and 2006. Fukuda is the name of a candidate who has been touted as the successor of Shinzo Abe, who resigned last week on the back of disastrous personal approval ratings and ill health. The political schedule comprises an internal election for the party leadership, followed by a general election next year in spring for the post of president. As in the United Kingdom, the leader of the winning party becomes leader of the country. “Koizumi is one of the few politicians with the vision and creativity to push the country forward. Other Japanese politicians are too focussed on consensus,” says Rheinwald. 'In addition, Koizumi was brilliant at working the system. Even if it sometimes looked as if he was taking one step back for ever"

Faber: How investors can beat hyper-inflation - General - FinanceAsia.com - The network for financial decision makers

Faber: How investors can beat hyper-inflation - General - FinanceAsia.com - The network for financial decision makers: "Faber: How investors can beat hyper-inflation By Dan Slater | 24 September 2007 Commentator Marc Faber says investors could benefit from sky-high asset prices as the US stokes inflation. In a typically bearish appraisal, author of the Gloom Boom and Doom Report Marc Faber advised investors on the last day of the CLSA Hong Kong forum on Friday to stock up on physical gold and rural real estate ahead of possible global conflicts and US stagflation (inflation without growth, last seen in the 1970s.) Faber sees the US as a consumption giant unable or unwilling to make capital investments, with third-world infrastructure, and a tendency to binge on consumer goods actually produced by other people. He estimates the US GDP has shrunk from a 32% share of the world's GDP in 2000 to just 28% this year. He believes the rise of the Asian block is inexorable, and points out that in emerging markets, oil consumption is already greater than that of the G7 group of countries. The sale of semiconductor chips is also four times as great in Asia as that of semiconductor chips in the US. Faber believes the conditions for a period of higher interest rates, low growth and high inflation are now with us, rooted in recent US policy. advertisement Thus, he sees US GDP gro"

Land price report sends mixed signals / Stagnant incomes, inconvenient locations holding down increases in some areas : Business : DAILY YOMIURI ONLIN

Land price report sends mixed signals / Stagnant incomes, inconvenient locations holding down increases in some areas : Business : DAILY YOMIURI ONLINE (The Daily Yomiuri): "Land price report sends mixed signals / Stagnant incomes, inconvenient locations holding down increases in some areas Tsuyoshi Ito Yomiuri Shimbun Staff Writer The government's report on average residential and commercial land prices released Wednesday shows the land price rises that started in major metropolitan areas have now spread further afield. In some prime locations in Tokyo, there are transactions far exceeding average prices, prompting concerns among some real estate analysts that the market may be overheating in some areas. However, these concerns contrast with the expectations of some observers that the recent credit squeeze in international financial markets, caused by the U.S. subprime mortgage loan crisis, could cloud sentiment among foreign investors who have been facilitating investment in the real estate market. In some cases demand has not matched escalating land prices. Observers say the mixed news makes it difficult to predict the future direction of land prices. On the recent holiday weekend ended Monday, the upscale Chuo-dori avenue in Tokyo's Ginza shopping district was crowded with shoppers. General food retailer Meidi-ya Co.'s Ginza Building is located on the street. The benchmark land price for the plot was 83.49 m"

Contradictions mount in US and world economy in wake of Fed rate cut

Contradictions mount in US and world economy in wake of Fed rate cut: "Robert Shiller, a liberal Yale economist who correctly predicted the collapse of the dot.com bubble, told the panel that “the collapse of home prices might turn out to be the most severe since the Great Depression.” The housing slump would have a major impact on consumer spending, and posed a “significant risk” of recession over the next year, he said. “Low income people will be especially hard hit,” Shiller warned, because they hold a disproportionate number of the subprime mortgages which are now being liquidated. Rising home prices have been the major factor in the steady rise of consumer spending over the past seven years, despite stagnant or declining real incomes. Homeowners extracted an average of nearly $1 trillion a year in additional spending money from 2001 through 2005, through a combination of home sales, home equity lines of credit and mortgage refinancing. One quarter of this vast sum went directly into consumer spending. Now this process is going into reverse. According to a forecast released Wednesday by Moody’s economy.com, more than three-quarters of the housing markets across the US will suffer a decline in home prices in the next several years, and price declines will average 7.7 percent nationally, exceeding 10 percent in 86 of the 379 largest markets. The wo"

House prices to drop much lower: Greenspan | Reuters

House prices to drop much lower: Greenspan | Reuters: "VIENNA (Reuters) - A big overhang of property will bring U.S. house prices down further, but it is too early to say if the economy will plunge into recession, former Federal Reserve chief Alan Greenspan was quoted as saying on Friday. Greenspan said in an interview with Austrian magazine Format that low interest rates in the past 15 years were to blame for the house price bubble, but that central banks were powerless when they tried to bring it under control. 'It's a difficult situation, there is an enormous overhang on the real estate market,' Greenspan was quoted as saying. 'Many buildings which just have been finished can't be sold ...' 'So far, prices have dropped only slightly. But it was enough to cause alarm around the world,' he said. 'Prices are going to fall much lower yet.' 'However, it is too early to answer the question about a recession. We simply don't know yet. It depends on how flexibly the economy can react,' he said. Greenspan said deregulation and the introduction of market economies in the former Communist bloc after the Berlin Wall fell in 1989 had caused a global boom and a worldwide reduction of interest rates, which both helped fuel the property bubble. 'There is no doubt about the fact that low interest rates for long-term government bonds have caused the real estate bubble"

FT.com / Home UK / UK - Crisis in S Korean building industry

FT.com / Home UK / UK - Crisis in S Korean building industry: "Crisis in S Korean building industry By Anna Fifield in Seoul Published: September 21 2007 03:00 | Last updated: September 21 2007 03:00 South Korea's mid-sized construction companies are collapsing like houses of cards, intensifying fears of a looming liquidity crunch in Asia's third-largest banking market. Korea has remained largely immune to the sub-prime woes that have afflicted international markets. But a series of smaller construction companies has been defaulting on project financing loans as they struggle to sell apartments outside Seoul. ADVERTISEMENT That has raised concern about a further deterioration in the quality of loans to construction companies and investors are beginning to worry about the impact on Korean banks. 'This is a critical moment,' said Chung Dong-joo of the Korea House Builders' Association. 'We call this a 'bankruptcy surplus', as companies have the ability to raise capital but are going bankrupt because of the high number of unsold apartment units. This hinders capital circulation and has plunged small and medium-sized companies intoa crisis.'"

New blow to dollar amid U.S. growth fears - International Herald Tribune

New blow to dollar amid U.S. growth fears - International Herald Tribune: "New blow to dollar amid U.S. growth fears By Carter Dougherty Published: September 20, 2007 E-Mail Article Listen to Article Printer-Friendly 3-Column Format Translate Share Article Text Size FRANKFURT: The world dumped the dollar on Thursday, pushing the greenback to an all-time low of $1.40 against the euro and to parity with the Canadian dollar for the first time in three decades as currency traders around the world digested the full implications of the U.S. Federal Reserve's new course for interest rates. The frenzied selling began early in the day in Europe, never let up, and reached across the Atlantic as traders concluded that the lower borrowing costs the Fed introduced on Tuesday would dampen the appeal of dollar-denominated assets like stocks, bonds and real estate just as other central banks are raising rates to create the opposite effect. Layered atop a weakening U.S. economy that is menaced as well by the prospect of a retreat by consumers who have driven growth for years, the dollar radiated instability as its traditional role as a refuge in times of crisis, one evident as recently as early August, appeared all but forgotten. 'It's pretty ugly right now for the dollar,' said Jim McCormick, the London-based chief of currency strategy for Lehman Brothers Intern"

Los Angeles Times - latimes.com

Los Angeles Times - latimes.com: "From the Los Angeles Times: September 21, 2007 MARKETS Fed's move called into question Rising bond yields and a slumping dollar fuel inflation worries after the rate cut. By Walter Hamilton, Los Angeles Times Staff Writer NEW YORK — Yields on long-term Treasury bonds jumped, the U.S. dollar sank and the price of gold surged Thursday, intensifying questions about whether the Federal Reserve's move this week to stimulate the economy could backfire. Though the central bank's cut in short-term interest rates on Tuesday stoked the stock market, it has spooked some other markets -- mainly by raising fears of higher inflation that could undermine the economy. Those concerns were in focus Thursday in the Treasury bond market, where long-term yields rose for a third day. The annualized yield on the 10-year Treasury note, a benchmark for mortgages, surged to 4.70% from 4.54% on Wednesday and 4.47% on Tuesday. A major fear is that higher long-term borrowing costs, particularly in the mortgage market, could damp the positive effects the rate cut was expected to have. 'The markets certainly are testing Mr. Bernanke,' said Tom Di Galoma, head of Treasuries trading at brokerage Jefferies & Co. in New York, referring to Fed Chairman Ben S. Bernanke. After two days of higher prices, the stock market on Thursday gave back some of it"

Greenspan: Higher inflation to warrant double-digit rates in future - USATODAY.com

Greenspan: Higher inflation to warrant double-digit rates in future - USATODAY.com: "Greenspan: Higher inflation to warrant double-digit rates in future Updated 1d 12h ago | Comments 213 | Recommend 40 E-mail | Save | Print | Reprints & Permissions | Subscribe to stories like this Former head of the Federal Reserve Alan Greenspan sits in his Washington D.C. office. He has written a book titled The Age of Turbulence. Enlarge image Enlarge By H. Darr Beiser, USA TODAY Former head of the Federal Reserve Alan Greenspan sits in his Washington D.C. office. He has written a book titled The Age of Turbulence. By Barbara Hagenbaugh, USA TODAY WASHINGTON — Former Fed Chairman Alan Greenspan predicts in a new book out Monday that the Fed will have to raise interest rates to double-digit levels in coming years to thwart inflation. Greenspan, 81, says in The Age of Turbulence that the inflation-damping effect of globalization, which has led to lower wage pressures, inflation and interest rates worldwide, will recede. At some point, the flow of people into the workforce in developing countries such as China, which has seen a movement of workers from farms into factories, will slow, leading to stronger wage pressures and prices, he says. The impact will be global. And the shift 'may be upon us sooner rather than later,' he says. Evidence: P"

Double Warning That a Recession May Be on the Way

clipped from www.nytimes.com Off the Charts Double Warning That a Recession May Be on the Way By FLOYD NORRIS Published: September 15, 2007 THE employment statistics and the bond market are combining to send out a warning that has been heard only rarely in the past two decades: A recession is coming in the United States. The two charts show the double warning. Both charts warned of an economic downturn before the 1990 and 2001 recessions, and they are doing so again. While each has arguably registered false warnings, they have never done so together. The first chart shows the difference between the yield on two-year Treasuries and the Federal Reserve’s target rate for federal funds — the rate on loans between banks. In normal times, the Treasury rate is usually higher.

Intesting article about 1987 Black Monday

Here is a long discussion about the Black Monday in 1987. During that day the Dow Jones index made a new loss record. http://simplearticle.blogspot.com/2007/09/black-monday-1987.html

Dollar's retreat raises fear of collapse - International Herald Tribune

Dollar's retreat raises fear of collapse - International Herald Tribune: "Dollar's retreat raises fear of collapse By Carter Dougherty Published: September 13, 2007 FRANKFURT: Finance ministers and central bankers have long fretted that at some point, the rest of the world would lose its willingness to finance the United States' proclivity to consume far more than it produces - and that a potentially disastrous free-fall in the dollar's value would result. But for longer than most economists would have been willing to predict a decade ago, the world has been a willing partner in American excess - until a new and home-grown financial crisis this summer rattled confidence in the country, the world's largest economy. On Thursday, the dollar briefly fell to another low against the euro of $1.3927, as a slow decline that has been under way for months picked up steam this past week. 'This is all pointing to a greatly increased risk of a fast unwinding of the U.S. current account deficit and a serious decline of the dollar,' said Kenneth Rogoff, a former chief economist at the International Monetary Fund and an expert on exchange rates. 'We could finally see the big kahuna hit.'"

US housing gets worse

clipped from business.timesonline.co.uk Robert Shiller, Economics Professor at Yale University, told The Times: “People are so accustomed to rising house prices, they do not believe it when someone tells them it will come to an end . . . What we have may be the makings of an economic crisis. We may be at a unique point in world history, like 1929, but this time it would be the housing market. Prices are still going up in Canada and the UK, but the US may lead the way.” One of the main speakers at today’s annual central bankers’ symposium in Jackson Hole, Wyoming, will tell his audience that there may be an American housing crisis to match any in history – and that Britain and Canada are likely to follow suit.

Danger: Steep drop ahead - September 17, 2007

Danger: Steep drop ahead - September 17, 2007: "Danger: Steep drop ahead Even if the credit crunch passes without a major catastrophe, the prices of stocks, bonds and real estate have a long way to fall. FORTUNE Magazine By Jeremy Grantham, Fortune September 5 2007: 9:27 AM EDT (Fortune Magazine) -- Credit crises have always been painful and unpredictable. The current one is particularly hair-raising because it's occurring amid the first truly global bubble in asset pricing. It is also accompanied by a plethora of new and ingenious financial instruments. These are designed overtly to spread risk around and to sell fee-bearing products that are in great demand. Inadvertently (to be generous), they have been constructed to hide risk and confuse buyers. How this credit crisis works out and what price we end up paying has to be largely unknowable, depending as it does on hundreds of interlocking and often novel factors and how they in turn affect animal spirits. In the end it is, of course, the management of animal spirits that makes and breaks credit crises. house_real_estate_for_sale.03.jpg Grantham: Home prices are well above the normal four times family income and will have to come down. More from FORTUNE Remembering Black Monday The hipster in the gray flannel suit The many faces of Ralph Lauren FORTUNE 500 Current Issue Subscribe to Fortune But even if this crisis is"

Employment development

clipped from www.contraryinvestor.com Over the past decade and one half, temp employment has both peaked and troughed ahead of the headline payroll trend.  As such, it has been a very important indicator to follow.  By the way, as you can see in the chart above, over the last few months, the year over year change in temp employment has gone negative.  Not a good thing in terms of foreshadowing forward headline payroll employment trends.  As per historical experience, negative rate of change trends in temp employment occurred just prior to the early 1990’s and 2001 recession, but not during the mid-cycle economic slowdown of the mid-1990’s.  Are current temp employment numbers and trends telling us the next recession is simply not far off?  We’ll just have to see what happens ahead, but for now we take this message seriously.

Unexpected Loss of Jobs Raises Risk of Recession

clipped from www.nytimes.com Unexpected Loss of Jobs Raises Risk of Recession By DAVID LEONHARDT and JEREMY W. PETERS Published: September 8, 2007 The job market took a serious and unexpected turn for the worse last month, raising the risk of a recession and putting added pressure on the Federal Reserve to move more aggressively to keep the ailing housing industry from infecting the rest of the economy. The Labor Department reported yesterday that 4,000 jobs were lost from July to August, and the deepest cuts were in industries that are connected to the housing market, like construction and manufacturing. It was the first employment decline since 2003, when the job market was still struggling to emerge from the slump after the 2001 recession.

Bloomberg.com: Commodities

Bloomberg.com: Commodities: "Sept. 6 (Bloomberg) -- Gold rose to the highest in almost four months in London on signs credit-market turmoil is spurring traders to seek a haven in the precious metal. Silver gained. Investment in StreetTracks Gold Trust, the biggest exchange- traded fund backed by the metal, climbed 2.5 percent to a record 528.36 tons yesterday, figures from the London-based World Gold Council show. The European Central Bank today lent emergency cash to banks for the fifth time in a month, a day after the Bank of England injected funds to reduce the cost of credit. ``It seems the gold market is ready to go higher,'' said Gerry Schubert, a director of metals at Fortis Bank in London. ``The whole upset in the financial markets will ultimately lead to gold strengthening its status as a safe haven.'' Gold for immediate delivery gained $6.03, or 0.9 percent, to $687.58 an ounce as of 1:48 p.m. in London, after earlier today gaining to $688.93, the highest since May 8. Prices have climbed 8 percent this year."

New Concerns in Europe About Credit Fallout - New York Times

New Concerns in Europe About Credit Fallout - New York Times: "The Organization for Economic Cooperation and Development, a Paris-based group of 30 industrial nations, issued a report warning that the credit crisis had dimmed prospects for economic growth, especially in the United States. It scaled back its growth forecasts for many leading economies and urged central banks to keep interest rates stable and low to stem further damage. And it recommended that the Federal Reserve consider trimming its benchmark interest rate by a quarter of a percentage point when it meets on Sept. 18. “You cannot rule out a recession” in the United States, said Jean-Philippe Cotis, the O.E.C.D.’s chief economist."

BCA Research - Independent Investment Research Since 1949

BCA Research - Independent Investment Research Since 1949: "About BCA Our Services Contact Info Careers Help BCA In the News Home U.S. Subprime Losses To Total /$200 Billion 11:22:00, August 30, 2007 The losses related to bad U.S. mortgage paper could end up being larger than the 1980s S&L losses in dollar terms. About 60% of subprime mortgages carry an adjustable rate, and $650 billion will reset at a higher interest rate in the next 16 months. Even without factoring in a recession, we estimate that the losses on bad subprime and alt-A paper could amount to about $200 billion over the 2007-2011 period (1.5% of today’s GDP). This compares with $153 billion (2.5% of 1990 GDP) in losses associated with the S&L meltdown in the late 1980s. Spread out over several years, such losses do not seem overwhelming on their own. However, it is the knock-on effects that are the larger risk to the economy, including a hit to consumer confidence and wealth, a curtailment of credit availability, and increased selling pressure in the housing market. Bottom Line: Fed rate cuts cannot solve the subprime mess, but can limit the negative impact on the economy."

BCA Research - Independent Investment Research Since 1949

BCA Research - Independent Investment Research Since 1949: "A Maturing Equity Bull Market 12:21:00, August 28, 2007 According to our Global Investment Strategy service, the recent shakeout in risky assets should be regarded as part of the maturing process of the equity bull market. This episode is very similar to the recession fears of 1998, which prompted Fed easing. The subsequent rally in stocks was powerful but led to increased volatility and ultimately ended in a crash two years later. We suspect that a similar pattern could play out this time around. Equities still offer reasonable value and should receive significant upside as investment capital gets funneled into fewer assets. Narrowing breadth of asset price inflation is a typical characteristic of a maturing market. In this cycle, commodities, government bonds, real estate and credit products have already largely been inflated but stocks still have room for further multiple expansion once the current turmoil in the credit market subsides. However, investors should be prepared for permanently higher volatility, which tends to accompany richer valuations. Bottom line: The bull market in equities, while in a maturing phase, should offer investors significant upside over the next two years."

Bush, Bernanke launch subprime assault: Financial News - Yahoo! Finance

Bush, Bernanke launch subprime assault: Financial News - Yahoo! Finance: "Bush, Bernanke launch subprime assault Friday August 31, 5:38 pm ET By David McMahon and Mike Peacock NEW YORK/LONDON (Reuters) - The Federal Reserve on Friday reassured investors it would take any steps needed to shelter the U.S. economy from a global credit squeeze, while President George W. Bush promised to help struggling homeowners refinance their mortgages. ADVERTISEMENT Chairman Ben Bernanke also said the central bank would not bail out investors who had made mistakes, but overall his comments reinforced the view that the Fed will cut interest rates by a quarter percentage point at its meeting on September 18. Bush urged lenders to work with homeowners to renegotiate their mortgages to prevent default and called on Congress to approve legislation that would provide mortgage insurance to borrowers through a network of private-sector lenders. 'It's very light on detail and limited in scope,' Jeff Schappe, chief investment officer at BB&T Asset Management in Raleigh, North Carolina, said of Bush's proposal. 'The important news today is that Bernanke is saying the Fed is going to do whatever it will take to limit the impact.'"

clipped from www.nytimes.com Pay at Investment Banks Eclipses All Private Jobs By DAVID CAY JOHNSTON Published: September 1, 2007 Top money managers earn such huge incomes that even when their compensation is mixed with the much lower pay of clerks, secretaries and others, the average pay in investment banking is 10 times that of all private sector jobs, new government data shows. Investment banking paid an average weekly wage of $8,367, compared with $841 for all private sector jobs, the Bureau of Labor Statistics said in a routine report issued Thursday. The report also showed how far ahead hedge fund managers are of other investment bankers in making money.

Bloomberg.com: Economy

Bloomberg.com: Economy: "U.S. Jobless Claims Rise for a Fifth Straight Week (Update3) By Bob Willis Enlarge Image/Details Aug. 30 (Bloomberg) -- First-time applications for jobless benefits unexpectedly increased for a fifth week, the longest streak since May last year, suggesting the housing recession and related turmoil in credit markets are costing jobs. Initial unemployment claims climbed by 9,000 to 334,000 in the week that ended Aug. 25, the highest level since April, the Labor Department said today in Washington. The four-week moving average, a less volatile measure, rose to 324,500 from 318,250. The deepest housing slump in 16 years is prompting builders and mortgage-lending companies such as American Home Mortgage Investment Corp. to fire workers. That may weigh on consumer spending, which accounts for more than two-thirds of the economy."

Stiglitz: U.S. Faces Economic Downturn: Financial News - Yahoo! Finance

Stiglitz: U.S. Faces Economic Downturn: Financial News - Yahoo! Finance: "Rising defaults on U.S. subprime mortgages have increased risks to the economy, with a worsening housing slump, credit problems and turbulence in global financial markets, said Stiglitz, a former World Bank chief economist who is here to attend a conference. Some 1.7 million Americans may lose their homes due to foreclosures and bankruptcy this year, piling further pressure on house prices, he said. Wages have stagnated although the U.S. gross domestic product was some 20 percent higher now from six years ago, he said. 'Mortgage payments are going up, house prices coming down, incomes are stagnating. It's not a pretty picture. So the dynamics could unravel more and where it stops, we can't be sure,' Stiglitz told reporters on the sidelines of the conference. 'We don't know how well the (U.S. Federal Reserve) will respond. The lack of transparency means we don't know how deep the problem is,' he said. 'The most likely outcome is that it will be a rather prolonged slowdown but not a recession.'"

SHORT-TERM FUNDING CRISIS CLAIMS LONDON FUND | By RODDY BOYD | Business News | Financial | Business and Money

SHORT-TERM FUNDING CRISIS CLAIMS LONDON FUND | By RODDY BOYD | Business News | Financial | Business and Money: "SHORT-TERM FUNDING CRISIS CLAIMS LONDON FUND By RODDY BOYD PrintEmailDigg ItRedditPermalinkStory Bottom August 30, 2007 -- The inability of finance companies to access short-term funding yesterday whacked another gilt-edged money manager whose asset-backed commercial paper program was unexpectedly downgraded. London-based Cheyne Capital began selling the assets underlying its $10 billion Cheyne Finance commercial paper program after Standard & Poor's on Tuesday knocked it down six notches. The blow to Cheyne's commercial paper program was stunning, as exactly two weeks ago S&P affirmed its triple-A rating."

Australian hedge-fund in trouble

clipped from www.iht.com Cayman Islands court orders liquidation of Australian-run hedge fund By Tim Johnston Published: August 30, 2007 SYDNEY: A court in the Cayman Islands placed the Basis Yield Alpha Fund in provisional liquidation after the Australian-run fund's evisceration by the U.S. subprime mortgage crisis. The court in the Cayman Islands, where the fund is based, appointed the U.S. accounting firm Grant Thornton as provisional liquidators. "At this stage we are undertaking an immediate assessment as to the financial position of the fund and any likely return to investors," Paul Billingham, a Grant Thornton partner, said Thursday in a statement. Grant Thornton has applied for Chapter 15 protection in a New York court. Chapter 15, a recent addition to the U.S. bankruptcy code, allows a judge to give formal recognition to an overseas bankruptcy procedure and protects the assets from seizure by U.S. creditors while the process is being carried out.

The next credit crunch? -- chicagotribune.com

The next credit crunch? -- chicagotribune.com: "The next credit crunch? As home loan market tightens, mounting credit card debt could spur new crisis By Susan Chandler | Tribune staff reporter August 26, 2007 Now that the easy money in home mortgages is all but over, consumers may soon be caught in a financial squeeze with their credit cards. That's the worry among some economists and credit counselors as home lending has shifted abruptly into low gear this summer. That leaves homeowners owing big sums to Visa or MasterCard without an important escape hatch -- the ability to pay down the plastic by dashing off a check from their home equity line of credit or rolling the debt into a new, bigger mortgage. 'You're not going to be able to get that mortgage loan. You'll be stuck with the higher interest credit card debt,' warns Carl Steidtmann, chief economist with"

Bank chief warns of German banking crisis - MarketWatch

Bank chief warns of German banking crisis - MarketWatch: "Bank CEO warns of German crisis By Steve Goldstein, MarketWatch Last Update: 11:13 AM ET Aug 21, 2007 PrintPrint EmailE-mail Subscribe to RSSSubscribe to RSS DisableDisable Live Quotes LONDON (MarketWatch) -- The chief executive of one of Germany's largest state-backed banks warned that foreigners were increasingly loath to extend credit to financial institutions in Europe's largest economy, which could spark a crisis. 'We sense reluctance on the part of foreign partners to extend credit to German banks,' WestLB CEO Alexander Stuhlmann told journalists on the sidelines of a bank event, according to wire service reports. 'If we have a banking crisis in Germany with other countries cutting us off, then other banks will also face difficulties.' His comments come days after a German lender, SachsenLB, said it required a credit line of 17.3 billion euros ($23.2 billion) because of the investments it had made in securities affected by the U.S. subprime mortgage crisis. IKB Deutsche Industriebank (DE:806330: news, chart, profile) required a similar bailout. Germany's finance minister, Peer Steinbrueck, was more optimistic, saying there are no signs of the German economy being affected. 'I believe those involved have the situation in hand,' he said. Meanwhile, a poll of insti"

US average income below level of year 2000

clipped from www.nytimes.com 2005 Incomes, on Average, Still Below 2000 Peak By DAVID CAY JOHNSTON Published: August 21, 2007 Americans earned a smaller average income in 2005 than in 2000, the fifth consecutive year that they had to make ends meet with less money than at the peak of the last economic expansion, new government data shows. Skip to next paragraph While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1 percent less than the $55,714 in 2000, after adjusting for inflation, analysis of new tax statistics show. The combined income of all Americans in 2005 was slightly larger than it was in 2000, but because more people were dividing up the national income pie, the average remained smaller. Total adjusted gross income in 2005 was $7.43 trillion, up 3.1 percent from 2000 and 5.8 percent from 2004.

Crisis Counsel - Wilbur Ross (2) - FORTUNE

Crisis Counsel - Wilbur Ross (2) - FORTUNE: "Now that we have identified the cause of the disease, how severe and how contagious is it? The present $200 billion of delinquencies will grow to $400 billion or $500 billion next year because $570 billion more low, teaser-rate mortgages will reset to market and consume more than 50% of the borrowers' income. Therefore most of the loans will be foreclosed or restructured. Probably 1.5 million to two million families will lose their homes. Meanwhile, few lenders will put mortgages on the foreclosed houses, so the prices will plummet. Despite these tragedies, total losses will probably be less than 1% of household wealth and only 2% to 3% of one year's GDP, so this is not Armageddon. However, even prime jumbo mortgages will be more expensive and more difficult to obtain."

Mortgage lender Countrywide begins lay-offs: report: Financial News - Yahoo! Finance

Mortgage lender Countrywide begins lay-offs: report: Financial News - Yahoo! Finance: "Reuters Mortgage lender Countrywide begins lay-offs: report Monday August 20, 3:23 am ET NEW YORK (Reuters) - Countrywide Financial Corp, which is trimming costs amid turbulent credit markets, began laying off staff involved in originating loans, according to a report on Monday in the Wall Street Journal's online edition, citing an internal e-mail. The job cuts occurred in the company's Full Spectrum lending unit, according to the Journal, which handles many home mortgages known as 'Alt-A,' or loans rated between prime and subprime and generally given to borrowers who do not provide documentation of income."

U.S. profit growth picture brightening: report: Financial News - Yahoo! Finance

U.S. profit growth picture brightening: report: Financial News - Yahoo! Finance: "Reuters U.S. profit growth picture brightening: report Monday August 20, 10:13 am ET NEW YORK (Reuters) - U.S. corporate profit growth estimates rose last week, with second-quarter earnings now projected to rise 8.4 percent from the year before compared with an estimate of 7.8 percent last week, according to Reuters Estimates. The quarter's profit growth picture has improved steadily since the beginning of the period back on April 1, when earnings were estimated to rise just 6 percent from the 2006 second quarter, Reuters Estimates said Monday. The projected growth rate combines the actual profit growth reported by the 451 components of the Standard & Poor's 500 index (^SPX - News) that had posted second-quarter results through Friday with the estimated growth for those companies still due to report. The strongest growth rates are being reported in the health care and technology sectors, up 14 percent and 13 percent respectively, Reuters Estimates said. A more forward-looking indicator of the profit scene is also improving. So far in August, of 918 companies offering some form of profit outlook, 26.8 percent were classified as positive versus 22.7 percent seen as negative, Reuters Estimates said. The positive-to-negative ratio, 1.18, is the highest since a 1.20 reading for October 2006 and"

Consumer sentiment in August is weakest in a year - USATODAY.com

Consumer sentiment in August is weakest in a year - USATODAY.com: "Consumer sentiment in August is weakest in a year Posted 1d 18h ago | Comments 24 | Recommend 4 E-mail | Save | Print | Subscribe to stories like this Reuters logo NEW YORK (Reuters) — Consumer sentiment deteriorated in August to its weakest in a year as more expensive oil, declining home prices and turmoil in financial markets all hurt confidence. The Reuters/University of Michigan Surveys of Consumers said its preliminary reading on consumer sentiment in August was 83.3, well below a median forecast of 88.0 and a sharp fall from the previous month's final reading of 90.4. The data came just hours after the Federal Reserve cut its primary discount rate, or the rate the central bank charges commercial banks to borrow directly from it, by half a percentage point. The Fed said the downside risks to economic growth had increased 'appreciably.' The unexpectedly weak reading in consumer sentiment backed a view that volatile swings in financial markets, including a steep fall in share prices since mid July, are starting to dampen the mood of consumers. 'I would have to say that it is not a good sign, and it is showing how the contagion on Wall Street is starting to affect Main Street out there,' said George Lucas, senior investment strategist at Deutsche Bank in New York."

How Missed Signs Contributed to a Mortgage Meltdown - New York Times

How Missed Signs Contributed to a Mortgage Meltdown - New York Times: "How Missed Signs Contributed to a Mortgage Meltdown
By NELSON D. SCHWARTZ and VIKAS BAJAJ Published: August 19, 2007 All through last year, Jim Melcher saw the signs of a rapidly deteriorating American housing market — riskier mortgages, rising delinquencies and more homes falling into foreclosure. And with $100 million in assets at his hedge fund, Balestra Capital, he was in a position to do something about it.
So in October, as mortgage-backed bonds were still flying high, he bet $10 million that these bonds would plunge in value, using complex derivatives available to any institutional investor. As his gamble began to pay off in the first months of 2007, Mr. Melcher, a money manager based in New York, plowed the profits into ever bigger wagers that the mortgage crisis would worsen further, eventually risking some $60 million of the fund’s money.

“We saw the opportunity of a lifetime, and since then events have unfolded on schedule,” he said. Mr. Melcher’s flagship fund has since doubled in value, even as this summer’s market turmoil cost other investors billions, forced the closing of several major hedge funds and pushed the stock market down 7 percent since mid-July. This week, Mr. Melcher is heading to Paris for a vacation with his wife.

The extent of the turmoil has stunned much of Wall Street, but as Mr. Melcher’s case makes clear, there were ample warning signs that a financial time bomb in the form of subprime mortgages was ticking quietly for months, if not years.

As far back as 2001, advocates for low-income homeowners had argued that mortgage providers were making loans to borrowers without regard to their ability to repay. Many could not even scrape together the money for a down payment and were being approved with little or no documentation of their income or assets.

Russia to help China oust the USA from Eurasia - Pravda.Ru

Russia to help China oust the USA from Eurasia - Pravda.Ru: "It was China, which preserved Russia's integrity during the US triumph in 1991-1993: the dismembered Russia would deprive China of the strategic back area. In its struggle for Russia, China will inevitably try to put an end to USA's expansion attempts towards the Far East of Russia. One may expect Chinese politicians making statements about the USA's threat to Russia: China and the USA will most likely commence negotiations about the division of the spheres of influence in the Far Eastern region. When the USSR collapsed in 1991, China was left alone face to face with the USA. The conflict potential of relations between the USA and China has been growing nonstop since then. One may say that the USA has been involved in the conflict with China from 2003, although it is a financial and economic struggle so far. The war of the American and Chinese economies may be toughened by 2009 with US-placed embargoes. China might exercise its military potential in return with a view to demoralize the West. China has been trying to restrain and oust the USA from Eurasia with a threat to destroy the US dollar as the global measure of value."

Article - A Chinese `Invasion` - News From Russia

Article - A Chinese `Invasion` - News From Russia: "23 September 2003 21:14 A Chinese `Invasion` Russia's latest census has produced a bombshell result: over the past decade, the Chinese have emerged as the fastest growing ethnic minority in Russia. While official data of the October 2002 census will be published only next month, preliminary figures leaked to the press show that Russia's Chinese population has grown from just over 5,000 in the late 1980s to 3.26 million today. This makes the Chinese the fourth biggest ethnic group in this country after Russians (104.1 million), Tatars (7.2 million) and Ukrainians (5.1 million) - all indigenous inhabitants of Russia. More than three-fourths of Chinese immigrants have settled down in Siberia and the Far East. The census results lend chilling reality to Russia's age-old nightmare of a Chinese takeover of the Asian part of Russia. Eighteen million Russians scattered across the India-size expanse of the Far East and Siberia face 250 million Chinese cramped across a common border in China's northern provinces. In the past the huge Chinese demographic pressure was contained by a tightly sealed barbed-wire border, but when the Soviet Union collapsed the 4,300-km Russian-Chinese border was thrown open to bilateral trade. Chinese traders poured in to sell clothes and other necessities to Russians struggling with a deep economic crisis and take back to China Russian timber,"

Russia and China have a good relationship

clipped from www.reuters.com Russia, China flex muscles in joint war games Fri Aug 17, 2007 5:22PM EDT By Guy Faulconbridge CHEBARKUL, Russia (Reuters) - Russia and China staged their biggest joint exercises on Friday but denied this show of military prowess could lead to the formation of a counterweight to NATO. The war games were staged under the flag of the Shanghai Cooperation Organization (SCO), a regional grouping that includes Russia, China and four Central Asian states. Russian President Vladimir Putin, who watched the war games with Chinese President Hu Jintao, dismissed comparisons with the western North Atlantic Treaty Organization (NATO).

Bloomberg.com: Japan

Bloomberg.com: Japan: "Japan's Stocks Have Worst Post-Bubble Week; Nintendo Plunges By Patrick Rial and Makiko Suzuki Enlarge Image A man walks past an electronic stocks board in Tokyo. Aug. 17 (Bloomberg) -- Japanese stocks plunged, sending the Topix index to its biggest weekly drop since the end of the asset inflation `bubble' of the 1980s. The Nikkei 225 Stock Average had its worst daily performance since the Sept. 11, 2001, terrorist attacks. Nintendo Co. fell by its daily limit, after the yen rose to the strongest in a year against the dollar as investors unwound so- called carry trade bets on high-yielding assets funded by yen loans. Toyota Motor Corp. dropped the most in six years."

FT.com / Companies / Financial services - Buy-out firms still on the hunt for funds

FT.com / Companies / Financial services - Buy-out firms still on the hunt for funds: "Buy-out firms still on the hunt for funds By Martin Arnold in London Published: August 16 2007 20:09 | Last updated: August 16 2007 20:09 Kohlberg Kravis Roberts, PAI Partners and Carlyle Group are among more than 50 private-equity firms seeking to raise at least $52bn of European leveraged buy-out funds, as they shrug off recent difficulties in credit markets. Several auctions of large companies that were expected to attract bids from private equity have been postponed, such as Cadbury’s sale of its Schweppes business in the US and Virgin Media’s auction of itself."

Countrywide Financial facing deposit withdrawals

clipped from www.latimes.com Worried about the stability of mortgage giant Countrywide Financial, depositors crowd branches. In Laguna Niguel, Bill Ashmore drove his Porsche Cayenne to the bank's office and waited half an hour to cash out $500,000. "It's got my wife totally freaked out," he said. A rush to pull out cash Anxious customers jammed the phone lines and website of Countrywide Bank and crowded its branch offices to pull out their savings because of concerns about the financial problems of the mortgage lender that owns the bank. Countrywide Financial Corp., the biggest home-loan company in the nation, sought Thursday to assure depositors and the financial industry that both it and its bank were fiscally stable. And federal regulators said they weren't alarmed by the volume of withdrawals from the bank.

Faith in credit fading during crunch - Los Angeles Times

Faith in credit fading during crunch - Los Angeles Times: "Even if the current trouble had taken a more traditional form, however, there is still a problem with credit crises that make them particularly difficult to deal with: Unlike the cash in your pocket, credit is in more than one place at a time. The act of giving or accepting it is almost entirely an act of faith. The quality is illustrated in a famous line from Frank Capra's 'It's a Wonderful Life' in which banker George Bailey (played by Jimmy Stewart) confronts an angry customer demanding his money, saying it is in Bailey's bank. 'Your money's not in the bank,' Bailey replies. 'It's in Mr. Smith's house.' 'There isn't enough money in the world to finance every transaction that occurs in a day, so you have to have faith or confidence you'll be paid when you're told you'll be paid,' said author and financial markets expert Peter L. Bernstein. That is precisely the faith that a growing number of people do not seem to have in the type of credit at the center of the current trouble: securities backed by mortgages, especially those backed by sub-prime mortgages (lent to people with less than strong credit histories). Hundreds of people crowded offices of Calabasas-based Countrywide Financial Corp., the biggest U.S. mortgage company, in Laguna Niguel, Pasadena"