Bloomberg:
The Federal Reserve led an unprecedented push by central banks to flood the financial system with as many dollars as banks want, backing up government efforts to revive confidence and helping to reduce money-market rates.
- France, Germany, Spain, the Netherlands and Austria committed 1.3 trillion euros ($1.8 trillion) to guarantee bank loans and take stakes in lenders, racing to prevent the collapse of the financial system. The announcements came as Britain took majority stakes today in Royal Bank of Scotland Plc and HBOS Plc.
- Money-market rates in London fell after policy makers offered banks unlimited dollar funding and European governments pledged to take ``all necessary steps'' to shore up confidence among lenders. The London interbank offered rate, or Libor, for three-month dollar loans dropped 7 basis points to 4.75 percent today, tied for the largest drop since March 17, the British Bankers' Association said.
- James Chanos, president of hedge-fund firm Kynikos Associates Ltd., said he's selling short the fewest financial shares in four years after they lost half their value and government support made it more likely the stocks will rally. ``We have the least amount of financials short in our portfolio that we've had in four years,'' Chanos said in an interview with Bloomberg Television. ``They're down quite a bit, and clearly with these kinds of rescue packages our view is the risk-reward is not great on the short side, probably selectively on the long side. We're looking elsewhere.'' Chanos, who manages $5 billion, also said he is reducing short-selling of the steel industry. The hedge-fund manager said he is betting against some areas abroad that have been rapidly increasing infrastructure growth. ``All you need to do is look at Dubai's travails all of a sudden, which we've been talking about for a while, as a microcosm of projects that were pie in the sky, built with easy credit,'' he said. ``A lot of those projects will find difficult financing. That's where we're going to see some problems.''
- Dubai may need help from Abu Dhabi and the United Arab Emirates government to finance a surge in borrowing that paid for the world's tallest tower, palm tree- shaped man-made islands and stakes in banks worldwide. Dubai's ``potential reliance'' will be ``most significant'' in coming years, Moody's Investors Service said in a report today. Government-controlled companies owe at least $47 billion, more than Dubai's gross domestic product, and they will continue to accumulate debt at a faster pace than the economy grows, the New York-based rating firm said. ``These companies that are based in Dubai have become larger than Dubai itself,'' said Giyas Gokkent, chief economist at National Bank of Abu Dhabi, the U.A.E.'s second-largest commercial bank by assets. ``If anything were to go wrong with any of these companies, Dubai does not have the wherewithal to deal with it.''
- U.S. Treasury Secretary Henry Paulson and Federal Reserve officials today will meet with executives from financial companies to discuss the government plan to restore confidence in credit markets, the Treasury said.
- The cost of protecting bank bonds from default fell as the U.K. bailed out Royal Bank of Scotland Group Plc, HBOS Plc and Lloyds TSB Group, and governments across Europe announced coordinated action to avert financial collapse. Credit-default swaps on the Markit iTraxx Financial index of 25 European banks and insurance companies dropped 11 basis points to 98, the lowest in three weeks, according to JPMorgan Chase & Co. prices at 10:45 a.m. in London The U.S. Federal Reserve, European Central Bank and the Bank of England will offer financial institutions unlimited dollar funds for the first time in an attempt to ease tensions in money markets. The Group of Seven finance chiefs, meeting in Washington Germany Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-risk, high-yield credit ratings decreased 30 basis points to 700, having reached a record 750 last week, JPMorgan prices show. The Markit iTraxx Europe index of 125 companies with investment-grade ratings fell 7 basis points to 131. The Markit iTraxx credit-default swap index of 50 investment-grade Asian borrowers outside Japan was down 35 basis points at 295 as of 5:30 p.m. in Hong Kong , Barclays Capital prices show. The Asian high-yield benchmark declined 75 basis points to 875.
- The European bank rescue plan laid out yesterday in Paris “What has been done over the last three days should provide elements of reassurance,” Strauss-Khan said. The worst of the financial crisis “may be behind us,” he added. The IMF will submit proposals to reform the financial system, including tighter control of hedge funds through the banks that provide them with debt, he said.
- Morgan Stanley(MS) climbed as much as 66 percent in New York trading after the firm sealed its $9 billion investment from Mitsubishi UFJ Financial Group Inc., giving the Japanese bank preferred stock that pays a 10 percent dividend. Mitsubishi UFJ, Japan's biggest lender, will get 21 percent of the New York-based company as previously agreed, the firms said today in a joint statement.
- Gold fell for the third straight session as equities worldwide rebounded, reducing the appeal of the precious metal as a haven against market turmoil. The London interbank offered rate, or Libor, for three-month dollar loans fell to 4.75 percent from 4.82 percent, the British Bankers' Association said. ``As markets may recover from now to next March, the full sense of security will come back into the market, and people will not be that interested in gold,'' Marc Faber, the managing director of Marc Faber Ltd. and the publisher of the Gloom, Boom & Doom report, said in an interview on Bloomberg Television.
Wall Street Journal:
- Eastern European countries, already financially overstretched, are facing a pullback by lenders and investors, which may threaten to burst economic bubbles in the Balkans and trigger a major slump in Hungary and the Baltic states , citing fund managers and economists. Many of those countries had borrowed heavily from overseas lenders to finance business activity and consumer spending.
- Keep Your Money in the Market. We’ve been through ups and downs before. We will have a serious recession now, but a 1930s-style depression is highly unlikely. We will not let the money supply decline by 25%, as we did in the '30s, and automatic stabilizers (like unemployment insurance) are now a significant element of fiscal policy. Don't forget that the U.S. economy is still the most flexible in the world and our "innovation machine" is alive and well. No one has consistently made money by selling America short, and I am confident the same lesson is true today.
- It may be premature to write the epitaph for funds of hedge funds, but people in the industry are giving them a less-than-glowing prognosis after a year in which the funds have on average declined in value by 11%. Fund-of-hedge-funds managers have historically decided who gets 40% of the hedge-fund industry's $1.9 trillion of assets to manage, the idea being that they can more efficiently differentiate between good hedge funds and also-rans. This year, however, their track record hasn't been good. And if, as expected, significant numbers of investors pull cash out of the funds as the opportunity arises near the end of the year, that could be enough to further hurt some funds' performances and leave others with a portfolio unbalanced by the sales needed to raise the cash.
Barron’s:
There’s reason to believe that the stock-market averages will hit bottom sometime in the next few months, even if the economy is still in the middle of a recession. The buy-and-hold approach still applies. The fear that sent the market down so sharply last week may have driven stocks close to their ultimate lows. "I don't think this is the end of America as we know it," says Byron Wien, chief investment strategist at Pequot Capital Management. "I think it's conceivable that the markets will bottom before year end." The good news today is that stocks appear to have gotten out ahead of any recession, falling so sharply that they might already have priced in pretty horrible times ahead. The Dow is down almost as much in the past year as the 45% it fell in the 1973-1975 recession, and its 12-month decline far exceeds the 24% it lost in the period leading up to and during the 1981-1982 recession, according to Birinyi Associates.
NY Times:
The country’s leading group of pediatricians is recommending that children receive double the usually suggested amount of vitamin D because of evidence that it might help prevent serious diseases. To meet the new recommendation of 400 units daily, millions of children will need to take vitamin D supplements each day, the American Academy of Pediatrics said. That includes breast-fed infants — even those who get some formula — and many teenagers who drink little or no milk.
NY Post:
- Sharper Image's new owners have cut a half-billion-dollar deal to catapult the brand out of bankruptcy into a global business.
USA Today:
How Congress set the stage for a fiscal meltdown. During last week's presidential debate, John McCain and Barack Obama sparred over what caused the financial crisis. It was a classic example of Washington finger-pointing. McCain and the GOP blame Fannie and Freddie — which were taken over by the government last month — because the troubled mortgage agencies' biggest backers were Democrats who said they wanted to increase access to homeownership. Meanwhile, Obama and other Democrats highlight Republicans' longtime focus on limiting regulations for the financial industry. No single government decision sparked the crisis, but collectively the candidates had a point: Both parties in Congress played important roles in setting the stage for the ongoing financial meltdown.
Boy Genius Report:
- iPhone 3G may be coming to a Wal-mart(WMT) near you.
Loyd’s List:
- Chinese coal demand is falling and will probably cut hiring ships that haul the fuel, citing an official at China’s Ministry of Communications. Demand for electricity, coal and crude oil peaked in July and has weakened since August, citing Jia Dashan, director of the transportation research and consultant department at the Waterborne Transportation Institute. Qinghuangdao port has 8.3 billion metric tons of coal, close to its capacity of 9 million tons.
Reuters:
Goldman Sachs (GS), the biggest oil trader on Wall Street, has been restricted from making a market in price assessment agency Platts' daily oil trading window as counterparty anxiety grows, two sources familiar with the move said on Monday. Goldman is the latest in a series of major investment banks to be placed under a so-called "review" by Platts, which has said it may sometimes need to limit the activities of some companies in its half-hour price-discovery process if their acceptability by counterparties threatens to distort benchmark prices. The review does not stop Goldman from trading oil, and there was no suggestion that the review had affected its day-to-day trade. But being restricted from making a market in the window will reduce the bank's influence on Platts' benchmark prices.
Rzeczpospolita:
“The current situation inclines us to rethink the euro-adoption data,” Skrzypek said.
Interfax:
- Russia Exports in September dropped 9% from the month before to $41.3 billion and imports rose 3% to $27.6 billion, citing an official.
Times of India
- Prospects of an early ban on short-selling in Indian futures and in the cash segment has increased considerably, with evidence mounting that a group of market operators are using the present weak sentiments to hammer it further by offloading shares in huge numbers. Sources indicated that the pressure to ban short-selling has increased in the light of reports that on Friday alone operators short sold shares worth Rs 2,500 crore, adding to the bearish sentiment.
Taiwan News:
- Russian stocks dropped Monday on declining world oil prices and new struggles for control of the world's largest nickel miner, prompting regulators to suspend trading on one of the country's two exchanges. The ruble-denominated MICEX was down 5 percent when trading was halted just after 3 p.m. (1100 GMT). The other exchange, the RTS, was down 6 percent.
recast to "
Australia - Jonathan Kaufman, the Senior Editor of the Wall Street Journal and a former Beijing Bureau Chief expects a housing crisis will soon hit China. "I think there's a huge bubble in China and I think that I would be surprised if they don't face similar situations as the US has faced, because banks were lending in China purely on a whim, keeping people in homes that they really couldn't afford," he said.
Valor Economico:
55% of respondents said the global credit crisis affected their spending patterns, according to the survey.
Investorsoffshore.com:
- "Current global market conditions in the hedge fund arena are characterized by heavy redemptions, suspensions and re-structurings coupled with much-reduced (although not zero) new fund formations. In the structured finance arena there has been severe drop-off in deal flows as a result of the freezing of the global capital markets. This situation is not expected to significantly improve until 2010. We are already seeing an impact on the public sector side, with new company registrations Jan-Sept down 10% over the same period in 2007." According to Tibbetts, some experts are forecasting that the number of hedge funds globally could contract by 20-30%, "which will obviously affect Cayman's book of business.” The Cayman Islands has rapidly become the domicile of choice for hedge funds due to its favourable regulatory regime. It is thought that about 80% of the world's hedge funds are registered in the jurisdiction, and at the last count, its financial industry regulator, the Cayman Islands Monetary Authority (CIMA), reported that more than 10,000 investment funds had registered there by the end of the second quarter of 2008.
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