Wednesday, October 24, 2007

I Think Fed will not cut RATE.....!!!!

why Fed will not cut rate ...?

Reason 1: Higher Inflation problems

Reason 2: All the OPEC country produce crued oil and sell
it in USD, and they import goods in Euro dollar

Reason 3: If dollar become cheaper then Crued oil price
will hike higher then again will create a greater
problems to global economy

Reason 4: If cut rate there will be more moneyy outflow from US. then US face recession

Reason 5: If US recession then who is going to buy the China's Toys ??
So any Suggestions.....?

Monday, October 22, 2007

Hope for the BEST and plan for the WORST (part 2)

Copper, Oil, Corn Lead Commodity Slide; Demand Growth May Slow

Copper, oil and corn led declines in commodities on speculation that U.S. credit-market losses will stunt economic growth and curb demand for raw materials.
Copper dropped to a five-week low, oil slipped from a record and corn fell the most in almost three weeks as equity markets plunged worldwide. The Group of Seven finance ministers and central bankers said the rising cost of credit will sink economic growth. The group represents about two-thirds of the $53 trillion world economy.
``America is going to go through at least one of its hidden recessions,'' Sean Corrigan, chief investment strategist at Diapason Commodities Management, said in an interview in London today. ``If you look at manufacturing and higher industry in America, it's in trouble.''
The UBS Bloomberg CMCI Index of 26 commodities dropped by the most in two weeks. The index fell 1.4 percent to 1,230.398, the biggest decline since Oct. 8. Before today, the index had jumped 19 percent and touched a record high 1,250.7118 on Oct. 19.
Slowing U.S. growth may continue to drive commodity prices lower, contributing to ``a potential commodity rout,'' said Ron Goodis, futures trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. ``People have really gotten caught by surprise. We've got all the commodities in the red today.''
Industrial Metals
The price of industrial metals, which track economic growth, may fall the most of all the commodities, Goodis said.
``Copper could be hit very hard,'' Goodis said.
Copper futures for December delivery fell 6.25 cents, or 1.8 percent, to $3.489 a pound at 9:47 a.m. on the Comex division of the New York Mercantile Exchange, after dropping to $3.45 a pound, the lowest since Sept. 18.
Crude-oil futures for December delivery fell as much as 2.6 percent today to $84.73 a barrel on the New York Mercantile Exchange. The contract reached a record $90.07 on Oct. 19.
Corn for December delivery fell 8.25 cents, or 2.2 percent, to $3.62 a bushel in overnight trading on the Chicago Board of Trade. A close at that price would be the biggest drop for a most-active contract since Oct. 2.

Wednesday, October 17, 2007

Hope for the BEST and plan for the WORST

China's stocks fell, with the key index dropping the most in five weeks, after Beijing regulators said they may allow arbitrage between shares traded on the mainland and Hong Kong. China Merchants Bank Co. led declines of A shares with Hong Kong listings.
Wuliangye Yibin Co. fell after saying third-quarter profit declined 10 percent from a year earlier. Ping An Insurance (Group) Co. gained after reporting premiums in the first nine months of the year.
The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, slid 152.49, or 2.6 percent, to 5,671.63 at as of 10:03 a.m. local time, the biggest decline since Sept. 11.
Tu Guangshao, vice chairman of the China Securities Regulatory Commission, said in Beijing yesterday that the panel is studying a proposal to allow swaps in A and H shares of Chinese companies. ``We will announce the result of the study soon,'' he said.
Limits on investments in and out of China have helped the mainland's CSI 300 Index almost triple this year, making the Hong Kong-traded shares of Chinese companies a cheaper alternative for investors.
China Merchants, the nation's fourth-largest bank by market value, fell 0.81 yuan, or 2 percent, to 39.99. China Petroleum & Chemical Corp., Asia's biggest refiner, fell 0.40 yuan, or 1.5 percent, to 25.73. Tsingtao Brewery Co., China's second-largest brewer, dropped 0.33 yuan, or 0.9 percent, to 37.97.

Friday, September 28, 2007

China Says to Tighten Property Lending

China on Friday unveiled a series of measures to tighten property lending in its latest attempt to cool the country's overheating real estate market and curb mortgage lending risks.

The central bank and China Banking Regulatory Commission said in a joint statement that it will ban banks from lending to developers found to have been hoarding land. The changes were expected to take immediate effect. Downpayment requirement for second homes were raised to 40% from 30%, and requirements for commercial properties such as offices and shopping malls were increased to 50% from 40%, the statement said.

Mortgage rates for such purchases must be no less than 1.1 times benchmark rates, it said.
"Recently, property prices had gone up quite fast, which is obviously irrational," the statement said. "Once prices tumble, bad loans at commercial banks would surge."

The statement said it would still encourage people to buy their first homes. Downpayments for buying homes smaller than 90 square metres will remain unchanged at 20%, while for larger homes, the rate will be kept at 30%.

It is the second time since last year that the government has guided commercial banks to raise the downpayment requirements for home purchases.

Since 2005, China has raised interest rates, imposed new taxes and restricted lending to cool the robust property market out of concern that a possible collapse might endanger China's financial system and hurt its economy.

However, increases in property prices have accelerated this year, fueled by excess liquidity brought about by the country's widening trade surplus and hot money inflow driven by China's yuan appreciation.

Property prices in 70 major cities jumped 8.2% in August from a year earlier, with prices going up 20.8% in the southern boomtown of Shenzhen and 12.1% in Beijing.

Share prices of Chinese listed developers such as China Vanke have lost ground in the past few days on domestic reports that the government would soon take steps to curb property speculation.

Tuesday, September 25, 2007

Just be CALM....

It was the best of times,

It was the worst of times,

It was the season of light,

It was the season of darkness,

We had everything before us,

We had nothing before us....

In short, it was a period very like the present...

Sunday, September 23, 2007

Dollar Crunching......??

The dollar fell to a record low against the euro and touched the weakest since 1976 versus the Canadian dollar on speculation the Federal Reserve will keep cutting U.S. interest rates.
The dollar posted the biggest weekly losses versus the euro since March as the Fed's half-percentage-point interest-rate cut on Sept. 18 dimmed the allure of U.S. assets. The Fed's trade- weighted dollar index sank to its lowest in 36 years. The dollar may extend its loss next week on reports forecast to show declines in home sales, durable goods and consumer confidence.

The U.S. currency fell 1.6 percent this week to $1.4091 per euro and touched $1.4120 yesterday, the lowest since the euro's inception in January 1999. The dollar has lost 6.3 percent this year against the euro. It will drop to $1.45 per euro within two months, according to Gartman.
The New York Board of Trade's dollar index comparing the U.S. currency against six primary peers including the euro and yen, touched 78.398 yesterday, the lowest since September 1992. The Fed's major currency trade-weighted dollar index dropped to 74.78 on Sept. 20, the weakest since its inception in 1971.

Inflation Concern.....

The benchmark 10-year Treasury note fell the most since March 2006 this week on concern the Federal Reserve's surprise half-point interest-rate cut may rekindle inflation.

Monday, September 10, 2007

After Credit Crunch... then Dollar Crunch...

Foreign Holders Flee Dollar

Interest-rate futures show traders are betting with 100 percent certainty the Fed will trim its benchmark by at least a quarter percentage point to 5 percent at its meeting Sept. 18.
Former Fed Chairman Alan Greenspan said on Sept. 6 that forces behind current market turmoil are ``identical'' to previous economic upheavals, including the 1987 stock-market crash and the aftermath of the 1998 Russian debt default and collapse of hedge fund Long-Term Capital Management LP.
The central bank cut its benchmark rate three times between September and November 1998. The dollar ended the year 13 percent weaker against the yen, and Treasuries fell for three straight quarters starting in the period ended Dec. 31, 1998.

Shifting Reserves
Asian central banks also reduced Treasuries last month in an effort to curb dollar gains against their currencies. Taiwan's central bank cut its currency reserves by $4.9 billion in August, mostly by selling U.S. bonds, George Chou, a deputy governor of Central Bank of the Republic of China (Taiwan), said in an interview.
Even before the flurry of sales, more nations were starting to shift foreign-exchange reserves away from U.S. government bonds.
Taiwan lawmakers are discussing whether to set up a fund to seek higher returns, Chou said. China is starting a fund to do the same for some of its almost $1.4 trillion in reserves. The fund raised $79 billion selling debt to the central bank last month.
China will likely, and appropriately, ``reduce its holdings of dollar assets to get higher returns,'' said Ha Jiming, chief economist in Beijing at China International Capital Corp., the nation's largest securities firm. Ha attends central bank Governor Zhou Xiaochuan's quarterly meeting with the nation's lenders.
The $50 billion Qatar Investment Authority said on Sept. 4 it is looking for options in Asia to counter a weak dollar.