Friday News Roundup
Here is a roundup of stories you might want to read this Friday …
US MORTGAGE MARKET
Here's a New York Times editorial with some pretty good ideas on what we should do to help the 1.7 million people facing foreclosure.
Ouch! Bob Ivry of Bloomberg takes the Fed to the Woodshed in: Bernanke, Paulson Were Wrong: Subprime Bust Is Contagious, Not `Contained' . Undeterred, Bernanke isn't blinking.
Speaking of the ongoing trainwreck in the mortgage market, Countrywide Says `Unprecedented' Disruptions May Hurt Profit; Stock Falls Countrywide Financial Corp., the biggest U.S. mortgage lender, said it faces ``unprecedented disruptions'' that may crimp profit, suggesting a credit crunch that started with the U.S. subprime market will spread. The shares fell in Europe.
Meanwhile, if you think banking stocks are cheap now, just wait, they're probably going to get a lot cheaper. But that's not stopping some early investors: Banking Stocks, Cheapest for Decade, Attract Investors Matrix, New Star
US MARKETS
When genius fails: Market Turmoil Is `Perfect Storm' for Quants, Citigroup Strategist Says The turmoil in the equity and credit markets has created a ``perfect storm'' that led to losses for hedge funds employing mathematical strategies, according to a Citigroup Inc. strategist.
AUSTRALIA
In Australia, Stocks Plunge Most Since September 2001 on Renewed U.S. Mortgage Concerns. And the Australian and New Zealand dollars fell off a cliff. Why is that happening? It's the unwinding of the Japanese carry trade -- credit market losses are forcing investors to sell high-yielding assets (like the Aussie and Kiwi dollars) bought with funds borrowed in Japan
I love this quote, in a rubbernecking at a car-wreck sort of way: "Subprime is a car that is out of control, it is only a matter of time before it crashes,'' said Alex Sinton, senior currency dealer at ANZ National Bank Ltd. in Auckland. "The New Zealand and Australian dollars are the possums in the headlights."
JAPAN
The carry trade is unwinding fast: Yen Climbs Against Euro, Korean Won, Australian Dollar on Credit Losses The yen climbed against the world's 16 most-active currencies as widening credit market losses prompted investors to cut holdings of higher-yielding assets funded by loans in Japan.
CHINA
China Trade Surplus Surges 67 Percent to $24.4 Billion, More Than Expected China's trade surplus surged 67 percent in July to the second-highest on record, bolstering U.S. Treasury Secretary Henry Paulson's case for a faster appreciation of the yuan.
Hong Kong not only had a bad Friday, it's setting up for a bad Monday, as it shut early to brace for a typhoon: Hong Kong Stocks Slide, Worst Week in Five Months, Exchange Shuts Early
CANADA
Canada is seeing its dollar decline as the carry trade unwinds. Meanwhile the Bank of Canada is the latest to say It Will `Provide Liquidity' to Aid Financial Markets
COMMODITIES
Gold Rises in Asian Trading Amid Demand From Jewelers; Silver Increases Gold rose in Asia underpinned by demand from jewelers after the precious metal tumbled the most in three months yesterday. Silver also gained.
Crude Oil Falls to Near Five-Week Low on Indications U.S. Demand May Slow Crude oil fell to near a five-week low in New York on signs U.S. demand has peaked and subprime loan defaults may weigh on the global economy.
IEA Trims Fourth-Quarter Demand Forecast on Signs U.S. Economy May Slow The International Energy Agency, an adviser to 26 nations, cut its forecast for fourth-quarter oil demand amid signs that the U.S. housing slump and crisis in debt markets may slow economic growth.
posted by Sean Brodrick @ 7:09 AM
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