IDS World Markets Tues 2nd December 08

[aussiebear]

 

 

 

 

 

 

 

 

 

http://finance.yahoo.com/intlindices

[aussiebear]

 

 

http://money.cnn.com/markets/morning_call/

 

 

 

 

 

 

 

http://www.kitco.com

 

 

 

http://www.kitconet.com/webcharts/base_metals.html

 

Energy futures

[aussiebear]

 

 

That was some heavy duty action in the US!

 

Sagging badly today with significant losses across most sectors. All Ords -3.3%, Miners heading the downside, -6.6%, Materials -6.1%, REITS and Energy both -4.1%. The only green sector is Telecomms +1.2%.

 

The big miners slugged once again: BHP -7.8% and RIO -7%. Golds joining in today, Newcrest -6.4%, Newmont flat and Lihir -3.5%.

 

Big losses for the oils: Woodside -6.6%, Santos -4.9% and Caltex -10.1%.

[aussiebear]

Australia Extends Biggest Rate-Cut Round Since 1991

 

Dec. 2 (Bloomberg) -- Australia?s central bank cut its benchmark interest-rate by one percentage point, extending the biggest round of reductions since a recession in 1991.

 

Governor Glenn Stevens lowered the overnight cash rate target to a six-year low of 4.25 percent in Melbourne today, the fourth reduction in as many months. Four of 21 economists surveyed by Bloomberg News forecast today?s move and 15 tipped a three-quarter point cut.

[Charmin]

I guess China news had an impact yesterday

"China?s Manufacturing Contracts by Record on Exports"

http://www.bloomberg.com/apps/news?pid=206...&refer=asia

[aussiebear]

 

 

The interest rate cut did nothing to dispel gloom and doom. All Ords finished -4% helped by hefty losses in Miners, -7.6% and Materials -7.3%. REITS also dived, -5.5% and IT wasn't far behind -5.3%. The lone green sector was Telecomms, +1.9%.

 

Heavy losses for the big 2: BHP -9.6% and RIO -8.7%. Goldwise, Newmont dropped -7.2% but the others did ok, Newcrest -0.3% and Lihir +0.9%.

 

The major oils kneecapped: Woodside -10.5%, Santos -2.7% and Caltex -8.9%.

 

The bearz driving in Asia: China -0.7%, Honkers -4.9%, India -2.9% and Nikkers -6.4%.

 

 

Over to UK/Europe

 

 

 

 

 

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

[aussiebear]

BOJ to Accept More Debt to Help Businesses Get Funds

 

Dec. 2 (Bloomberg) -- The Bank of Japan will accept lower- grade corporate bonds as collateral for loans to banks to unclog credit markets as the country?s recession deepens.

 

The central bank will begin accepting BBB or higher-rated corporate debt on Dec. 9 and will start a new lending facility for commercial banks in January, it said in a statement after an emergency meeting today in Tokyo. The policy board kept its overnight lending rate at 0.3 percent.

[aussiebear]

AIG Sells Private Bank to Abu Dhabi for $254 Million

 

Dec. 1 (Bloomberg) -- American International Group Inc., the insurer bailed out by the U.S., agreed to sell a bank unit catering to wealthy clients in Asia and the Middle East to Abu Dhabi-based Aabar Investments PJSC for 307 million Swiss francs ($254 million).

 

AIG Private Bank will be independent, based in Switzerland, with a new name and branches in Hong Kong, Shanghai, Singapore and Dubai, AIG said today in a statement. David Monfried, a spokesman for AIG, confirmed the sale price and declined further comment.

 

AIG is selling businesses including life and retirement services and a plane lessor to repay a government loan that saved it from bankruptcy in September. The New York-based insurer got an expanded bailout last month valued at more than $150 billion after being overwhelmed by bad bets on U.S. housing that led to $43 billion in losses over four straight quarters.

[swordfish]

Let's bust a comex - day two

http://meltdown2011.wordpress.com/2008/11/...omex-countdown/

 

http://meltdown2011.files.wordpress.com/20...2008-12-012.png

[Rationalize]

Australian Savers get a Spanking.

 

At its meeting today, the Board decided to reduce the cash rate by a further 100 basis points, to 4.25 per cent, effective 3 December 2008.

 

Recent [ass reaming] action by governments and central banks to stabilise [terrorise] their respective financial systems have begun to take [side]effect. Nonetheless, financial market sentiment remains fragile [duh], as evidence accumulates of weak economic conditions in the major countries and a significant slowing in many emerging countries. Commodity prices have fallen further. This, combined with the likelihood of below-trend growth in the global economy, suggests that global inflation will moderate significantly in 2009 [until the hyperinflation hits].

 

It's official: The risk free rate has been set BELOW the inflation rate. Why bother saving anymore ..

 

www.rba.gov.au

[alceringa]

Rationalize don't forget that the Oz Government is backstopping all bank deposits, so any bank deposit is "risk free", not just RBA loans.

 

Despite that, bankwest is signaling some type of massive problem with this advertisement showing backwardation on term deposits. Surely they aren't the first bank to ever do this, but I've can't recall ever seeing it.

[Jetlag]

" Thirty-year Treasury bonds are returning the most since 1995 as investors bet the Federal Reserve will buy the securities to help bring down long-term borrowing costs.

 

The so-called long bond has returned 27.8 percent this year, including a 15.6 percent gain in November, Merrill Lynch & Co. index data show. The debt is poised for the best annual performance since rallying 34 percent 13 years ago. "

 

"?Bubble? Phase

 

Bonds rallied even after David Rosenberg, the chief North American economist at New York-based Merrill, said yesterday that demand for Treasuries had reached the ?bubble? phase like in technology stocks in 2000 and real estate six years later."

 

http://www.bloomberg.com/apps/news?pid=206...&refer=home

[Rationalize]

Rationalize don't forget that the Oz Government is backstopping all bank deposits, so any bank deposit is "risk free", not just RBA loans.

 

Despite that, bankwest is signaling some type of massive problem with this advertisement showing backwardation on term deposits. Surely they aren't the first bank to ever do this, but I've can't recall ever seeing it.

True. The funny part is that since the guarentee, the bank term deposit spread over the RBA rate has not tightened.

 

Bank West has a short term funding problem. Needs cash now, thus the backwardation. The alternative it that it is speculating on rates falling further. This does happen every so often. Inverse yield curve, etc.

 

Also, it usually delays cutting its rate by a few days. Will be more like 5.00% 3-month, by next Monday.

 

More obvious desparation on the business TD accounts:

[Jetlag]

"?Bernanke-san? Signals Policy Shift, Evoking Japan Comparison

 

Bernanke yesterday said he may use less conventional policies, such as buying Treasury securities, to revive the economy, because his room to lower the main U.S. rate from the current 1 percent level is ?obviously limited.? Even so, reducing the rate is ?certainly feasible,? he said.

 

The Bank of Japan is the only major central bank in modern times to rely on quantitative easing -- the strategy of injecting more reserves into the banking system than needed to keep the target interest rate at zero.

 

The U.S. economy ?will probably remain weak for a time,? even if the credit crisis eases, Bernanke said yesterday in his speech. While the Fed can?t push interest rates below zero, ?the second arrow in the Federal Reserve?s quiver -- the provision of liquidity -- remains effective,? he said. "

 

http://www.bloomberg.com/apps/news?pid=206...&refer=home

[Rationalize]

"?Bernanke-san? Signals Policy Shift, Evoking Japan Comparison

 

Bernanke yesterday said he may use less conventional policies, such as buying Treasury securities, to revive the economy, because his room to lower the main U.S. rate from the current 1 percent level is ?obviously limited.? Even so, reducing the rate is ?certainly feasible,? he said.

 

The Bank of Japan is the only major central bank in modern times to rely on quantitative easing -- the strategy of injecting more reserves into the banking system than needed to keep the target interest rate at zero.

 

The U.S. economy ?will probably remain weak for a time,? even if the credit crisis eases, Bernanke said yesterday in his speech. While the Fed can?t push interest rates below zero, ?the second arrow in the Federal Reserve?s quiver -- the provision of liquidity -- remains effective,? he said. "

 

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Umm, ok I am confused.

 

If the FED buys Treasuries means it is printing money to finance government spending, right?

 

Money supply explosion.