Posted on 03/03/2008 2:27:16 AM PST by TigerLikesRooster
London and Europe join global equities sell-off
By Michael Hunter in London and Lindsay Whipp in Tokyo
Published: March 3 2008 08:54 | Last updated: March 3 2008 08:54
Europe joined the global sell-off on equities markets on Monday, as the dollar continued to trade around the $1.52 mark against the euro, helping commodities prices to linger around record levels.
As European stock markets opened for business, gold continued to close in on the $1,000 mark, rising to $982.60 a troy ounce, up from $975.90 at the close on Friday. Crude looked to have established a foothold above $100 a barrel, up 0.3 per cent at $102.15.
In London, the FTSE 100 started the session down 1.3 per cent at 5,810.6, a loss of 73 points, with banking stocks once more dominating the selling, despite solid earnings from HSBC. The UK’s biggest bank took a $17.2bn hit from its exposure to the US subprime lending crisis, but reported earnings of $24.2bn, broadly in line with forecasts.
The FTSE Eurofirst 300 lost 1.5 per cent to 1,295.4, with the CAC 40 in Paris down 1.5 per cent at 4,717.7 and the Xetra Dax in Frankfurt 1.7 per cent lower at 6,636.8.
Comments from Credit Suisse that there could be fresh subprime-releated losses at its peer UBS outweighed HSBC’s solid earnings and spooked the wider European banking sector.
”Further writedowns appear likely and could be large,” said Credit Suisse of its fellow Swiss bank, speculating that new losses could reach SFr15.5bn.
Stephen Pope, of Cantor Fitzgerald, said: ”With worries about stagflation appearing, credit spreads moved wider once again especially as there were calls from UBS that the writedowns announced so far are inadequate”
The sharp falls on global equities were prompted on Friday in the US, where an onslaught of bad news compounded fears of recession in the world’s biggest economy. There were also stubborn worries that there might be more writedowns in the financial sector.
Commodities markets continued to push higher as investors flew from risk and the weakening dollar added to upward pressure on prices.
The dollar suffered lingering fall-out from expectations of further rate cuts in the US after Ben Bernanke, chairman of the Federal Reserve, signalled that the central bank could loosen monetary policy further in a bid to stem off recession. The dollar stood at €1.5196 as European equities trade began. Against the pound, the dollar was at £0.7667.
On Asian equities markets, the Nikkei 225 led the downturn, losing 4 per cent to 13,057.13 by lunchtime in Tokyo, and recently traded down 3.6 per cent to 13,109.42. The broader Topix slid 3.4 per cent to 1,279.65.
Shares of Japanese exporters had the double whammy of the stronger yen to cope with, and consumer electronics makers and automakers were some of the biggest contributors to the market declines.
Ping!
This is kinda like watching a 300-pound-woman (in spandex pedal pushers, to complete the visualization) bungee-jumping —
Every time she topples off the bridge, I wonder if there’s gonna be a bounce - or a juicy ‘splat!’....
Bizarre, but utterly spot on, analogy :o)
What an amazing metaphor!
Smiling is a great way to start the day.
Soros, call your broker....
This is being engineered, and the Demoncrats aren’t helping, and the GOP is culpable.
Engineered in 1913, reengineered in the 30’s, and perfected in the 90’s and 00’s. But the credit bubble will pop sooner or later despite the best efforts (another emergency Fed rate cut today?) to keep it inflated.
Yep, and every time the fat lady jumps, she’s put on another 20 pounds, and another couple of elastic threads in her bungee cord have broken since last time.
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."~~Ludwig von Mises
Even another 25 basis pt cut will not do much. OPEC will probably announce Wednesday they will hold production stable or say they will cut some on production but actually not do it because of the returns they are getting per barrel.
Because of the US instigated sub-prime mess, the Feds will most likely cut the rate to devalue the dollar even more in a vain attempt to keep the smaller banks solvent at this time.
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