Lehman Brothers Fate September 14, 2008
Posted by mylastresort in rumors, sovereign funds.Tags: American International Group, banking, Citigroup, Collapse, economy, FED, John A. Thain, John Mack, Lehman Bros, Lehman Brothers, Long-term Capital Management, LTCM, Merrill Lynch, Morgan Stanley, NYC, subprime, US, Vikram S. Pandit, Washington Mutual
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Just like a scene from a movie top banking executives meet at the New York Fed to discuss Lehman Brothers fate. Exactly 10 years ago the same meeting occured to discuss Long Term Capital Managment (LTCM) a hedgefund which collapsed in 1998 and sent the market tumbling.
“I’m hoping that some big firm will want them more than the Fed wants them… The government right now, the Treasury and the Fed among others, they’re trying to work the deal with no government money, as they should.”
- Senator Richard Shelby, Senate Banking Committee
The current roster consists of the following attendees:
- Citigroup Vikram S. Pandit
- Merrill Lynch John A. Thain
- American International Group
- Washington Mutual
- Morgan Stanley John Mack
- Goldman Sachs Lloyd C. Blankfein
- JPMorgan Chase James Dimon
- Credit Suisse Brady Dougan
- Bank of New York Mellon Robert Kelly
- UBS Robert Wolf
- Barclays Bert E. Diamond
Including Henry M. Paulson, Treasury Secretary, & Timothy Geithner, New York Fed president.
Qatar lowers interest rate March 23, 2008
Posted by mylastresort in analysis, bahrain, qatar, saudi arabia.Tags: analysis, Appreciation, bahrain, Bank, Basis point, CBB, CBK, Central Bank, Countries, Currencies, currency, Cut, Depeg, Dove, economy, FED, Federal Reserve, Food, Gulf, inflation, kuwait, oman, Peg, Products, qatar, Qatari, Qatari Riyal, Rate cuts, Rent, Revaluations, saudi arabia, speculation
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Qatar has just announced a rate cut of 75 bp (basis points) on its depository facility rate to 2.25%. Thus far Saudi Arabia, Bahrain and now Qatar have been forced to lower their rates, despite rising inflation, to match the Fed cuts made in the previous week.
Annual inflation in Qatar has risen to 13.74% in December 2007. The second highest rate on record as food and rent costs surged in the economy. The Gulf central banks are torn between efforts to fight inflation and prevent appreciation of their dollar pegged currencies.
Speculation on the Gulf currencies revaluation has been seen to increase as inflationary pressures push the countries in to rapid reformation of their monetary policies. As of now the Qatari Riyal forward contract is has appreciated 3.9% to 3.4989 per dollar in a year.
Fed actions in chronological order (Article) March 18, 2008
Posted by mylastresort in analysis.Tags: Bank of Canada, Bank of England, Central Bank Actions, Credit Crunch, Crisis, Cuts, Discount Rate, economy, Emergency, European Central Bank, FED, Federal Reserve, Federal Reserve Actions, Feds actions, Financial Markets, Great Depression, Housing, Intervention, JPMorgan Chase, Rate cut, Swiss National Bank, Target, United States, US, USD
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Everyone is talking about the Feds actions in the market and I just found this article very interesting. It depicts the US Federal Reserves actions in chronological order.
(Reuters) – The Federal Reserve on Sunday lowered the discount rate it charges on direct loans to banks and announced a new lending program to provide credit to other big Wall Street firms, the latest in a series of moves to try to stabilize financial markets.
The Fed cut the discount rate to 3.25 percent from 3.5 percent, effective immediately, and said it would increase the maximum maturity of discount rate loans to 90 days from 30 days.
Federal Reserve emergency intervention March 17, 2008
Posted by mylastresort in analysis.Tags: Action Economics, analysis, Ben Bernake, Crisis, David Cohen, Depression, Discount Rate, economy, EURO, FED, Federal Reserve, global, Gold, Record Levels, subprime, US, Wall Street, Yen
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The US federal reserve has set an emergency interest rate cut on Sunday. The news shocked the global economy. This is the biggest sign of how devastating the credit crisis is for Wall Street.
“The fear is how many more skeletons in the closet are still there in the global credit markets? …This is another effort by the Fed to calm things down, but the cloud on the horizon is just how much more of these credit issues are still out there.”
- David Cohen, economist at Action Economics in Singapore.
The market has shrugged off news that the Fed has announced fresh emergency measures to stem the quick spreading financial crisis. It is claimed the tools they are using have not been used since the Great Depression. The weakening dollar has spurred fresh new records across the board.
- Euro $1.5905
- Yen 95.77
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Gold 1,030
“The Federal Reserve in close consultation with the Treasury is working to promote liquid, well functioning financial markets, which are essential for economic growth. To that end we took two steps today… These steps will provide financial institutions with greater assurance of access to funds,”
- Ben Bernanke, Federal Reserve Chairman
Gold (XAU) crossing record level March 13, 2008
Posted by mylastresort in analysis.Tags: Economics, economy, Fear, FED, Federal Reserve, global, Gold, Market, recession, Safe haven, Tennis court, USD, XAU
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Gold is regarded as a safe haven for investments. It is a scarce commodity. It is said that if you collect all the Gold excavated all-throughout history it would be the size of a standard tennis court (length x width x height).During times of a recession or fear in the market speculators usually flock to Gold. As per my previous posts I have given my analysis of the markets and the effects on the global economy. As Gold crosses never before seen levels it is proving that the economic events taking place are in fact serious and should be feared.
Gold (XAU) crosses $1,000
US Dollar defying fundamentals March 13, 2008
Posted by mylastresort in analysis.Tags: commodities, EUR, EURO, FED, Federal Reserve, Gold, Japanese Yen, JPY, modity Warrants Australia, Oil, Peter McGuire, Record, US Dollar, USD, XAU
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USD dropped to 12 year low versus Japanese Yen ($/Yen @ 99.77)
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USD dropped to a record low versus the Euro (EUR/$ @ 1.5624)
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Investors are heading to commodities for safety (Gold XAU @ $989)
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Oil held steady near $110 trading just below a record high
”We’re looking at the U.S. dollar, we’re looking at speculation, we’re looking at geopolitical. Those three things tying together are defying fundamentals…”
- Peter McGuire, managing director of Commodity Warrants Australia
Finally, Wall Street dealers agree March 9, 2008
Posted by mylastresort in analysis.Tags: Employment Data, FED, Poll, Reuters, Wall Street
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All dealers see at least 50 bps Fed rate cut in March Wall Street dealers unanimously expect the Federal Reserve to cut interest rates by at least a half point in March, a Reuters poll showed on Friday, with a growing minority seeing room for an even bolder
move after the release of dismal employment data.
A poll conducted after the jobs numbers on Friday shows the majority of those dealers expect the Fed will act aggressively again in April and cut rates by a further half-percentage point.
An increasing number see the federal funds rate, or the recommended overnight lending rate between banks, eventually falling below 2 percent from the current 3.0 percent.
Economists predict negative real interest rate levels in ‘08 March 9, 2008
Posted by mylastresort in analysis.Tags: Economics, FED, Greg Mankiw, Harvard, Mortgages, Real Interest Rates, United States
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Negative real interest rates are most likely if growth expectations are particularly low or if uncertainty is particularly high, Harvard economics professor Greg Mankiw
wrote on his blog this week.
“Both forces seem to be working now,” said Mankiw, a former chairman of the White House Council of Economic Advisors.
Economists at Lehman Brothers now warn of a possible double-dip recession in the first half of 2008 and again in early 2009 once fiscal stimulus measures fade.
“We now believe the tax rebate checks will arrive too late to prevent an outright recession,” said Lehman economist Ethan Harris.
“We expect (the Fed) to cut another 150 basis points by early 2009,” the Lehman economists said.
That would take nominal fed funds to 1.5 percent, not far from the 1 percent seen from June 2003 to June 2004 — a time when the Fed faced a deflation, not an inflation, risk.
More economists are starting to expect the end-point of the Fed’s current rate cutting cycle to be under 2.0 percent, perhaps in the 1.5 percent to 1.75 percent range, which may help to keep bond yields at negative real rates of return below the current U.S. inflation rate.
The Federal Open Market Committee meets on March 18 to determine its next move on interest rates. Federal funds, the Fed’s key lending rate, now stand at 3.0 percent, after being cut from 5.25 percent last September.
Short-term interest rate futures, which measure market sentiment toward Fed policy, imply that the Fed will lower the funds rate to 2.25 percent this month, and probably to 1.75 percent by mid-year.
