Nov. 17 (Bloomberg) -- Japan's economy, the world's second largest, unexpectedly shrank in the third quarter, confirming it entered the first recession since 2001 as companies cut spending.
Gross domestic product fell an annualized 0.4 percent in the three months ended Sept. 30, the Cabinet Office said today in Tokyo. Economists predicted the economy would grow 0.1 percent after contracting a revised 3.7 percent in the previous period.
HONG KONG (AFP) — Hong Kong slipped into recession in the third quarter as the global economic slowdown took its toll on the financial hub, government figures showed Friday.
Hong Kong's gross domestic product fell 0.5 percent from the previous quarter on a seasonally adjusted basis, following a fall of 1.4 percent in the second quarter, the Census and Statistics Department said in a statement.
"The growth of the Hong Kong economy slowed notably further in the third quarter, as the external sector slackened amid the faltering global demand," government economist Helen Chan said in the statement.
"And as domestic demand towards the end of the quarter was severely hit by the outbreak of the global financial tsunami that caused significant jitters in the local asset markets."
The standard definition for recession is two consecutive quarters of falling GDP.
Hong Kong joins Singapore, Germany, New Zealand and Italy in reporting a technical recession as the global slowdown bites into economies across the world.
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Source:AFP
The eurozone has fallen into recession for the first time since the single currency was introduced in 1999, official figures show this morning.
Eurostat, the European Union statistics agency, said third quarter GDP across the 15-nation eurozone shrank 0.2 per cent, following a 0.2 per cent fall in the previous quarter. A recession is defined as two quarters of negative growth.
Yesterday, Germany, Europe's largest country, fell into recession for the first time in four years but it emerged today that GDP in France is still growing, up 0.14%. However, Spain admitted today that growth shrank by 0.2 per cent.
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Source:Timesonline
* Intel cuts Q4 rev forecast by 14 pct
* Says demand is weak in all market segments, geographies
* Applied Materials, National Semi also give weak outlooks
* Intel shares drop to 12-yr low, drags on tech stocks
Intel, the biggest maker of chips for personal computers, forecast fourth-quarter revenue of $9 billion, plus or minus $300 million. That compares to its October forecast of $10.1 billion to $10.9 billion, and the average analyst estimate of $10.3 billion according to Reuters Estimates.
"For revenue to be that far down sequentially, it means consumers have basically shut down for the holidays," said Charter Equity Research analyst John Dryden. Intel's third-quarter revenue was $10.2 billion.
Source: Reuters
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And now INTC is heading to 2002 lows.And the market will follow to the 2002 lows. Sooner than later. We STILL DON"T have a capitulation to mark a bottom. Till then no need to buy any stocks.
"We must implement the measures to ensure a fast and stable economic development," Premier Wen Jiabao said at a meeting of government leaders, according to a report read out on the state television. "They are not only the needs of the development of ourselves, but also our biggest contribution to the world."
The government's stimulus announcement appears to exaggerate the size of its plan by including projects already under way, including reconstruction from the devastating May earthquake in China's southwest, said Sherman Chan, an economist for Moody's Economy.com."The exaggeration highlights the government's desperation to revive sentiment, which is perhaps the key factor to sustaining growth amid global turmoil," Chan said in a report.
Source: Yahoo news
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Questions that remain and will be answered in a few weeks:
Will this revive the commodities again as it is focussed on infrastructure buildout ?
They are planning to spend $14 billion before the end of this year. Will this help kick start the markets for a Santa Rally?
Will this massive spending help the world economy esp US ?
While short-term stock movements can't be foretold, the likelihood is that the market will recover before the economy or general investor sentiment rebound, and ``if you wait for the robins, spring will be over,'' he said.
Referring to the 1930s Depression, Buffett pointed out that the Dow Jones Industrial Average reached its nadir on July 8, 1932; economic conditions continued to deteriorate until Franklin D. Roosevelt became president in March 1933, and by that time the market had climbed 30 percent.
Source:Bloomberg
October 17 (Bloomberg) -- Princeton University Professor Paul Krugman, winner of the 2008 Nobel Prize for economics, talks with Bloomberg's Mike Schneider in New York about the U.S. economy and global financial crisis. Krugman's new book is called "The Conscience of a Liberal." (Source: Bloomberg)Oct. 17 (Bloomberg) -- The cost of borrowing dollars in London fell, rounding off the first weekly decline since July, after central banks around the world pumped unprecedented amounts of cash into money markets and governments backed loans.
The London interbank offered rate, or Libor, for three-month loans in dollars dropped for a fifth day, sliding 8 basis points, or 0.08 percentage point, to 4.42 percent, the British Bankers' Association said. It declined 40 basis points this week. The overnight rate for dollars slid 27 basis points to 1.67 percent, the lowest level since September 2004. Asian rates also fell.
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"Then you will hit bottom and then you start over. The people who are sound will take over the assets from the people who aren't sound and we will start over. This is the way the world has worked for a few thousand years."
The current rescue plans, which will force governments to issue more debt, print money and flood the markets with liquidity, will flare up inflation after the crisis is over and will create worse problems, Rogers warned."We're setting the stage for when we come out of this of a massive inflation holocaust," he said.
"I have an enormous amount of cash and I've been using it to buy more Japanese yen, more Swiss Francs, more agricultural products… there's a liquidation phase going on, where everything is being liquidated. They're selling everything in sight."
"In a period like this the way you make money coming out of it is to own the things were the fundamentals have not been impaired," Rogers added.
If you followed this chart, you would have been out of the market on September 30 and avoided the massive damage that took place in the past week.
Here is current chart of S&P 500.
60 minute view of S&P 500 chart. Very important chart !!US investors pulled record amounts of money from mutual funds last month - nearly trebling the previous mark set during September 2001 - as they rushed to cash amid market turmoil.
By the close of business on Monday, investors had withdrawn $74.5bn during September, including $50.5bn from equity mutual funds and $24bn from bond funds, according to TrimTabs. In the eight months to the end of August, the funds had attracted total net inflows of $20bn.
Big outflows were under way before Monday's stock market meltdown. On Monday alone, however, investors pulled close to $10bn from equity funds.
Money market funds, which have traditionally been a beneficiary of mutual fund outflows, saw net outflows of $10bn on Monday, indicating that investors remain extremely jittery.
Source:Financial Times
"Momentum has slowed in the phosphates business near-term due to the combined effects of soft seasonal demand, higher customer inventory levels and falling raw material costs," said Prokopanko.
"We might not have to cut back a million tonnes, but we will do whatever is necessary to balance the (inventory) pipeline."
First time miss. This will be very bad for the stock.Stock is down $12 or 17% in AH.
Yesterday's historic drop and today's bounce. Yesterday's candle dropped below my trendlines that have been in place since the beginning of this year. A good trendline is one that can hold through many months of stock movement. Today's candle moved the markets back into the TL. I would want to wait and watch at this moment. A lot depends on the passage of the bailout plan. If this trendline breaks to the downside...then really ..I mean really lookout below.
The rupee declined 6.2 percent this month to 46.92 against the dollar as of 9:33 a.m. in Mumbai, the biggest monthly drop since November 1997, according to data compiled by Bloomberg. The currency reached 46.9750 last week, the lowest since July 2006.
Overseas investors have sold $9.2 billion more of local equities this year than they bought, according to data from the Securities & Exchange Board of India. They bought a record $17.2 billion in stocks last year which helped the rupee complete its best annual gain in at least 34 years.
Source: BloombergSeattle-based WaMu, which was founded in 1889, is the largest bank to fail by far in the country's history. Its $307 billion in assets eclipse the $40 billion of Continental Illinois National Bank, which failed in 1984, and the $32 billion of IndyMac, which the government seized in July.
One positive is that the sale of WaMu's assets to JPMorgan Chase prevents the thrift's collapse from depleting the FDIC's insurance fund. But that detail is likely to give only marginal solace to Americans facing tighter lending and watching their stock portfolios plunge in the wake of the nation's most momentous financial crisis since the Great Depression.
Source: AP-Yahoo
``The credit lines in the American financial system, the lifeblood of the economy, are completely frozen,'' he said, according to Senator Charles Schumer of New York, a Democrat who was in the meeting. Banks had stopped lending to each other overnight, Bernanke said.
That threatened to halt all lending in the U.S., forcing businesses to close and idling workers, the Fed chief said. The Fed also was seeing money being moved out of the country.
``You could have massive failures within days,'' he told the group, and it would go beyond the banking system to ``large name- brand companies,'' according to a congressional staff member who attended the meeting and took notes.
The Federal Reserve Board late Tuesday confirmed it would authorize the Federal Reserve Bank of New York to lend as much as $85 billion to American International Group Inc., which has unraveled in the face of mounting losses related to insurance on complex financial instruments and credit downgrades that forced the company to raise billions in capital. The New York insurance company is the largest in the world.
Bailing out a private company not under its direct purview is an extraordinary and historic move for the Federal Reserve, whose primary roles include setting United States monetary policy and banking supervision and regulation.
All the assets of AIG and of its primary non-regulated subsidiaries are held in collateral to the loan, the Fed said. These assets include the stock of substantially all of the regulated subsidiaries. The loan is expected to be repaid from the proceeds of the sale of the firm’s assets. The U.S. government will receive a 79.9 percent equity interest in AIG and has the right to veto the payment of dividends to common and preferred shareholders.
The AIG facility has a 24-month term. Interest will accrue on the outstanding balance at a rate of three-month LIBOR plus 850 basis points. AIG will be permitted to draw up to $85 billion under the facility.
Source: Sacramento Biz Journal
The markets definitely like it. Futures are up huge. Asian markets are up nicely. The interesting fact is FED kept rates steady because this was in the works. So market rally to continue.
Chart of Wachovia Bank. Wachovia breaks the Trendline. Negative CMF. RSi still not oversold.
The plan comes as top government officials and Wall Street executives hold marathon meetings to save Lehman Brothers. The meetings have failed to find a buyer for the troubled 158-year-old investment bank, raising worries that its likely collapse would disrupt global financial markets.
The official also said the U.S. Treasury Department and the Federal Reserve are pushing Bank of America Corp. to buy Merrill Lynch & Co., though talks are still preliminary.
Expectations that Lehman would survive as a company dimmed Sunday afternoon after Barclays PLC withdrew its bid to buy the investment bank.
For Lehman, Liquidation Seems the Most Likely Scenario
The fate of Lehman Brothers darkened as Barclays, the sole remaining bidder for the firm, told federal regulators that it was walking away from a transaction.
Bank of America, Merrill Lynch in Merger Talks
Bank of America and Merrill Lynch are in merger discussions. Much remains uncertain and conditions were fluid.
AIG plans to disclose a comprehensive restructuring early Monday that is likely to include the disposal of major assets, including its aircraft-leasing business.
Something is up at Lehman... It cannot break this very important trendline support just because of Korean bank is not interested. Did something go wrong at Lehman that is not yet disclosed to the media? Or am I just thinking too much ?The nationalization of Fannie Mae and Freddie Mac shows that the U.S. is "more communist than China right now" but its brand of socialism is meant only for the rich, investor Jim Rogers, CEO of Rogers Holdings, told CNBC Europe on Monday.
But Rogers said in the long term the move spelled trouble.
"This is madness, this is insanity, they have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents. I'm not quite sure why I or anybody else should be paying for this," Rogers told "Squawk Box Europe."
Rogers, who is short on U.S. bonds, said these are likely to fall while commodities may rally. The two government-sponsored enterprises don't have good loans on their books, because "everybody else took the good stuff and dumped the bad stuff onto Fannie and Freddie," he said.
From 2010, Fannie and Freddie will have to shrink their portfolios by 10 percent a year until they reach $250 billion, to reduce the risk to the taxpayer, according to the Treasury plan. But this may put additional pressure on the housing market, Rogers said.
"That's going to also ensure that house prices continue to go down. It's going to be harder and harder to get a mortgage."
Investors should not pin their hopes on this year's presidential election for a solution to the problems, as none of the candidates is likely to find one, Rogers said.
"This is a big huge mess and neither one of them has a clue what to do next year. It's going to be a mess."
Source: CNBC
Very interesting setups in the markets around Bear Stearns bailout. The exact same setup is present during the Fannie-Freddie bailout. Check RSI levels, Candles, Stochastics and CMF. Do you see the similiarity? Well if the market behaves the same way like it did following the bailout, we are in for a nice run. I have SSO- Ultralong S&P 500 and QQQQ-Oct-48 calls from last Thursday.
Most analysts surveyed by AFP expect the 13-nation cartel to agree to trim its output informally at its meeting before waiting until later, possibly at a scheduled gathering in December, to alter its official target.
The trimming will be achieved by members, mainly powerhouse Saudi Arabia, agreeing to cut their excess production above their OPEC quota, which would remove oil from the market but not amount to a formal change in policy.
Under fierce pressure from the United States, Saudi Arabia agreed in May and June to increase production to help calm the runaway crude market which reached a pinnacle on July 11, when crude struck 147 dollars a barrel in New York.
"Even Saudi Arabia doesn't want the price to come down too much," said analyst Manouchechr Takin at the Britain-based Centre for Global Energy Studies (CGSE) referring to the moderate and pro-US Middle East producer.
The stakes are entirely different to the last time OPEC members met in March, when crude prices had broken through 100 dollars a barrel and were on a steep upwards trajectory.
This time, oil prices are on the way down approaching 100 dollars a barrel -- a level many members, above all the traditional price hawks of Iran and Venezuela, are keen to protect.
But economic conditions, which determine demand for oil, have worsened considerably, with many European economies facing recession, the United States struggling and fears growing about the emerging economies of Asia. (Source:AFP)
----------------------------------------------------------I have not traded the oil market last week. If you observe following Gustav, the market never provided an edge. We will have to wait and see.
The fact that a home on the city's east side was listed for $1 recently shows how depressed the real estate market has become in one of America's poorest big cities.
And it still took 19 days to find a buyer.
The home, at 8111 Traverse Street, a few blocks from Detroit City Airport, was the nicest house on the block when it sold for $65,000 in November 2006, said neighbor Carl Upshaw. But the home was foreclosed last summer, and it wasn't long until "the vultures closed in," Upshaw said. "The siding was the first to go. Then they took the fence. Then they broke in and took everything else."
Put on the market in January for $1,100, the house had no lookers other than the squatters who sometimes stayed there at night. Facing $4,000 in back taxes and a large unpaid water bill, the bank that owned the property lowered the price to $1.
While it's not unusual for $1 to be exchanged when property is transferred for legal reasons, listing a home in the Multiple Listing Service for $1 was surprising and unsettling to Kent Colpaert, the listing real estate agent for the property.
"I've never seen a home listed for $1," Colpaert said.
"But it's been hit hard: It's just a shell."
On Tuesday, Realtor.com listed one other single-family home, one duplex and one empty lot at $1 in Detroit.
(Source-Detroit news)
I played intraday this amazing one day runner in ABK. ABK jumped up following MBI news that came in AH yesterday.Oil prices rose to above $117 a barrel Wednesday on concerns that Tropical Storm Gustav may disrupt operations in the Gulf of Mexico, home to a quarter of U.S. crude production.
By midday in Europe, light, sweet crude for October delivery was up $1.40 at $117.67 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.16 overnight to settle at $116.27 a barrel.
In London, October Brent crude rose $1.15 to $115.78 a barrel on the ICE Futures exchange.
"It's obviously been a factor playing on the minds of oil markets at the moment," said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney. "There's a potential impact on production in the Gulf of Mexico area."
Gustav roared ashore on Haiti Tuesday near the city of Jacmel as a hurricane with top sustained winds near 90 mph (145 kph). The National Hurricane Center said the storm's winds dropped from hurricane-strength to 60 mph (95 kph) Wednesday. The storm was centered about 80 miles (125 kilometers) west of Port-au-Prince. But the storm's expected to get stronger later this week and continue moving toward the west-northwest.
The center says the storm could become a Category 2 hurricane Thursday, with winds of 96 mph or higher, on its expected path between Cuba and Jamaica.
Last week, Oil broke through the down trendline that was in place for a month and then started building a small uptrend. This was decisively broken on Friday morning following the Lehman news and Dollar rally.SEOUL (Reuters) - State-run Korea Development Bank said on Friday Lehman Brothers was one of its options for acquisitions, reviving expectations that the U.S. investment bank might still bring in a large investor.
"We are studying a number of options and are open to all possibilities, which could include (buying) Lehman," a KDB spokesman said.
KDB said it was open to mergers or acquisitions of both domestic and foreign companies to beef up its weak areas as the government was aiming to privatize it by 2012.
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Comment: Chances of this acquisition going through is very high.
(Click on chart for sharper image.)
US Bank writedowns since 2007 on Financial Times.
Euro had the biggest fall in 8 years. This was after ECB President Jean-Claude Trichet said economic growth will be ``particularly weak'' through the third quarter. People don't like surprises and it was was reflected in the reaction to the news. The Euro/FXE broke the 200 EMA. And the Dollar broke above the 200 EMA. This was more pronounced in the prices of Oil which has been only going down. The Dollar also broke through a downtrend line that was in place.
Here is the updated chart. We are back at the lower trendline after breaking out yesterday. Proves this market is very good at having wild swings and why many are having a tough time judging this market. The important point to note here is that the FED day lows are still intact. Also, the bottom TL has provided support for the past two times. Will it break on the third try? Well, it is anyone's guess. Till then, I will be watching this chart closely for next actions.
The second option that I laid out yesterday played out very well. That is down or flat in the open and then a big rally. I think we are headed to 1320-1340 range till this rally is over. That will be close to about 600-700 points on Dow. Enjoy the rally and don't short at this time. I am fully loaded on the long side. Check RIMM, AAPL, WMT, SHLD. Also, there is too much of negativity around commodities. Expect commodities to help this rally. So, all the Agris, Coals, Steels and maybe oil will help the rally. Note Oil doesn't have to continually fall. It can be either flat or slightly up to help the markets.
The FED held rates steady at 2%. They had one dissent and it is always Fisher.
S&P 500 broke above the downtrend channel. Now is this the new formation of a bull flag? Still unclear.
