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IDS World Markets Thurs 4th October 07


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t?s=%5EAORD

 

 

On the downward trail for a change. All Ords -0.7% and Utilities is the only green sector, +0.7%. Of the others, Materials and Healthcare are level pegging, -1.5% and Energy is next at -1.2%.

 

In the miners, BHP -2% and RIO -1.9%. Golds are mixed: Newcrest -0.9%, Newmont -1.2% and Lihir +0.2%.

 

Oils are all down: Woodside -1.1%, Santos and Caltex -1.2%.

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I wonder if Helo Ben is a student of Martin Armstrong's writings on the the Great Depression? :lol:

 

One of the best summaries of the economic drivers behind the first Great Depression, in my view, was Martin A. Armstrong's "The Greatest Bull Market in History". Although he's in prison and not due for release until 2011, Armstrong's review of events leading up to, and after, the Great Crash is really a seminal work. Reading Armstrong in part, one gets the sense that auto stocks peak, then demand peaks and then the gates of hell open:

 

"Thus the innovation of the automobile indeed helped to expand the economy during the 1920s but as competition heightened and the market became saturated, it was the auto stocks which first signaled that the trend was over when they peaked during the first quarter of 1929. The secondary industries which had expanded on the coattails of the auto industry continued higher into late summer and collapsed from exhaustion. This would be the essential interpretation based upon Schumpeter?s theory of innovation."

 

This all leads to me developing some context for you of the automaker reports out this week. Ford was the largest decliner, but even Toyota - which I consider a global bellwether - was down 4%. If consumer confidence declines further, and if consumers aren't willing to step up and continue buying at the frantic pace, the US 'consumer economy' could be in serious trouble.

 

 

 

Still, if I look at Armstrong's history, where auto stocks peaked around March 1929 - some seven months before the Crash, I have to look at the big carmakers, like GM whose stock hyas peaked this year in late June, Ford, which peaked on July 1st, and even Toyota, which peaked at the same time, and wonder "Hmmm...what happens 6-7 months from those old highs if the autos don't make new highs and darned quickly?" Honda peaked two weeks after the pack.

 

 

 

You better pray Ford was just having a bad month in their showrooms and that this isn't the front edge of a trend.

http://urbansurvival.com/week.htm

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Australian Building Approvals Drop After Rate Rise

 

Oct. 4 (Bloomberg) -- Australia's home-building approvals declined more than economists forecast in August after the central bank raised interest rates and the stock market slumped.

 

The number of approvals fell 1.7 percent from July, the first drop in three months, the Bureau of Statistics said today in Sydney. The median estimate of 23 economists surveyed by Bloomberg News was for a 0.5 percent drop.

 

A decline in approvals for new apartments and renovations suggests slowing residential construction may damp growth in an economy in its 16th year of expansion. The central bank's rate increase took borrowing costs to the highest in 11 years and turmoil in global financial markets dented consumer and business sentiment in August.

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Deutsche Bank to Write Off About $3.12B From Subprime Losses

 

FRANKFURT, Germany (AP) -- Deutsche Bank AG said Wednesday it will write off about $3.12 billion in losses from the U.S. mortgage morass, but that gains from asset sales and tax credits will allow Germany's biggest bank to report a third-quarter profit of about $1.98 billion.

 

Deutsche Bank said in a statement that it would take a charge of approximately 1.5 billion euros ($2.13 billion) on residential mortgage-backed securities, structured credit products, along with as much as 700 million euros ($991.6 million) on its leveraged loans and loan commitments.

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w?s=%5EAORD

 

 

Quite a slide today which I wasn't really expecting. All Ords closed -1.3% led down by Materials, -2.5% followed by Energy -2.1%. IT was the solitary green sector, +0.2%.

 

Hefty losses on the big 2: BHP -3.2% and RIO -3.4%. Golds remained mixed, Newcrest +1%, Lihir -3% and Newmont -0.6%.

 

A sharp pullback in the oils: Woodside -1.9%, Santos -1.5% and Caltex -3.1%.

 

A reddish day in Asia: Honkers -1.5%, Taiwan -0.8%, Nikkers -0.6%.

 

 

On to UK/Europe:

 

t?s=%5EFTSE

 

t?s=^GDAXI

 

t?s=^FCHI

 

http://finance.yahoo.com/intlindices?e=europe

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U.K. House Prices Fall for First Time in Nine Months

 

Oct. 4 (Bloomberg) -- U.K. house prices fell in September for the first time in nine months as higher interest rates and a global credit slump cooled demand for property, a report from HBOS Plc showed.

 

The average cost of a home in Britain declined 0.6 percent to 198,500 pounds ($403,000) from a month earlier, compared with a 0.3 percent gain in August, the U.K.'s biggest mortgage lender said in a statement on the Regulatory News Service. Prices rose 10.7 percent in the quarter through September from a year earlier.

 

``Interest rate increases are biting now as people come off favorable fixed-rate products and move to significantly higher rates,'' Martin Ellis, chief economist at HBOS, said in an interview. ``It squeezes people's incomes and affects demand.''

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EU Recovers Agricultural Aid From Italy, France, Other Nations

 

Oct. 3 (Bloomberg) -- European Union regulators reclaimed farm subsidies of 145 million euros ($206 million) from member states including Italy and France because of inadequate controls, late payments and other rule violations.

 

The aid was for products including olive oil, fruit, vegetables and meat between 1997 and 2005, said the European Commission, the 27-nation EU's regulatory arm in Brussels. Italy and France together must return more than 134 million euros under the order, which also covers Belgium, Denmark, Germany, Ireland, the Netherlands, Portugal, Spain, Sweden and the U.K.

 

This marks the 25th time the commission has claimed back unduly spent EU agricultural subsidies since 1995, when the bloc tightened controls over how member states disburse the aid. The EU faces demands from trade partners such as Australia and European consumers to reduce farm subsidies, which amount to nearly half the bloc's 116 billion-euro budget this year.

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Good Morning!

 

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DJ Fed Accepts $4 Bln In 14-Day RPs

 

Type of transaction: 14-Day RPs

Total accepted: $4 Bln

Total submitted: $99.75 Bln

 

Agency Collateral Operation

Total accepted: None

Total submitted: $32.3 Bln

Stop-Out Rate: N/A

Weighted Average: N/A

High-rate submitted: 4.77%

Low-rate submitted: 4.65%

 

Treasury Collateral Operation

Total accepted: $4 Bln

Total submitted: $22.95 Bln

Stop-Out Rate: 4.65%

Weighted Average: 4.66%

High-rate submitted: 4.69%

Low-rate submitted: 4.5%

 

Mortgage-Backed Collateral Operations

Total accepted: None

Total submitted: $44.5 Bln

Stop-Out Rate: N/A

Weighted Average: N/A

High-rate submitted: 4.81%

Low-rate submitted: 4.7%

 

(Data was provided by the New York Federal Reserve Bank).

 

 

(END) Dow Jones Newswires

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DJ Fed Accepts $4 Bln In 14-Day RPs

 

Type of transaction: 14-Day RPs

Total accepted: $4 Bln

Total submitted: $99.75 Bln

 

Agency Collateral Operation

Total accepted:  None

Total submitted: $32.3 Bln

Stop-Out Rate:  N/A

Weighted Average:  N/A

High-rate submitted: 4.77%

Low-rate submitted: 4.65%

 

Treasury Collateral Operation

Total accepted: $4 Bln

Total submitted: $22.95 Bln

Stop-Out Rate: 4.65%

Weighted Average: 4.66%

High-rate submitted: 4.69%

Low-rate submitted: 4.5%

 

Mortgage-Backed Collateral Operations

Total accepted:  None

Total submitted: $44.5 Bln

Stop-Out Rate:  N/A

Weighted Average:  N/A

High-rate submitted: 4.81%

Low-rate submitted: 4.7%

 

(Data was provided by the New York Federal Reserve Bank).

 

 

  (END) Dow Jones Newswires

612537[/snapback]

 

Hmmm. They shorted the 14 day rollover by $3 billion.

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