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Tracked by: 8 Boarders
Hi Lalitdeshpandey,
When talented people get angry
The intellectual content of the message gets lost
Only the negative part is remembered and good info never get absorbed
Buy others
People differ on opinion/views,more the intelligence more the difference
I see it every where, in academics,politics,even with father and son
Having Grey hair i have gone thru that
Let the content blossom and debated, and anger disappear
Take care
GV
GV
...
In reply to:
SENSEX to rally by 2400 pts in 7 days
Posted by :
Lalitdeshpandey
Ya you are right gv,
I am lesser tolerent man.. I shall have littlemore tolerance!!!
Will take care.........
But basically , We shall remember always ( I feel so 0 that MMB india is the board where we are posting. What we post shall have little corelation with Indian stock market..
If Dow fall, its ok.. some times but when Some one post messages in toto about what , with which most of the viewers have to do nothing..... anger flows in a different way......
And anger is built gradually.........
See RAMGE.. Boarder and his messages. he is at the top f his anger.. against S Kotak.. Not because Kotak is his enemy... he is pro type Indian man rushing, always ,tohelp (un wanted) ladies..
Once I sow one accident in which driver was seriously injured ful of blood, but lot os ( may be most of ) people were asking his beautiful wife ki, MADAM , Are you ok ?? Jya da laga to nahi na ??
etc etc..... Ultimately that man expired on the road.. and people still were suporting lady seating on the road site and checking her feet etc!!!!!!!!!!!!!
This type is non s.......na ?????
RAMGE is doing same thing on my board. Addressing me Kotak.. I finally lost my temparament and also started abusing him......
What we can do ?? we are also human being and not Mohan lal karamchand Gandhi na ???
any way,
I like people like you who remind us of ill and that way try to help us in restricting !!!!!!
Thanks, 
Tracked by: 0 Boarder
I am absolutely agree with both the analysts Mr kela and Mr Akash, it is like a sunami which had hit the world, every thing will be normal after some time but it is a great time to buy.Market tiger Mr Udyan Mukherjee is seems to be nervous as TV-18 has also gone down drastically. When such tigers become nervous think that is end of fall,leaving few hundred point here and there.My dear inverstors world in nervous but u dont get nervous, plan your expence and invest ur saving in market instead of putting in FD in banks. There is nothing to loose more than this, you may remember me after one year or so..........
In reply to:
Experts differ on mkts stabilising
Posted by :
MMB Messenger
Madhusudhan Kela, Reliance Mutual Fund sees the markets stabilising over the next 10-15 days. However, Akash Prakash, Amansa Capital PTE said it is tough to see an end to the market mayhem.
Tracked by: 0 Boarder
Madhusudhan Kela, Reliance Mutual Fund sees the markets stabilising over the next 10-15 days. However, Akash Prakash, Amansa Capital PTE said it is tough to see an end to the market mayhem....
Tracked by: 3 Boarders
I will wait for your reply.
Thank you
Ravi...
In reply to:
Why US brokers merge with US Banks?
Posted by : Kalidas
there are three kinds of investors Those
- who are afraid to lose money
- who are afraid to make money
- who are afraid to hold the money.
You are in last category. Buy altogether 5 stosks. I will tell you tomorrow the list
Kalidas, Hong Kong
10-10-2008
Tracked by: 8 Boarders
I posted Long eply but... net bacame vilan refused to support my message.
Any way,
Thanks......
In reply to:
SENSEX to rally by 2400 pts in 7 days
Posted by : gv
"We shall be serious....."
Off course, so are others who are investing/trading
But,why the anger?and exchanging nasty mails
anger is also contagious
and seriousness should bring caution and not anger
Tracked by: 8 Boarders
Ya you are right gv,
I am lesser tolerent man.. I shall have littlemore tolerance!!!
Will take care.........
But basically , We shall remember always ( I feel so 0 that MMB india is the board where we are posting. What we post shall have little corelation with Indian stock market..
If Dow fall, its ok.. some times but when Some one post messages in toto about what , with which most of the viewers have to do nothing..... anger flows in a different way......
And anger is built gradually.........
See RAMGE.. Boarder and his messages. he is at the top f his anger.. against S Kotak.. Not because Kotak is his enemy... he is pro type Indian man rushing, always ,tohelp (un wanted) ladies..
Once I sow one accident in which driver was seriously injured ful of blood, but lot os ( may be most of ) people were asking his beautiful wife ki, MADAM , Are you ok ?? Jya da laga to nahi na ??
etc etc..... Ultimately that man expired on the road.. and people still were suporting lady seating on the road site and checking her feet etc!!!!!!!!!!!!!
This type is non s.......na ?????
RAMGE is doing same thing on my board. Addressing me Kotak.. I finally lost my temparament and also started abusing him......
What we can do ?? we are also human being and not Mohan lal karamchand Gandhi na ???
any way,
I like people like you who remind us of ill and that way try to help us in restricting !!!!!!
Thanks,...
In reply to:
SENSEX to rally by 2400 pts in 7 days
Posted by : gv
"We shall be serious....."
Off course, so are others who are investing/trading
But,why the anger?and exchanging nasty mails
anger is also contagious
and seriousness should bring caution and not anger
Tracked by: 8 Boarders
"We shall be serious....."
Off course, so are others who are investing/trading
But,why the anger?and exchanging nasty mails
anger is also contagious
and seriousness should bring caution and not anger
...
In reply to:
SENSEX to rally by 2400 pts in 7 days
Posted by : Lalitdeshpandey
Whatever we post, we shall take responsibility , if lot of peoplefollow us..
I just wanted to tell this guy that he is on wrong path.
Instead he started arguing with me. And I did what I felt!!
When every one is faling wrong we can not blame and single out any one. However, he should have accepted my views, too, even after Sensex plunged 2400 poins instead of rallying the same!!!!!!
It is matter of MONEY and LOSSES, This board is not for poets and story writers. We shall be serious.....
Tracked by: 0 Boarder
Market psychology experts weigh in on what`s feeding the selling frenzy on Wall Street and when to look for investors` moods to change
Searching for a way to describe the current stock market meltdown? Call it the "Panic of 2008."
In the past century, the world has seen countless financial crises, economic downturns, and market crashes. But the last major event to be called a `panic` was the Panic of 1907.
If ever it were appropriate to revive the term "panic," this is the time. The day-after-day declines in the stock market are unprecedented.
The S&P 500, the broad U.S. stock index, has lost 22% of its value in six trading sessions, from Oct. 2 to Oct. 9. Brian Gendreau of ING Investment Management points out that the Dow Jones industrial average, founded in the late 19th century, until this month had never seen six consecutive daily declines of 1% or more.
Forget Normal
Normally even falling stock markets take a break from time to time, as the vultures swoop in to pick up stocks at bargain prices.
But now, the market`s psychology is anything but normal.
Every time the stock market rallies—as it did on the morning of Oct. 9—"there are tons of sellers everywhere," says Dave Rovelli, managing director of equity trading at Canaccord Adams. "People just want out."
Panic in financial markets—just as in everyday life—is explained by the fight-or-flight instinct. "That makes people overreact," says Avanidhar Subrahmanyam, a professor and expert on market psychology at the UCLA Anderson School of Management.
Not only are stock traders running scared, so are financial institutions. "You`ve got panics not only among individual investors but panic in the industry itself," says John Merrill, chief investment officer at Tanglewood Wealth Management.
Dysfunction in the credit markets means financial firms lack the confidence to transact business with each other.
Irrational Despair?
A panic is a "situation in which people do things that contradict rationality," says Paolo Pasquariello, a professor at the University of Michigan`s Ross School of Business.
But by that definition, is this really a panic? "It`s difficult to say people are selling because they are panicking," Pasquariello says. Selling now isn`t necessarily irrational, he says. There are plenty of good reasons to move from riskier to safer investments at a time when the financial system has stopped working and a serious economic slowdown looks imminent to many economists.
By contrast, Subrahmanyam is more convinced the markets are behaving irrationally. It`s not as if we`ve had a nuclear war and "real" assets were destroyed, he says. Rather, problems are in the financial sector, not the "real" activity in the rest of the economy. "The real, nonfinancial base of the economy is still fairly strong," he says—far stronger than during, for example, the Great Depression.
Bargain Basement
"Financial panics don`t last forever," says ING`s Gendreau. Eventually investors will realize that many assets are trading at deep discounts. "Either we`re going to go into a Great Depression, or some of these assets are trading at very attractive prices," he says.
Many market participants believe the wave of stock selling is being pushed by hedge funds and other institutions that must sell assets to raise cash. Often these assets—from stocks in solid companies to municipal bonds—are being sold without regard to their inherent value. But, before jumping back in the market, "You wait for the forced selling to run its course," Merrill says.
So when might this downward spiral end?
Because of our flight-or-flight instincts, Subrahmanyam says, "things are very quick to crash." But "the recovery takes much longer."
You First
"The market ultimately reaches a bottom," says Georgetown University finance professor Reena Aggarwal. However, "no one wants to be the first to move. The markets behave in a herd mentality."
Pasquariello worries governments may simply blame market troubles on panic and irrationality—"on people being crazy." That gives them the excuse to step in and try to restore market confidence in artificial ways—such as the its recent ban on the short-selling of financial stocks, which he opposed. The real reasons for the financial crisis will "take a long time to fix," Pasquariello warns.
By its nature, a crisis is a time of uncertainty. It could be months before we know whether markets are crashing because of irrational fear or because of real economic problems. And that`s scary.
...
Tracked by: 1 Boarder
There are NO TALKS to renegotiate the Morgan Stanley-MUFG deal, according to people familiar with the matter. Morgan Stanley expects to receive the $9 billion investment Tuesday.
...
In reply to:
No one is too big not to fall
Posted by : sambala
But now economists wonder what will happen when the pace of deleveraging slows - and those holding dollar-denominated assets consider the expanding U.S. financing burden at a time when growth prospects look weak.
"When this process plays itself out," says University of Oregon economics professor Tim Duy, "the fundamentals working against the dollar will come into focus again."
By Colin Barr
Tracked by: 1 Boarder
At least fall is stopped, Dow is down around 100, NASDAQ is green, Thanx God, its stopped crude has shown almost 10% in a day, The day was full volatile, but not bad....
In reply to:
No one is too big not to fall
Posted by : Leave it.
Dear Mr.Prashant ptp,
Even today the signals are not good for a positive trading in Indian Markets. This is only my personal view as I just returned from the brokers shell, where not a much noise was made.
Dow falls 508 as panic takes over Wall Street
The Dow tumbles more than 5% in part because of Fed boss Bernanke`s gloomy economic outlook and continuing stress on financial companies.
The Nasdaq loses more than 100 points, and the S&P 500 drops below 1,000 for the first time since 2003.
Stocks fell to their lowest levels in five years today as fears grew about the global banking system`s ability to survive the worst credit crunch since at least World War II.
The Dow Jones industrials fell 508 points, or 5.1%, to 9,447. The Nasdaq Composite Index fell 108 points, or 5.8%, to 1,755, and the Standard & Poor`s 500 Index was off 61 points, or 5.7%, to 996.
Today`s close was the Dow`s lowest since Oct. 2, 2003; it`s down about one-third since peaking a year ago.
The Nasdaq`s close was its worst since August 18, 2003, and the S&P`s decline was its worst -- and its first close under 1,000 -- since Sept. 30, 2003.
Take your own cue for todays trading. I am a student of actuary. Retired from LIC of India ten years back, residing in USA. As on date the politics do not take the economics into account for placing it to the public`s attention. But the foreclosure action taken by some banks speedily has sent waves of resentent.Fed action is not appreciated by the public as one or two in a street is thrown out of job and the cires of the family is widely heard. Only the auditor general of America is a topic for little discussion when some in the brokers premises are interested to exchange comments. I shall try to post the excerpts. This borad nor the board members are widely interested to talk. The need for incresed deposit insurance cover for bank deposits are felt very much, as many feel that the Govt. will take care. If that is the fact why they offer one lac limit of deposit insurance cover for bank deposits. For the next three days , people will be busy with something else religiously. Perhaps, I can wish to see the ray of hope on Monday next.
v.krishnamoorthy
Here in US things will be as it is. It took ten days for the Anxiety index to cross Atlantic. As there are very small countries in europe, there is no concerted action to save UK- pounds or EURO.
v.krishnamoorthy
Tracked by: 8 Boarders
There needs to be a strong signal that they`re moving forward together," said Silvia "To say we had a good meeting but we can`t get it together, it`d be a very bad sign. Impotence is not an option."
The attention being given to the crisis is one reason many are expecting that the heads of states of the G-8 nations - the G-7 plus Russia - also may meet by early next week. Italian Prime Minister Silvio Berlusconi said Thursday that President Bush had proposed a summit of G-8 leaders in Washington next week. The White House denied Thursday that a meeting had been set, although it said the Bush administration is open to such a meeting.
In comments Friday morning on the financial crisis and this weekend`s G-7 meeting, the president did not announce plans for a summit of G-8 leaders.
"I think the finance ministers can certainly do the job, but to send the strongest message, you need the biggest of the bigs involved," said Giddis. "How much carnage do you have to see to get everyone to the table?"
What role for IMF?
It`s unclear what role the IMF can play in solving the global financial crisis.
The organization was formed near the end of World War II to promote international financial stability as a way of the kind of avoiding global economic hardship that helped cause that war. It is best known for loaning money to smaller economies facing economic crises, such as the collapse of their currency.
Swedish Central Bank Governor Stefan Ingves issued a statement Friday saying the IMF should play a central role in finding a solution.
"As we learn lessons from the financial turmoil and adapt the rules for the international financial system, we need to give the IMF with its analytical strength and universal membership a stronger role in promoting global financial stability," Ingves said. "At this juncture, the IMF should consider using its mandate to call for a multilateral consultation to develop a response to the ongoing financial crisis."
But others say that the IMF is better suited to deal with problems in smaller nations, those with small enough economies that an IMF loan program can make a difference. When the crisis hits economies the size of the United States, Europe and Japan, those critics say, the IMF can only offer limited help.
"The best they can do is play a supporting role," said Giddis
...
In reply to:
SENSEX to rally by 2400 pts in 7 days
Posted by : sambala
All EYES turn to world LEADERS LEADERS.
As finance ministers of 7 largest economies meet, hopes rise that coordinated action will solve crisis.
NEW YORK -- The Federal Reserve and Treasury Department haven`t been able to stop the panic gripping U.S. financial markets.
Neither have finance ministers and central bankers across the globe - from powers such as Britain and China to smaller countries such as Iceland.
In the face of the growing global crisis, can the Group of Seven and International Monetary Fund make a difference?
That`s what the world is hoping. But even those calling for coordinated action on a global scale aren`t sure they can.
The IMF and its sister organization the World Bank are holding their joint annual meeting in Washington, while the finance ministers of the world`s leading industrialized nations, the G-7, are also set to meet in Washington this weekend. In addition, the G-20, the finance ministers and central bankers for a larger group of the world`s top nations, will also meet.
With governments moving to pump billions into the troubled banking system, talk is brewing of the need for coordinated action to restore confidence and stability to markets.
"I hope the G-7 meeting will point toward coordinated actions to show that authorities are getting ahead of the curve," said Robert Zoellick, president of the World Bank, on Thursday. "Countries will take different actions, customized to their circumstances, yet the actions need to target the same basic problems."
That problem is a lack of confidence between financial institutions worried about their ability to safely trade and loan money to one another. The lack of confidence has caused a near global cut-off in credit needed to fund the day-to-day operations of business big and small around the world.
"The G-7 countries can work through this crisis by dealing with bad assets, recapitalizing banks, and providing much needed liquidity," said Zoellick. "They need to work together to fix the financial, regulatory, and supervisory system that failed."
Can they get it together?
But agreement on coordinated action will be difficult, and some experts question whether it`s even the solution needed for plunging stock markets around the globe. They point out that coordinated emergency interest rate cuts by the major central banks around the globe on Wednesday did little to free up lending.
"I think we`re dealing with more confidence than substance," said Kevin Giddis, head of fixed-income trading at Morgan Keegan. "We`ve done all of the rotations a couple of time, and it`s clear that pure infusion of cash doesn`t restore confidence."
Giddis is hoping the G-7 finance ministers will announce guarantees for all interbank lending, a move that he believes could break the crisis of confidence. He said the doubts about whether an agreement can be achieved continue to weigh on global financial markets.
"Whether`s it`s possible, I don`t know," he said.
John Silvia, chief economist with Wachovia, said whatever programs the finance ministers might announce this weekend would probably take months if not years to directly affect the way global financial transactions take place.
"Do you think this is Yul Brynner and the Magnificent Seven? No," he said.
It`s not even clear if the finance ministers have the power to announce something like an interbank lending guarantee without approval of their governments` legislative branches, Silvia noted. He said a simple commitment of the ministers to take coordinated steps in the future should help assure and calm investors.
But Silvia said the risk to financial markets is that the statement from the ministers will fall short of current hopes for pledges of unified action. He said a statement filled with platitudes and no concrete promises will likely shake investor confidence even further early next week.
cont.....
Tracked by: 1 Boarder
Hello Sir,
it seems the US market is being operated by some purpose to fall, Today I hope at least there fall should stop, so in upcoming week we can see some stability, Here, in India Govt has reduced 1.0 CRR, also market seen very bad (worst) figures of IIP, so it worked like Oil on Flame. But if u ask me Sir, I think at ratio markets falling, it`ll bounce as same within some days, but in Market always Some Days matterz, crude is down almost 50%, everything is fine, so lets hope it will recover also soon, coz everything is going on now as precautionary level. its jus amazing, if u study charts, u can analyze things, market graphs r showing movements like Intraday, keep posting new action taken by US Govt.
regards
Prashant...
In reply to:
No one is too big not to fall
Posted by : Leave it.
Dear Mr.Prashant ptp,
Even today the signals are not good for a positive trading in Indian Markets. This is only my personal view as I just returned from the brokers shell, where not a much noise was made.
Dow falls 508 as panic takes over Wall Street
The Dow tumbles more than 5% in part because of Fed boss Bernanke`s gloomy economic outlook and continuing stress on financial companies.
The Nasdaq loses more than 100 points, and the S&P 500 drops below 1,000 for the first time since 2003.
Stocks fell to their lowest levels in five years today as fears grew about the global banking system`s ability to survive the worst credit crunch since at least World War II.
The Dow Jones industrials fell 508 points, or 5.1%, to 9,447. The Nasdaq Composite Index fell 108 points, or 5.8%, to 1,755, and the Standard & Poor`s 500 Index was off 61 points, or 5.7%, to 996.
Today`s close was the Dow`s lowest since Oct. 2, 2003; it`s down about one-third since peaking a year ago.
The Nasdaq`s close was its worst since August 18, 2003, and the S&P`s decline was its worst -- and its first close under 1,000 -- since Sept. 30, 2003.
Take your own cue for todays trading. I am a student of actuary. Retired from LIC of India ten years back, residing in USA. As on date the politics do not take the economics into account for placing it to the public`s attention. But the foreclosure action taken by some banks speedily has sent waves of resentent.Fed action is not appreciated by the public as one or two in a street is thrown out of job and the cires of the family is widely heard. Only the auditor general of America is a topic for little discussion when some in the brokers premises are interested to exchange comments. I shall try to post the excerpts. This borad nor the board members are widely interested to talk. The need for incresed deposit insurance cover for bank deposits are felt very much, as many feel that the Govt. will take care. If that is the fact why they offer one lac limit of deposit insurance cover for bank deposits. For the next three days , people will be busy with something else religiously. Perhaps, I can wish to see the ray of hope on Monday next.
v.krishnamoorthy
Here in US things will be as it is. It took ten days for the Anxiety index to cross Atlantic. As there are very small countries in europe, there is no concerted action to save UK- pounds or EURO.
v.krishnamoorthy
Tracked by: 8 Boarders
All EYES turn to world LEADERS LEADERS.
As finance ministers of 7 largest economies meet, hopes rise that coordinated action will solve crisis.
NEW YORK -- The Federal Reserve and Treasury Department haven`t been able to stop the panic gripping U.S. financial markets.
Neither have finance ministers and central bankers across the globe - from powers such as Britain and China to smaller countries such as Iceland.
In the face of the growing global crisis, can the Group of Seven and International Monetary Fund make a difference?
That`s what the world is hoping. But even those calling for coordinated action on a global scale aren`t sure they can.
The IMF and its sister organization the World Bank are holding their joint annual meeting in Washington, while the finance ministers of the world`s leading industrialized nations, the G-7, are also set to meet in Washington this weekend. In addition, the G-20, the finance ministers and central bankers for a larger group of the world`s top nations, will also meet.
With governments moving to pump billions into the troubled banking system, talk is brewing of the need for coordinated action to restore confidence and stability to markets.
"I hope the G-7 meeting will point toward coordinated actions to show that authorities are getting ahead of the curve," said Robert Zoellick, president of the World Bank, on Thursday. "Countries will take different actions, customized to their circumstances, yet the actions need to target the same basic problems."
That problem is a lack of confidence between financial institutions worried about their ability to safely trade and loan money to one another. The lack of confidence has caused a near global cut-off in credit needed to fund the day-to-day operations of business big and small around the world.
"The G-7 countries can work through this crisis by dealing with bad assets, recapitalizing banks, and providing much needed liquidity," said Zoellick. "They need to work together to fix the financial, regulatory, and supervisory system that failed."
Can they get it together?
But agreement on coordinated action will be difficult, and some experts question whether it`s even the solution needed for plunging stock markets around the globe. They point out that coordinated emergency interest rate cuts by the major central banks around the globe on Wednesday did little to free up lending.
"I think we`re dealing with more confidence than substance," said Kevin Giddis, head of fixed-income trading at Morgan Keegan. "We`ve done all of the rotations a couple of time, and it`s clear that pure infusion of cash doesn`t restore confidence."
Giddis is hoping the G-7 finance ministers will announce guarantees for all interbank lending, a move that he believes could break the crisis of confidence. He said the doubts about whether an agreement can be achieved continue to weigh on global financial markets.
"Whether`s it`s possible, I don`t know," he said.
John Silvia, chief economist with Wachovia, said whatever programs the finance ministers might announce this weekend would probably take months if not years to directly affect the way global financial transactions take place.
"Do you think this is Yul Brynner and the Magnificent Seven? No," he said.
It`s not even clear if the finance ministers have the power to announce something like an interbank lending guarantee without approval of their governments` legislative branches, Silvia noted. He said a simple commitment of the ministers to take coordinated steps in the future should help assure and calm investors.
But Silvia said the risk to financial markets is that the statement from the ministers will fall short of current hopes for pledges of unified action. He said a statement filled with platitudes and no concrete promises will likely shake investor confidence even further early next week.
cont........
In reply to:
SENSEX to rally by 2400 pts in 7 days
Posted by : sambala
Crony capitalism? What better example than the manning of not only the US Treasury secretary’s post, but also that of the president’s chief of staff by former executives of Goldman Sachs (incidentally, the president of the World Bank also comes from the same investment bank). These are only the current examples of the revolving door between Wall Street and the US Administration prevalent for long — and often presented as a manifestation of the public service spirit of Wall Street bankers. To be sure, the public service urge comes only after hundreds of millions have been earned in “trading” profits. To appreciate the culture of investment banks, I can do no better than quote two instances cited in The Economist’s (September 27, 2008) review of “The Partnership: The Making of Goldman Sachs”, by Charles D Ellis. A female job candidate was asked if she would have an abortion rather than lose the chance to work on a big deal! This may be an aberration; but surely it also manifests the culture of money being the only value, consciously or unconsciously cultivated by the investment banks. The second instance cited in the review is no aberration: surely the top management knew that Goldman traders were making huge profits betting house prices would drop, even as the bank continued to sell mortgage backed securities, and continued to claim that, in its corporate value system, clients come first.
Henry Paulson, the current US Treasury secretary was chairman of Goldman Sachs for a long time before taking up the present job. He also wants unfettered rights to use $700 billion of taxpayers’ money to buy sub-standard assets from the banking system, in order to save it. (Can things get any more bizarre?) Incidentally, the original draft of the bill had no money for helping those deprived of their houses through repossession.
Tracked by: 1 Boarder
But now economists wonder what will happen when the pace of deleveraging slows - and those holding dollar-denominated assets consider the expanding U.S. financing burden at a time when growth prospects look weak.
"When this process plays itself out," says University of Oregon economics professor Tim Duy, "the fundamentals working against the dollar will come into focus again."
By Colin Barr
...
In reply to:
No one is too big not to fall
Posted by : sambala
Why the GREENBACK is on a TEAR
Surprisingly, a financial panic rooted in aversion to debt has spared the currency of the world`s biggest debtor.
NEW YORK (Fortune) -- There`s a silver lining in the financial panic of 2008: the surprising strength of the dollar.
Investors have spent the year fleeing the scourge of leverage - the accumulation of assets via massive amounts of debt. A collapse of market confidence contributed to the failure of heavily indebted firms like Lehman Brothers and Washington Mutual, and forced the nationalization of AIG (AIG, Fortune 500) and others. Panic sales of companies that depend on borrowing in the locked-up short-term credit markets have only accelerated this week, with Morgan Stanley (MS, Fortune 500) off 25% two days in a row.
But it could be worse, believe it or not. While the stock market`s October dive has decimated brokerage statements and retirement accounts around the world, the selling so far has spared the currency of the biggest debtor of all, the U.S. government.
In a twist few predicted, the rush away from risky assets has actually been good for the dollar - even though the U.S. needs to borrow $2 billion a day from its creditors overseas just to keep the lights on, and has been adding to its already substantial obligations at a rapid clip.
Recent weeks have brought a $700 billion plan to buy financial assets and a loan commitment to AIG that expanded into 12-digit territory in less than a month, among many others. This expansive government response to the financial crisis has had longtime skeptics of U.S. fiscal policy renewing their predictions for a dollar crash.
"While it is dizzying to predict how this plan will be implemented, it is fairly simple to foresee the macroeconomic consequences," Peter Schiff, president of broker-dealer EuroPacific Capital and a long-time bear on the dollar, wrote last month. "The U.S. dollar will be shattered beyond repair. The government simply has no means to make good on the trillions of new liabilities."
But the dollar hasn`t been shattered, because it has become clear that the U.S. is far from the only economy to be sputtering. The International Monetary Fund warned this week that economic output will be flat next year in Europe and the U.K., and the other major developed economy - Japan - has yet to emerge from a slump that is now going on two decades.
Thus the U.S. currency has risen more than 15% against the euro in the past three months, including an 8% surge since Paulson proposed the Troubled Asset Relief Program in mid-September. The dollar has lost some of its value against the yen, but during the past month`s tumult it has retained its value against the Japanese currency and against gold better than any other major currency has.
The dollar`s strength even against classic safe-haven currencies such as the Swiss franc "partly reflects the unwinding of dollar-selling positions accumulated since mid-September," writes CMC Markets currency strategist Ashraf Laidi, "as well as funds` disposal of positions in emerging market assets."
One side effect from the recent rash of deleveraging has been that investors who earlier sold dollars to fund bets on commodities and stocks now must buy greenbacks to unwind those trades. Meanwhile, the safety of U.S. government bonds beckons: The yield on the three-month Treasury bill recently was 0.2% - meaning investors are willing to give up the prospect of earning any return on their money in exchange for being assured of capital preservation.
Still, there`s some question about how long the dollar`s renaissance will last. The dollar tumbled for most of the past six years against the currencies of major trading partners, as a surging oil-import bill contributed to massive U.S. trade deficits, before rebounding this summer as the commodities bubble collapsed.
cont.....
Tracked by: 1 Boarder
Why the GREENBACK is on a TEAR
Surprisingly, a financial panic rooted in aversion to debt has spared the currency of the world`s biggest debtor.
NEW YORK (Fortune) -- There`s a silver lining in the financial panic of 2008: the surprising strength of the dollar.
Investors have spent the year fleeing the scourge of leverage - the accumulation of assets via massive amounts of debt. A collapse of market confidence contributed to the failure of heavily indebted firms like Lehman Brothers and Washington Mutual, and forced the nationalization of AIG (AIG, Fortune 500) and others. Panic sales of companies that depend on borrowing in the locked-up short-term credit markets have only accelerated this week, with Morgan Stanley (MS, Fortune 500) off 25% two days in a row.
But it could be worse, believe it or not. While the stock market`s October dive has decimated brokerage statements and retirement accounts around the world, the selling so far has spared the currency of the biggest debtor of all, the U.S. government.
In a twist few predicted, the rush away from risky assets has actually been good for the dollar - even though the U.S. needs to borrow $2 billion a day from its creditors overseas just to keep the lights on, and has been adding to its already substantial obligations at a rapid clip.
Recent weeks have brought a $700 billion plan to buy financial assets and a loan commitment to AIG that expanded into 12-digit territory in less than a month, among many others. This expansive government response to the financial crisis has had longtime skeptics of U.S. fiscal policy renewing their predictions for a dollar crash.
"While it is dizzying to predict how this plan will be implemented, it is fairly simple to foresee the macroeconomic consequences," Peter Schiff, president of broker-dealer EuroPacific Capital and a long-time bear on the dollar, wrote last month. "The U.S. dollar will be shattered beyond repair. The government simply has no means to make good on the trillions of new liabilities."
But the dollar hasn`t been shattered, because it has become clear that the U.S. is far from the only economy to be sputtering. The International Monetary Fund warned this week that economic output will be flat next year in Europe and the U.K., and the other major developed economy - Japan - has yet to emerge from a slump that is now going on two decades.
Thus the U.S. currency has risen more than 15% against the euro in the past three months, including an 8% surge since Paulson proposed the Troubled Asset Relief Program in mid-September. The dollar has lost some of its value against the yen, but during the past month`s tumult it has retained its value against the Japanese currency and against gold better than any other major currency has.
The dollar`s strength even against classic safe-haven currencies such as the Swiss franc "partly reflects the unwinding of dollar-selling positions accumulated since mid-September," writes CMC Markets currency strategist Ashraf Laidi, "as well as funds` disposal of positions in emerging market assets."
One side effect from the recent rash of deleveraging has been that investors who earlier sold dollars to fund bets on commodities and stocks now must buy greenbacks to unwind those trades. Meanwhile, the safety of U.S. government bonds beckons: The yield on the three-month Treasury bill recently was 0.2% - meaning investors are willing to give up the prospect of earning any return on their money in exchange for being assured of capital preservation.
Still, there`s some question about how long the dollar`s renaissance will last. The dollar tumbled for most of the past six years against the currencies of major trading partners, as a surging oil-import bill contributed to massive U.S. trade deficits, before rebounding this summer as the commodities bubble collapsed.
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No one is too big not to fall
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