STOCK MARKET WATCH, Thursday October 4

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday October 4, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 474 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2463 DAYS
WHERE'S OSAMA BIN-LADEN? 2175 DAYS
DAYS SINCE ENRON COLLAPSE = 2136
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES

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AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON October 3, 2007

Dow... 13,968.05 -79.26 (-0.56%)
Nasdaq... 2,729.43 -17.68 (-0.64%)
S&P 500... 1,539.59 -7.04 (-0.46%)
Gold future... 735.70 -0.60 (-0.08%)
30-Year Bond 4.79% +0.01 (+0.19%)
10-Yr Bond... 4.54% +0.01 (+0.31%)






GOLD, EURO, YEN, Loonie and Silver

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PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

---

Read more: du

[ozymandius]

1. Market WrapUp: U.S. Economic Energy Intensity:

Why $80 oil hasn't impacted our economy, but why $162 oil will
BY CHRIS PUPLAVA

With oil north of $80 a barrel it seems appropriate to revisit another conundrum facing economists, which is why high energy prices have yet to derail the economy. Many economists and analysts have estimated that high oil prices would lead to demand destruction and dent economic activity. Back in 2005 oil jumped to $60 a barrel and then even over $70 a barrel with hurricanes Katrina and Rita, and yet the resilient U.S. economy continued chugging along.

Last year we saw West Texas Intermediate Crude (WTIC) oil rise to $79.86 a barrel, kissing the $80 a barrel mark and again analyst were expecting demand destruction that never materialized. Oil retreated towards the end of last year before bottoming near $51.03 a barrel in early January of this year. Since then oil has risen 64% to new all-time highs at $83.76 a barrel. The question then becomes, if the economy survived $70 dollar oil and $80 dollar oil, how high can it go before oil prices impact the economy?

Looking back to the late 1970s and early 1980s energy crisis, where sky rocketing oil prices contributed to the twin recessions in 1980 and 1981, provides a comparative example with which to determine how high energy prices can go before the economy cries “uncle”. There have been several suggestions as to why high oil prices have not impacted the economy as they did during the 1970s and 1980s, one being inflation. Correcting crude oil for inflation does reveal that we have not risen to the inflation adjusted high of $102.53 per barrel seen on March 31st, 1980, as we are currently more than 20% below that high.

-cut-

The result of China’s industrialization and the exporting of U.S. manufacturing jobs overseas is an explosion in the energy consumption of China, as a manufacturing economy is inherently more energy intensive than a service economy. The normal pattern in U.S. corporate hiring in response to economic activity abruptly came to an end during the 2001 recession and was the catalyst that led to the surge in Chinese energy demand.

Instead of revamping its manufacturing base when emerging from the 2001 recession, corporate America continued to gut its manufacturing base, exporting jobs overseas as manufacturing employment has been on a one-way-street, down.

http://www.financialsense.com/Market/wrapup.htm

[Demeter]

14. Who Says It Hasn't Impacted the Economy?

Does Walmart have to go bankrupt for somebody to take notice that the economy is reeling? Or can they make excuses that avoid that elephant in the living room?

Isn't the mortgage collapse conditional on how much money gasoline costs drained out of pockets these past 5 years? And the states' financial problems? And the disappearance of any new businesses with the exception of Blackwater?

Do we really need to grab pitchforks and torches and riot in the street before somebody notices?


Of course, I'm in Michigan, and we've been in depression since Bush stole his first term...and since the government cooks their reports like cream of wheat, there's no trusting the numbers. Let's just say that 1973 would feel like a recovery, today!

[fasttense]

21. Interesting you should post that.

My husband works as a subcontractor for Wal-Mart. He has noticed of late that many people are being sent home early without completing their 10 hour shifts. They have fired several supervisors and a few managers. The center is practically empty by noon.

The fallout of the sub-prime mess will be hitting us for years. I saw this poll on AOL and found the results amazing:

Have you been affected by the mortgage crisis?
No 83% 845
Yes 17% 177
Total Votes: 1,022

http://money.aol.com/

People are really not paying attention. Have you applied for a loan in the last three months? If you have, you have been affected by the mortgage crisis. Have you bought imported products in the last three months? If you have, you have been affected by the mortgage crisis.

I read on Dr. Housing Bubble that the majority of people who are behind in their mortgage payments give the reason for their delinquency as the loss of income. It is not just the bad mortgages. It is the lack of jobs out there that are causing people to default. Since this administration has joined with corporations to send most of our middle class jobs to foreign countries, Americans can't pay their mortgages. Now who would have thought it?

[Demeter]

22. In a Perverse Way, That's GOOD News

When you are riding a mule, the first thing you have to do is get its attention....

If having Walmart go under is the apocalypse that ends this nonsense, I'm all for it happening sooner rather than later.

[poverlay]

36. I'm just not sure that I can stand all of those

dirty, poor republican people shopping at my Target and Trader Joe's though... :sarcasm:
:sarcasm: :sarcasm:

[Hugin]

29. So, this is the final result of the so-called "Jobless Recovery" we experienced earlier...

Although, I maintain it wasn't a Recovery and it's steadily gotten worse.

The housing market and therefore the economy as a whole won't 'recover' until...

- There are jobs near these McMansions which pay an adequate salary to make the payments.
- The ridiculous prices of the McMansions level off in some sensible and affordable range based
on the prevailing wages in the areas where they have been built.
- Energy profit gouging ceases.
- The War and it's expensive debt are ended.
- Deficit spending is ended.
- The only rich and the super rich begin to pay their fair share of what it costs to live in this country.
- The Corporate Welfare and Privatization of our infrastructure is ended and the huge conglomos begin to
pay their fair share of what it costs to do business in this country.
- We re-develop our industrial and agricultural base.

Otherwise, it's all over folks. Welcome to your new Banana Republic.

[InkAddict]

32. The high cost of healthcare and old eligibility criteria for assistance

that don't work to anyone's general welfare also have contributed. What would you save, your child/spouse/parent or your house? And just what kind of care would one expect if one was willing to not encumber "surviving" family members?

[ozymandius]

2. Today's Reports

8:30 AM Initial Claims 09/29
Briefing Forecast 310K
Market Expects 310K
Prior 298K

10:00 AM Factory Orders Aug
Briefing Forecast -3.0%
Market Expects -2.8%
Prior 3.7%

http://biz.yahoo.com/c/e.html

[UpInArms]

24. Initial Claims in @ 317,000 (last wk rev'd up 3K)

28. U.S. 4-wk. avg. continuing jobless claims fall to 2.56 mln
8:30 AM ET, Oct 04, 2007 - 55 minutes ago

29. U.S. continuing jobless claims fall by 10,000 to 2.54 mln
8:30 AM ET, Oct 04, 2007 - 55 minutes ago

30. U.S. 4-wk. avg. initial claims rise by 500 to 312,750
8:30 AM ET, Oct 04, 2007 - 55 minutes ago

31. U.S. weekly initial jobless claims up by 16,000 to 317,000
8:30 AM ET, Oct 04, 2007 - 55 minutes ago

[UpInArms]

30. U.S. Aug. factory orders down 3.3% vs fall 2.6% forecast

01. U.S. Aug. factory orders ex-transportation down 1.7%
10:00 AM ET, Oct 04, 2007 - 4 minutes ago

02. U.S. July factory order up revised 3.4% vs 3.7% prev
10:00 AM ET, Oct 04, 2007 - 4 minutes ago

03. U.S. Aug. factory orders biggest drop since Jan.
10:00 AM ET, Oct 04, 2007 - 4 minutes ago

04. U.S. Aug. factory orders down 3.3% vs fall 2.6% forecast
10:00 AM ET, Oct 04, 2007 - 4 minutes ago

[ozymandius]

3. Oil prices fall below $80 barrel

BANGKOK, Thailand - Oil prices fell Thursday in Asia, extending a decline from the previous session that came after an unexpected increase in U.S. crude oil inventories.

Light, sweet crude for November delivery fell 28 cents to $79.66 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore. The Nymex crude contract fell 11 cents to settle at $79.94 a barrel in Wednesday's floor session.

Crude oil futures have fallen four straight days after trading at near record levels last week.

The weekly inventory report from the U.S. Energy Department's Energy Information Administration was mixed, analysts said.

Crude oil supplies unexpectedly rose in the week ended Sept. 28. Gasoline and distillate inventories unexpectedly fell.

-cut-

Oil's true value is closer to $65 a barrel, said Tim Evans, an analyst at Citigroup Inc. in New York, instead of the near $80 a barrel or higher range it has been trading.

Many analysts feel oil prices have been driven up by speculative buying, and they argue that the market's underlying supply and demand fundamentals do not support the record prices of recent weeks.

http://news.yahoo.com/s/ap/oil_prices

[Roland99]

7. Oil is still very $$. But yet I just filled up yesterday at $2.49/gal (well, $2.39 w/discount)

nearly $1/gal below peak prices here earlier this year while oil is over $10/bbl more.

[ozymandius]

4. Each lost Wall St job costs NYC two other jobs: study

NEW YORK (Reuters) - New York City could lose two jobs for every one cut on Wall Street, while anecdotal evidence shows that both residential and commercial markets might finally be starting to cool, a new report said on Wednesday.

Capsizing financial and real estate markets could torpedo the city budget.

"Barring a Wall Street (and Main Street housing market) miracle, the city faces a potential deficit reaching 5 percent of city-funded spending this year or more," the Manhattan Institute's report said.

Next year, there could be an even bigger deficit of 7 percent to 12 percent, the nonprofit research group warned.

Wall Street companies can produce up to one-fifth of city tax revenues. These employers added 20,000 workers from 2003 to 2006, causing other firms to hire 40,000 employees, the report said. Until scorched by the summer mortgage meltdown, this sector seemed poised to match or top 2006's record bonuses.

But now banks and brokerages are slashing tens of thousands of jobs, and Mayor Michael Bloomberg, who had to close a $5 billion deficit when his first term began in 2002, might again have to raise taxes or cut spending, the report said.

http://news.yahoo.com/s/nm/20071004/bs_nm/newyorkcity_economy1_dc

[ozymandius]

5. Asian shares fall as investors lock in gains; Hang Seng leads decline UPDATE

SINGAPORE, Oct. 4, 2007 (Thomson Financial delivered by Newstex) -- Stock markets across Asia fell Thursday with Hong Kong leading the decline, as investors took a break from the recent rally to lock in gains and await the US September jobs report.

The Hang Seng retreated from its recent record highs, shedding another 700 points, or 2.6 percent, to 26,756, with the selling acclerating in the final hour of trade.

The Nikkei closed down 0.6 percent at 17.092, while the broader Topix finished down 0.5 percent at 1,655. Technology stocks including electronics giant Sony (NYSE:SNE) fell after weakness in the US sector overnight.

The Australian S&P/ASX 200 closed down 1.4 percent at 6,566 and the All Ordinaries was down 1.3 percent at 6,579 with mining giants BHP Billition and Rio Tinto pacing the decline.

http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-20021578.htm

[Ghost Dog]

8. Yup.

http://www.bloomberg.com/apps/news?pid=20601080&sid=adWT49p.ohmQ&refer=asia

``There's quite a lot of risk in the markets and valuations aren't very cheap,'' said Christopher Wong, who helps manage $50 billion at Aberdeen Asset Management in Singapore. ``Investors have been increasing their risk appetite, whether that's justified remains to be seen.''

The Morgan Stanley Capital International Asia Pacific Index lost 1 percent to 164.71 as of 3:42 p.m. in Tokyo. The drop, the most since Sept. 18, snapped a five-day advance that drove the measure to a high. Its 14-day relative strength index closed above 70 on each of the past four days, a signal some investors view as a signal to sell.

Japan's Nikkei 225 Stock Average, which failed to reach a high in the recent rally, lost 0.7 percent to 17,077.26. Australia's key index fell the most in seven weeks and India's Sensitive Index ended its best winning streak in four years. China, where the CSI 300 Index closed Sept. 28 at a record, is shut for a week-long holiday.

...

``We've seen an amazing run but things have probably gone too far, too fast,'' said Richard Wallace, who helps manage $138 million at Wallace Funds Management in Sydney. ``The global economy has still got pretty significant question marks.''

...

China Mobile and China Life Insurance Co. led declines in Hong Kong, having been the biggest contributors to the Hang Seng Index's rally since China's Aug. 20 announcement that citizens will be allowed to buy the city's shares directly.

The Hang Seng gained 33 percent in that time and the Hang Seng China Enterprises Index, which tracks the Hong Kong-listed shares of 43 mainland companies, jumped 53 percent. The gains were the biggest among 89 global benchmarks tracked by Bloomberg.

...

``It's China and the emerging markets driving economic growth and, when that happens, we should trade at a premium,'' Khiem Do, who helps oversee $16 billion of equities in Asia excluding Japan at Baring Asset Management (Asia) Ltd. ``A lot of people miss that and they say markets are too expensive so sell, sell, sell.''

/...

[Ghost Dog]

9. Nikkei falls 0.6 pct as Kyocera, tech stocks slide

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20071004:MTFH63471_2007-10-04_06-50-34_T142730&type=comktNews&rpc=44

TOKYO, Oct 4 (Reuters) - Japan's Nikkei average retreated 0.6 percent on Thursday from the previous session's nine-week closing high, dragged down by high-tech shares such as Kyocera Corp (6971.T: Quote, NEWS , Research) after a negative report on Intel Corp (INTC.O: Quote, Profile , Research).

Retail giant Seven & I Holdings Co Ltd (3382.T: Quote, NEWS , Research) dropped more than 3 percent on news it will likely miss its first-half profit target.

Aeon Co Ltd (8267.T: Quote, NEWS , Research), Japan's second-biggest retail group, lost nearly 5 percent. It said minutes before the closing bell its first-half operating profit fell 18 percent, hit by poor sales at its U.S. apparel unit Talbots Inc (TLB.N: Quote, Profile , Research).

The market received some support as banks such as Mitsubishi UFJ Financial Group (8306.T: Quote, NEWS , Research) continued their rally on the notion the worst is over for the U.S. subprime mortgage market, said Akihito Yamanoi, general manager of the equity investment department at AIG Global Investment Corp. (Japan).

"It's natural for the market to adjust itself after the recent rally ... but before the U.S. jobs data, investors find it hard to make a move," he said.

Investors are watching Friday's release of September U.S. payrolls data, which may suggest the housing slump and credit market turmoil is seeping into the broader U.S. economy.

/...

[Ghost Dog]

10. BOJ's Iwata stresses risks in Japanese economy

http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=2007-10-04T070351Z_01_T161758_RTRIDST_0_JAPAN-ECONOMY-BOJ-UPDATE-2.XML

SHIMONOSEKI, Japan, Oct 4 (Reuters) - Bank of Japan Deputy Governor Kazumasa Iwata, seen as dovish on interest rates, said on Thursday the central bank needed to closely examine risks, among them soft stock prices and a higher yen.

Iwata, the only BOJ member to vote against the central bank's latest rate increase in February, stressed downside risks for Japan's export-driven economic growth, among them the increased chance of a further U.S. economic slowdown and still jittery financial markets.

"We need to be aware that stock price falls and the yen's rise, if sustained, could have a negative effect on Japan's economic outlook," Iwata said in a speech to business leaders in Shimonoseki, southwestern Japan.

Financial markets did not react to Iwata's remarks, a week ahead of the next Japanese rate review, at which it is seen keeping its key policy rate unchanged at 0.5 percent.

Iwata was seen as doing little to clarify whether the BOJ will raise rates this year, as part of a programme to restore Japanese them to more normal levels, or wait until next year while it assesses fallout from U.S. subprime woes.

"Iwata was cautious as expected as he underlined the point that uncertainty was heightening over the outlook for the U.S. economy," said Naomi Hasegawa, senior fixed income strategist at Mitsubishi UFJ Securities.

/...

[ozymandius]

6. Wall Street waits for jobs report

LONDON (CNNMoney.com) -- U.S. stocks are likely to trade lower Thursday as investors move to the sidelines ahead of a closely watched employment report that could provide clues about the future direction of interest rates.

At 4:26 a.m. ET, futures were weaker and pointing to a lower open for Wall Street.

Traders are anxious ahead of the September jobs report due out on Friday. The government report is expected to show a gain of 100,000 jobs after a decline in August, according to economists surveyed by Briefing.com.

The number is likely to play a big factor as the Federal Reserve decides whether or not to keep cutting interest rates. A weak report could give policymakers room to keep lowering rates. A much stronger report could also rattle investors hoping for more cuts from the Fed.

http://money.cnn.com/2007/10/04/markets/stockswatch/index.htm

[Ghost Dog]

11. Deutsche and Merrill latest credit victims

http://www.ft.com/cms/s/0e213364-718f-11dc-8960-0000779fd2ac,dwp_uuid=0ce591b8-2fa2-11dc-a68f-0000779fd2ac,upd=enforce_dwp,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F0e213364-718f-11dc-8960-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Feurope

By Chris Hughes and Gillian Tett in London and Ivar Simensen in Frankfurt
Published: October 3 2007 10:08 | Last updated: October 4 2007 01:05

Deutsche Bank on Wednesday became the latest big investment bank to announce losses worth billions of dollars as a result of the recent credit turmoil.

Deutsche’s announcement came as Osman Semerci, head of fixed income trading at Merrill Lynch, became the latest high-level casualty of the credit squeeze.

"To continue reading this article, please register – it’s quick, free and without obligation..."

(The FT changed their registration policy, it seems).

[Ghost Dog]

26. Sceptics round on Deutsche Bank's forecast

http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=2007-10-04T131319Z_01_L04643307_RTRIDST_0_DEUTSCHEBANK-ANALYSTS.XML&WTmodLoc=HybArt-C2-NextArticle-2

FRANKFURT, Oct 4 (Reuters) - Deutsche Bank's (DBKGn.DE: Quote, Profile , Research) insistence it was on track for its 2008 profit goal was greeted with scepticism on Thursday after credit market turmoil knocked the bank's third-quarter pretax results.

Although Deutsche's shares had rallied with the news on Wednesday, JP Morgan said Germany's biggest listed lender had in fact issued a profit warning and criticised it for giving "unrealistic" guidance for next year.

Citigroup analyst Jeremy Sigee latched onto the bank's proviso that markets would have to function "normally" for its 2008 target to be reached. "The latter phrase appears to be a new emphasis and will be crucial," he wrote.

Others were more optimistic. UBS described the forecast as reassuring while Morgan Stanley said market investors would see the writedowns from the credit crisis as "cathartic".

Deutsche Bank stock lagged sector peers on Thursday, gaining 0.4 percent to 95.90 euros by 1246 GMT while the DJ Stoxx European banking index <.SX7P> rose 1.5 percent.

On Wednesday, Deutsche announced it expected pretax profit to slip by about a third in the third quarter of the year despite a windfall from the sale of offices on Wall Street.

As with major rivals, Deutsche's profits are being squeezed by heavy writedowns on structured credit products as well as loans whose value dwindled amid the debt market crisis. The bank would normally farm these loans out to other banks, but it has become harder to sell on such debt in the wake of a credit squeeze that began with a wave of mortgage defaults in the United States.

/...

[Ghost Dog]

12. Capital markets face shift to opaque investors

http://www.ft.com/cms/s/71d05460-71d7-11dc-8960-0000779fd2ac,dwp_uuid=0ce591b8-2fa2-11dc-a68f-0000779fd2ac,upd=enforce_dwp,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F71d05460-71d7-11dc-8960-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Feurope

Global financial markets face a permanent shift in power from traditional money managers to opaque groups such as petro-dollar investors, Asian central banks, hedge funds and private equity groups, according to a study out Thursday.

These power brokers had amassed $8,400bn in assets by the end of 2006, three times what they held in 2000 when they were “little more than fringe players” in the capital markets, says the report, published by McKinsey Global Institute.

[Ghost Dog]

13. Danger lights flashing for eurozone economy

http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=176463&version=1&template_id=48&parent_id=28

PARIS (Reuters): Bad news is coming thick and fast from the European economy and those who hoped a global credit crunch would hit only financial markets without denting economic activity ought to be feeling uneasy.

...

The latest bad news on eurozone economic performance came in a service sector survey involving soundings of purchasing managers at some 2,000 companies across the currency zone, and follows a downturn in business and consumer sentiment.

The September survey, spearheaded by consultancy NTC Research, showed activity hit a two-year low and that the monthly deceleration was the sharpest in the nine-year history of the exercise.

The same PMI survey series painted a broadly similar picture in the manufacturing sector and most of the latest readouts are flashing orange, notably in European powerhouse economy Germany.

“It is not clear how widespread and long-lasting German firms expect the current pain to be,” Lehman Brothers economist Sandra Petcov said of the service sector reports.

Economists said all was not doom and gloom however and that the readout in employment and business expectations at euro zone level were encouraging.
Some of the problems were in the pipeline before the crunch hit in August, be it downturns in the bubbly Spanish and Irish housing and construction sectors or the absence of any marked upturn in German household spending.

“Signs of weakening in the euro area were already present prior to the financial merket turmoil as shown by the moderation in construction and manufacturing output growth,” said Jacques Cailloux, chief Europe economist at Royal Bank of Scotland.

...

Consumer sentiment sank in September in Germany, France and Spain according to national surveys, and business morale slumped in both pan-European surveys by the European Commission as well as national ones, notably in Germany, down at a 21-month low.

/...

[Ghost Dog]

15. Rallying banks help European stocks turn positive

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=eurMktRpt&storyID=2007-10-04T090411Z_01_L04591304_RTRIDST_0_MARKETS-EUROPE-STOCKS-URGENT.XML

PARIS, Oct 4 (Reuters) - European stocks turned positive in late morning trade, as rallying banking shares overshadowed a drop in mining stocks, retreating after hefty gains. Investors remained cautious ahead of interest rate decisions from both the Bank of England and the European Central Bank expected later in the day.

At 0858 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was up 0.06 percent at 1,571.61 points, moving into positive territory for the fourth consecutive session. Royal Bank of Scotland (RBS.L: Quote, Profile , Research) was up 4.1 percent, while HSBC (HSBA.L: Quote, Profile , Research) was up 1.6 percent. On the downside, Anglo American (AAL.L: Quote, Profile , Research) lost 2.5 percent and Rio Tinto (RIO.L: Quote, Profile , Research) dipped 1.8 percent.

[Ghost Dog]

16. Strong banks lift FTSE; market awaits rate verdict

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=londonMktRpt&storyID=2007-10-04T100852Z_01_L04597241_RTRIDST_0_MARKETS-BRITAIN-STOCKS-UPDATE-1.XML

LONDON, Oct 4 (Reuters) - Leading UK shares rose on Thursday, as Northern Rock (NRK.L: Quote, Profile , Research) leapt after people familiar with the matter said Citigroup had offered funding to potential buyers, and investors widely expected the Bank of England to hold rates.

By 1006 GMT the FTSE 100 .FTSE was up 48.9 points, or 0.75 percent, at 6,584.1, reversing earlier losses to outperform other major European indexes as heavyweight London-listed oil shares rose.

...

Banks led the advance as troubled lender Northern Rock surged 14 percent, building on a 12 percent rise on Wednesday. The Times said at least four serious bidders remained in the auction of the bank, including JC Flowers and Cerberus.

Royal Bank of Scotland (RBS.L: Quote, Profile , Research), which is nearing the finishing line for the takeover of ABN AMRO (AAH.AS: Quote, Profile , Research) against an improving equity- and credit-market backdrop, rose 3.3 percent. Lloyds (LLOY.L: Quote, Profile , Research), Barclays (BARC.L: Quote, Profile , Research) and HSBC (HSBA.L: Quote, Profile , Research) were also standout gainers.

All eyes were on the Bank of England, which is due to announce its monetary policy committee (MPC) decision on interest rates at 1100 GMT and is expected to keep borrowing costs steady at 5.75 percent following recent ructions in global stock markets amid an ongoing credit crisis.

/...

[Ghost Dog]

25. European shares extend gains on Trichet comments

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20071004:MTFH71380_2007-10-04_13-01-51_L0438859&type=comktNews&rpc=44

LONDON, Oct 4 (Reuters) - European shares extended gains on Thursday on comments from European Central Bank President Jean-Claude Trichet after the ECB kept rates steady, as expected.

Trichet said that forecasts for 2008 confirmed the main scenario of GDP growth around potential, and that the underlying rate of money and credit growth remained strong. At 1249 GMT, the FTSEurofirst 300 index of top European shares <.FTEU3> was up 0.44 percent at 1,577.70 points, after touching the day's high at 1,579.23 on Trichet's comments.

/..

[Ghost Dog]

40. Steady rates extend Europe shares' winning streak

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=eurMktRpt&storyID=2007-10-04T163816Z_01_L04443132_RTRIDST_0_MARKETS-EUROPE-SHARES-UPDATE-4.XML

LONDON, Oct 4 (Reuters) - A key European share benchmark ended higher on Thursday, extending a winning streak to four days as central banks kept rates on hold as expected and financials gained.

The FTSEurofirst 300 <.FTEU3> index of top European shares ended 0.11 percent higher at 1,572.75 points, with banks the top weighted gainers.

But national benchmarks were mixed, with Britain's FTSE 100 .FTSE rising, France's CAC 40 <.FCHI> flat and Germany's DAX <.GDAXI> slightly lower.

/...

[Ghost Dog]

17. FOREX-Dollar slips as markets await BoE, ECB rate decisions

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=usDollarRpt&storyID=2007-10-04T075213Z_01_L04576697_RTRIDST_0_MARKETS-FOREX-UPDATE-3.XML

LONDON, Oct 4 (Reuters) - The dollar slipped on Thursday, but stayed off record lows against the euro, with major currencies trading within narrow ranges ahead of key interest rate decisions from the Bank of England and the European Central Bank.

Both the BoE and the ECB are expected later in the session to keep their interest rates steady at 5.75 percent and 4.0 percent, respectively, as they wait to see how the global credit crunch affects their overall economies.

...

The euro <EUR=> was slightly up at $1.4095 and well below its all-time high of $1.4281 hit according to Reuters data earlier this week.

Meanwhile, the yen rose against the euro and other high- yielding currencies like the Australian dollar as investors trimmed positions in carry trades ahead of the central bank decisions.

/...

[Ghost Dog]

18. Bank of England keeps UK borrowing costs at 5.75%

Bank of England keeps UK borrowing costs at 5.75 per cent as house price inflation market finally begins to slow
http://business.timesonline.co.uk/tol/business/economics/article2587811.ece

The Bank of England’s Monetary Policy Committee's (MPC) voted today to keep the interest rates unchanged at 5.75 per cent, as the six-year high in borrowing costs helped to push house price inflation down by 0.6 per cent in September.

The MPC was widely expected to keep British borrowing costs at the present rate despite the turmoil in the financial markets.

Interest rates have risen to a six-year high after five increases since August last year.

The rises appear to be taking the pace out of housing inflation, according to figures released by the Halifax, showing the first monthly fall since December last year, when prices declined by 0.9 per cent.

Overall, house prices in the third quarter of this year rose by 0.9 per cent, but this is compared with an increase of 3 per cent in the first three months of 2007 and 2.3 per cent in the second quarter.

/...

[Ghost Dog]

23. ECB leaves eurozone rates on hold

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B20be5875%2D94b6%2D464e%2D8888%2D052fa0c1c649%7D

The European Central Bank has left its main interest rate unchanged at 4 per cent amid uncertainty about the impact of the global credit squeeze on the eurozone economy. No change had been expected by the ECB, which met in Vienna after last month’s decision to shelve a planned quarter percentage increase in borrowing costs that had been pencilled in before the recent financial market turmoil.

...

Many analysts believe ECB interest rates have already peaked and that the next move will be downwards sometime next year.

/..

[fasttense]

19. My father was a tail gunner in WWII.

He would have loved this joke. Thanks for posting it.

[Ghost Dog]

28. A hot seat. Glad he made it, fasttense.

[neverforget]

46. My uncle was also a tailgunner in WW2 on a B17.

[UpInArms]

20. dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DX&v=i

Last trade 78.545 Change -0.092 (-0.12%)

Watch What the Fed Watches - New Weekly Report

http://www.dailyfx.com/story/topheadline/Watch_What_the_Fed_Watches_1191438822788.html

Trying to time when the Federal Reserve will cut interest rates next and by how much is the biggest task for the financial markets at the moment and the biggest driver of currency, stock and bond market fluctuations. The majority of the market is looking at just non-farm payrolls, inflation data, consumer spending and bond yields, which means if that’s all that you follow, you risk being behind the curve. The Fed’s job is to not only balance growth with inflation, but also to ensure stability in the banking sector. They need to be ahead of the curve and in order to do so they look at much more than the monthly consumer and inflation data. Our new report Watch What the Fed Watches provides weekly updates on many of the things that the Fed follows including bank deposits, credit card delinquencies and bond spreads.

CREDIT MARKET: HOW IS IT DOING?



<snip>

U.S. CONSUMER: HOW ARE THEY DOING?



...more...

The US Dollar is Back - Or Is It?

http://www.dailyfx.com/story/bio1/The_US_Dollar_is_Back_1191446355161.html

For the second day in a row, we have seen the US dollar recover, but the strength was not universal. The dollar is higher against the Euro, British Pound, Swiss Franc and Japanese Yen but weaker against the commodity currencies. Last month, seven indicators correctly forecasted a weak payrolls number. This month, six out of those seven including the ADP survey and the Challenger layoffs report signal that there will be a sharp improvement in payrolls. Economists are currently expecting 100k jobs to have been added to corporate payrolls last month and the fact that the latest data supports that call explains why the US dollar is higher. In addition to the ADP and Challenger reports, the components of service sector ISM also painted a more bullish outlook for this Friday’s non-farm payrolls. After contracting for the first time since September 2003, the employment component rebounded back into expansionary territory. Prices paid were also materially higher, reflecting the inflationary pressures of a weaker dollar. The overall index dropped from the prior month but the drop was less than expected. Meanwhile also leading the dollar higher is speculation that we could see some official criticism about dollar weakness at the upcoming G7 meeting. We believe that the chance of this is slim because it would require all 7 of the members including the US and the UK to back the language change. However, an official comment on the dollar may not be needed to cause an increase in volatility. In the spring of 2004, US Treasury Secretary Snow was briefing a group of journalists at the G-7 meeting. When asked about how he would define a strong dollar, Snow said: “You want the currency to be a good store of value against its rivals. You want it to be something people are willing to hold. You want it to be hard to counterfeit.” The market pounced on the fear that this meant the US government would no longer support a strong dollar. In the weeks that followed, the dollar fell 4 percent against the Yen and 3.5 percent against the Euro. This time around, we are looking for the opposite scenario, which are comments to support the dollar. Jobless claims and US factory orders are due for release tomorrow. If claims remain below 300k, speculation of a bottom in the US economy will build. As for factory orders, it is expected to drop following deterioration in durable goods and manufacturing ISM.

...more...

[UpInArms]

27. Countrywide ordered to provide option data: reports (insider trading)

http://www.reuters.com/article/businessNews/idUSN0410733620071004?feedType=RSS&feedName=businessNews

NEW YORK (Reuters) - Countrywide Financial Corp (CFC.N: Quote, Profile, Research) was ordered to give confidential information about its stock-grant practices to a pension fund that claims it gave executive stock rights at "unusually suspicious and lucrative times," the Los Angeles Times reported on its Web site.

A ruling issued late on Tuesday in Delaware Chancery Court, demands that Countrywide turn over "minutes, notes, presentations, slides" and other materials regarding stock options granted to Countrywide officers or executives, the article said.

According to the article, Countrywide said in a statement that the suit "presented no credible evidence of wrongdoing relating to the purported manipulation of option grants."

<snip>

The court also ordered Countrywide to give the retirement plan any information that Countrywide may have produced for the U.S. Securities and Exchange Commission, the New York Stock Exchange and the Department of Justice, in connection with any investigation into Countrywide's stock option grants, the Times reported.

...more at link...

[Demeter]

49. Krugman's Column on countryside Was Enlightening

http://www.nytimes.com/2007/10/01/opinion/01krugman.html?_r=1&n=Top/Opinion/Editorials%20and%20Op-Ed/Op-Ed/Columnists/Paul%20Krugman&oref=slogin





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

Enron’s Second Coming?

By PAUL KRUGMAN

In May 2005 NYSE Magazine featured an article titled “American Dream Builder” — a glowing profile of Angelo Mozilo, the chairman and C.E.O. of Countrywide Financial, the nation’s largest mortgage lender. The article portrayed Mr. Mozilo as a heckuva guy — a man from a humble background determined to help other people, especially members of minority groups, achieve the American dream of homeownership.

The article didn’t mention one of Mr. Mozilo’s other distinguishing characteristics: the extraordinary size of his paychecks. Last year Mr. Mozilo was paid $142 million, making him the seventh-highest-paid chief executive in America.

These days, of course, Mr. Mozilo doesn’t look like such a wonderful guy, after all. Instead, he’s starting to bring back memories of other people who used to be praised not just as great businessmen but as great human beings — people like Enron’s Ken Lay and WorldCom’s Bernie Ebbers.

So far, nobody has accused Mr. Mozilo of breaking the law. Still, what we’re learning from the housing mess is that the crisis of corporate governance, which made headlines in the early years of this decade, never went away.

At this point it appears that Mr. Mozilo achieved the rare feat of victimizing three distinct groups...

[UpInArms]

31. HUGE Fed Pumping Program Today: $28 Billion so far

Fed adds $24 bln in temporary reserves in 7-day repo

http://www.reuters.com/article/bondsNews/idUSNYG00077220071004

NEW YORK, Oct 4 (Reuters) - The U.S. Federal Reserve on Thursday said it added $24 billion of temporary reserves to the banking system via a 7-day repurchase agreement.

The Fed accepted as collateral $18.32 billion of Treasuries, $5.04 billion of agency debt and $640 million of mortgage backed securities.

Federal funds traded in the market at 4.75 percent after the operation amount was announced, matching the 4.75 percent target rate the Fed sets.

Earlier on Thursday, the Fed added $4 billion of temporary reserves to the banking system via a 14-day repurchase agreement, accepting Treasuries as collateral.

Fed adds $4 bln in reserves through 14-day repos

http://www.reuters.com/article/bondsNews/idUSNYD00010820071004

NEW YORK, Oct 4 (Reuters) - The U.S. Federal Reserve said on Thursday it added $4 billion of temporary reserves to the banking system through 14-day repurchase agreements.

The Fed said the collateral accepted on the 14-day repurchase was made up of $4 billion of Treasuries. A total of $99.75 billion in bids were submitted for the 14-day repurchase.

[PassingFair]

33. WTF? Is this a daily or weekly infusion/outfusion now?

What the hell?

I don't know whether to: :shrug: or :scared:

[radfringe]

34. think of it this way

you are in a small boat in the middle of the ocean. the boat is leaking in a gallon a water for 1/2 gallon you bail out. It's delaying the inevitable, drag and dump economics...

drag it out and dump it on the next guy

[Demeter]

42. Excellent Analogy, But For One Omission

There are hungry sharks in the ocean, slowly gnawing away at your leaky vessel, making the water flow in faster, and faster, while you have less space to stand and are in danger of being eaten alive while bailing....

[Theres-a]

52. One more thing

There is a satellite teevee on the boat,and all the channels talk about how great everything is,and it's not the captain's fault that the passengers aren't able to fix the boat. And another chorus adds "No one could have anticipated a leak in the boat".

[UpInArms]

35. it is now definitely "daily"

http://www.321gold.com/fed/temp_bank_res.html

here's a link to an archive showing the 9/11 pump

http://www.321gold.com/fed/temp_bank_res_01.html

(really an interesting recordation site)

[TrogL]

37. Gold Bug alert

[UpInArms]

39. facts are facts wherever they exist

[Ghost Dog]

41. Gold rebounds from 2-week lows on weaker dollar

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=goldMktRpt&storyID=2007-10-04T152227Z_01_L04629728_RTRIDST_0_MARKETS-PRECIOUS-UPDATE-5.XML

LONDON, Oct 4 (Reuters) - Gold rebounded to trade higher on Thursday after hitting two-week lows, as the metal's allure as an alternative investment rose with a drop in the dollar.

Spot gold <XAU=> hit an intraday low of $720.70 an ounce before rising more than $12 to $733.20. It was quoted at $732.20/732.80 by 1442 GMT, against $729.70/730.50 late in New York on Wednesday.

"Gold rebounded after U.S. data releases, Trichet comments and the fact that we held above $720. As there have been people looking to take profits, there have been those who are looking to get in on a dip," said Simon Weeks, director of precious metals at ScotiaMocatta.

"We are expected to trade between $725 and $736 for now, but I think we would hold and work our way higher overall. If we could get a close on Friday above $740, then next week we would see another run at the highs."

The dollar fell, snapping a three-day rally, as dealers anticipated Friday's September U.S. payrolls data may not reflect enough strength to keep the Federal Reserve from cutting interest rates.

Dealers also noted comments by European Central Bank President Jean-Claude Trichet who said risks to economic growth remained to the downside amid market uncertainty.

/...

[PassingFair]

38. So.....

:shrug:

...is the appropriate physical response?

As long as the money is being "repaid"
there is nothing to get upset about,
right?

I'm not being facetious here. Just stupid. :)

On edit:

Just re-read the math part about the HALF gallon being "repaid"

Commence :scared:!

[Roland99]

44. National Debt has risen $180 billion THIS WEEK ALONE?!?!?

Am I reading that correctly?!


:wow:

[Ghost Dog]

43. 13:30 - wait-and-see

Dow 13,971.63 Up 3.58 (0.03%)
Nasdaq 2,729.51 Up 0.08 (0.00%)
S&P 500 1,541.27 Up 1.68 (0.11%)
10-Yr Bond 4.5270% Down 0.0160
NYSE Volume 1,456,300,500
Nasdaq Volume 1,018,020,120

1:00 pm : The major indices continue to trade in a tight range close to the unchanged mark, as the market remains in a wait-and-see mode ahead of the September jobs report tomorrow.

The hotel operator Marriot International (MAR 42.11, -2.21) has been a laggard today. Although it reported that earnings per share were a penny better than analysts' expectations, revenue still declined from the previous year. Also, Marriot forecasted future earnings that were lower than expected.

Crude oil futures, in a roller coaster trade today, are now up 1.0% to $80.75.DJ30 +11.47 NASDAQ +3.25 SP500 +2.76 NASDAQ Dec/Adv/Vol 1200/1630/888 mln NYSE Dec/Adv/Vol 1333/1815/503 mln

12:30 pm : The indices have been choppy since the last update. They continue to float around the unchanged mark.

As has been the case of late, the small-cap Russell 2000 index (+0.25%) is outperforming its large-cap counterparts this session. Mid-caps are not faring as well; the S&P 400 (-0.07%) is lagging behind, but not by a large margin.

Sears Holding (SHLD 142.75, +4.47) has received a nice boost this morning following a report from Bloomberg that it received an email from activist investor William Ackman who confirmed that he had purchased 5 million shares in Sears. Ackman did not give a reason why he made the purchase. DJ30 -1.78 NASDAQ +1.26 R2K +0.25% SP400 -0.07% SP500 +1.77 NASDAQ Dec/Adv/Vol 1242/1569/807 mln NYSE Dec/Adv/Vol 1380/1735/450 mln

12:00 pm : After a positive start, and then a dip into negative territory, the indices have steadied and now trade close to unchanged. Overall, the morning had very little market-moving economic and corporate news.

The Department of Labor reported weekly initial jobless claims for the week ended September 19th rose to 317k, a bit higher than the consensus estimate of 310K. Jobless claims were up from the previous reading of 301k.

The Department of Commerce reported that factory orders in August slipped 3.3%, versus the consensus estimate that called for a decrease of 2.8%. Orders rose 3.4% in July.

For the most part, investors have ignored today's economic reports as they await tomorrow's employment release from The Department of Labor. Economists are expecting nonfarm payrolls for September to grow by 100K, compared with a decrease of 4K in August.

The utilities (+0.7%), healthcare (+0.7%) and telecom (+0.5%) sectors have provided leadership in today's session. The financial sector (+0.3%) is another standout whose relative strength of late has kept broader selling efforts in check.

The energy (-0.6%) and technology sectors (-0.3%) have shown the most weakness thus far.

Crude oil futures have seen a decent amount of volatility this morning. They are currently trading down 0.1% to $79.89. DJ30 -3.57 NASDAQ +0.61 SP500 +1.48 NASDAQ Dec/Adv/Vol 1169/1598/721 mln NYSE Dec/Adv/Vol 1230/1835/401 mln

11:30 am : Buying interest has tapered off, but there has not been any concerted selling interest either. The Nasdaq and S&P are holding near their best levels of the session. The Dow is positive territory, but has been unable to recover its opening gains.

Of the 30 Dow components, 21 are in the green this session. A few heavyweights are holding the average from further gains, including IBM (IBM 115.21, -1.19), Caterpillar (CAT 77.46, -1.10) and Exxon Mobil (XOM 90.56, -0.77).

United Tech Corp (UTX 80.55, +0.88), Procter & Gamble (PG 70.97, +0.56) and Du Pont (DD 49.84, +0.46) are pacing the Dow thus far. DJ30 +9.11 NASDAQ +3.99 SP500 +3.14 NASDAQ Dec/Adv/Vol 1151/1576/618 mln NYSE Dec/Adv/Vol 1186/1847/336 mln

/...

[Spazito]

45. Qatar & Vietnam ditch the dollar

Qatar & Vietnam ditch the dollar

Announcements on Thursday from the Qatari and Vietnamese governments that they are rapidly divesting in dollar denominated securities will not come as good news to the US government. Overseas investors hold half of America’s $4,400bn of marketable government debt, up from a third in 2001 according to the US Treasury department.

Qatari Prime Minister, Sheikh Hamad bin Jassim bin Jabr al-Thani said on US TV that the government-backed $50bn Qatari Investment Authority (QIA) now had less than 40 per cent of its investments in dollars, down from a high two years ago of 99 per cent.

Given that the Emirate’s oil and gas revenue is in dollars, the latest troubles in the US economy have accelerated the need to diversify investments into non-dollar markets. Currencies such as the Euro, the British Pound and the Swiss Frank, are all looking far more stable as investments for the QIA, said Sheikh Hamad. Such was the Qatari PM’s concern about the sliding dollar, that he even said an oil price of $125 per barrel would not be unreasonable.

On Thursday, the State Bank of Vietnam quietly let slip it would be ending its dollar purchase schemes, which it has been using to hold down the Vietnamese currency. Although it only has middling dollar reserves of $40bn, Vietnam is widely regarded as a barometer for economic sentiment among other, bigger, regional dollar sinks like China, Taiwan, Korea or Singapore. Hans Redeker, currency chief at BNP Paribas, told the Telegraph:

more

http://ftalphaville.ft.com/blog/2007/10/04/7831/qatar-vietnam-ditch-the-dollar

(Found this on LBN, here is the link to the thread:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3016471

[Ghost Dog]

47. 15:06 -

Dow 13,960.98 Down 7.07 (0.05%)
Nasdaq 2,728.40 Down 1.03 (0.04%)
S&P 500 1,540.93 Up 1.34 (0.09%)
10-Yr Bond 4.5250% Down 0.0180
NYSE Volume 1,944,988,250
Nasdaq Volume 1,326,653,880

:00 pm : A rather lackluster afternoon continues, as the indices head into the final hour of trading around the same levels they were at three hours ago.

Another strong sector today is biotech, including big moves by Neopharm (NEOL +16%), Lipid Sciences (LIPD +26%), and Hollis-Eden (HEPH + 26%).

With one hour of trading to go, the markets may find a more definite direction into the close, in anticipation of tomorrow's employment numbers.

DJ30 -1.95 NASDAQ -1.03 SP500 +1.61 NASDAQ Dec/Adv/Vol 1348/1574/1.27 mln NYSE Dec/Adv/Vol 1334/1895/737 mln

2:30 pm : There has been no market moving news since the open, and the indices continue to move sideways.

Chinese stocks continue their strength today, including China Architectural (RCH +32%), China Natural Resources (CHNR +13%), and China Shenghuo Pharma (KUN +40%).

Steel and Gas Utilities have joined the laggard list, while wire services continue to lead the market today.DJ30 -3.90 NASDAQ -2.39 SP500 +1.43 NASDAQ Dec/Adv/Vol 1291/1600/1.16 bln NYSE Dec/Adv/Vol 1306/1899/687 mln

[Name removed]

48. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[ozymandius]

50. Oooh! Looking at the finals -- I'll say tomorrow will be bloody.

Jeebus! Qatar and Vietnam are ditching the dollar. Economic reports, (boiled-fried-baked-and-otherwise-cooked) according to the Feds, are reporting conditions firmly planted in the toilet. Ewww. That's a nasty smell coming from Wall Street.

Oh well... here's the finish.

Dow 13,974.31 Up 6.26 (0.04%)
Nasdaq 2,733.57 Up 4.14 (0.15%)
S&P 500 1,542.84 Up 3.25 (0.21%)
10-Yr Bond 4.523% Down 0.02
NYSE Volume 2,695,939,250
Nasdaq Volume 1,759,148,000

4:25 pm : With little market-moving economic and corporate news on Thursday, the market was in wait-and-see mode ahead of The Department of Labor employment report due at 8:30 ET on Friday.

After a positive start, and then a dip into negative territory, the major indices steadied to the unchanged mark around 12:00 ET and held there until the final half hour of trading. At that time, modest buying interest helped the indices finish with small gains.

The weekly initial jobless claims for the week ended September 19th rose to 317k, up from the previous reading of 301k. Jobless claims were higher than the consensus estimate of 310k.

The Department of Commerce reported that factory orders in August slipped 3.3%, versus the consensus estimate that called for a decrease of 2.8%. Orders rose 3.4% in July. Despite the fact that orders were lower than expected, the stock market began its recovery effort shortly after the report's release.

These economic reports are usually not market-movers, and investors especially ignored them today as they await tomorrow's employment release from The Department of Labor. Briefing.com's estimate for a 100,000 increase in September nonfarm payrolls matches the consensus estimate.

Eight of the ten economic sectors finished the day in positive territory. The utilities (+0.8%), telecom (+0.6%) and industrial (+0.4) sectors provided leadership today.

The underperformance from the consumer discretionary (-0.3%) and technology (-0.1%) sectors helped prevent the stock market from making further gains.

Nutrisytem (NTRI 31.59, -15.98) received attention after its stock plummeted 33% following a company-issued warning on third quarter revenue and earnings. The company said marketing dollars have become less efficient, meaning it has attracted fewer new customers while incurring higher customer acquisition costs.

While the equity market traded in a tight range, the same can not be said for crude oil futures. Crude oil was on a bit of a rollercoaster ride today, after being down as much as 1.0%, it finished the day up 2.0% to $81.51. DJ30 +6.26 NASDAQ +4.14 SP500 +3.25 NASDAQ Dec/Adv/Vol 1287/1647/1.73 bln NYSE Dec/Adv/Vol 1231/2028/1.10 bln

[Spazito]

51. Pressure mounts to drop peg as dollar's slide seen to continue( UAE)

DUBAI — With the dollar set for a sustained slide against Euro and other currencies, the UAE is under mounting pressure to revalue the dirham and review its much debated dollar-peg policy, analysts said.



Gary Dugan, Chief Investment Officer, Global Wealth Management, EMEA at Merrill Lynch, said the dollar, which has been losing value against a host of foreign currencies, will weaken further against the yen and Swiss franc. "Our greatest conviction is that the dollar will weaken further. One more worrying facet of recent dollar weakness has been market concern that more countries might drop the dollar peg," he said.

Dugan said if the dollar were to lose its lustre as a reserve currency this could prove disruptive to the global financial system. "In the Middle East the market has become concerned that more countries would drop the dollar peg with Opec potentially changing the oil price to a currency basket rather than the dollar."

snip

Financial analysts said the prospect of a prolonged sliding dollar makes central bankers in the MENA region anxious since they sit on a large amount of greenbacks. "While a fast eroding dollar has also caused rampant inflation across the region forcing many to question the continued peg of the GCC's currencies to the dollar, the issue has become intensely pressing for the countries in the region as their enormous current account surpluses are from dollar-denominated oil exports," they pointed out.

more

http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/business/2007/October/business_October37.xml§ion=business&col=