Wednesday, September 17, 2008
17 sep
It is increasingly clear that inflation is not the real problem facing
the global economy. Instead recession is. That means that interest
rates are more likely to fall than to rise over the next few months.
Indeed, as inflation expectations have fallen in the last few weeks,
the rates on fixed rate savings bonds are already on the way down.
That means credit is scarce. And without credit economic growth grinds to a halt. Jeremy Warner puts it in the Independent: “less credit equals less money equals less business.” Which of course equals less economic growth.
Yesterday the Libor rate – the rate at which banks borrow from each other – jumped from around 5% up to more like 5.5%
Our advice? Don’t buy a house. The less available credit there is the more prices will fall\\
, it’s the turn of the biggest US insurer by assets, American Insurance Group, to come under the markets’ microscope as the next potential failur, it’s the turn of the biggest US insurer by assets, American Insurance Group, to come under the markets’ microscope as the next potential failur
AIG forms the keystone of the financial system
if any financial organization is ‘too big to fail’, this one is.
OIL: broke fib 68=> down, s=83,70,60
gft
The AIG was saved by the government late in the day, and this excellent
news for this superb vital insurance company – and for many other
financial institutions and individuals. Moreover, the stocks recovered
on solid earnings from Morgan Stanley. The US CPI started to slip –
this is only the beginning, as oil prices have been falling since then
and have more room to go.
Euro/dollar closed lower on Tuesday, but my model remains long. It should now attempt to recover those losses.
Initial
resistance is at 1.4270. This is followed by 1.4330. Above 1.4482, the
high on Monday, resistance is still seen at 1.4545. Above 1.4625,
resistance is at 1.4810.
Immediate support remains at 1.4145. Below 1.4088, the low on Monday, support is now seen at 1.4004. A pivot low is at 1.3883.
Intraday Recap of events IV: AIG has been given special permission from the
state of NY to access $20B to free up liquidity.
Intraday Recap of events VI: EM currencies that are either related to
commodities (BRL, RUB, ZAR) or with a big financing need (TRY, ISK) are selling
off big time. Gainers are and will be JPY and CHF.
AIG FAILURE COULD COST FINANCIAL FIRMS $180 BLN, RBC SAYS
the global economy. Instead recession is. That means that interest
rates are more likely to fall than to rise over the next few months.
Indeed, as inflation expectations have fallen in the last few weeks,
the rates on fixed rate savings bonds are already on the way down.
That means credit is scarce. And without credit economic growth grinds to a halt. Jeremy Warner puts it in the Independent: “less credit equals less money equals less business.” Which of course equals less economic growth.
Yesterday the Libor rate – the rate at which banks borrow from each other – jumped from around 5% up to more like 5.5%
Our advice? Don’t buy a house. The less available credit there is the more prices will fall\\
, it’s the turn of the biggest US insurer by assets, American Insurance Group, to come under the markets’ microscope as the next potential failur, it’s the turn of the biggest US insurer by assets, American Insurance Group, to come under the markets’ microscope as the next potential failur
AIG forms the keystone of the financial system
if any financial organization is ‘too big to fail’, this one is.
OIL: broke fib 68=> down, s=83,70,60
gft
The AIG was saved by the government late in the day, and this excellent
news for this superb vital insurance company – and for many other
financial institutions and individuals. Moreover, the stocks recovered
on solid earnings from Morgan Stanley. The US CPI started to slip –
this is only the beginning, as oil prices have been falling since then
and have more room to go.
Euro/dollar closed lower on Tuesday, but my model remains long. It should now attempt to recover those losses.
Initial
resistance is at 1.4270. This is followed by 1.4330. Above 1.4482, the
high on Monday, resistance is still seen at 1.4545. Above 1.4625,
resistance is at 1.4810.
Immediate support remains at 1.4145. Below 1.4088, the low on Monday, support is now seen at 1.4004. A pivot low is at 1.3883.
Intraday Recap of events IV: AIG has been given special permission from the
state of NY to access $20B to free up liquidity.
Intraday Recap of events VI: EM currencies that are either related to
commodities (BRL, RUB, ZAR) or with a big financing need (TRY, ISK) are selling
off big time. Gainers are and will be JPY and CHF.
AIG FAILURE COULD COST FINANCIAL FIRMS $180 BLN, RBC SAYS
Labels: forex
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