Wednesday, September 24, 2008

Today's Headlines


- Crude oil fell .76/bbl. after a government report showed that US fuel consumption fell. Fuel demand averaged 19.5 million barrels a day during the past four weeks, down 5.3% from a year earlier, the Energy Dept. said today. Oil and gasoline supplies fell as refiners slashed operating rates to 66.71%, the lowest since record keeping began 19 years ago, the dept. said. Gasoline supplies fell 5.9 million barrels to 178.7 million barrels, the lowest since 1967.

- Goldman Sachs Group Inc. led a decline in the cost of protecting bank bonds from default after the Wall Street firm won the backing of billionaire investor Warren Buffett. Credit-default swaps on Goldman tumbled 54 basis points to 320, according to CMA Datavision prices at 7 a.m. in New York. Contracts on Merrill Lynch & Co. dropped 37 basis points to 281 and Morgan Stanley fell 25 to 487. Citigroup Inc. decreased 12 basis points to 210 and Bank of America Corp. fell 11 to 132, CMA prices show.

- The Canadian housing market is headed for a meltdown because household finances are in even worse shape than in the US or the UK, said David Wolf, chief strategist at Merrill Lynch Canada.

- Federal Reserve Chairman Ben S. Bernanke said the U.S. is facing ``grave threats'' to financial stability and warned that the credit crisis has started to damage household and business spending. ``Economic activity appears to have decelerated broadly,'' Bernanke said today to a congressional Joint Economic Committee hearing, downgrading the assessment of Fed officials when they met on Sept. 16.

- Morgan Stanley(MS), the second-largest bank in commodities trading, will seek U.S. regulatory approval to retain its oil tankers, metals dealing and raw-materials businesses after becoming a commercial bank this week.

- Goldman Sachs Group Inc.(GS), Wall Street's most profitable firm, is paying a ``steep'' price to gain investors' confidence in its earnings prospects.

- Texas oil magnate T. Boone Pickens' hedge funds have lost around $1 billion this year, including $270 million of personal losses, The Wall Street Journal said. One fund focused on energy stocks was down almost 30 percent through August, the paper said adding that a smaller commodity-focused fund is down 84 percent.


- Allianz SE doesn’t expect economic growth in Germany in the second half of this year, CEO Diekmann said. Declining commodity prices could lead to a recovery of domestic demand in 2009, Diekmann said.

- Romanian real estate sales declined an annual 43% in the first half as foreigners invested less amid growing financial turmoil. The volume of sales dropped to $1.3 billion in the first half and the decline will continue over the next year, citing a study by real estate broker Jones Lang LaSalle Inc.

The Economic Times:

- Rising delinquencies have taken their toll on the Inida’s consumer finance companies. A majority of non-banking finance companies (NBFCs), with a foreign parentage, are moving aggressively to close down their branch networks. GE Money Financial Services, the consumer finance arm of General Electric(GE), is said to have slashed its branch network by more than half, while Standard Chartered Bank-promoted NBFC, Prime Financials now left with barely six branches from a peak of over 50, according to bank officials. Defaults have been on the rise, primarily due to a bout of interest rate hikes and a crackdown on collections. It is not just in consumer finance that companies are taking a hit. For instance, banks are now facing the heat on the retail business front also. HSBC, which has suffered a huge loss in its credit card operations because of rising defaults, is now going slow on credit cards and personal loans.

Valor Economico:

- Brazilian farmers bought 29% less fertilizer in August compared with a year earlier. The decline follows early orders this year ahead of the 2008-2009 grains season and the weakening of the Brazilian real, which made fertilizer imports more expensive.

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