Asian News

[Ichiro]

25feb-Dow Average Has Worst Weekly Drop Since August; Financials Fall

By Michael Patterson and Eric Martin

Feb. 24 (Bloomberg) -- The Dow Jones Industrial Average had its biggest weekly slide since August as rising consumer prices reduced the odds of an interest rate cut and concern mounted that mortgage defaults may reduce profit growth at banks.

Countrywide Financial Corp., Lehman Brothers Holdings Inc. and Bear Stearns Cos. pushed a gauge of financial shares in the Standard & Poor's 500 Index to its biggest decline in 12 weeks. Hewlett-Packard Co. helped drag down the Dow average from a record after the world's largest personal-computer maker said price cuts hurt profit margins.

The government's latest inflation report reinforced comments last week by Federal Reserve Chairman Ben S. Bernanke that his primary concern is fighting inflation. A rise in loan delinquencies among riskier ``subprime'' borrowers may reduce earnings at financial companies, which account for 22 percent of the S&P 500 index's value.

``The subprime issue has been something a lot of people have been concerned about, but investors for a while were just ignoring it,'' said Edward Hemmelgarn, who oversees about $400 million as president of Shaker Investments Inc. in Cleveland. ``It tends to create a cascading effect. The more people start to default, the more investors become risk-averse.''

In a holiday-shortened week, the Dow industrials dropped 0.9 percent to 12,647.48, the biggest weekly decline since the period ended Aug. 11. The index reached a record 12,786.64 on Feb. 20.

The Standard & Poor's 500 Index slipped 0.3 percent to 1451.19.

The Nasdaq Composite Index gained 0.8 percent to 2515.10 after mergers lifted shares XM Satellite Radio Holdings Inc. and Whole Foods Market Inc.

Iran Concerns

Investors were also chilled by reports that Iran defied a United Nations Security Council demand to halt its atomic work. Stocks extended their declines on Feb. 22 as traders speculated the U.S. might raise its terror alert. The U.S. Department of Homeland Security said there has been no change in the threat level.

for info:

http://www.bloomberg.com/apps/news?pid=20601087&sid=ar8OR2rq2_8Q&refer=worldwide

[Ichiro]

25feb-Asian Stocks Rise for Sixth Week; Nippon Steel, Posco Advance

By Chen Shiyin

Feb. 24 (Bloomberg) -- Asian stocks advanced for a sixth week, lifting a regional index to a record high. Nippon Steel and Posco rose on speculation that there will be more takeovers in the steel industry.

``M&A will be a long-lasting investment theme, and steelmakers are likely targets because of the industry's reorganization worldwide,'' said Hideo Arimura, who helps manage $16 billion at Dai-Ichi Kangyo Asset Management Co. in Tokyo. ``They have room to increase dividend payouts as well.''

E*Trade Australia Ltd. and Malaysia Oxygen Bhd. gained after receiving separate takeover offers. Materials stocks rose as Australia's Zinifex Ltd. offered to buy Wolfden Resources Inc., a Canadian mining company, and as metal prices gained.

The Morgan Stanley Capital International Asia-Pacific Index added 0.8 percent to 148.01 this week, adding to a five-week, 5.9 percent rally. A measure of steelmakers and materials producers posted the biggest advance among the gauge's 10 industry groups.

Japan's Topix index jumped 2.3 percent to the highest since November 1991, while the Nikkei 225 Stock Average added 1.8 percent to 18,188.42.

Mitsubishi Estate Co. gained after Bank of Japan Governor Toshihiko Fukui said interest rates will stay low, holding down borrowing costs, and Mori Building Co., the nation's largest developer by assets, said the supply of office space will fall this year and next.

Indexes gained around the region, except in New Zealand, Indonesia and India. Benchmarks in South Korea, Australia and Singapore rose to records during the week. Markets in China and Taiwan were closed all week for the Lunar New Year holiday.

Steelmakers Advance

Japan's Nippon Steel, the world's second-largest maker of the alloy, rose 11 percent this week after the company said in a Feb. 19 filing to the Tokyo Stock Exchange that it raised its stake in Nakayama Steel Works Ltd. to 8.7 percent from 6.6 percent.

Steelmaker stocks climbed last year partly on speculation Mittal Steel Co.'s takeover of Arcelor SA, which created the world's largest maker of the alloy, would accelerate reorganization in the industry globally.

Meanwhile, Posco, the world's No. 3 steelmaker, said Feb. 23 that it had won approval from shareholders to ease rules restricting its ability to sell stock, strengthening defenses against any hostile takeover attempt. The shares gained 3.9 percent this week.

for info:
http://www.bloomberg.com/apps/news?pid=20601080&sid=az8T3tgQHIhE&refer=asia

[Ichiro]

25feb-Sanyo Faces Accounting Investigation; Shares Tumble (Update6)

By Masaki Kondo and Mariko Yasu

Feb. 23 (Bloomberg) -- Sanyo Electric Co., bailed out last year by Goldman Sachs Group Inc. and two Japanese banks, said regulators are investigating whether it failed to fully disclose losses. The stock plunged 21 percent.

``We are cooperating with the investigation'' by the Securities and Exchange Surveillance Commission, Sanyo said in a statement today. The maker of batteries and mobile phones understated losses at seven subsidiaries for the year ended March 2004, the Asahi newspaper reported earlier today, citing a person it didn't identify.

The probe may hamper efforts by Goldman, Daiwa Securities SMBC Co. and Sumitomo Mitsui Financial Group Inc. to revive Osaka-based Sanyo, which is projecting a third year of losses. The company plans to sell its chip operations and cut jobs to focus on its rechargeable battery unit, the world's largest.

``The company lacks management competence,'' said Tomokatsu Mori, who helps oversee $7.4 billion at Fukoku Capital Management Inc. in Tokyo. ``Profits the company made by selling batteries are being eroded by unprofitable businesses so it's unlikely that Sanyo will post improved earnings.''

Goldman, the world's most profitable securities firm, Daiwa and Sumitomo Mitsui invested 300 billion yen ($2.5 billion) in Sanyo in January 2006 in return for management control.

New York-based Goldman and Daiwa SMBC, each bought 125 billion yen of preferred stock that can be converted into a 24.5 percent stake in the company and sold to outside investors without Sanyo's consent starting March 14.

``We are committed to supporting the company for the long term,'' said Sumiko Iwadate, Goldman's spokeswoman in Tokyo. Daishu Nagata, a spokesman for Daiwa SMBC, an investment-banking venture between Sumitomo Mitsui and Daiwa Securities Group Inc., also affirmed his company's support for Sanyo.

Share Tumble

Sanyo stock fell 48 yen to 181 at the close in Tokyo. The cost of protecting the company's debt against default doubled compared with yesterday as perceptions of its creditworthiness deteriorated, according to BNP Paribas. Five-year credit-default swaps based on 1 billion yen of Sanyo bonds rose to 16.8 million yen from 8 million yen yesterday, according to BNP Paribas.

for info:

http://www.bloomberg.com/apps/news?pid=20601101&sid=a6I54hf83IVw&refer=japan

[Ichiro]

25feb-Economics 101 Is of Little Help to BOJ This Week: William Pesek

By William Pesek

Feb. 20 (Bloomberg) -- The will-they-or-won't-they? debate surrounding the Bank of Japan's meeting this week misses the point. The real issue is whether Japan finds itself in a trap.

There's a better than 50 percent chance the BOJ will boost its key overnight lending rate from 0.25 percent to 0.50 percent tomorrow. The economy's 4.8 percent annual growth rate in the last three months of 2006, up from 0.3 percent in the previous quarter, gives Governor Toshihiko Fukui political cover to act.

If I were Fukui, I would just do it -- end the two-day meeting beginning today with an interest-rate increase. It would take pressure off the BOJ. It would take some air out of so- called yen carry trades, in which investors borrow in yen for next to nothing and buy higher-yielding assets in other markets.

In the long run, though, the BOJ's options will probably become more and more limited. The reason: Japan finds itself in a trap of sorts.

When the word ``trap'' was applied to Japan in recent years, the reference was to liquidity. The idea, which was explored in depth by economists such as Princeton University's Paul Krugman, was that Japan's credit system was malfunctioning even with rates at zero. No matter how many yen the BOJ printed, banks weren't lending and companies weren't borrowing.

The BOJ is confident enough that those days are over, so it ended its five-year experiment with ``quantitative easing'' in March 2006. Four months later, the central bank raised rates for the first time since August 2000.

Where's the Inflation?

Since then, nothing. In January, the BOJ bowed to political pressure not to boost rates. And now, it's facing another roadblock in its desire to return some normalcy to monetary policy: a conspicuous lack of inflation pressure.

At first glance, the most recent gross domestic product data seem to back Fukui's desire for higher borrowing costs. Consumer spending rose 1.1 percent, after dropping at the same rate in the previous period. Business investment surged 2.2 percent, up from 0.8 percent. Assuming they won't be revised lower, the figures suggest that Japan's longest recovery since World War II is broadening.

That is, until you look at inflation, which seems to be slowing. Core consumer prices, which exclude fresh food, rose a mere 0.1 percent in December because of cheaper oil. The drop in fuel costs may push core prices to zero or make them fall in coming months. It's also worth noting that even after the fourth- quarter rebound in consumption, spending over the second half of 2006 was little changed.

BOJ's Bind

The BOJ is in quite a bind. Fukui has a point when he says it's important to normalize borrowing costs; no developed nation should ever offer zero interest rates, never mind a Group of Seven one. That argument isn't working with the government, though. Politicians say Japan still needs ultra-low rates.

Hence the BOJ's effort to highlight another reason to boost the cost of money: the risk of runaway inflation. The argument is that with deflation ending, Japan could experience an uncontrollable surge in prices, like a beach ball held underwater suddenly shooting higher. It isn't happening, even though the credit system is on the mend. Japan has moved from a liquidity trap to an economic trap.

On Feb. 1, Fukui said rising corporate profits ``are expected to filter to households steadily through various routes.'' Yet a day earlier, data showed monthly wages, including overtime and bonuses, fell 0.6 percent in December from a year earlier.

What gives? Globalization. The entrance of a few billion low-wage workers in China, India, the former Soviet states and elsewhere is affecting corporate decisions everywhere. In the past, one could see a cause and effect when Japanese companies enjoyed rising profits -- wages and bonuses went up. Things are no longer that simple.

Labor Arbitrage

It's all part of the global labor arbitrage keeping in check the salaries of workers in developed nations, increasing their work hours and shifting benefit costs from employers to employees. In the past, Japan could insulate its economy from global labor dynamics. Not anymore.

There are other forces holding back wages. Concerns about the long-term viability of the national pension system are slowing the process of morphing Japan's aggressive savers into spenders. The phasing out of lifetime employment is having a similar effect. Memories of Japan's 15-year funk may be weighing on consumer sentiment.

for info:

http://www.bloomberg.com/apps/news?pid=20601039&sid=a5HNGLTT2txM&refer=columnist_pesek

[Ichiro]

25feb-BUBBLES BREWING IN SHANGHAI,
TOKYO, AND LONDON
by Gary Dorsch
Editor, Global Money Trends Magazine
February 22, 2007

“There is a bubble growing. Investors should be concerned about the risks,” said Cheng Siwei, vice-chairman of China’s National People’s Congress in a January 31st interview with the Financial Times. “But in a bull market, people will invest relatively irrationally. Every investor thinks they can win. But many will end up losing. But that is their risk and their choice,” Cheng warned.

In what might develop into the third biggest stock market bubble in history, ranked alongside Japan’s Nikkei-225 of 1986-89, and the Nasdaq’s 1999-2000 bull run, the Shanghai Composite “A” share Index, restricted mainly to Chinese nationals, has posted a 140% gain over the past 12-months, after soaring 46% in the fourth-quarter of 2006 alone. And without deliberate market intervention, the A-share market could inflate into a Nasdaq-like bubble.

How Beijing decides to deal with the Shanghai bubble, can have a great impact on the outlook for the Chinese economy, global commodity markets, and exporters in the region from Australia, Hong Kong, Japan, and Korea. Will Beijing try to prick the bubble and set-off a steep correction, or carefully calibrate a series of tightening measures to take some steam out of the market and simply flatten it out?

Sometimes, markets can boomerang on central banks and torpedo the most carefully designed strategies. Therefore, jawboning is usually the first act of official intervention in the market place, because it’s cost free and doesn’t change underlying market conditions. Siwei’s remarks did trigger a 15% pullback from January’s peak, as traders locked in profits from sky-high valuations, figuring that official warnings might turn into concrete steps to cool down the market.


for info:

http://www.financialsense.com/fsu/editorials/dorsch/2007/0222.html

[Ichiro]

25feb-NEW HIGHS BY THE SCORE
by David Shvartsman
Finance Trends Matter
February 23, 2007

If you were watching the markets this week and last, you might have noticed a definite theme unfolding, even from a distance. Simply put, the number of new highs being set in financial markets across the board is almost staggering.

We saw new, synchronized highs in the Dow Transports, Industrials, and Utilities averages last week, prompting some to warn of danger ahead.

We have reports of new highs in margin debt, with a record $285.6 billion set in January on the New York Stock Exchange. Margin debt increased 24.2 percent in 2006, while the Dow gained 16.3 percent, according to the Sacbee.com article.

The Nasdaq reached a six-year high Thursday, helped along by a rally in chip stocks. It marked the Nasdaq Composite Index's highest close since February of 2001.

Looking across the globe, we witnessed new highs in Australian share markets, with the ASX 200 and the All Ordinaries index both ending the week at new highs.

The Nikkei closed at a seven-year high, finishing over the 18,000 mark for the first time since 2000.

for info:

http://www.tsptalk.com/mb/newreply.php?do=newreply&noquote=1&p=79207

[Ichiro]

26feb-European stocks -- Factors to watch on Feb 26
Mon Feb 26, 2007 1:50am ET20

By Marie Maitre

PARIS, Feb 26 (Reuters) - European shares geared up for a mildly higher opening on Monday, propped by fresh takeover activity, but rising tensions over Iran's nuclear programme lifted the euro and oil to highs last seen several weeks ago.

Financials will likely be under the spotlight. A $32 billion buyout offer for U.S. power company TXU from Texas Pacific Group (TPG.UL: Quote, Profile , Research) and Kohlberg Kravis Roberts & Co. (KKR.UL: Quote, Profile , Research) was expected to be confirmed on Monday in what would be the largest private equity deal ever.

In Europe, The Times reported that private equity investment firm 3i Group (III.L: Quote, Profile , Research) was hoping to buy British estate agency Foxtons in a sale that could be worth 400 million pounds ($782.3 million), and French reinsurer Scor (SCOR.PA: Quote, Profile , Research) said it would launch a public offer for all outstanding shares in Converium (CHRN.S: Quote, Profile , Research), after earlier securing a third of the Swiss group.

Elsewhere, DaimlerChrysler AG (DCXGn.DE: Quote, Profile , Research) is thinking about taking a minority stake in General Motors Corp. (GM.N: Quote, Profile , Research) as payment for Chrysler if a deal between the two automakers takes place, the Financial Times said on Monday.

The earnings season continues in a relatively subdued vein on Monday, with results from Spanish groups Gas Natural (GAS.MC: Quote, Profile , Research) and Grupo Ferrovial (FER.MC: Quote, Profile , Research), Dutch mail company TNT (TNT.AS: Quote, Profile , Research) and British insurer Old Mutual (OML.L: Quote, Profile , Research).

But overall market sentiment remained capped by Iran's nuclear programme. Western powers meet in London on Monday to discuss tightening U.N. sanctions on Iran amid a flurry of tough and sometimes colourful talk between Washington and Tehran over the Islamic Republic's nuclear programme.

for info:

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070226:MTFH44703_2007-02-26_06-50-20_L26616059&type=comktNews&rpc=44

[Ichiro]

26feb-UPDATE 1-BOJ Jan rate dissenters worried about overheating
Mon Feb 26, 2007 2:22am ET30

TOKYO, Feb 26 (Reuters) - The three members of the Bank of Japan's nine-member board who proposed raising interest rates in January said holding rates steady could excessively stimulate the economy, minutes of the central bank's Jan. 17-18 meeting showed on Monday.

The minutes showed Atsushi Mizuno, Miyako Suda and Tadao Noda were on the losing end of a 6-3 vote to keep the overnight call rate target unchanged at 0.25 percent.

It was the closest vote in more than three years.

Last week the board voted 8-1 to raise the rate to 0.5 percent as more members became convinced that economic and price growth would remain in a positive trend.

Mizuno said he feared that if the central bank did not raise rates, financial markets could misinterpret the move to mean the bank tolerated a weak yen.

for info:

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070226:MTFH45395_2007-02-26_07-22-20_T218482&type=comktNews&rpc=44

[Ichiro]

26feb- AP
Slower Economic Growth Is Predicted
Monday February 26, 8:03 am ET
By Martin Crutsinger, AP Economics Writer
Forecasters Say the Economy Will Grow at the Slowest Pace in 5 Years in 2007

WASHINGTON (AP) -- Restrained by a worse-than-expected slump in housing, the economy will grow at the slowest pace in five years in 2007, leading economic forecasters say. They predict consumers will get a break on inflation from falling energy prices.

The survey of 47 top forecasters, released Monday by the National Association for Business Economics, found a greater expected impact from the ailing housing market this year than did the previous forecast in November. Stronger consumer spending will help offset the housing drag, according to the survey.

The panel predicted that the overall economy will grow by 2.7 percent this year. It would be slowest annual increase in the gross domestic product since a 1.6 percent rise in 2002, when the economy was pulling out of the last recession. In 2006, the GDP rose by 3.4 percent.

GDP measures the value of all goods and services produced in the United States. It is the broadest gauge of the country's economic health.

NABE's November forecast put GDP growth this year at 2.5 percent.

The slight upward revision occurred even though the forecasters now believe housing construction will plunge by 14.9 percent this year. That would be nearly three times bigger than the 5.5 percent fall in residential construction they had projected in the earlier survey.

Construction spending dropped by 4.2 percent for all of 2006. That decline was a chief factor in the economy's sluggish growth in the second half of last year. Thousands of construction workers lost their jobs and home builders struggled with slumping sales as the five-year housing boom ended abruptly.

But the economic forecasters see a cushion to the sharp drop in housing: stronger than previously expected consumer spending. This measure will grow by 3.2 percent in 2007, the same as last year, the panel said.

for info:

http://biz.yahoo.com/ap/070226/economic_outlook.html?.v=4

[Ichiro]

26feb- AP-Dollar Falls Against Yen, Euro in Asia
Monday February 26, 6:08 am ET

TOKYO (AP) -- The dollar dipped against the euro in Asia Monday to its lowest level in almost two months, and it also fell against the yen as market sentiments turned sour toward the dollar.

The euro touched $1.3199, its strongest since $1.3291 Jan. 3, mainly on speculative trading. The euro was trading at $1.3180 midafternoon, up from $1.3162.


The dollar also fell against the yen to 120.98 yen from 121.04 yen late Friday in New York.

Weighing on the dollar were renewed concerns about tensions over Iran's nuclear program, expectations for a sharp downward revision in fourth-quarter U.S. economic growth and falling long-term U.S. interest rates, said Hideaki Inoue, chief foreign-exchange manager at Mitsubishi UFJ Trust and Banking.

info:
http://biz.yahoo.com/ap/070226/dollar.html?.v=2

[Ichiro]

26feb- AP-Euro Relatively Steady Against Dollar
Monday February 26, 6:17 am ET

German Consumer Confidence, Fears About Iran Keep Euro Relatively Steady Against Dollar

FRANKFURT, Germany (AP) -- The euro was nearly unchanged against the dollar on Monday as German consumer sentiment fell for a second straight month and worries about Iran's nuclear ambitions kept currencies on edge.


The 13-nation euro bought US$1.3163 in morning European trading, nominally up from US$1.3162 in New York late Friday after the GfK research group reported that German consumer confidence in March dipped again.

The Nuremburg-based research group said its forward-looking consumer climate indicator fell to 4.4 points, down from a revised reading of 4.9 points in February and well below 8.7 points in January, a decrease blamed on the 3 percent rise in Germany's value-added tax to 19 percent.

The British pound fell to US$1.9628 from US$1.9637 and the dollar also moved lower against the Japanese currency, dropping to 120.78 yen from 121.04 yen.

David Jones, chief markets analyst at CMC Markets in London, said the declines were tied to uncertainty over Iran's nuclear program and what type of response could be coming from the United States.

info:
http://biz.yahoo.com/ap/070226/euro_dollar.html?.v=2

[Ichiro]

26feb-Stock Futures Jump on TXU Takeover Deal
Monday February 26, 8:19 am ET

By The Associated Press
Stock Futures Climb After TXU Agrees to Be Bought by a Consortium for $45 Billion

U.S. stock futures advanced on Monday with a takeover of utility giant TXU stirring up consolidation hopes.

S&P 500 futures rose 4.4, to 1458.20 and Nasdaq 100 futures rose 7.5, to 1852.50. Dow industrial futures improved 43, to 12707.


Last week, the Dow industrials slipped 0.9 percent and the S&P 500 gave up 0.3 percent. The Nasdaq Composite closed up by 0.8 percent.

Crude oil futures rose 38 cents to $61.52 a barrel as Iran, criticized for its nuclear research program, test fired its first rocket into space, according to the country's state television.

Gold futures rose $1.20 to $687.90 an ounce.

Not much is on the U.S. economic calendar except a speech from Federal Reserve member Susan Bies. The dollar lost ground against the yen, while it was steady against the euro.

TXU soared 27 percent in Frankfurt after agreeing to be bought by a consortium led by Kohlberg Kravis & Roberts and Texas Pacific Group for $45 billion.

Company management and Colony Capital have agreed to buy Station Casinos for $8.8 billion, including $3.4 billion in debt.

info:

http://biz.yahoo.com/ap/070226/wall_street.html?.v=2

[Ichiro]

26feb- AP-Greenspan Warns of Likely U.S. Recession
Monday February 26, 8:34 am ET
Alan Greenspan Warns That U.S. Economy May Slip Into Recession by End of Year

HONG KONG (AP) -- Former U.S. Federal Reserve Chairman Alan Greenspan warned Monday that the American economy might slip into recession by year's end.

He said the U.S. economy has been expanding since 2001 and that there are signs the current economic cycle is coming to an end.


"When you get this far away from a recession invariably forces build up for the next recession, and indeed we are beginning to see that sign," Greenspan said via satellite link to a business conference in Hong Kong. "For example in the U.S., profit margins ... have begun to stabilize, which is an early sign we are in the later stages of a cycle."

"While, yes, it is possible we can get a recession in the latter months of 2007, most forecasters are not making that judgment and indeed are projecting forward into 2008 ... with some slowdown," he said.

Greenspan said that while it would be "very precarious" to try to forecast that far into the future, he could not rule out the possibility of a recession late this year.

The U.S. economy grew at a surprisingly strong 3.5 percent rate in the fourth quarter of 2006, up from a 2 percent rate in the third quarter. A survey released Monday by the National Association for Business Economics showed that experts predict economic growth of 2.7 percent this year, the slowest rate since a 1.6 percent rise in 2002.

Greenspan also warned that the U.S. budget deficit, which for 2006 fell to $247.7 billion, the lowest in four years, remains a concern.

"The American budget deficit is clearly a very significant concern for all of us that are trying to evaluate both the American economy's immediate future and that of the rest of the world," he said via satellite at the VeryGC Global Business Insights 2007 Conference.

infoLhttp://biz.yahoo.com/ap/070226/hong_kong_us_greenspan.html?.v=4

[Ichiro]

27feb-FOREX-Dollar hits two-month low vs euro on Iran jitters
Tue Feb 27, 2007 1:31am ET147
Company Market News

By Naomi Tajitsu

TOKYO, Feb 27 (Reuters) - The dollar touched a two-month low against the euro and slipped against the yen on Tuesday amid growing tensions over Iran's nuclear programme and renewed worries about the U.S. housing market.

U.S. data later in the day could point to a slowing economy and offer reasons for the Federal Reserve to cut interest rates later this year, while investors are keeping an eye on rising defaults among high-risk borrowers in U.S. sub-prime mortgages.

Traders were beginning to shift gear after pummelling the low-yielding yen and turning some of their focus to the U.S. economy and any broader fallout from the sub-prime troubles, as well as geopolitical concerns. "The focus had been on the yen until now, but the market is realising that the dollar isn't doing all that well either," said a trader at a major Japanese trading house.


World powers agreed at a meeting in London on Monday to work on a new U.N. Security Council resolution to apply pressure on Iran over its nuclear programme while remaining committed to seeking a negotiated solution, British officials said.

info:
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070227:MTFH72233_2007-02-27_06-30-58_T223036&type=comktNews&rpc=44

[Ichiro]

27feb-European stocks -- Factors to watch on Feb 27
Tue Feb 27, 2007 2:01am ET147

LONDON, Feb 27 (Reuters) - European stocks are set for a softer start to Tuesday's session, peeling back from six-year closing highs, amid a flurry of corporate earnings and data releases.

Oil prices will remain in firm focus, with crude holding above $61.50 a barrel as tensions continue over Iran's nuclear ambitions. The stand-off also helped knock the dollar to two-month lows against the euro.

European companies reporting earnings include Eiffage (FOUG.PA: Quote, Profile , Research), Air Liquide (AIRF.PA: Quote, Profile , Research), Vinci (SGEF.PA: Quote, Profile , Research), Henkel (HNKG_p.DE: Quote, Profile , Research), Iberia (IBLA.MC: Quote, Profile , Research), Repsol (REP.MC: Quote, Profile , Research), Red Electrica (REE.MC: Quote, Profile , Research), FCC (FCC.MC: Quote, Profile , Research) and Hays (HAS.L: Quote, Profile , Research).

UK retailer Sports Direct Interational is due to price its initial public offering which is expected to raise around 810 million pounds. Its share ticker will be (SPD.L: Quote, Profile , Research).

On the economic front, U.S. January durable goods orders are due for release at 1330 GMT, followed by U.S. consumer confidence and home sales at 1500 GMT.

China's main stock index, the Shanghai Composite <.SSEC>, plunged more than 8 percent as profit-taking by local funds snowballed before a parliament session beginning next week. Turnover was massive at 115.7 billion yuan ($14.9 billion), a multi-year record.

info:

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070227:MTFH72776_2007-02-27_07-01-06_L27729685&type=comktNews&rpc=44

[Ichiro]

27feb- Daily FX-US Dollar Weakens as Prospects for a Rate Hike Diminishes
Monday February 26, 4:18 pm ET

By Kathy Lien, Chief Strategist strategist@dailyfx.com



· US Dollar Weakens as Prospects for a Rate Hike Diminishes


· Malta’s Euro Application and Hawkish ECB Comments Helped to Boost Euro

· Japanese Yen Extends Rally on Hawkish Comment from Shiozaki



US Dollar - Weakens as Prospects for a Rate Hike Diminishes



Our action packed week begins tomorrow and judging from today’s price action and analyst estimates, traders are not expecting the US releases to be particularly dollar friendly. We start off with the January durable goods orders report tomorrow. Although a drop in Boeing orders is expected to drag total orders lower, even excluding the volatile transportation component, demand for goods made to last for more than three years is expected to drop. Taking a look back at the last three reports on orders for durable goods, the market’s reaction tends to be very volatile because of the underlying information provided by the ex transportation component. However by the end of the day, the headline number left a longer lasting reaction in the EUR/USD. Aside from durable goods, we are also expecting consumer confidence and existing home sales. Higher oil prices over the past few weeks will probably weigh on confidence, which leaves the home sales figures as the wildcard. The Federal Reserve is watching the stability of the housing market very closely and at this point, analysts are expecting an increase in sales of existing homes. Strength in this report could offset any disappointments in the durable goods report. In today’s Financial Times and Wall Street Journal, there are competing headline articles about how the Federal Reserve may have changed their belief that low unemployment induces inflation. Recent comments from Ben Bernanke suggests that unemployment may be able to remain as low as 4.5 percent and still not induce inflation. If this is true, then the Federal Reserve may not be tempted to raise interest rates preemptively. Unless we see a meaningful pickup in the housing market, we believe that the Federal Reserve will continue to stand pat, especially as sub-prime lending market faces bigger risks.


Japanese Yen - Extends Rally on Hawkish Comment from Shiozaki


The Japanese Yen was stronger across the board today thanks to hawkish comments from Cabinet Secretary Shiozaki who said that prices are “picking up.” He also indicated that the improvement in the output gap reported last time was a welcome development. For the first time in 10 years, the output gap rose by 0.6 percent. Now that the Bank of Japan has already raised rates, it is hardly surprising that the market has shrugged off the dissenting votes in favor of a rate hike at the January meeting (rates were left unchanged at the time). Any signs of strength will certainly fuel speculation for further rate hikes by the Bank of Japan. The Japanese Yen could also receive boost from year end repatriation over the next few weeks. Corporate profitability has been exceptionally strong which could lead to sizeable repatriation ahead of the March 31st fiscal year end.

info:
http://biz.yahoo.com/fxcm/070226/1172528295797.html?.v=1

[Ichiro]

27feb-European stocks sink to near 4-wk lows, miners fall
Tue Feb 27, 2007 4:33am ET145

By Sophie Hares

LONDON, Feb 27 (Reuters) - European stocks tumbled to their lowest in almost four weeks on Tuesday, dragged lower by heavyweight miners after the main Chinese index took a beating and by banking shares.

Among major movers, Standard Chartered (STAN.L: Quote, Profile , Research) sank following its results, while EADS (EAD.PA: Quote, Profile , Research) gained after its board agreed on a restructuring plan for its Airbus unit.

"We're seeing a little bit of correction, a little bit of profit taking, but it's nothing serious. You've seen some excellent results in the last few days," said Thomas Muehlberger, fund manager at Bayern Invest in Munich.

"A lot of people are concerned about the situation in China. The feeling is we'll have very high volatility in that market."

The FTSEurofirst 300 <.FTEU3> index of leading European shares fell as much as 1.5 percent to 1,529.74 points, its lowest level since Feb. 1.

The move followed a lower Wall Street session as crude oil hovered above $61 a barrel as tensions continued over Iran's nuclear ambitions. The stand-off weighed on investor risk aversion, helping send the yen sharply higher against the dollar and euro.

In China, the Shanghai Composite <.SSEC> fell nearly 9 percent, its biggest drop in a decade, as profit-taking by local funds snowballed ahead of a parliamentary session next week.

info:

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070227:MTFH76060_2007-02-27_09-33-46_L27214554&type=comktNews&rpc=44

[Ichiro]

27feb-Wall Street to open down after China shares plunge
Tue Feb 27, 2007 7:10am ET144

LONDON, Feb 27 (Reuters) - Wall Street is set to open down on Tuesday with investors jittery after shares plunged in China and awaiting key clues about the strength of U.S. consumption from economic data and corporate earnings.

U.S. stocks could be ruffled if funds start to pull money out of emerging market equities after the Shanghai Composite Index <.SSEC> fell nearly nine percent, its steepest decline in a decade.

Another concern for investors will be oil prices, which have knocked Wall Street over the last week and remain above $61 on Tuesday on forecasts for a drop in U.S. fuel stocks and escalating Iran nuclear tensions.

"This should be a warning shot across the bow that if you haven't taken some profits, you might want to do that," said Steve Previs of Jefferies International.

U.S. stock futures suggested the major indexes would all open weaker. At 1140 GMT Dow Jones industrial average futures <DJc1>, S&P 500 futures <SPc1> and Nasdaq futures <NDc1> were down 0.5-0.9 percent.

info:

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070227:MTFH79598_2007-02-27_12-10-22_L27273437&type=comktNews&rpc=44

[Ichiro]

28Feb-FOREX-Yen rises 2 pct vs dollar as carry trade unwinds
Tue Feb 27, 2007 3:01pm ET15


NEW YORK, Feb 27 (Reuters) - The yen extended gains on Tuesday and rose 2 percent against the dollar as investors unwound carry trades amid rising risk aversion.

Against the dollar, the yen rose as much as 2 percent and traded at 118.20 yen <JPY=> ,its biggest jump since December 2005. The yen also rallied against the Australian dollar, New Zealand dollar and Canadian dollar, all popular targets of carry trades by speculators and individual investors in Japan.

info:

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070227:MTFH93632_2007-02-27_20-01-44_NYH000391&type=comktNews&rpc=44

[Ichiro]

28feb-U.S. Stocks Tumble Most Since 2002 on China Plunge, Orders Drop

By Eric Martin

Feb. 27 (Bloomberg) -- U.S. stocks tumbled the most since September 2002 as a plunge in Chinese shares sparked a global selloff and raised concern that investors will dump equities after a four-year bull market.

The declines, compounded by a slide in demand for U.S. business equipment, wiped out the year-to-date gains in the Dow Jones Industrial Average and Standard & Poor's 500 Index. The Nasdaq Composite Index also headed for its steepest drop since July 2002. Only two companies in the S&P 500 rose and every one of the Dow's 30 members retreated, led by Alcoa Inc. and Caterpillar Inc., companies that depend on demand from China.

Europe's Dow Jones Stoxx 600 Index slid 3 percent and emerging markets dropped. Russian shares fell from an all-time high, while Brazil's Bovespa Index sank 7.8 percent. U.S. Treasuries rose on increased demand for debt securities amid the worldwide equity slump and signs of a slowing economy after durable-goods orders fell more than forecast in January.

``Any force that works against global economic expansion is a negative,'' said Liam Dalton, who oversees $1.2 billion as chief executive officer of Axiom Capital Management in New York. ``The big straw on the camel's back is this China issue.''

The S&P 500 retreated 47.05, or 3.3 percent, to 1402.32 as of 3:15 p.m. in New York after earlier losing as much as 4.1 percent. The Dow average sank 409.93, or 3.3 percent, to 12,222.33. It earlier fell as much as 546.2 points, or 4.3 percent. The Nasdaq dropped 90.73, or 3.6 percent, to 2413.79.

Chinese Measures

China's government approved a special task force to clamp down on illegal share offerings and investments with borrowed money after indexes climbed to records. The Shanghai and Shenzhen 300 Index dropped 9.2 percent, wiping out $107.8 billion from a stock market that doubled in the past year.

``The Chinese market getting banged for 9 percent last night is only going to have a negative impact for markets across the world,'' said Michael Driscoll, a trader at Bear Stearns & Co. in New York. ``People in the U.S. have been anxiously awaiting a pullback. That may become self-fulfilling at some point.''

info:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aDyabMf.1TcM&refer=worldwide

[Ichiro]

28feb-Yen Volatility Rises as Investors Cut Bets Currency to Decline

By Liz Capo McCormick

Feb. 27 (Bloomberg) -- Volatility on options on the yen climbed to the highest in more than a week after investors exited bets the currency would decline.

The yen surged against major currencies, including rallies of more than 2 percent versus the New Zealand dollar and South African rand, after International Monetary Fund Managing Director Rodrigo de Rato said carry trades, where investors borrow in Japan and buy higher-yielding assets, may cause ``exchange-rate misalignments'' and worsen global imbalances.

``It's the unwinding of the carry trade,'' said Michael Holmes, a currency options trader in London at Australia & New Zealand Banking Group Ltd. ``Implied volatility on the options is reacting to the move in the spot market.''

Implied volatility on one-week dollar-yen options jumped to 9 percent, from 6.8 percent yesterday, and reached the highest since Feb. 16. It's the biggest jump in volatility in a month. Traders quote implied volatility, a gauge of expected swings in exchange rates, as part of setting option prices.

Implied volatility on one-week Australian dollar-yen options was 8.625 percent, and also touched the highest since Feb. 16.

The yen rose 1.6 percent to 118.74 per U.S. dollar at 11:17 a.m. in New York, and 1.8 percent to 94.07 per Australian dollar. It surged 2.5 percent against the New Zealand dollar and 3.2 percent versus the rand.

Volatility Watch

Japan's benchmark lending rate is 0.5 percent, compared with 5.25 percent in the U.S., 6.25 percent in Australia, 7.25 percent in New Zealand and 9 percent in South Africa.

``If dollar-yen moves below the 118 level, I'd expect one- month implied volatility to rise to 8.5 percent,'' said Holmes. ``If the Australian dollar weakens by another percent versus the yen, I'd expect one-month implied volatility to rise by about 0.5 percentage points.''

info:
http://www.bloomberg.com/apps/news?pid=20601083&sid=aXMAx30p5mE0&refer=currency

[Ichiro]

28feb-Yen Gains Most Since 2005 Versus Dollar as Traders Unwind Bets (The fED may be cutting the interest rate by Aug of 2007)

By Min Zeng

Feb. 27 (Bloomberg) -- The yen rose the most in more than 19 months against the dollar amid a sell-off in U.S. stocks and as investors shunned emerging-market assets, prompting an unwinding of trades betting on a decline in the Japanese currency.

Japan's yen also gained against the British pound and euro after International Monetary Fund Managing Director Rodrigo de Rato said carry trades, where investors borrow in Japan and buy higher-yielding assets, may cause exchange-rate misalignments. The Swiss franc, another funding currency for the carry trade, rose the most in almost three months.

``There is a perfect storm brewing against yen carry trade,'' said Paresh Upadhyaya, who helps manage $29 billion in currency assets at Putnam Investments in Boston. ``The yen has further scope to appreciate as people cut back their short yen positions.'' A short position is a bet on a currency's decline.

Japan's currency climbed 2.35 percent, the most since a gain of 2.4 percent on July 21, 2005, to 117.96 against the dollar at 3:23 p.m. in New York, from 120.66 yesterday. The yen touched 117.49 per dollar, the strongest since Dec. 15. It also gained to 156.21 per euro from 159.13, rebounding from an all-time low of 159.65 on Feb. 23.

The yen also advanced 5.6 percent against the Turkish lira, 4.7 percent versus the South African rand and 3.5 percent against Iceland's krona as investors shunned riskier assets in emerging markets following a rout in Chinese stock market shares.

Borrowing Costs

At 0.5 percent, Japan has the lowest borrowing costs in the industrialized world compared with 5.25 percent in the U.S. and U.K. Switzerland's benchmark is 2 percent, while the European Central Bank's rate is 3.5 percent.

One-month implied volatility on options on the dollar versus the yen rose to 8.01 percent, the highest since Feb. 1, from 7.2 percent yesterday.

The increase may discourage carry trades, as it implies wider exchange-rate fluctuation risk. The one-month implied volatility of yen against the euro and the pound also increased.

The dollar dropped to the lowest level in almost two months against the euro after a government report showed orders for durable goods fell 7.8 percent in January from a revised 2.8 percent gain a month earlier, raising speculation signs of slow growth may push the Federal Reserve to cut borrowing costs this year.

Interest Rate Bets

The odds the Fed will cut interest rates 0.25 percentage point by its meeting in August rose to 100 percent, from 42 percent yesterday, according to futures contracts.

info:http://www.bloomberg.com/apps/news?pid=20601083&sid=aERAFLr7NexE&refer=currency

[Ichiro]

28feb-Emerging-Market Stocks Slide Following Plunge in Chinese Shares

By Anne Pollak and Alexander Ragir

Feb. 27 (Bloomberg) -- Emerging-market stocks tumbled the most since June after a plunge in Chinese equities reduced investors' appetite for riskier assets.

The declines were sparked by the biggest drop in Chinese shares in a decade on concern the government may crack down on illegal investments that helped drive benchmarks to records. Russian stocks fell from an all-time high today. Turkey's stock index had its biggest decline since June. Mexico's Bolsa fell the most since Sept. 11, 2001. Latin American shares fell the most in eight years.

``I wouldn't buy'' in emerging markets, said Marc Faber, a Hong Kong-based investor who manages about $300 million and who predicted the U.S. stock market crash in 1987. ``Something has changed in the financial market: It's the time to sell rallies rather than buy dips.''

Emerging market stocks soared to records, partly on confidence that growth in China will fuel demand for exports such as copper, oil and steel. Before today, the Morgan Stanley Capital International's Emerging Markets Index climbed 20 percent in 12 months. The index's price to earnings ratio rose to 15.92, almost double the average for the past year.

Today the gauge erased its gain for the year today, falling 3.5 percent to 907.95 at 3:07 p.m. in New York, the biggest drop since June 13.

The Shanghai and Shenzhen 300 Index, which tracks yuan- denominated A shares listed on China's two exchanges, fell 250.18, or 9.2 percent, to 2457.49. Today's rout wiped out $107.8 billion from a stock market that doubled in the past year as 249 of the key index's 300 shares plunged by the 10 percent limit.

China Clamps Down

China's highest ruling body, the State Council, has approved a special task force to clamp down on illegal share offerings and other banned activities in the market, the government said. The group will provide advice on regulations and policy explanations of the securities market, according to a statement published Feb. 25 on the central government's Web site.

Stocks surged in China last year after a government plan to make more than $200 billion of state-owned stock tradable revived investor demand and paved the way for sales by some of the nation's biggest companies. The economy, which in 2005 overtook the U.K. as the world's fourth biggest, averaged annual growth of 9.6 percent in the past five years.

info:http://www.bloomberg.com/apps/news?pid=20601013&sid=aLRjJ1Muk6Ko&refer=emergingmarkets

[Ichiro]

28Feb- According to the 6 am Business News in Japan, the Nikkei may range today between 17,300 and 17,800 (close: 18,119) today (28 Feb) and the yen between 117.50 and 118.50 (close:117.97). The decline of the Nikkei will heavily depend on the China Stock Market this morning. If the China market drops another 10% or so, watch out! But, if it recovers, the drop will not be as bad. Also, we may see a few bankrucptcy of the hedge fund in the near future. Those that bet against the yen will be hurting... But, I think this is a temporary market correction... This is nothing compared to the black monday market decline of 25%.

[Aspiration]

Thanks for your continued coverage of the changes in the far east!

[Ichiro]

No problem!!!! But, I am glad that the market dropped now rather than at the latter part of the year because we are going to have a great year. I thought for sure that the Vietnam or India stock market would cause the market selloff in the near future. We just have to keep our eyes open for those emerging growth countries since they are high risk.... But, i am glad that the Chinese market stablized for the time being by appreciating 4%. The Japanese consumers are sure taking the hit since the BOJ recently raised the interest rate since most of the mortage loan rates are adjusted loan rates rather than fixed loan rates.

[Ichiro]

28Feb- AP-Stocks Bounce Back After Big Selloff
Wednesday February 28, 3:13 pm ET

By Tim Paradis, AP Business Writer

Stocks Rebound Fitfully Following Bernanke Comments, Economic Data, Dow Gains 55 Points

NEW YORK (AP) -- Wall Street rebounded fitfully Wednesday from the previous session's 416-point plunge in the Dow industrials as investors took comfort from comments by Federal Reserve Chairman Ben Bernanke but still showed signs of unease about the economy. In late afternoon trading, the Dow Jones industrials were up 55.76, or 0.46 percent, at 12,272.00.

Broader stock indicators were also higher. The Standard & Poor's 500 index was up 7.82, or 0.56 percent, at 1,406.86, and the Nasdaq composite index was up 9.57, or 0.40 percent, at 2,417.43.

Bernanke's remarks to Congress that he still expects moderate economic growth gave some investors confidence to look for bargains. A recovery in some overseas markets following a worldwide selloff Tuesday also lent some support to U.S stocks, but the advance lacked some conviction -- the major indexes fluctuated through the morning and into the afternoon, with the Dow rising as much as 137 points before pulling back and then advancing again.

The Fed chairman allayed some of the fears about a slowdown in the U.S. and Chinese economies that fed Tuesday's drop; remarks earlier in the week from former Fed Chairman Alan Greenspan warning that a U.S. recession could take hold later this year contributed to Tuesday's declines.

Investors were parsing a series of economic reports out Wednesday, hoping to glean a direction for stocks.

The market took some solace from a Commerce Department report that the U.S. economy grew at an annual rate of 2.2 percent in the fourth quarter. The gross domestic product reading was slightly below expectations, but didn't come in as low as some investors feared. The reading was more than a percentage point below the initial estimate of 3.5 percent made a month ago.

Bernanke's comments and the GDP report helped depressed stock prices look a little more attractive.

info:

http://biz.yahoo.com/ap/070228/wall_street.html?.v=68

[Ichiro]

28Feb- AP-Economy Grows Slower Than Expected in 4Q

Wednesday February 28, 12:21 pm ET

By Jeannine Aversa, AP Economics Writer

Economy Grows at a 2.2 Percent Pace in Final Quarter of 2006, New Home Sales Plunge

WASHINGTON (AP) -- The economy grew at a sluggish 2.2 percent pace in the final quarter of last year, the government reported Wednesday in one of the steepest downward revisions in years. In another report, new-home sales plunged in January by the largest amount in 13 years.



The pair of reports released Wednesday by the Commerce Department came a day after stocks on Wall Street and around the globe took a nosedive.

The new reading on gross domestic product showed the economy in a considerably weaker state than the government first estimated. It had initially reported the expansion in the last three months of 2006 to be at a 3.5 percent pace. The principal reason for the new, significantly lower estimate: Businesses tightened their belts amid fallout from the troubled housing and automative sectors.

The fresh look at the housing market was sobering. New-home sales plummeted by 16.6 percent in January from the previous month. That was the largest decline since January 1994 when sales slid by 23.8 percent.

The decline in January -- much steeper than analysts were anticipating -- left sales at a seasonally adjusted annual rate of 937,000, the lowest level since February 2003. Sales fell sharply in all parts of the country.

Home prices were down from a year ago. The median sales price of a new home -- where half sell for more and half for less -- dropped to $239,800 in January, a 2.1 percent decline from the same month last year.

The new GDP figure for the October-to-December quarter was a tad slower than the 2.3 percent growth rate economists were forecasting and clearly less sunny than that original estimate. The GDP, which measures the value of all goods and services produced within the United States, is the best overall barometer of economic health.

Although the fourth quarter's showing marked a slight improvement from the third quarter's mediocre 2 percent growth rate, it didn't alter the overall picture that economic activity in both quarters was restrained by the housing slump and the ailing automotive sector.

for info:
http://biz.yahoo.com/ap/070228/economy.html?.v=11

[Ichiro]

28feb-U.S. Stocks Rebound From Plunge; P&G, Sprint, Merck Lead Gains (Time to buy some of my favorite stocks)

By Eric Martin

Feb. 28 (Bloomberg) -- U.S. stocks rebounded from their biggest plunge in four years as Federal Reserve Chairman Ben S. Bernanke reassured investors the economy is poised to grow and strategists advised investors against selling equities.

Shares of consumer, telephone and health-care companies, whose earnings are less reliant on swings in the economy, led the advance. Procter & Gamble Co. climbed the most in seven months for the best performance in the Dow Jones Industrial Average. Sprint Nextel Corp. rose after its sales beat analysts' estimates, while Merck & Co. gained on a higher profit forecast.

European and Asian stocks slumped, while emerging markets had their steepest two-day drop in eight months in the wake of yesterday's U.S. selloff. In all, more than $1 trillion of global stock market value was wiped out over the last two days. The Dow average is headed for its worst month since April 2005.

``People are poking around amidst the rubble of yesterday's market collapse, looking for good things to buy,'' said John Carey, who manages about $12 billion at Pioneer Investment Management in Boston. ``The consumer economy here in the U.S. is still pretty strong. The longer-term picture continues to be encouraging.''

The Dow industrials added 48.47, or 0.4 percent, to 12,264.71 as of 2:56 p.m. in New York. The Standard & Poor's 500 Index rallied 6.98, or 0.5 percent, to 1406.02. The Nasdaq Composite Index increased 9.42, or 0.4 percent, to 2417.28.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aFQqtmJtex.E&refer=news

[Ichiro]

28feb-Dollar Advances as Bernanke Expects Economy to Gather Momentum

By Min Zeng and Ye Xie

Feb. 28 (Bloomberg) -- The dollar advanced from a 10-week low against the yen and rose from the weakest since January versus the euro after Federal Reserve Chairman Ben S. Bernanke said it is ``reasonable'' to expect stronger growth in midyear.

The U.S. currency also benefited as the nation's stock markets rebounded after the biggest drop in four years yesterday following a sell-off in emerging market assets. The yen's decline started in Asian trading after reports in Japan showed declines in industrial production and retail sales.

``The market takes Bernanke's comment as hawkish,'' said Michael Malpede, a senior currency analyst in Chicago at Man Global Research. ``People are buying the dollar.''

The dollar rose to 118.42 yen at 2:06 p.m. in New York from 117.93 yesterday. It reached 117.49 yesterday, the weakest since Dec. 15. The dollar traded at $1.3227 per euro from $1.3242 yesterday when it touched $1.3259, the lowest since Jan. 3.

Gains in the dollar were limited as U.S. reports showed the world's largest economy in the fourth quarter grew less than initially forecast, a gauge of U.S. business activity shrank this month and new-home sales dropped in January.

http://www.bloomberg.com/apps/news?pid=20601083&sid=aI_77MPnCePo&refer=currency

[Ichiro]

28feb-U.S. Economy: Home Sales Tumble, Growth Revised Lower (Update3)

By Courtney Schlisserman and Joe Richter

Feb. 28 (Bloomberg) -- New-home sales in the U.S. tumbled last month by the most in 13 years and fourth-quarter economic growth was less than previously estimated, dousing speculation that the worst of the slowdown is over.

January new-home purchases fell 16.6 percent, the most since 1994, the Commerce Department said today in Washington. The department in a separate report said gross domestic product, the sum of all goods and services produced, grew at an annual rate of 2.2 percent, compared with the 3.5 percent reported on Jan. 31, and the 2 percent the previous quarter.

Federal Reserve Chairman Ben S. Bernanke played down the figures, saying the growth revision is in line with his estimates and predicting a rebound later this year. His remarks helped lift stocks after the biggest slide in four years.

``One by one, various growth indicators for the U.S. economy are tipping to the downside,'' said Avery Shenfeld, a senior economist at CIBC World Markets Inc. in Toronto. ``The housing market still looks decidedly in a downtrend. The Fed appears to be somewhat late in adjusting its views.''

A separate report showed a national business activity index unexpectedly dropped this month. The National Association of Purchasing Management-Chicago said its business barometer fell to 47.9 this month, the lowest since October 2002, from 48.8 in January. A reading lower than 50 signals contraction.

For all of last year, the economy grew 3.3 percent, compared with 3.2 percent in 2005.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aK9Q01ZUMmp0&refer=worldwide

[Ichiro]

28feb-SE Asia stocks-Markets stage biggest falls since 1997 crisis
Tue Feb 27, 2007 11:11pm ET19 (from Yahoo singapore)

By Wee Sui Lee

SINGAPORE, Feb 28 (Reuters) - Most Southeast Asian stocks suffered their biggest one-day declines since Asia's 1997 financial meltdown, as investors sold off shares in a panic, following the slump in global markets.

Singapore's benchmark Straits Times Index <.STI> fell 5.63 percent by 0341 GMT and Malaysian shares tumbled 5.95 percent.

The Philippine index lost 7.3 percent, while Indonesian stocks fell 3.22 percent. Thai shares were down 1.64 percent.
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Dealers said the selloff in Southeast Asian markets followed a near 9-percent plunge in Chinese stocks on Tuesday.

"China's the culprit. We have a lot of listed Chinese companies, so we're dependent on China," said a dealer with a regional brokerage in Singapore.

Singapore-listed Chinese companies -- which make up more than 100 of about 700 listed firms on the city-state's bourse -- sank sharply on Wednesday.

Shipbuilding and repair firm Cosco Corp. (COSC.SI: Quote, Profile , Research), controlled by China's top shipping firm, plunged 8.9 percent, which reduced its market cap to below US$ 4 billion.

info:

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070228:MTFH01862_2007-02-28_04-10-59_SIN237543&type=comktNews&rpc=44

[Ichiro]

28feb- AP-Stocks Rebound Fitfully After Selloff
Wednesday February 28, 4:09 pm ET
By Tim Paradis, AP Business Writer
Stocks Rebound Fitfully Following Bernanke Comments, Economic Data, Dow Gains 60 Pts

NEW YORK (AP) -- Wall Street rebounded fitfully Wednesday from the previous session's 416-point plunge in the Dow industrials as investors took comfort from comments by Federal Reserve Chairman Ben Bernanke but still showed signs of unease about the economy.

Bernanke's remarks to Congress that he still expects moderate economic growth gave some investors confidence to look for bargains. A recovery in some overseas markets following a worldwide selloff Tuesday also lent some support to U.S stocks, but the advance lacked some conviction -- the major indexes fluctuated through the morning and into the afternoon, with the Dow rising as much as 137 points before pulling back and then advancing again.

The Fed chairman allayed some of the fears about a slowdown in the U.S. and Chinese economies that fed Tuesday's drop; remarks earlier in the week from former Fed Chairman Alan Greenspan warning that a U.S. recession could take hold later this year contributed to Tuesday's declines.

Investors parsed a series of economic reports out Wednesday, hoping to glean a sense of where stocks were headed. Bernanke's comments and a gross domestic product reading that mostly met expectations helped bring out some buyers. Nevertheless, investors remained cautious and didn't rush headlong into stocks and discount the possibility of a further shakeout.

"It's typical that you get a bounceback the next day," said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co. "Now we're essentially flat on the year. Can we go up from here or down? That sorting-out process will continue now."

A recovery in China's Shanghai Composite Index, which had fallen nearly 9 percent Tuesday, also helped boost U.S. stocks, although other Asian markets and European exchanges saw declines of more than 1 percent.

http://biz.yahoo.com/ap/070228/wall_street.html?.v=70

[Ichiro]

1mar-Thursday March 1, 2:46 AM
World stocks mixed after Tuesday rout

LONDON (AFP) - European and Asian stocks mostly struggled on Wednesday, but Wall Street rebounded as leading figures in the world economy rushed to reassure markets after the previous day's sharp global sell-off.

Stock markets in Frankfurt, London and Paris finished Wednesday with losses in excess of 1.0 percent on concerns over slowing economic growth in the United States and a possible overheating on the Chinese stock market, dealers said.

From Tokyo to Sydney, Hong Kong to Mumbai, most share prices fell heavily in Asia on Wednesday.

However, Wall Street opened higher, rebounding from the worst fall since the September 11, 2001 attacks.

In Washington, US Federal Reserve chairman Ben Bernanke told lawmakers that his economic outlook remains unchanged and that financial markets were functioning "normally" following the slump.

In China, Shanghai stocks recovered nearly four percent in a technical rebound on Wednesday, after their biggest one-day fall in 10 years.
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Chinese Premier Wen Jiabao meanwhile appealed for stability and reform of the financial markets, as share prices clawed back ground.

In European closing deals, London's FTSE 100 index of leading shares finished 1.82 percent lower at 6,171.50 points and in Paris the CAC 40 ended 1.29 percent down at 5,516.32 points.

Frankfurt's DAX 30 index slid 1.53 percent to close at 6,715.44 points.

"What we are seeing is the echo of the fall in the Chinese market (on Tuesday) and more importantly the fall that we saw in the US equity market overnight," said Glenn Maguire, chief economist for Asia at Societe Generale.

"I don't think these moves significantly change the macroeconomic outlook for China which remains relatively firm at this stage," he added.

In Shanghai, share prices closed with a rally of 3.94 percent on Wednesday, one day after slumping 8.8 percent -- which was their biggest single day loss since 1996.

Many market watchers took the view that the recent falls were a necessary correction in an upward market trend.

"I think giving up a few percentage points isn't a big deal, in the context of things, when we've had four great years of rising stock markets," said Mike Lenhoff, chief strategist at Brewin Dolphin Securities in London.

info:
http://asia.news.yahoo.com/070228/afp/070228184409top.html

[Aspiration]

It sounds like you really have your eye on a lot of the widowmakers hanging up in the trees. I had some clue in to the impending Chinese threat a couple weeks ago from reading http://billakanodoodahs.com/ (I think this was the site), but I had no idea there were other markets in danger out there. I wish I had seen the Chinese thing as a more imminent threat than I did - I had thought nothing would happen before March. Guess I shouldn't quit my day job to become a fortune teller eh?

Anyways, I think I have had my eyes opened with this event. Again, thanks for all the great reading links. Good luck with your trading!

[Ichiro]

Aspiration,

When the Chinese stock market dropped 9% recently, none of the Asian stock market really took a hit that day. So, what happened? When the US government announced the surprisingly weak manufacturing report that day, it was the major trigger along with the drop in Chinese Stock market as the reasons for the meltdown. This meltdown was going to happen sooner or later. It is good that it happened now since the FEDs will probably reduce the interest rate by late August which will be good for the stock market. I will be adding more $$$ to my ETFs this week.

[Ichiro]

1mar-yahoo singapore-business

Thursday March 1, 4:31 PM
Asian stocks wobble as aftershocks continue

Asian investors sweated Thursday as the aftershocks from the recent global stock market rout reverberated around the region, pushing Tokyo and Shanghai back into negative territory.

Markets waited nervously to see if selling pressure would ease -- as many analysts predict -- or whether the recent signs of stabilisation in many markets are merely the eye of the storm before a further selloff.

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Analysts have been quick to point out that the Asian economies remain in good shape, but after the sharp falls of recent days nerves were still frayed.

After clawing back some of their massive losses on Wednesday, Chinese share prices turned lower again, closing down 2.91 percent as the rollercoaster ride continued following Tuesday's worst selloff for a decade.

Dealers said investors remained jittery despite a turnaround of nearly four percent Wednesday and volatility was expected to continue given the Chinese market was up more nearly 130 percent over the last 12 months.

"Investors are still wondering if the storm is actually over or not," said Masatoshi Sato, a senior strategist at Mizuho Investors Securities in Tokyo.

"Aftershocks in some markets, where prices are overvalued, may be seen from now on. Volatile and sensitive trading is likely to continue at least until mid-March," he said.

In Tokyo the benchmark Nikkei-225 index closed down 0.86 percent as an overnight rebound on Wall Street helped to reassure nervous investors after the index slumped 2.85 percent on Wednesday.

Hong Kong was also down almost one percent in late trade and Sydney ended 0.38 lower, while New Zealand shares eked out a gain of 0.29 percent and Manila closed up 4.0 percent.

"I don't think people are panicky but they're nervous the correction may have further to go," said Ric Klusman of Aequs Securities.

"They fear the rise on Wall Street may turn out to be the dead cat bounce."

Federal Reserve chairman Ben Bernanke told US lawmakers that financial markets are functioning "well" and "normally" a day after the worst one-day drop in US stocks since the aftermath of the September 11, 2001 attacks.

Despite the fresh losses in parts of Asia, many market watchers remained optimistic that the worst of the recent rout would soon be over.

"The impact of the global stock slump is expected to wane soon as a lot of players still bet that this is a temporary phenomenon," said Kenichi Azuma, a senior broker at Cosmo Securities.

info:
http://sg.biz.yahoo.com/070301/1/46zr0.html

[Ichiro]

1mar-yahoo singapore--business

Thursday March 1, 4:27 PM
Chinese shares close 2.91 percent lower as jitters pervade

Chinese share prices closed 2.91 percent lower Thursday as jittery investors sold blue-chip holdings after the biggest one-day decline in a decade earlier in the week, dealers said.

They said investors remained concerned the market was still substantially overbought despite stock prices falling 8.84 percent on Tuesday, dismissing Wednesday's recovery of nearly four percent as a technical rebound.

ADVERTISEMENT
Premier Wen Jiabao's comments on Wednesday calling for financial stability had only marginally eased fears, and more volatility was expected to continue as the market remained up 120 percent over the past 12 months, they said.

Investors nevertheless still plunged into Ping An Insurance, China's second biggest insurer, which saw its share price rise nearly 40 percent on debut.

The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, closed down 83.88 points at 2,797.19, after moving between 2,760.91 and 2,878.36.

Turnover rose to 106.61 billion yuan (13.7 billion dollars) from 95.42 billion in the previous session.

The Shanghai A-share Index ended down 87.99 points or 2.91 percent at 2,937.76 on turnover of 105.84 billion yuan, while the Shenzhen A-share Index was down 18.02 points or 2.35 percent at 749.33 on turnover of 50.39 billion yuan.

"The market was still influenced by Tuesday's fall while yesterday's rebound was just a technical correction," said Shen Jun, an analyst with Shangzhenglian consulting based in Shanghai.

"You're starting to see more of a consensus that the market is in a correction, as we see most blue chips stocks, like Industrial Bank of China, Bank of China and China Life Insurance falling sharply.

"At the same time institutional investors are also cashing out."

Tuesday's hefty sell-off was blamed partly on rumours the government would start levying taxes on capital gains made on stock investments, but was quickly denied by officials in local media the following day.

Their comments, along with Wen's promise "to promote the "safe and steady" reform of the country's financial sector and to push capital market reforms to a "new stage", helped the bourse to a short-lived recovery.

Trade on Thursday was highly volatile with the key Shanghai Composite index falling nearly four percent in the afternoon before clawing back more than one percent in the closing minutes of trade.

info:

http://sg.biz.yahoo.com/070301/1/46zzd.html

[Ichiro]

1mar-WHAT'S BEHIND THE GLOBAL STOCK MARKET SHAKE OUT?

by Gary Dorsch
Editor, Global Money Trends Magazine
February 28, 2007

In a keynote speech on February 2nd, in the northern Italian city of Turin, Bank of Italy chief Mario Draghi, warned global stock market operators not to assume that present favorable conditions would last. “It is not realistic to expect that the current orderly market conditions will last forever, we do not know where the next crisis will come from, we must do everything to be prepared,” he said.

“Market pricing does not currently incorporate the full range of potential risks. Financial market participants need to take into account in their risk analyses, the full implications of a possible reversal of the current benign conditions, including the possibility of less liquid markets,” he warned.

But Draghi is the “Boy who Cried Wolf”, and few hedge fund or stock traders heeded his warnings. Central banks, including Draghi’s ECB, are flooding the global money markets with liquidity, encouraging rampant speculation in financial markets. On Jan 29th, the ECB’s Klaus Liebscher admitted, “Liquidity levels continue to be enormously accommodative, driven by high borrowing due to low interest rates,” he said. The Euro M3 money supply is exploding at a 9.8% annual clip, it’s fastest in 17-years!

info:

http://www.financialsense.com/fsu/editorials/dorsch/2007/0228.html

[Ichiro]

1mar-fsu-Tuesday's Market Plunge by Michael A. Nystrom
BullNotBull.com
February 28, 2007

At it's worst level, the Dow was down today over 540 points in a global selling spree that started overnight in China. By the end of the day, it had recovered somewhat, but still closed down over 400 points. The real story was the volume: 2.3 million advancing shares advanced, versus 2.3 billion decliners in what could be the most lopsided selling day in history! In other words, 99% of today's share volume was down!

After hearing this news, many people's first instinct is to ask "What caused it?" The next question people are concerned about is, "Will it continue?" And finally, "What should I do?" I'll do my best to answer those questions in this article.

What Caused It?

It's hard to say exactly what single event, if any, "caused" today's market meltdown, but we do know that it was a global selloff that began overnight in China. The Shanghai index fell a whopping 9% the very day after it reached an all time high. Remember, this market had risen over 130 percent last year, so this was obviously a market driven by speculation, similar to the 1929 US market, and the 2000 Nasdaq market. The parabolic rise made a correction inevitable, and jittery, speculation-driven markets such as these can sell off on the slightest hint of rumor.

"Traders said the slide did not appear to be triggered by concrete news," but instead was fed by various fears. The linked article goes on to discuss a number of rumors that fluttered through the crowd. Westerners are much more likely to ascribe the cause of the plunge to Greenspan's speech to a business group in Hong Kong, in which he stated the US economy was likely headed for a recession by the end of the year. Greenspan is no longer head of the Federal Reserve, and holds no official position, but his words and opinions obviously still have considerable sway. Apparently he's still the Maestro.

This morning's bad news didn't end with the markets. Early risers also learned that a suicide bomber struck the main gate of the compound Dick Cheney was visiting in Afghanistan, in an apparent attempt on the VP's life. Later the Commerce Department reported that durable-goods orders fell 7.8 percent in January, including the biggest slide in business equipment demand in three years.

It was a morning of bad news. Markets are emotional and all the pessimism took its toll. The fact that consumer confidence was announced to have risen to a 5-1/2 year high did nothing to help the morning sentiment. I'm not sure what drugs consumers are smoking these days - or maybe it's the people doing the surveys - because things sure don't look that great to me!

So to get back to what "caused" the plunge - conditions were ripe, and there were a number of triggers. Before we go on, let's take a look at some charts:

Dow down 3.29%, S&P 500 down 3.4%, Nadaq down 3.86%. This is not crash territory by any stretch of the imagination, (though you woulndn't know that from CNBC's breathless reporting of the plunge). It just feels like it because we haven't seen any substantial pullbacks over the past 5 years. These were in fact the worst market drops since September 2001.

The technical situation with the Dow, S&P 500 & Nasdaq are similar, so lets focus on the S&P 500. The eight-month uptrend on the daily chart has clearly been broken. The trend line that served as support for the past eight months now serves as overhead resistance. Today's action also plunged prices below both the 50-day and 100-day moving averages. Not a good sign for the bulls.

info:
http://www.financialsense.com/fsu/editorials/nystrom/2007/0228.html

[Aspiration]

Ichiro,

I think your analysis is spot on. Until things stabilize somewhat (And I do not think we have seen the real bottom yet), I will be sitting on the sidelines. Once it looks like we really have hit the bottom (I'm guessing at least another week with some sliding even after the rapid descent stops, but it's purely guesswork), I will jump back into the market and do some value buying. Do you have any thoughts on how long it might take the Asian markets to hit a "bottom?"

[Ichiro]

Now, it may be the unwinding of the carry trade in yen which may impact on the market....

European shares fall further, yen strength weighs
Thu Mar 1, 2007 7:50am ET136


LONDON, March 1 (Reuters) - European shares followed U.S. stock futures lower on Thursday as the strength of the yen fuelled worries over unwinding of the carry trade in that currency.

The FTSEurofirst 300 index of top European shares was down 1.1 percent at 1,465.48 points, its lowest point in the day.

U.S. stock futures for the main indexes were down 0.6 percent as the yen rallied to 117.61 against the dollar <JPY=> and 155.44 against the euro

info:http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070301:MTFH41670_2007-03-01_12-50-40_L0129362&type=comktNews&rpc=44

[Ichiro]

Aspiration,

I think that the asian stocks would need a few more down days before it could start rising again since they appreciated too fast in a very short time span. If the US stock market stablizes (I mean the Dow and the SP500) in the next few days, that should help the Asian stocks. My only concern is that the US small caps really did not participate in this rally yesterday. I would watch the moving averages of asian stock markets very closely. The unwinding of the carry trade of the yen could spoil all this....

[Ichiro]

1mar- Reuters-Futures sink as risk aversion resurfaces (the unwinding of the carry trade of yen will have a major impact on the market today. As I said earlier, some of the hedge funds will be in big trouble this week).
Thursday March 1, 8:10 am ET

NEW YORK (Reuters) - Stock index futures fell on Thursday as the yen strengthened, raising worries that the risk aversion shown by investors in Tuesday's global equities rout may resurface when Wall Street opens.


The carry trade features borrowing in yen because of Japan's low interest rates and investing in higher-yielding, often risky assets and markets. The strategy is popular among hedge funds.

"Global liquidity has been the main driver for the market, and the carry trade is a major contributor to that liquidity," said Michael Malone, trading analyst at Cowen & Co. "It was my expectation that the worst was not necessarily over after Tuesday. I'm not sure we'll return where we were at the close on Monday."

S&P 500 futures were down 10.5 points, below fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

[Ichiro]

2mar- AP-Stocks Stage Comeback on Upbeat Data (I just added postion in VO this morning--what a deal!!!)
Thursday March 1, 2:39 pm ET
By Madlen Read, AP Business Writer
Stocks Stage Comeback on Upbeat Manufacturing Report, Indexes Turn Positive

NEW YORK (AP) -- A still skittish Wall Street staged a comeback Thursday, with the Dow Jones industrials erasing almost all of 209-point drop after an upbeat assessment of manufacturing activity eased some worries about a flagging U.S. economy.

The blue chip index nudged into positive territory in midafternoon, then fluctuated in a narrow range. Several hours earlier, the broader Standard & Poor's 500 index made its first foray into the plus column.

Investors, relieved that manufacturing is still expanding, bought some of the stocks pummeled in Tuesday's drop that sliced 416 points off the Dow. Fears about the U.S. economy contributed to that plunge, and a halfhearted rebound on Wednesday followed soothing words from Federal Reserve Chairman Ben Bernanke.

The Institute for Supply Management's index of February manufacturing activity came in at 52.3, stronger than the 50.0 reading analysts expected and up from 49.3 in January. The index is an important measure of a part of the economy that has given investors headaches in recent months. Manufacturing has suffered from the listless housing market and hard-up auto industry, and at times has given off signals that a recession might be in the offing. A reading at 50 and above indicates expansion, while anything below 50 signals contraction.

The ISM data helped the market regain lost ground, but anxiety still plagued the Street, with the indexes bouncing around choppily as many investors bailed out of equities and fled to safe havens like Treasurys, fearing that stocks could see a bigger correction.

"The aftermath of Tuesday's major selloff will linger for the next couple of days. I don't think we're totally out of the woods yet," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc.

info:

http://biz.yahoo.com/ap/070301/wall_street.html?.v=74

[Ichiro]

2mar-Yen Gains to 11-Week High as Investors Unwind Their Trades (carry trade causing the yen to appreciate....As the GOJ icnreases their interest rate, the yen will appreciate more but would cause instablity to the world stock market. Why? the hedge fund will be forced to unload their stock investments)

By Min Zeng

March 1 (Bloomberg) -- The yen rose to an 11-week high against the dollar and gained versus the euro on concern falling stock markets are prompting investors to unwind trades they had financed by borrowing the Japanese currency.

Traders exited the so-called carry trade as they cut their appetite for riskier assets in emerging markets and moved into U.S. government debt. Investors have taken advantage of the lowest interest rate among major economies in Japan to borrow yen and buy higher-yielding assets elsewhere. The dollar pared its losses after U.S. manufacturing unexpectedly expanded last month.

``The market is getting nervous,'' said Alan Ruskin, head of international currency strategy in North America at RBS Greenwich Capital Markets Inc. in Greenwich, Connecticut. ``You are going to see yen strength as risk appetite is compressed.''

Japan's currency rose 0.7 percent to 117.73 per dollar at 2:04 p.m. in New York from 118.56 yesterday. It reached 116.97, the highest since Dec. 13. The yen advanced 1.1 percent to 155.19 per euro from 156.85, and increased versus the British pound, the Canadian dollar and currencies in Australia and New Zealand.

The yen gained the most since July 2005 against the dollar on Feb. 27 amid a global equity decline.

The Japanese currency rallied 1.9 percent against the South African rand, 1.6 percent versus the Turkish lira and 1.6 percent against Iceland's krona as investors shunned emerging-market assets.

info:

http://www.bloomberg.com/apps/news?pid=20601087&sid=ajIHW5zodLFk&refer=worldwide

[Ichiro]

2mar-China's Stocks Extend Declines on Valuation Concern; Banks Drop

By Zhang Shidong and Yidi Zhao

March 1 (Bloomberg) -- China's stocks, the catalyst for a global selloff this week, extended declines on concern shares are too expensive relative to earnings.

Industrial & Commercial Bank of China Ltd., which last year raised $22 billion in the world's biggest initial public offering, and Bank of China Ltd. led the drop.

``Valuations for the whole market are a bit high, making investors jittery,'' said Chen Shide, who manages about $212 million at GF Fund Management Co. in Guangzhou. ``Some funds are also selling stocks that made substantial gains.''

The Shanghai and Shenzhen 300 Index, which tracks yuan- denominated A shares listed on China's two exchanges, slid 71.03, or 2.8 percent, to 2473.54 at the close. The measure added 3.5 percent yesterday, after plunging 9.2 percent two days ago. It has climbed 20 percent this year.

The key measure is valued at 38 times earnings, compared with 15 times for the Morgan Stanley Capital International Emerging Markets Index.

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, dropped 2.9 percent to 2797.19. The Shenzhen Composite Index, which covers the smaller one, slid 2.3 percent to 719.90.

Stocks around the region fell, adding to the steepest losses in eight months yesterday, after China's equities plunged the most in a decade earlier this week. The Dow Jones Industrial Average slid 3.3 percent on Feb. 27. The U.S. measure added 0.4 percent yesterday.

info:
http://www.bloomberg.com/apps/news?pid=20601089&sid=axgdzlVNQFnY&refer=china

[Ichiro]

2mar-Emerging-Market Stocks Extend Global Decline for a Third Day (watch the emerging market stocks---high risk)

By Alexander Ragir

March 1 (Bloomberg) -- Emerging markets fell, heading for their biggest three-day decline in almost eight months, as investors sold shares in the largest developing countries on concern that global growth will slow.

Stock indexes in Russia, China and Turkey fell more than 2.9 percent each, helping extend the slide in the Morgan Stanley Capital International Emerging Market index to 6.3 percent since Feb 26. Brazil's Bovespa fell 1.1 percent. The global equity rout was triggered by a plunge in Chinese shares two days ago and a U.S. report on durable goods orders that missed economists' forecasts.

``The markets that are crowded have seen the biggest shake- out,'' said Bill Rudman, who helps manage about $2 billion of emerging-market equity for WestLB Mellon Asset Management in London. ``The possibilities of economic risk would also be more questionable in Europe. That would include Russia and Turkey.''

Reports earlier this week said durable goods orders in the U.S. fell the most in three years, while a barometer of business activity contracted for a second month and dropped to the lowest since October 2002. The rout started in China on Feb. 27 amid concern the government of the fastest-growing major economy will tighten controls on investment.

China's Shanghai and Shenzhen 300 Index fell 2.8 percent on concern that shares are too expensive relative to earnings. Industrial & Commercial Bank of China Ltd., which last year raised $22 billion in the world's biggest initial public offering, fell 3 percent. Bank of China Ltd. fell 1.3 percent.

``What you're seeing in emerging markets is an extension of the impact of globalization,'' said Christopher Palmer, who helps manage $3.5 billion in emerging market equities for Gartmore Investment Management in London. ``China's problem is no longer a Chinese problem.''

info:
http://www.bloomberg.com/apps/news?pid=20601089&sid=adGiqPMkvGLQ&refer=china

[Ichiro]

2mar-- According to the 6 am Business News in Japan, the Nikkei may range today between 17,100 and 17,500 (close: 17,453) today (2mar) and the yen between 117.20 and 118.20 (close:117.57). They also stated that the Nikkei may not stablize until it hits below 17,000.

[Ichiro]

2mar-hina Tightens Control of Banks' Foreign Borrowing (Update2)

By Zhang Dingmin

March 2 (Bloomberg) -- China tightened controls on short- term foreign borrowing by local banks to protect the country's financial security and help correct international imbalances, the currency regulator said.

The State Administration of Foreign Exchange has lowered borrowers' outstanding foreign-debt quotas for 2007, the Beijing-based regulator said in a statement on its Web site, without being more specific.

``Short-term foreign debt is rising too fast,'' the regulator said.

China's medium and short-term foreign debt rose 16 percent in 2006, the regulator said. The Asian nation's foreign debt was $288 billion as of March last year. Short-term debt now accounts for about 57 percent of the total, the regulator said.

Foreign currency deposits in China stood at 1.3 trillion yuan ($168 billion) at the end of January, according to money supply data released by the government.

info:
http://www.bloomberg.com/apps/news?pid=20601087&sid=apBCV1YRsflY&refer=home

[Ichiro]

2mar-European Stocks Fall as China Tightens Borrowing; BHP Declines

By Sarah Thompson

March 2 (Bloomberg) -- European stocks extended the worst rout in four years after China tightened controls on short-term foreign borrowing, heightening concern that expansion in the world's fastest-growing major economy will slow.

Rio Tinto Group, BHP Billiton and Xstrata Plc led a slide by mining companies on concern that demand for metals from the world's most populous country will decline.

The Dow Jones Stoxx 600 Index is set for the biggest weekly decline since March 2003, the month the U.S. invaded Iraq, amid concerns global economic growth is headed for a decline.

``There is an effort to try and cool down the Chinese economy,'' said Henk Potts, a fund manager at Barclays Stockbrokers in London, which manages $45 billion. ``What we have seen is how important China has become. It's truly an integral part of the global economy.''

The Stoxx 600 Index fell 0.3 percent to 360.87 as of 10:06 a.m. in London after earlier gaining 0.8 percent. The Stoxx 50 fell 0.2 percent and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, dropped 0.2 percent.

China tightened controls on short-term foreign borrowing by local financial institutions to protect its financial security and help correct international imbalances.

info:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aARhm8DhhdT8&refer=home

[Ichiro]

2mar-Sakakibara Says BOJ Could Raise Interest Rates in May (Update2) (bad news---I need to get out before May 07... The carry trade will unwind faster when the interest rate is raised).

By Jason Clenfield and David Tweed

March 2 (Bloomberg) -- Eisuke Sakakibara, former currency- policy chief at Japan's Ministry of Finance, said it's possible the central bank will raise interest rates in May rather than wait until parliamentary elections are held in July.

When the Diet is in session it's easier to raise rates because any criticism of monetary policy by the ruling Liberal Democratic Party will be countered by the opposition, Sakakibara said in a speech at the foreign press club in Tokyo today.

The Bank of Japan doubled its key overnight lending rate to 0.5 percent last week, its second rate increase in six years. Sakakibara said the bank should have acted in December. Twenty- two of 26 economists surveyed by Bloomberg News last week said there'll be no further increases until the second half of 2007.

Sakakibara said the yen will remain weak for the time being, predicting the currency to trade in the 115 to 120 range against the dollar and around 150 per euro.

The former Finance Ministry official said he expects the so- called yen carry trade to continue for some time. He said it's necessary that the trade, in which investors borrow in Japan's currency to buy higher-yielding assets overseas, unwinds slowly.

The yen headed for its biggest weekly gain against the dollar in 14 months after a slump in emerging-market stocks and bonds discouraged investors from making the trades.

Japan's currency has gained almost 3 percent this week, the biggest increase since the period ended Dec. 16, 2005, to 117.64 per dollar at 3:39 p.m. in Tokyo from 121.08 on Feb. 23. It rose to 154.96 per euro from 159.38 at the end of last week.

info:

http://www.bloomberg.com/apps/news?pid=20601080&sid=alctBTMt36tM&refer=asia

[Ichiro]

2mar-China's Stocks Advance After Slump; China Vanke, ZTE Lead Gains

By Zhang Shidong

March 2 (Bloomberg) -- China's stocks rose as some investors judged this week's tumble, the biggest in four weeks, as excessive. China Vanke Co., the nation's No. 1 property developer, led an advance by shares that had fallen the most.

``The market has been calming down and has stabilized after the rout,'' said Yan Ji, an investment manager at HSBC Jintrust Fund Management Co. in Shanghai, which oversees about $517 million. ``Confidence will return as we see all the fundamentals still support an upside.''

The Shanghai and Shenzhen 300 Index, which tracks yuan- denominated A shares listed on China's two exchanges, advanced 35.19, or 1.4 percent, to 2508.73 at the close. The measure had a 6.3 percent tumble this week, its biggest drop since the five days to Feb. 2.

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, gained 1.2 percent to 2831.53. The Shenzhen Composite Index, which covers the smaller one, rose 1.5 percent to 730.55.

Stocks had their steepest declines in a decade on Feb. 27 amid concern that a government crackdown on investments with borrowed money will end a rally that drove benchmarks to records.

China's plunge, coupled with concern the U.S. economy would slow, sparked a worldwide rout this week. The Dow Jones Industrial Average has fallen 3.2 percent in the last three sessions, while stocks across Europe and Asia also declined, extending their worst slump in four years and wiping out more than $1.5 trillion in global market value.

`Short-Term Correction'

The economy, which in 2005 overtook the U.K. as the world's fourth largest, averaged annual growth of 9.6 percent in the past five years. It expanded 10.7 percent last year.

info:
http://www.bloomberg.com/apps/news?pid=20601089&sid=aEzGlZ5jJSh4&refer=china

[Ichiro]

2mar- AP-Experts: Yen's Rally Won't Last (Folks, it doesnt look good since the yen is appreciating too fast. In a few days, the dollar will appreciate and the I fund will take a hit.).
Friday March 2, 7:13 am ET
Former Japanese Government and Central Bank Officials Say Yen's Rally Won't Last

TOKYO (AP) -- The yen's recent recovery may have little staying power because Japanese interest rates are still too low to render so-called yen-carry trades impractical, a trio of former Japanese government and central bank officials said Friday.

ADVERTISEMENT
The dollar fell as much as 3.4 percent against the Japanese currency this week to 116.69 yen, its lowest level in two and a half months.

Traders were spooked into unwinding bets that the dollar would strengthen amid renewed concerns about a U.S. slowdown and the sell-off in worldwide stock markets, analysts say.

But Eisuke Sakakibara, who served as Japan's vice finance minister for international affairs between 1997-1999, said yen-carry trades -- a strategy to borrow money at Japan's low rates to earn higher returns abroad -- will likely remain popular and that should keep the yen the from appreciating too much.

"The carry trade will continue for some time, and this weak-yen tendency is not going to be reversed quickly," Sakakibara told a seminar hosted by the Foreign Correspondents' Club of Japan.

The yen's persistent weakness is unlikely to be affected by any tightening of interest rates, added Rei Masunaga, former director general of the Bank of Japan's foreign department, given that the central bank's benchmark rate is 0.5 percent, far lower than the U.S. rate of 5.25 percent or the euro bloc's 3.5 percent.

The yen's recent weakness has been drawing criticism from Japan's trade partners, especially European policy-makers, because it benefits Japanese manufacturers by making their products more competitive on global markets.

for info:

http://biz.yahoo.com/ap/070302/japan_yen_prospects.html?.v=1

[Ichiro]

2msar-Yen Heads for Best Week in 14 Months on Exit From Carry Trades

By Aaron Pan and Chris Young

March 2 (Bloomberg) -- The yen headed for its biggest weekly gain against the dollar in more than 14 months after a slump in emerging-market stocks and bonds discouraged investors from borrowing the currency to buy higher-yielding assets.

The Japanese yen is the best-performing currency in the world this week, as investors unwind so-called carry trades where they buy the currency to repay their loans. The South African rand and the New Zealand dollar, higher-yielding currencies that have benefited from the carry trade, are the two worst performers in the week. Asian shares also slumped for a third day.

``The desire to reduce risk remains the key driver in the financial markets,'' said Derek Halpenny, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. ``The yen continues to gain in the foreign-exchange market as participants unwind further short yen positions.'' A short position is a bet that an asset price will decline.

Japan's currency has gained 3.4 percent this week, the biggest increase since the period ended Dec. 16, 2005, to 117.20 per dollar at 7:42 a.m. in New York, from 121.08 on Feb. 23. It reached 116.92 earlier, the highest since Dec. 13. Japan's yen rose 3.4 percent to 154.23 per euro from 159.38 at the end of last week. The euro dropped today as a report showed German retail sales slumped in January.

U.S. Treasuries also headed for a weekly gain as investors sought protection in government debt. The yield on the benchmark 10-year Treasury note tumbled 13 basis points to 4.54 percent, from 4.67 percent on Feb. 23. Emerging-market dollar debt yield spreads over Treasuries widened this week by the most since September.

Stocks Sell-Off

The sell-off in stocks has fueled a 7.2 percent weekly gain in the yen against the South African rand and a 6.2 percent advance versus the New Zealand dollar. The Morgan Stanley Capital International Emerging Market Index has slumped 6.6 percent this week to 878.25.

``This is a major hiccup for the carry trade,'' said Clifford Bennett, chief strategist at FxMax, a Sydney-based currency forecasting company. ``I'm bullish on the yen against the dollar'' and it may reach 112 in a month.

The Swiss franc, another currency that is used to fund carry trades, is headed for its fifth straight week of gains versus the dollar. It last traded at 1.2221 against the U.S. currency, from $1.2326 a week ago.

info:http://www.bloomberg.com/apps/news?pid=20601087&sid=atqOu.nVtT68&refer=home

[Ichiro]

2mar-U.S. Stock-Index Futures Decline; Dell, Hewlett-Packard Slide (Dell may extend the global selloff)

By Eric Martin and Adria Cimino

March 2 (Bloomberg) -- U.S. stock futures fell as a profit shortfall at Dell Inc., the world's second-largest personal- computer maker, added to concerns that slowing earnings and economic growth will extend a global selloff.

Hewlett-Packard Co., Dell's rival, also retreated. Speculation that profit at technology companies may trail estimates has risen following a Gartner Inc. report this week that said global semiconductor sales growth will slow because of falling demand for personal computers and mobile phones.

``Expectations in technology, almost alone among sectors, were probably too high,'' said Fritz Meyer, senior investment officer at AIM Investments, which manages $150 billion in Houston.

Futures also declined before a report that may show consumer sentiment fell in February as fuel prices rose. An increase in jobless claims yesterday helped reinforce investors' concerns that economic growth may be slowing.

Standard & Poor's 500 Index futures expiring this month dropped 7.70 to 1397.20 as of 8:51 a.m. in New York. Dow Jones Industrial Average futures declined 57 to 12,195 and Nasdaq-100 Index futures fell 17.75 to 1740.

Weekly Recap

Stocks are headed for their worst week since April 2005 after a plunge in Chinese shares helped spark a global selloff. Slowing profit growth, a rise in mortgage delinquencies and signs that U.S. manufacturing is contracting have raised concern the economy may slip into a recession.

So far this week, the S&P 500 and Dow have fallen 3.3 percent, while the Nasdaq Composite Index, which gets 40 percent of its value from computer shares, has dropped 4.4 percent.

Investors should cut their equity holdings and buy government bonds because the current selloff isn't over, according to Dresdner Kleinwort, the top-ranked strategy team in the world.

info:
http://www.bloomberg.com/apps/news?pid=20601084&sid=aC80NJC6SQcg&refer=stocks

[Ichiro]

3mar-U.S. Stocks Drop Again as Confidence Falls; Home Depot Retreats (I am sure that the hedge funds are taking a big hit-- why? They are getting hit with the yen carry trade unwinding and also that their stock investments are turning sour. If the yen appreciates below 116, watch out!!! It will not only cause the hedge funds to dump more of their stock investments which are already dropping also the appreciation of the yen will cause them to have a negative return. Since the appreciation of the yen is only temporary, it will have a negative impact on the I fund once the yen depreciates to 120 in the near future. Well, see you all in a week.. I am going on vacation!)

By Eric Martin

March 2 (Bloomberg) -- U.S. stocks dropped to a three-month low, completing their worst week since January 2003, after a decline in consumer confidence magnified the risk profit growth will be wiped out by a recession.

Home Depot Inc., the biggest home-improvement retailer, slumped for a 12th day as data this week showed new-home sales declined the most in a decade. Alcoa Inc., the largest aluminum maker, and Exxon Mobil Corp., the biggest energy company, led the Dow Jones Industrial Average lower on speculation a weakening economy will reduce demand for metals and oil.

The Standard & Poor's 500 Index retreated 16, or 1.1 percent, to 1387.17. It dropped for the third time in the four days since a plunge in Chinese shares helped spark a worldwide rout. Slowing earnings growth, a rise in mortgage delinquencies and signs that U.S. manufacturing is contracting have sent the index down 5 percent since it reached a six-year high on Feb. 20.

``We've been long overdue for a correction,'' said Eric Teal, who oversees $6.5 billion as chief investment officer at First Citizens BancShares Inc. in Raleigh, North Carolina. ``The fact that it was a little more panic-oriented should not surprise too many people.''

The Dow average decreased 120.24, or 1 percent, to 12,114.10, the lowest since Nov. 10. The Nasdaq Composite Index fell 36.21, or 1.5 percent, to 2368.

Global Retreat

Today's retreat followed a fourth straight drop in Europe and a slide in Asia that completed that region's worst weekly performance since July. The Dow Jones Stoxx 600 Index fell 0.3 percent, while the Morgan Stanley Capital International Asia- Pacific Index lost 0.8 percent.

An indicator that measures the rate of expected stock-market swings rose. The Chicago Board Options Exchange SPX Volatility Index, known as the VIX, surged 18 percent and closed above its level on Feb. 27, when stocks had their worst rout in four years.

info:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aeHgcxw.59VA&refer=home

[Ichiro]

16mar-Jim Rogers Sees U.S. Property Crash

source:Moneynews.com--14 mar 07
Wednesday, March 14, 2007 2:07 p.m. EDT
MOSCOW -- Commodities investment guru Jim Rogers stepped into the U.S. subprime fray on Wednesday, predicting a real estate crash that would trigger defaults and spread contagion to emerging markets.

"You can't believe how bad it's going to get before it gets any better," the prominent U.S. fund manager told Reuters by telephone from New York.

"It's going to be a disaster for many people who don't have a clue about what happens when a real estate bubble pops.

"It is going to be a huge mess," said Rogers, who has put his $15 million belle epoque mansion on Manhattan's Upper West Side on the market and is planning to move to Asia.

Worries about losses in the U.S. mortgage market have sent stock prices falling in Asia and Europe, with shares in financial services companies falling the most.

Some investors fear the problems of lenders who make subprime loans to people with weak credit histories are spreading to mainstream financial firms and will worsen the U.S. housing slowdown.

"Real estate prices will go down 40-50 percent in bubble areas. There will be massive defaults. This time it'll be worse because we haven't had this kind of speculative buying in U.S. history," Rogers said.

"When markets turn from bubble to reality, a lot of people get burned."

The fund manager, who co-founded the Quantum Fund with billionaire investor George Soros in the 1970s and has focused on commodities since 1998, said the crisis would spread to emerging markets which he said now faced a prolonged bear run.

"When you have a financial crisis, it reverberates in other financial markets, especially in those with speculative excess," he said.

"Right now, there is huge speculative excess in emerging markets around the world. There will be a lot of money coming out of emerging markets.

"I've sold out of emerging markets except for China," said Rogers, long a prominent China bull.

Even in China, the world's fastest expanding economy, Rogers said stocks were overvalued and could go down 30-40 percent.

But he added: "China is one of the few countries in the world where I'm willing to sit out a 30-40 percent decline."

The last stock market bubble to burst was the dot-com craze which sparked a crash from March 2000 to October 2002.

When the last bubble burst in Japan, said Rogers, stock prices went down 85 percent despite the country's high savings rate and huge balance of payment surplus.

"This is the end of the liquidity party," said Rogers. "Some emerging markets will go down 80 percent, some will go down 50 percent. Some will most probably collapse."

[Tempest]

China will unravel if we go down the tubes. It will be a mess worse then 1929. He is not going to be any safer sitting on his bags of money in Shanghai.

[merlin]

Ditto

[Ichiro]

20mar- AP-BOJ Leaves Interest Rates Unchanged

Tuesday March 20, 4:33 am ET

By Carl Freire, Associated Press Writer

Bank of Japan Leaves Interest Rates Unchanged at 0.5 Percent

TOKYO (AP) -- The Bank of Japan held its benchmark interest rate steady at 0.5 percent at the end of a two-day policy meeting Tuesday after lifting it a quarter point last month amid signs of continued economic growth.


But data released earlier this month showed that consumer prices were flat for the first time in eight months in January, fueling speculation that the central bank would hold off for quite awhile before raising interest rates again.

Price stability is particularly important for Japan because the nation's economy was plagued for years by deflation, or continuously falling prices, which dragged on growth.

The BOJ's next policy setting meeting is scheduled for April 9-10, after the bank's closely watched "tankan" quarterly survey on corporate sentiment set for release April 2.

Analysts and financial market traders say the bank may face opposition from the government if it tries to raise rates again before nationwide parliamentary Upper House elections in July.

The Bank of Japan policy board raised its key interest rate to 0.50 percent from 0.25 percent Feb. 21 -- the first hike since July.

Japan's core consumer price index was unchanged in January from a year-earlier, the first time it was flat since May 2006. Economists expect core CPI in February to fall slightly due to the drop in crude oil prices.

Gov. Toshihiko Fukui offered few clues over the timing of future monetary tightening, sticking with his long-held position that the Bank will gradually adjust interest rates based on economic and price developments.

Fukui did say the bank will keep in mind signs of accelerating land prices in some urban areas, although he said they aren't a critical factor in determining interest rates.

In a monthly report, the Bank kept its assessment of the economy as moderately expanding -- the same wording it used the previous two months -- noting that consumer spending remains solid and prices will be stable in the long run.

for info:

http://biz.yahoo.com/ap/070320/japan_central_bank.html?.v=7

[Ichiro]

20Mar- AP-Japanese Stocks Rise for 2nd Session
Tuesday March 20, 4:58 am ET
Japanese Stocks Rise for 2nd Session, Led by Real Estate, Retail Issues

TOKYO (AP) -- Japanese stocks advanced for a second straight session Tuesday, led by real estate and retail issues.

The benchmark Nikkei 225 index gained 153.65 points, or 0.90 percent, to finish at 17,163.20 points on the Tokyo Stock Exchange. On Monday, the index added 1.59 percent.


Traders said real estate stocks led the way ahead of a planned release of Japan's land prices by the government later this week.

"Compared with the previous year, I think it's very likely we'll see land prices rise in nearly all of Japan's major cities, not just in the main metropolitan areas," said Akio Yoshino, market economist with Societe Generale Asset Management in Tokyo.

Among real estate stocks, Mitsui Fudosan Co., the country's biggest real estate developer by sales, rose 4.02 percent at 3,360 yen (US$28.47) after brokerage Goldman Sachs hiked its target price on the stock to 4,150 yen (US$35.17) on Monday.

for info:
http://biz.yahoo.com/ap/070320/japan_markets.html?.v=2

[Ichiro]

21mar-North Korea refuses to join nuke talks

By BO-MI LIM, Associated Press Writer 1 hour, 44 minutes ago

BEIJING -
North Korea stayed away from six-nation talks on its nuclear program Tuesday in a dispute over $25 million of its funds, dimming prospects for progress on getting the communist regime to disarm.
ADVERTISEMENT

But Christopher Hill, the chief American envoy to the negotiations, met with Kim Kye Gwan, his North Korean counterpart, and later downplayed concerns that efforts to meet goals outlined in a landmark Feb. 13 disarmament agreement were in vain.

While he characterized the day's progress as "kind of slow," he expressed optimism the conflict over the North Korean funds frozen in Banco Delta Asia, a Macau bank, would be resolved.

"I think we're still on track," Hill told reporters late Tuesday. He did not give any details on his meeting with Kim.

North Korea boycotted the six-nation talks for more than a year after Washington blacklisted the tiny, privately run bank on suspicion the funds were connected to money-laundering or counterfeiting.

U.S. Deputy Assistant Treasury Secretary Daniel Glaser announced Monday the money would be transferred to a North Korean account in Beijing and it is up to the Monetary Authority of Macau, a Chinese territory, to release the funds.

for info:North Korea refuses to join nuke talks

By BO-MI LIM, Associated Press Writer 1 hour, 44 minutes ago

BEIJING -
North Korea stayed away from six-nation talks on its nuclear program Tuesday in a dispute over $25 million of its funds, dimming prospects for progress on getting the communist regime to disarm.
ADVERTISEMENT

But Christopher Hill, the chief American envoy to the negotiations, met with Kim Kye Gwan, his North Korean counterpart, and later downplayed concerns that efforts to meet goals outlined in a landmark Feb. 13 disarmament agreement were in vain.

While he characterized the day's progress as "kind of slow," he expressed optimism the conflict over the North Korean funds frozen in Banco Delta Asia, a Macau bank, would be resolved.

"I think we're still on track," Hill told reporters late Tuesday. He did not give any details on his meeting with Kim.

North Korea boycotted the six-nation talks for more than a year after Washington blacklisted the tiny, privately run bank on suspicion the funds were connected to money-laundering or counterfeiting.

U.S. Deputy Assistant Treasury Secretary Daniel Glaser announced Monday the money would be transferred to a North Korean account in Beijing and it is up to the Monetary Authority of Macau, a Chinese territory, to release the funds.

[pogo]

is the japan market close for 3/21/2007 or later tonight

[Ichiro]

Japan market is closed due to a national holiday.

Ichiro

[Ichiro]

21mar- AP-Fed Expected to Keep Rates Unchanged

Wednesday March 21, 3:42 am ET

By Martin Crutsinger, AP Economics Writer

Federal Reserve Officials Expect to Keep Interest Rates Unchanged

WASHINGTON (AP) -- As the Federal Reserve tries to guide the economy in for a soft landing, it is being battered by turbulent financial markets, a slumping housing industry and stubborn inflation pressures.

None of that is expected to alter the course Fed Chairman Ben Bernanke and his colleagues have established of keeping interest rates steady at current levels until there is firm evidence that inflation pressures have begun to recede.

Wrapping up a two-day meeting on Wednesday, Fed officials were widely expected to hold interest rates unchanged while still expressing greater concerns about inflation than the threat of weaker economic growth.

The federal funds rate, the interest that banks charge each other, has been at 5.25 percent since last June when the central bank capped a two-year, credit-tightening campaign with its 17th consecutive quarter-point rate hike.

In the five Fed meetings since that time, the central bank has stayed on hold. Economists believe this will be the sixth meeting with no move on interest rates even though the economic landscape has changed significantly since the last Fed meeting on Jan. 30-31.

The stock market, which had been hitting record highs, has suffered some stomach-churning days, including a 416-point plunge in the Dow Jones industrial average on Feb. 27.

That market swoon was blamed on comments former Fed Chairman Alan Greenspan made about the possibility of a recession at the end of this year and spreading troubles among lenders dealing in subprime mortgages, loans made to borrowers with weak credit histories.

In addition, the economy has turned weaker with business investment, which had been expected to take up the slack from a weakening home market, faltering. And consumer spending is weaker as well.

That is why some economists have been pushing the possibility of a recession higher this year. Greenspan put the odds at one in three.

Normally, the central bank would respond to spreading economic weakness by cutting interest rates. However, two reports on inflation last week showed that price pressures remain a problem with both wholesale and retail prices rising more rapidly in February.

for info:
http://biz.yahoo.com/ap/070321/fed_interest_rates.html?.v=4

[Ichiro]

21mar- AP-Euro Unchanged, Pound Higher Vs. Dollar

Wednesday March 21, 6:35 am ET

Euro Unchanged, Pound Higher Against U.S. Dollar

BERLIN (AP) -- The euro was unchanged against the U.S. dollar on Wednesday before the Federal Reserve's verdict on interest rates, while the pound extended gains prompted by strong British inflation data.


The 13-nation euro bought US$1.3307 in morning European trading, unchanged from its level in New York late Tuesday. The pound rose to US$1.9627 from US$1.9609.

The dollar rose to 117.66 Japanese yen from 117.25 yen.

The Fed was widely expected to leave rates unchanged out of concern that signs of sluggishness in the U.S. economy have not sufficiently dampened inflation pressures, but markets were looking for signals on its future course.

for info:

http://biz.yahoo.com/ap/070321/euro_dollar.html?.v=1

[Ichiro]

21mar- AP-Japan Abuzz Over Punishment of Web Guru

Wednesday March 21, 2:54 am ET

By Yuri Kageyama, AP Business Writer

Differing Punishment Given to Internet Guru and Major Brokerage Raising Questions in Japan

TOKYO (AP) -- Japan has been abuzz with the unusually harsh prison term handed to former Internet kingpin Takafumi Horie -- and the slap on the wrist given to scandal-tainted brokerage Nikko Cordial in another high-profile case of accounting regularities.


Horie, founder of Internet portal site operator Livedoor Co., was sentenced to 2 1/2 years in prison Friday for violating securities laws and falsifying earnings. Four other former top executives at Livedoor have been arrested and put on trial. Their verdicts will be announced Thursday.

In contrast, no one at Nikko Cordial, which has admitted to inflating profits the previous two fiscal years, has been charged.

Instead, Japan's third biggest securities company -- which Citigroup Inc. aims to take over -- was fined 500 million yen, or US$4 million, by Japan's watchdog Financial Services Agency.

And while Livedoor's stock was delisted last year, the Tokyo Stock Exchange decided last week not to remove Nikko Cordial shares -- despite widespread speculation that they would be.

Such differences are raising questions among the Japanese public about how evenly justice is being meted out in what some say is still a gray area in this nation's securities laws.

"What's happening is unfair," said Koetsu Aizawa, economics professor at Saitama University. "Slamming on the little guy who stands out while letting big names go is what's so despicable about Japan."

Aizawa says the charges against Nikko Cordial were serious enough for delisting -- and believes that Nikko Cordial's reputation was protected by the authorities for the overall stability of the Japanese stock market.

foriinfo:

http://biz.yahoo.com/ap/070321/japan_uneven_justice.html?.v=1

[Ichiro]

22mar-GLOBAL MARKETS-Stocks firm again, with one eye on cenbanks
Wed Mar 21, 2007 5:40am ET162

By Mike Dolan

LONDON, March 21 (Reuters) - Renewed bullishness on global stock markets nudged Asian and European bourses higher again on Wednesday, but wariness about the course of central bank interest rates slightly tempered this week's strong gains. European stocks <.FTEU3> rose again after a brief tick lower at the open, while shares in Asian chip makers climbed after strong earnings late on Tuesday from U.S. software makers Oracle Corp. (ORCL.O: Quote, Profile , Research) and Adobe Systems Inc. (ADBE.O: Quote, Profile , Research).

China's main stock index <.SSEC>, which last month triggered a global sell-off, hit a record on gains in the resources and property sectors. Hong Kong's Hang Seng index closed 0.8 percent higher. Tokyo markets were closed for a public holiday.

But the fresh optimism on world markets -- driven in part by a wave of merger and acquisition activity on both sides of Atlantic -- was restrained by concern about how central banks may react to creeping inflation rates in the major economies.

The U.S. Federal Reserve announces its latest interest rate decision at 1815 GMT. No change in key rates from 5.25 percent is expected but any nuance in the Fed's post-meeting statement will be assessed for future policy direction.

Weakness in the U.S. housing market and concern about the subprime mortgage sector has prompted many to bet on Fed easing this year, but some say it will remain focused on inflation.

"We think they'll keep a tightening bias," said Bernd Meyer, European strategist at Deutsche Bank in Frankfurt.

In the euro zone European Central Bank chief Jean-Claude Trichet said he saw mid-to-long term inflation expectations solidly anchored -- striking a dovish note at a European parliament committee hearing amid widespread expectations of more ECB rate rises

for info:

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070321:MTFH16976_2007-03-21_09-40-16_L21728372&type=comktNews&rpc=44

[Ichiro]

22mar-FTSE rises after UK rates seen on hold for now
Wed Mar 21, 2007 6:20am ET139

By Ana Nicolaci da Costa

LONDON, March 21 (Reuters) - Britain's FTSE 100 .FTSE rose on Wednesday after minutes from the Bank of England's last meeting cooled bets for a rate increase before the summer, shifting the focus to a U.S. rate decision later in the day.

The BoE minutes showed one policy maker had voted for a rate cut this month and none had wanted a hike.

"That's quite surprising. As you know the general feeling has been that there is one more hike left in the pipeline yet," said Richard Hunter, head of UK equities at Hargreaves Lansdown.

Britain's FTSE index of 100 leading companies was up 0.2 percent at 6,233.2 at 1004 GMT.

Stocks were already underpinned by recent takeover activity, gains in U.S. stocks overnight and a record-high for the Chinese index which had triggered a global sell-off late last month.

A possible tie-up between British bank Barclays (BARC.L: Quote, Profile , Research) and Dutch rival ABN AMRO, which would be Europe's biggest ever financial services deal, and speculation about other deals have helped stocks bounce back in recent days.

Britain's Barclays was 0.4 percent higher, after earlier gaining as much as 2 percent, as dealers said the bank was moving quicker to agreeing an $80 billion takeover than earlier expected.

for info:
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070321:MTFH17997_2007-03-21_10-20-44_L21369939&type=comktNews&rpc=44

[Ichiro]

22mar-Asian stocks nudge higher-Markets in Hong Kong, China gain but investors cautious amid uncertain outlook for global interest rates; Japan closed for holiday.

March 21 2007: 6:07 AM EDT

LONDON (Reuters) -- Renewed bullishness on global stock markets nudged Asian and European bourses higher again Wednesday, but wariness about the course of central bank interest rates slightly tempered this week's strong gains.

European stocks rose again after a brief tick lower at the open, while shares in Asian chip makers climbed after strong earnings late Tuesday from U.S. software makers Oracle Corp. (Charts) and Adobe Systems Inc. (Charts)

China's main stock index, which last month triggered a global selloff, hit a record on gains in the resources and property sectors. Hong Kong's Hang Seng index closed 0.8 percent higher. Tokyo markets were closed for a public holiday.

But the fresh optimism on world markets - driven in part by a wave of merger and acquisition activity on both sides of Atlantic - was restrained by concern about how central banks may react to creeping inflation rates in the major economies.
The Fed has its own March Madness

The Federal Reserve announces its latest interest rate decision at 2:15 p.m. ET. No change in key rates from 5.25 percent is expected but any nuance in the Fed's post-meeting statement will be assessed for future policy direction.

Weakness in the U.S. housing market and concern about the subprime mortgage sector has prompted many to bet on Fed easing this year, but some say it will remain focused on inflation.

"We think they'll keep a tightening bias," said Bernd Meyer, European strategist at Deutsche Bank in Frankfurt.

In the euro zone European Central Bank chief Jean-Claude Trichet said he saw mid-to-long term inflation expectations solidly anchored - striking a dovish note at a European parliament committee hearing amid widespread expectations of more ECB rate rises.

for info:
http://money.cnn.com/2007/03/21/news/international/markets_global.reut/index.htm?source=yahoo_quote

[Ichiro]

22mar- AP-Fed Keeps Interest Rates at 5.25 Percent

Wednesday March 21, 3:27 pm ET


By Martin Crutsinger, AP Economics Writer

Federal Reserve Leaves Key Interest Rate Unchanged at 5.25 Percent for Sixth Straight Meeting

WASHINGTON (AP) -- The Federal Reserve left a key interest rate unchanged Wednesday but triggered a strong rally on Wall Street as investors took hope the central bank might cut rates in the future.

Fed Chairman Ben Bernanke and his colleagues voted to keep the federal funds rate, the interest that banks charge each other, at 5.25 percent. It was the sixth straight meeting at which the Fed has not changed the rate.


In the statement explaining its action, however, the Fed this time dropped language about possible future rate increases. Any "future policy adjustments" would depend on the performance of both inflation and the economy, according to the statement.

Financial markets saw that change as a sign the Fed was considering future rate cuts and was not just focused on raising rates.

Investor euphoria over the possibility of rate cuts pushed the Dow Jones industrial average up by more than 160 points in the hour of trading following the Fed's midafternoon announcement.

Economists cautioned that investors probably were getting too enthusiastic about the likelihood the Fed would cut rates any time soon.

They noted the Fed statement also expressed increased worries that inflationary pressures have risen. The statement said that risks of inflation were the Fed's "predominant policy concern."

Analysts said the central bank appeared to acknowledge it is in a bind, caught between an economy being dragged down by troubles in the housing industry and stubbornly high inflationary pressures.

for info:

http://biz.yahoo.com/ap/070321/fed_interest_rates.html?.v=24

[Ichiro]

23mar- Daily FX-Dollar Creeps Higher Ahead Of FOMC Comments

Wednesday March 21, 1:31 pm ET

By John Kicklighter, Currency Analyst strategist@dailyfx.com

Dollar traders bided their time Wednesday though the early New York hours, anxiously awaiting the Federal Open Market Committee’s decision on interest rates and - more importantly – their outlook for the economy and inflation.


Before the Fed hit the wires, EURUSD was still holding still in congestion between 1.3290 and 1.3325. The greenback was finding a more consistent bid against the Swiss franc, sending the pair 55 points off of its overnight, range lows to 1.2170. Since hitting a new three-week high in the early London hours, the British pound reversed course and began to loose ground against the dollar. A quick 100-point drop in GBPUSD to 1.9555 marked the height of volatility before consolidating around 1.96. Finally, USDJPY bounced higher to further develop a wedge formation with a top eyed around 118.

Despite the considerable tension in the FX market during the New York session, there were few indicators for traders to tip toe around. However, each held a significant level of market-moving potential. By mid-day the only event to have crossed the ticker was the Mortgage Bankers Association’s weekly applications numbers. According to their data, total activity for purchasing and refinancing slipped 2.7 percent in the week through March 16th – the first and biggest contraction in a month. While this indicator is usually ignored, the market has taken heed of the data in recent weeks as investors across the finance spectrum monitor developments in the sub-prime mortgage sector for guidance in their own assets. Apart from the headline decline, savvy market participants likely took note of the 4.5 percent drop in refinancing applications and the 7.3 percent plunge in adjustable rate mortgage approvals. As ARMs continue to reset to current rates, Americans may begin to switch to the comparative safety of fixed-rate mortgages.

After its few moments in the sun, the MBA applications was stored away for later use while traders turned to the more overbearing risk in the forthcoming FOMC rate decision. Heading into the conclusion of the two-day meeting, the pertinent markets were pricing in predictions of the sixth consecutive pass on changing the nation’s benchmark lending rate. The real interest behind the event was in the subsequent statement that accompanies the decision. In recent weeks, previous forecasts from officials for inflation and growth have both come under fire. Conflicting with the stable growth projection, regional manufacturing reports have signaled declines for the current month while housing data has revived concerns of an extended and deepened slump. However, last week’s inflation data is expected to make the biggest impact. As the average American grows increasingly concerned with his/her mortgage payment and equities markets fail to reenter the steady bull-trend of past months, the crosshairs have fallen on the Fed. Perhaps looking for an easy out, many are impatiently waiting for the policy body to finally cut rates; yet this contradicts consistent warnings of inflation risks. Following Friday’s pick up in headline CPI, few economists actually expect the Fed to remove its hazard flag for price pressures.

for info:
http://biz.yahoo.com/fxcm/070321/1174498323878.html?.v=1

[Ichiro]

23mar-U.S. Stocks Rally, Erasing 2007 Losses, After Fed Statement

By Eric Martin

March 21 (Bloomberg) -- U.S. stocks rose the most in eight months, erasing their losses for the year, after the Federal Reserve unexpectedly abandoned its tilt toward raising interest rates. Morgan Stanley led a gain in financial shares after reporting profit that beat analysts' estimates.

Benchmark indexes climbed to their highs of the day, with the Standard & Poor's 500 Index posting its best three-day rally since April 2003. Earnings reports from software makers Oracle Corp. and Adobe Systems Inc. also lifted share prices.

Central bank officials held the benchmark interest rate at 5.25 percent for a sixth meeting, matching the estimates of all 93 economists surveyed by Bloomberg. While inflation remains the ``predominant policy concern,'' the Fed dropped a reference to ``additional firming'' in its statement.

``We've been waiting for the Fed to be on our side,'' said Michael Mullaney, who manages $10 billion at Fiduciary Trust Co. in Boston. ``The Fed's next move is probably going to be a cut, and probably sometime no later than August.''

The S&P 500 added 24.18, or 1.7 percent, to 1435.12 at 3:05 p.m. in New York. The Dow Jones Industrial Average increased 162.87, or 1.3 percent, to 12,450.97. The Nasdaq Composite Index rose 40.83, or 1.7 percent, to 2449.04.

Stocks gained yesterday after a government report showed housing starts in February rebounded from a nine-year low.

Today, more than seven stocks rose for every one that declined on the New York Stock Exchange. Almost 1.1 billion shares changed hands on the Big Board, 33 percent less than the same time a week ago.

for info:
http://www.bloomberg.com/apps/news?pid=20601087&sid=atKmElh6KRTU&refer=worldwide

[Ichiro]

23mar-Asian Stocks Rise for Fifth Day; Rinker Gains on U.S. Growth

By Stuart Kelly

March 21 (Bloomberg) -- Asian stocks rose for a fifth day, set for this month's best close.

Taiwan Semiconductor Manufacturing Co. and Rinker Group Ltd., the largest supplier of cement blocks in the U.S., led gains among exporters after the U.S. reported a bigger-than- expected increase in housing starts, easing concern a property slump will derail expansion in the world's largest economy.

``Sustainable U.S. demand will help support Asian exporters' profit outlook,'' said Phil Chen, who manages $154 million at Grand Cathay Securities Investment Trust Co. in Taipei. ``It will be more resilient than many people have expected.''

The Morgan Stanley Capital International Asia-Pacific Excluding Japan Index climbed 0.4 percent to 400.50 as of 4:03 p.m. in Hong Kong. That's the highest close since Feb. 27, when the biggest drop in China's shares in a decade sparked a five- day rout that erased $3.3 trillion of market value globally.

Japan's markets were shut today for the vernal equinox holiday, while benchmarks for China's two exchanges set new highs. The Shanghai Composite Index climbed 0.8 percent to 3057.38 and the Shenzhen Composite added 1.4 percent.

BHP Billiton and Rio Tinto Group paced gains among mining stocks after copper prices extended a rally to a three-month high after the housing report damped concern U.S. demand will flag. PetroChina Co. and PTT Pcl declined after crude oil for May delivery fell yesterday for the third time in four days.

for info:
http://www.bloomberg.com/apps/news?pid=20601080&sid=axQTDnPRHFIg&refer=asia

[Ichiro]

22mar-European Stocks Rise on Takeover Outlook; British Airways Gains

By Adria Cimino

March 21 (Bloomberg) -- European stocks rose for a fifth day on speculation mergers and acquisitions will increase. British Airways Plc, Iberia Lineas Aereas de Espana and Nutreco Holding NV climbed as investors bet they will be takeover targets.

``There's a lot more activity with buyouts, which is supportive of equities,'' said Daniel Broby, who helps manage $14 billion as chief investment officer at Bankinvest in Copenhagen. ``It is okay to resume buying again.''

The Dow Jones Stoxx 600 Index climbed 0.4 percent to 368.75 in London. The Stoxx 50 added 0.2 percent and Euro Stoxx 50, a measure for the 13 nations sharing the euro, was little changed.

So far this year, mergers and acquisitions in Europe have totaled $323 billion, according to data compiled by Bloomberg. Deals reached a record $1.4 trillion in 2006.

CNP Assurances SA had the biggest gain since 2000 as the insurer reported an increase in earnings. British building companies Wolseley Plc and Balfour Beatty Plc rose after U.K. Chancellor of the Exchequer Gordon Brown announced recording spending on public services.

National benchmarks advanced in 16 of 18 western European markets. The U.K.'s FTSE 100 added 0.6 percent. France's CAC 40 was little changed and Germany's DAX rose 0.2 percent.

British Airways, Europe's third-largest airline, advanced 3.3 percent to 519.5 pence on expectations it may receive a bid from Emirates, the largest Arab airline.

``British Airways, which was earlier tipped as a candidate to bid for Iberia, is now rumored to attract the interest of Emirates,'' said Jawaid Afsar, a trader at Securequity Ltd. in Sheffield, England.

`Very Surprising'

Laura Goodes, a spokeswoman at British Airways, said the company never comments on market speculation. Tim Clark, president of Emirates, denied interest in buying British Airways and said the takeover talk was ``very surprising.''

Iberia, Spain's biggest airline, advanced 3.4 percent to a record 3.70 euros on speculation the so-called open skies agreement may lead to a bid from Deutsche Lufthansa AG. Yesterday the shares soared 8.8 percent.

At present there is no agreement, offer or proposal of any kind, Madrid-based Iberia said today.

for info:
http://www.bloomberg.com/apps/news?pid=20601085&sid=aetsVwF1R9R8&refer=europe

[Ichiro]

23mar-European Stocks Rally on Fed Statement; Daimler, Siemens Gain

By Sarah Jones and Alexis Xydias

March 22 (Bloomberg) -- European stocks headed for the longest rally this year after the Federal Reserve in the U.S. indicated it's no longer inclined to raise interest rates.

DaimlerChrysler AG and Siemens AG, which make a large proportion of sales in the world's biggest economy, led a sixth day of gains in the Dow Jones Stoxx 600 Index. Eiffage SA and Valeo SA rose on takeover speculation.

``It's reassuring that we are coming to the end of this tightening bias,'' said Fabrice Theveneau, head of pan-European equity research at Societe Generale in Paris. ``We are seeing more energy coming into the market with merger and acquisition activity. The Fed is just adding to the good news.''

The Stoxx 600 added 1.2 percent to 373.31 at 12:04 p.m. in London. The Stoxx 50 rose 1.5 percent and Euro Stoxx 50, a measure for the 13 nations sharing the euro, gained 1.7 percent.

Asian stocks climbed to a three-week high and U.S. stocks yesterday posted the biggest gain in eight months after the Fed dropped a reference to ``additional firming'' in its statement.

Fed officials held the benchmark interest rate at 5.25 percent for a sixth meeting, matching the estimates of all 94 economists surveyed by Bloomberg.

Next Plc climbed to a record after the clothes retailer said annual profit rose. AXA SA and Allianz SE led Europe's largest insurers higher after Merrill Lynch & Co. recommended investors increase their holdings in the industry.

National benchmarks rose in all 18 western European markets that were open. The U.K.'s FTSE 100 added 0.7 percent. France's CAC 40 gained 1.4 percent and Germany's DAX rose 1.9 percent.

`Good Buy'

``Stocks are well priced if the Fed keeps rates unchanged or even lowers them once,'' said Joaquin Garcia Huerga, who helps manage $1.5 billion at Ahorro Corporacion Gestion in Madrid ``Companies also seem to be feeling that stocks are a good buy. We see more mergers and acquisitions.''

DaimlerChrysler, which makes most of its sales in the U.S, climbed 2.4 percent to 58.38 euros. Siemens surged 3.3 percent to 82.35 euros. UBS AG, which counts the Americas as its largest market after Europe, added 2.5 percent to 73.3 Swiss francs.

Eiffage, France's third-biggest construction company, gained 8.6 percent to 92.52 euros. The shares surged as much as 17 percent on speculation that Sacyr Vallehermoso SA, Spain's fifth- largest builder, will make a takeover approach.

info:http://www.bloomberg.com/apps/news?pid=20601085&sid=agpEsFBs.4n0&refer=

[Ichiro]

23mar-Asian Stocks Rise to 3-Week High on Fed Stance; Sony Advances

By Darren Boey and Chua Kong Ho

March 22 (Bloomberg) -- Asian stocks climbed to a three- week high after the U.S. Federal Reserve abandoned its bias toward an increase in interest rates. Sony Corp. and Samsung Electronics Co. led gains among exporters.

``Asia's growth is still geared toward trade with the U.S.,'' said Peter Chiang, who helps oversee about $8 billion as chief investment strategist at DBS Asset Management in Singapore. ``The Fed's comments give it more leeway to ease interest rates and provide relief to a market that's worried about a fallout from a slowing U.S. economy.''

Cnooc Ltd. advanced as crude-oil prices rose for a third day, while a rise in gold prices helped lift Newcrest Mining Ltd. Cheung Kong (Holdings) Ltd. and Cosco Pacific Ltd. reported higher earnings, helping lift Hong Kong's Hang Seng Index.

The Morgan Stanley Capital International Asia-Pacific Index added 1.7 percent to 145.84 at 5:04 p.m. in Tokyo. It's set for the highest close since Feb. 27, the day a plunge in Chinese stocks triggered a global rout that erased $3.3 trillion of market value. All of the benchmark's 10 industry groups rose.

The Nikkei 225 Stock Average climbed 1.5 percent to 17,419.20 and the Topix index added 1.4 percent, boosted by gains in Nippon Steel Corp. and JFE Holdings Inc. after Japan's steel exports increased. China's key stock index advanced to a record, completing its recovery from the recent sell-off, while Pakistan was the only market to decline in the region.

info:
http://www.bloomberg.com/apps/news?pid=20601080&sid=aBqsubigwqCg&refer=asia

[Ichiro]

23mar-Japan Land Prices Rise for First Time in 16 Years (Update2)

By Finbarr Flynn

March 22 (Bloomberg) -- Land prices in Japan rose for the first time in 16 years as overseas and domestic investors competed to acquire properties in the country's three biggest cities.

Gains in Tokyo, Osaka and Nagoya compensated for a drop in regional areas. Average commercial land prices in the three cities rose 8.9 percent and residential 2.8 percent in the year ending Dec. 31, the Ministry of Land, Infrastructure and Transport said in report released today.

``Japan is becoming a country of cities, and those companies leveraged to urban real estate will do best,'' said Eric Starr, a Japanese stock portfolio manager at Connecticut-based Forest Investment Management LLC, which manages about $820 million in assets. ``I see real estate as a multi-year trade in Japan.''

Land values are still recovering from the collapse of an asset bubble at the start of the 1990s and the ensuing decade of declines. Overseas investors continue to pour money into Japanese real estate, attracted by low interest rates, economic growth and new securitization deals. The investment rush has sparked fears that a new land bubble may emerge in certain areas.

The Bank of Japan said in its Financial System Report last week that it was ``necessary to carefully watch future developments in the real estate markets and their effect on the financial system.'' Japanese interest rates are still the lowest among developed economies after the bank raised rates to 0.5 percent last month.

``The possibility of the Bank of Japan raising interest rates faster than the market expects has emerged with this data,'' said Yoji Otani, an analyst at Credit Suisse Securities Japan Ltd. in Tokyo. ``The current phenomenon in land prices is becoming a problem. The BOJ has good evidence of that now.''

info:
http://www.bloomberg.com/apps/news?pid=20601068&sid=ahAySDWegbzM&refer=economy

[Ichiro]

23mar-U.S. Stock-Index Futures Are Little Changed; Motorola Declines

By Sarah Thompson

March 22 (Bloomberg) -- U.S. stock-index futures were little changed after Motorola Inc. said profit and sales this year won't meet its forecast, raising concern that companies' earnings may miss estimates.

Motorola, the world's No. 2 mobile-phone maker, ``may have started investors worrying about first-quarter earnings,'' said Simon Carter, head of North American equities at Aegon Asset Management in Edinburgh, where he helps oversee $3 billion.

Shares of Motorola slid in Europe. Wal-Mart Stores Inc. fell after the world's largest retailer said it will pay $530 million in bonuses to U.S. workers.

Exxon Mobil Corp., the world's biggest investor-owned oil company, rose on higher crude prices. Nike Inc., the world's largest athletic-shoe maker, declined before reporting earnings.

Standard & Poor's 500 Index futures expiring in June decreased 0.7 to 1444.3 at 11:42 a.m. in London. The S&P 500 yesterday had its best performance since July. Dow Jones Industrial Average futures rose 5 to 12,528. Nasdaq-100 Index futures were unchanged at 1825.

The U.S. stock market posted its biggest gain in eight months yesterday, wiping away most of the losses for the year, after the Federal Reserve indicated it is no longer biased toward higher interest rates.

Earnings reports today may add insight on whether Motorola's reduced profit and sales forecast signals that U.S. companies' earnings are heading lower, while a government report on jobless claims will offer guidance on the pace of economic growth.

Jobless Claims

First-time claims for jobless benefits in the U.S. rose last week to 323,000 from 318,000 the prior week, according to the median estimate of 39 economists surveyed by Bloomberg News.

info:
http://www.bloomberg.com/apps/news?pid=20601084&sid=aTvvBlFvLgDQ&refer=stocks

[Ichiro]

23mar- AP-Dollar Higher Against Major Currencies

Thursday March 22, 4:07 pm ET

Dollar Rebounds Against Major Currencies in Wake of Fed Rate Decision

NEW YORK (AP) -- The dollar recovered against the other major currencies on Thursday, a day after the Federal Reserve held interest rates steady.

The U.S. currency rebounded in Europe as the euro fell to $1.3334 in late New York trading from $1.3381. The 13-nation euro reached a two-year high against the dollar Wednesday, surpassing the March 2005 high of $1.3485.

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The British pound slid to $1.9652 from $1.9687, while Japan's currency rose to 118.15 yen from 117.47 yen.

The dollar weakened on Wednesday after the Fed voted to keep interest rates at 5.25 percent -- continuing its course of leaving rates on hold after a string of increases last year.

The Fed last changed rates in June 2006 when it capped a two-year credit-tightening stretch with a 17th quarter-point rate increase.

Higher interest rates, used to combat inflation, can help bolster a currency by making certain types of investments more attractive.

Rates in Europe have risen. Earlier this month, the European Central Bank raised its key interest rate a quarter point to 3.75 percent, the seventh increase since December 2005, when it was 2 percent.

Fed officials expressed concern about the risk of inflation over weak economic growth, echoing sentiments from previous meetings. This time, however, they dropped language specific to the potential for a rate increase in the future.

for info:

http://biz.yahoo.com/ap/070322/dollar.html?.v=2

[Ichiro]

23mar- AP
Japan Court Convicts 4 Ex-Livedoor Execs
Thursday March 22, 8:26 am ET
By Yuri Kageyama, AP Business Writer
Japanese Court Convicts Four Former Livedoor Executives of Inflating Earnings Reports

TOKYO (AP) -- A Japanese court convicted four former executives of disgraced dot-com company Livedoor of inflating earnings reports Thursday in a scandal that destroyed one of the country's highest-flying Internet startups.


The rulings followed Livedoor founder and former CEO Takafumi Horie's conviction last week on similar charges of securities laws violations and his prison sentence of 2 1/2 years. Horie, who had pleaded not guilty, immediately appealed the decision.

On Thursday, Ryoji Miyauchi, Livedoor's former chief financial officer, was sentenced to 20 months in prison after he pleaded guilty. Three other former executives, who pleaded guilty to some of the charges, were given suspended prison terms, avoiding time in prison.

The Livedoor scandal broke in January 2006, when prosecutors arrested Horie and other top executives on suspicion of securities laws violations. The news sparked a sell-off in the Tokyo stock market at that time amid widespread shock over the apparent downfall of Livedoor and Horie, who had become a celebrity for his gutsy takeover attempts and flashy lifestyle.

The executives were accused of setting up a number of funds to do stock swaps and other stock trading to pad their books. Prosecutors said the complex set of schemes fabricated 5 billion yen (US$42.5 million; euro32 million) in profit.

Presiding judge Toshiyuki Kosaka said Miyauchi was the chief architect of some of the schemes as No. 2 at Livedoor under Horie, but said Horie shared much of the blame because he was the chief executive.

info:
http://biz.yahoo.com/ap/070322/japan_internet_trial.html?.v=5

[Ichiro]

23mar- Daily FX-Dollar Free Fall Stalls Though New Lows Already In Place
Thursday March 22, 1:35 pm ET
By John Kicklighter, Currency Analyst strategist@dailyfx.com

Since the Fed announced its neutral lean yesterday afternoon, the greenback has put in new multi-month lows and subsequently rebound in a few short hours. Still a little shaken, dollar bulls will have time to gather their wits on Thursday’s fundamentally quiet session before the existing home sales report shakes up the currency market one last time before the weekend.

For price action, the pullback in EURUSD epitomized the mixture of caution and profit-taking seen across the majors. In the Asian session, the pair made a last-gasp spike to 1.3410 before gradually pulling back to 1.3350. At the same time, USDCHF formed a 1.2080 base before slowly working its way back above 1.21. The pound delayed its move against the dollar until the London session when GBPUSD rallied to 1.9730 before settling back to the range low round 1.9660. Finally, the previous 24 hours of action in USDJPY hasn’t amounted to any serious breaches of technical protocol. A low around 117.25 and return to 117.95 has kept a three-week long range intact.

The battered dollar was looking forward to a day of rest on Thursday. After a number of market-moving events in the past three days, traders had only jobless claims and the Leading Indicators index listed on the docket. The aggregate Leading gauge was undoubtedly the most influential report of the two. Already expected to slow, the Conference Board’s report surprised the market with a greater than predicted 0.5 percent contraction in its February print – the biggest drop in a year. Adding to the disappointment, January’s initial modest rise was revised down to a 0.3 percent decline. From the breakdown of the forward-looking indicator, half of the components reported declines for the month. The employment, factory activity and consumer sentiment components all contributed to the poor showing with individual declines of their own. Overall, this often over-looked indicator was perhaps saying more to traders than usual following the cooled rhetoric from the FOMC on Wednesday concerning inflation. Also hitting the wires, the jobless claims numbers reversed some of the pessimistic sentiment with the Leading index. First time filings for unemployment benefits fell to 316,000 in week through March 17th, the slowest pace since the opening week of February. However, the bullish convictions these numbers can rouse is limited considering the less volatile four-week average is still well above typical levels of previous months.

info:http://biz.yahoo.com/fxcm/070322/1174584965445.html?.v=1

[Ichiro]

23mar-P
Japanese Stocks Climb; Dollar Down
Friday March 23, 5:07 am ET
Japanese Stocks Rise for 4th Session to Reach 1-Month High; Dollar Down Against Yen

TOKYO (AP) -- Japanese stocks rose Friday for a fourth straight session, climbing to their highest in nearly a month, led by autos, banking and oil issues.

The benchmark Nikkei 225 index added 61.41 points, or 0.35 percent, to finish at 17,480.61 points on the Tokyo Stock Exchange -- its highest since Feb. 28. The index now has risen 4.4 percent over the past four trading sessions, including a 1.5 percent gain Thursday.



Traders said exporters like autos moved higher amid relative stability in dollar-yen trading, while commodity-related stocks like oils advanced after a rise in oil prices.

Gainers included Toyota Motor Corp., which rose 0.51 percent to 7,840 yen ($66.44) and Nippon Oil Corp., which posted a 1.17 percent to 948 yen ($8.03). Banks also advanced, with Mizuho Financial Group Inc. rising 1.30 percent to 782,000 yen ($6,627.12).

info:http://biz.yahoo.com/ap/070323/japan_markets.html?.v=4

[Ichiro]

23mar- AP
Dollar Steady Against the Yen in Asia
Friday March 23, 4:27 am ET
Dollar Steady Against the Yen in Asian Trading Ahead of Release of U.S. Home Sales Data

TOKYO (AP) -- The dollar was steady against the yen in Asia Friday as players awaited U.S. home sales data due later in the day amid a lack of fresh market-moving news.

The U.S. dollar was trading at 118.14 yen at 2:50 p.m. (0550 GMT) Friday, down from 118.15 yen late Thursday in New York. The euro fell to $1.3330 from $1.3334.

Commercial buying by Japanese importers helped lift the dollar earlier in the day, but many market participants were awaiting the release of U.S. existing home sales data for February.

There also was talk that some fund players had resumed yen-carry trades -- a popular strategy in which investors borrow yen at Japan's low interest rates invest the proceeds in higher-yielding units -- but many traders said that most short-term investors refrained from actively trading currencies.

The recent volatility in global stock markets also has currency market players keeping a close eye on stock prices.

"Many players still can't feel comfortable about trading one way or another despite the increasing stability of stock price moves," said Hidenori Kato, a senior dealer at Societe Generale.

info:
http://biz.yahoo.com/ap/070323/asia_dollar.html?.v=1

[Ichiro]

23mar-Gaspari Says Inflation `Under Control,' ECB Needs to Wait a Bit

By Gabi Thesing

March 23 (Bloomberg) -- Outgoing European Central Bank council member Mitja Gaspari said inflation in the 13 euro nations is ``under control'' and it's ``premature'' to talk about further interest-rate increases.

``I'm not saying that inflation expectations are completely benign, but inflation is obviously under control,'' Gaspari, who heads Slovenia's central bank, said in an interview in Frankfurt yesterday. ``Talking about any further interest-rate adjustment is premature at the moment, we need to wait a bit.''

A 20 percent drop in the price of oil from a July record has helped keep euro-area inflation below the ECB's 2 percent limit for six straight months. Even so, the bank this month raised its benchmark rate for the seventh time since late 2005, to 3.75 percent, and left the door open for further moves, saying monetary policy continues to be ``on the accommodative side.''

``This explanation is very clear, it's not an immediate sign of any action,'' Gaspari said. The bank's policy should remain on the accommodative side ``for a while just to see if this analysis is correct.''

Asked if his assessment of the inflation outlook is shared by most on the ECB's 19-member governing council, Gaspari said ``the majority of us are of the same opinion.''

info:http://www.bloomberg.com/apps/news?pid=20601085&sid=aygW9WoA9q7c&refer=europe

[Ichiro]

22mar-Dollar Heads for Weekly Gain Against Yen on Reassessment of Fed

By Chris Young and Stanley White

March 23 (Bloomberg) -- The dollar headed for a weekly gain against the yen as investors bet the Federal Reserve's inflation concerns will delay a reduction in interest rates.

The dollar has rebounded from a two-year low against the euro, reached after the Fed March 21 removed a bias to increase borrowing costs. The difference in yield between benchmark 10- year U.S. and Japanese government bonds widened to a one-month high, boosting the allure of dollar-denominated assets.

``People got too dovish on the Fed,'' said Adrian Foster, director of currency sales at Dresdner Kleinwort in Beijing. ``The message was in fact inflation is still their primary concern. It's consistent with the Fed being on hold. It's dollar- supportive.''

The dollar traded at 118.08 yen as of 7:45 a.m. in London from 116.75 a week ago. The U.S. currency was at $1.3330 per euro from $1.3331 yesterday, when it reached $1.3411, the weakest since March 2005. It may strengthen to 118.50 yen and $1.3280 per euro today, Foster said.

The currency fell March 21 after the Federal Open Market Committee kept its target for overnight lending between banks at 5.25 percent and dropped a reference in its previous five statements to the need for ``additional firming.'' The statement also said inflation is the ``predominant concern.''

Futures contracts showed declining expectations the Fed will cut rates in the first half of the year, indicating the rate premium over Japan is likely to hold at 4.75 percentage points in coming months.

Yield Spread

Bank of Japan Governor Toshihiko Fukui yesterday said the central bank will keep rates low for some time and adjustments need to be gradual. Japan's 0.5 percent benchmark is the lowest among major economies. The yield advantage for holding U.S. 10- year Treasury notes over similar-maturity Japanese debt widened to 3.04 percentage points, the most since Feb. 22, from 2.97 points at the start of the week.

Japanese Finance Minister Koji Omi told lawmakers today there is no plan to significantly change Japan's foreign-exchange reserves, the world's second-largest after China.

Gains in the dollar may be limited before a U.S. report forecast to show sales of previously owned homes declined last month to an annual rate of 6.30 million, from 6.46 million in January, according to the median forecast of 63 economists surveyed by Bloomberg News. The National Association of Realtors is scheduled to release the data at 10 a.m. in Washington.

info:http://www.bloomberg.com/apps/news?pid=20601101&sid=attmq4Efe1YI&refer=japan

[Ichiro]

23mar-China's Oil Demand May Increase 29% by 2010, CNPC Official Says

By Wang Ying

March 23 (Bloomberg) -- China's oil demand may rise 29 percent by 2010 from last year's levels, said an official from China National Petroleum Corp.

Oil demand may reach 455 million metric tons (about 9.14 million barrels a day), Gong Jinshuang, senior research engineer at China's largest oil company, said in Beijing today. Imports may increase to 250 million tons, accounting for more than 50 percent of demand, he said.

Annual oil demand growth in the world's second-largest energy consumer may slow to below 5 percent between 2010 and 2015 because of increased use of alternatives such as biofuels, he said.

info:http://www.bloomberg.com/apps/news?pid=20601089&sid=avTrb952aiew&refer=china

[Ichiro]

23mar- AP
Dow, Nasdaq Head Toward Higher Opening
Friday March 23, 8:34 am ET
By Tim Paradis, AP Business Writer
Dow, Nasdaq Head Toward Higher Opening Ahead of Report on Home Sales

NEW YORK (AP) -- U.S. stocks headed for a moderately higher open Friday ahead of a report on home sales that could indicate whether Wall Street's somewhat less-pessimistic view of the sector is warranted.

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The Federal Reserve this week said an "adjustment" in the housing sector was continuing, offering some relief for investors left unnerved by the woes among so-called subprime mortgage lenders. Wall Street had grown concerned that an implosion among subprime lenders, which make loans to people with poor credit, could spill over into other parts of the economy and derail already slowing economic growth.

Within the first hour of trading Friday the National Association of Realtors is expected to report last month's median home price. The last report, which arrived Feb. 27 as global markets swooned and the Dow Jones industrials fell 416 points on the day, indicated the median price of a home declined for the sixth straight month.

The figures will include existing home sales and inventories. Wall Street expects February sales will slip to 6.35 million, after jumping to 6.46 million in January.

Dow Jones Industrials futures expiring in June rose 13 points, or 0.10 percent, to 12,558. Standard & Poor's 500 index futures rose 2.80 points, or 0.19 percent, to 1,447.80, while Nasdaq 100 index futures advanced 3.25, or 0.18 percent, to 1,822.00.

info:http://biz.yahoo.com/ap/070323/wall_street.html?.v=11

[Ichiro]

24mar-FOREX-Dollar gains as housing data dims rate cut view
Fri Mar 23, 2007 4:36pm ET21

By Steven C. Johnson

NEW YORK, March 23 (Reuters) - The dollar firmed against the euro on Friday as a surprise jump in U.S. existing-home sales tempered the case for lower benchmark interest rates by the middle of the year.

It also recovered losses against the yen sustained overnight when data showed the first annual rise in Japanese land prices in 16 years.


The U.S. report, which showed sales of previously owned homes beat forecasts and rose by a hefty 3.9 percent last month, eased fears about the health of the housing sector.

The data also helped the dollar wipe out losses suffered earlier this week when the Federal Reserve adopted a more neutral monetary policy stance at its latest meeting, suggesting to some investors that a rate cut was imminent.

"The market had been very bearish, but the home sales data and yesterday's fall in jobless claims negate the doomsday scenario that foresees recession in the next quarter," said Boris Schlossberg, currency strategist at DailyFX.com.

info:http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070323:MTFH95492_2007-03-23_20-36-33_N23416416&type=comktNews&rpc=44

[Ichiro]

24mar- AP
Dollar Mostly Higher Against Currencies
Friday March 23, 4:03 pm ET
By Jackie Farwell, AP Business Writer

NEW YORK (AP) -- The dollar continued its recovery against most of the major currencies on Friday as markets digested unexpectedly strong housing data two days after the Federal Reserve voted to hold interest rates steady.

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The euro fell to $1.3290 in late New York trading from $1.3334 Thursday. On Wednesday, the 13-nation currency reached a two-year high against the dollar, surpassing the March 2005 high of $1.3485.

The British pound dropped to $1.9614 from $1.9652, and Japan's currency fell to 118.05 yen from 118.15 yen.

The National Association of Realtors reported Friday that sales of existing homes rose by 3.9 percent in February, pushed higher by mild winter weather in the Northeast. It was the largest one-month gain in nearly three years.

Worries lingered, however, about the ailing housing industry as troubles mount in the mortgage lending market. Increasingly, mortgages offered to consumers with poor credit histories are going into default, forcing lenders to tighten up on their loan standards.

The dollar continued to make gains after weakening on Wednesday with the Fed's decision to hold interest rates steady at 5.25 percent -- continuing its course of leaving rates on hold after a string of increases.

info:http://biz.yahoo.com/ap/070323/dollar.html?.v=1

[Ichiro]

24mar-Dow: 5-day rally, back in the black
Stocks inch higher on home sales rise but Iran worries boost oil prices and limit market's gains.
By Alexandra Twin and Rob Kelley, CNNMoney.com staff writers
March 23 2007: 4:17 PM EDT

NEW YORK (CNNMoney.com) -- Stocks inched higher Friday, gaining after unexpected strength in home sales, but worries about rising oil prices limited gains.

The Dow Jones industrial average (Charts) rose 0.2 percent, marking the fifth straight day of gains for the Dow and pushing the index of 30 blue chips back into the plus column for the year after the recent sell-off.


The broader S&P 500 index (Charts) gained 0.1 percent. The Nasdaq composite (Charts)gained 0.2 percent.

Stocks struggled Thursday after Wednesday's big gains when the Fed softened its language on potential rate hikes.

A situation in the Persian Gulf contributed to oil worries: 15 British marines were taken captive by Iranian naval vessels. U.S. light crude oil for May delivery rose 59 cents to $62.28 a barrel on the New York Mercantile Exchange

Here's a look at what was moving near the close:

Stocks remained in transition mode Friday, with investors buying on the housing market news, but remaining cautious about the latest news from Iran.

"I think we're still in the midst of the correction," said Harry Clark, CEO of Clark Capital Management. "The average correction runs for 8 to 12 weeks, and we're still in week four."

"We'll continue to see the economy slowing. We're going to see slower earnings growth, that's for sure. The last six times housing dropped anywhere near this much, it caused a recession within six months."

info:http://money.cnn.com/2007/03/23/markets/markets_0405/index.htm?source=yahoo_quote

[Ichiro]

30mar-Asian Stocks Rise on Japanese Economic Reports; Mizuho Gains

By Stuart Kelly and Kotaro Tsunetomi

March 30 (Bloomberg) -- Asian stocks rose, led by Mizuho Financial Group Inc., after industrial production and household spending reports in Japan boosted confidence in the growth outlook for the region's biggest economy.

``There's a sense of recovery there and that's providing support to the market,'' said Hideyuki Ookoshi, who oversees $365 million at Chiba-Gin Asset Management Co. in Tokyo. ``If production recovers, the Japanese economy could take off from its current plateau around mid-year.''

The Morgan Stanley Capital International Asia-Pacific Index climbed 0.2 percent to 144.72 as of 5:46 p.m. in Tokyo. The benchmark has gained 3 percent this year, its third straight quarterly advance.

Japan's Nikkei 225 Stock Average rose 0.1 percent to 17,287.65, while the broader Topix index climbed 0.2 percent. Markets advanced, except in Hong Kong, China, Thailand, Sri Lanka and New Zealand. The Philippine Stock Exchange Index added 1.6 percent, the most in the region.

Inpex Holdings Inc. led energy stocks higher after crude oil prices rose for a ninth day. Australia's Fairfax Media Ltd. gained on speculation of industry mergers after ownership restrictions are removed next week. Posco led South Korean steelmakers higher on expectations that rising prices for the alloy will boost profit.

U.S. stocks climbed yesterday after jobless claims unexpectedly fell and a government report showed the world's biggest economy grew at a faster pace last quarter than some economists estimated.

Industrial Production

Mizuho Financial, Japan's No. 2 bank, climbed 2 percent to 759,000 yen. Nippon Telegraph & Telephone Corp., the country's biggest telephone company, jumped 2.1 percent to 623,000 yen. Mitsui Fudosan Co., the largest property developer, climbed 2.1 percent to 3,460 yen.

Industrial production in Japan, the world's second-largest economy, dropped a seasonally adjusted 0.2 percent in February from the previous month, the trade ministry said today. Economists surveyed by Bloomberg News had forecast a 0.7 percent drop. Inventories dropped 0.4 percent.

for info:http://www.bloomberg.com/apps/news?pid=20601080&sid=az.MJePUIxog&refer=asia

[Ichiro]

30mar-Japan's Household Spending Jumps; Production Falls (Update6)

By Jason Clenfield and Lily Nonomiya

March 30 (Bloomberg) -- Japan's household spending rose at double the pace forecast by analysts last month and industrial production fell less than expected, suggesting the world's second-largest economy can weather a U.S. slowdown.

Spending jumped 1.3 percent in February, the statistics bureau said today in Tokyo, more than the 0.6 percent median estimate of 29 economists surveyed by Bloomberg News. Output slipped 0.2 percent from January, less than the projected 0.7 percent decline.

The jobless rate held at an eight-year low of 4 percent for a fourth month, a separate report showed, suggesting companies are confident enough to keep hiring. A recovery in consumer spending from last year's lull may cushion the economy from slowing growth in the U.S., Japan's biggest export market.

``We're seeing more evidence that consumer spending is regaining ground,'' said Naoki Iizuka, a senior economist at Mizuho Securities Co. in Tokyo. ``With exports and production set to slow, consumer spending will support growth and prevent the economy from stalling.''

Japan's consumer prices fell for the first time in 10 months, the statistics bureau said separately. Finance Minister Koji Omi said he doubts the report indicates the economy is still experiencing deflation. Bank of Japan Governor Toshihiko Fukui said this week he expects prices to rise in the long term even if they ``hover around zero'' in coming months.

info:http://www.bloomberg.com/apps/news?pid=20601080&sid=a81xBfmgwZao&refer=asia

[Ichiro]

30mar-Europe Confidence Unexpectedly Rises, Jobless Rate Declines

By John Fraher

March 30 (Bloomberg) -- Confidence in the European economy unexpectedly increased and unemployment fell to a record, giving the European Central Bank scope to raise interest rates in the 13-nation euro region again.

An index of sentiment among executives and consumers in the euro area increased to 111.2 in March from 109.7 in February, the European Commission in Brussels said today. Economists expected 109.5, the median of 27 forecasts showed. The jobless rate fell to 7.3 percent in February and inflation accelerated to 1.9 percent in March, separate surveys showed.

The euro region's economy, which expanded at the fastest pace since the start of the decade in 2006, may gather momentum later this year as companies increase investment spending and hiring, bolstering consumer confidence. ECB President Jean- Claude Trichet said yesterday borrowing costs are still ``on the accommodative side'' after seven rate increases since late 2005.

``The data we are getting on the domestic side is extremely positive and clearly points towards a rate hike in June from the ECB,'' said Silvia Pepino, an economist at JPMorgan Chase & Co.

German business confidence unexpectedly rose in March and approached a 16-year high, European retail sales increased for the first time in three months and French unemployment dropped to the lowest in almost 24 years in February.

Investors expect the ECB to raise its main rate by a quarter percentage point to 4 percent by the end of the first half, futures trading shows. The implied rate on the three-month Euribor futures contract for June was at 4.10 percent today.

info:http://www.bloomberg.com/apps/news?pid=20601085&sid=ay2mvZMcXm2I&refer=europe

[Ichiro]

30mar-Dollar Little Changed Before U.S. Data; Set for Quarterly Loss

By Anchalee Worrachate and Stanley White

March 30 (Bloomberg) -- The dollar was little changed before U.S. reports on inflation, consumer confidence and spending today that will provide indications on the outlook for the Federal Reserve's interest-rate policy.

The U.S. dollar is set for a second quarterly loss against the euro on concern a slowing housing market and mortgage delinquencies are hurting the economy. Fed Chairman Ben Bernanke on March 28 said monetary policy is still aimed at combating inflation even as risks to economic expansion are increasing.

``It's not a great quarter for the dollar,'' Hans-Guenter Redeker, chief currency strategist at BNP Paribas, said in London. ``There are signs the problem in the housing market is spilling over into investments and consumer confidence but the Fed isn't willing to accept that yet.''

The dollar traded at 118.01 yen at 9:06 a.m. in London from 118.07 in late New York yesterday and 119.05 at the end of last quarter. It was at $1.3320 per euro from $1.3331 yesterday and $1.3197 last quarter.

The U.S. currency may slide to 115 yen by the end of next quarter and 110 yen three months after that, Redeker said.

Personal spending probably rose in February at the slowest rate in four months, the Commerce Department will say, according to a Bloomberg survey of economists. The report will also show the Fed's preferred price gauge stayed elevated, giving policy makers less room to maneuver on rates as growth slows.

``We're seeing quite a downshift in the outlook for the U.S. economy,'' said Greg Gibbs, a currency strategist at ABN Amro Holding NV in Sydney. ``We've seen a number of statistics continue to be a little bit softer. I'm looking for dollar weakness.''

info:http://www.bloomberg.com/apps/news?pid=20601083&sid=a.Jf0LkAF2eE&refer=currency

[Ichiro]

30mar-Oil Pares Gains After Iran Hints at British Prisoner Release

By Grant Smith

March 30 (Bloomberg) -- Oil pared gains that had taken it close to a six-month high after the president of Iran implied the country may release a British sailor seized in the Persian Gulf.

Iranian President Mahmoud Ahmadinejad will ``look positively'' at a request by Turkey to release female British sailor Faye Turney, one of 15 U.K. naval personnel seized by Iran a week ago, a spokesman for Turkish Prime Minister Recep Tayyip Erdogan said.

info:http://www.bloomberg.com/apps/news?pid=20601013&sid=aAYRxNspWRvI&refer=emergingmarkets

[Ichiro]

30mar-Asia Central Banks May Shift to Higher Rate Bias, Barclays Says

By Shamim Adam

March 30 (Bloomberg) -- Asian central banks may tilt toward higher interest rates and allow their currencies to appreciate later this year as inflationary pressures rise, according to Barclays Capital Inc.

Export growth in Asia is showing signs of a pick-up after sliding in the second half of 2006, and rising money supply point to stronger local demand, strategist Nicholas Bibby said in a report this week. While two quarters of oil price declines and low food costs in some Asian nations curbed inflation, that ``benign situation'' is unlikely to last, he said.

``Production constraints and geopolitical tensions will drive oil prices higher over the course of the year,'' Singapore-based Bibby wrote. Emerging Asia's ``relatively robust expansion, combined with the more domestically driven nature of growth, is likely to cause inflation to drift higher in the latter part of the year.''

Quickening inflation and higher rates may threaten consumer spending and investment in the region, which is trying to reduce dependence on export-led growth to make expansion more self- sustaining. Barclays's view is at odds with that of the Asian Development Bank, which this week said lower oil and commodity prices, as well as previous rate increases, will stem inflation and encourage central banks to cut borrowing costs this year.

``As the pass-through effects of high oil prices comes to an end, there may be scope for interest rates to come down,'' the ADB said its Asian Development Outlook 2007 report, citing Indonesia and Thailand which have already begun lowering rates.

info:
http://www.bloomberg.com/apps/news?pid=20601068&sid=a7Uf43IIi9Do&refer=economy

[Ichiro]

6apr-U.S. Economy: Job Growth Quickens, Unemployment Drops (Update2)--
(Goldman now projects the Fed will trim its overnight lending rate target by a quarter point in September per message below).

By Joe Richter

April 6 (Bloomberg) -- American employers added more workers than forecast in March and the jobless rate matched a five-year low, giving the economy a spark as it struggles to overcome slumps in housing and manufacturing.

The 180,000 increase in employment, the most in three months, followed a 113,000 gain in February that was larger than previously estimated, the Labor Department reported today in Washington. The jobless rate fell to 4.4 percent, a level last seen in October, defying predictions it would climb.

Plentiful jobs and bigger paychecks are giving more people the means to spend, preventing the housing recession from spreading to the rest of the economy. The report takes some of the pressure off Federal Reserve Chairman Ben S. Bernanke to cut interest rates. Bonds tumbled and the dollar jumped.

``The expansion is going to keep rolling,'' said Bill Cheney, chief economist at John Hancock Financial Services Inc. in Boston. ``The Fed isn't going to move rates any time this year.''

Economists at Goldman, Sachs & Co. and UBS Securities LLC were among those who pushed back Fed rate-cut forecasts following the payrolls report.

Forecast Changes

Goldman now projects the Fed will trim its overnight lending rate target by a quarter point in September, rather than in June. They maintained a year-end forecast of 4.5 percent for the target rate, down from the current 5.25 percent. UBS, which had predicted four reductions beginning in May, now forecasts three cuts beginning in June.

info:http://www.bloomberg.com/apps/news?pid=20601068&sid=arFfG0jqYtTk&refer=economy

[Ichiro]

6apr-Dollar Advances From Two-Year Low as Jobs Report Beats Forecast
(The dollar rose today 0.51 percent to 119.33 yen)
By Bo Nielsen and Ye Xie

April 6 (Bloomberg) -- The dollar rose from a two-year low against the euro and strengthened versus the yen as a government report showed the U.S. added more jobs than economists forecast.

The dollar advanced against 12 of the 16 most active currencies tracked by Bloomberg as the unemployment data led traders to reduce speculation the Federal Reserve will cut borrowing costs in the third quarter. Currency moves were magnified by a lack of volume, traders said.

``It was a very strong number, and after yesterday's move it surprised a lot of people,'' said Camilla Sutton, a currency strategist in Toronto at Scotia Capital Inc. ``It switches things around, and we can see a stronger dollar for a while.''

The dollar rose 0.4 percent to $1.3375 per euro at 2:19 p.m. in New York. It was the biggest gain since March 22. The U.S. currency fell yesterday to $1.3442 per euro, the lowest since March 2005. The dollar rose today 0.51 percent to 119.33 yen.

U.S. stock markets were closed today for Good Friday, and the Securities Industry and Financial Markets Association recommended bond trading close at 11 a.m. New York time.

The dollar also strengthened against the yen on speculation signs of U.S. economic strength will encourage investors to buy higher-yielding assets financed by borrowing in Japan, a practice known as the carry trade.

``The dollar is going strong, and we'll see people taking on more risk,'' said Brian Taylor, chief currency trader in Buffalo, New York, at Manufacturers & Traders Trust. ``They'll be putting on more carry trades as we speak. It's going to be hard to stop the yen's decline.

info:http://www.bloomberg.com/apps/news?pid=20601083&sid=a481hJhbsTPU&refer=currency

[Ichiro]

6apr-Asian Stocks Drop; U.S. Index Futures Rise on Employment Report (U.S. stock-index futures rose after employment growth was higher than economists forecast)


By Chris Nagi

April 6 (Bloomberg) -- Japanese retailers paced declines in Asian shares, while U.S. stock-index futures rose after employment growth was higher than economists forecast. Markets in Russia and Pakistan advanced.

Japan's Topix index dropped 0.2 percent after the Nikkei newspaper said earnings at Seven & I Holdings Co., Japan's largest retailer by sales, may miss the company's forecast.

``The report on Seven & I prompted some disappointment among investors,'' said Haruo Otsuka, who oversees $870 million at Toyota Asset Management Co. in Tokyo. ``Retailers are not doing all that badly but not well enough to attract money from other industry groups.''


U.S. Futures

Standard & Poor's 500 Index futures expiring in June gained 5.3 to 1458 as of 9:15 a.m. in New York, when Globex trading ended. Nasdaq-100 Index futures climbed 10.5 to 1838.75. U.S. stock exchanges were closed.

U.S. stocks yesterday completed a weeklong rally to post their best start to a second quarter since 2004, helped by Kirk Kerkorian's $4.5 billion offer for Chrysler Corp. For the week, the Dow Jones Industrial Average added 1.7 percent, the S&P 500 rose 1.6 percent and the Nasdaq Composite Index increased 2.1 percent.

info:http://www.bloomberg.com/apps/news?pid=20601084&sid=a4M1aDbSyucs&refer=stocks

[Ichiro]

6apr-U.S. Pockets Aren't Deep Enough to Win Yuan Row: William Pesek

By William Pesek

April 4 (Bloomberg) -- Almost two years after a modest currency revaluation, China is still thumbing its nose at U.S. demands for big gains in the yuan.

Last week, officials in Beijing seemed to yawn as Charles Schumer, a U.S. senator pushing for tariffs on Chinese imports, predicted that a new measure aimed at forcing China to boost the yuan will pass Congress by next year.

The U.S. also imposed tariffs on imports of Chinese coated paper. China's response was summed up by central bank researcher Tang Xu who said a stronger currency alone won't solve U.S. trade disputes. Traders were equally unmoved by the U.S. action.

In Japan, meanwhile, neither the government nor investors seemed concerned about a U.S. senator's proposal to require Asia's biggest economy to stop holding down the yen. ``It's time for our government to hold Japan accountable for what amounts to illegal trade subsidies,'' Michigan Democratic Senator Debbie Stabenow said last week.

What gives? You would expect the U.S. to have more sway in markets. It does, after all, print the reserve currency. And while China is growing 10 percent, India isn't far behind and Japan is recovering, the $13 trillion U.S. economy is still proving hard to replace.

One explanation for the U.S.'s waning clout in foreign- exchange markets is something that gets little attention: the country's lack of currency reserves.

Short on Reserves

Certain benefits come from printing the most-used currency, having great sway over the International Monetary Fund and being the pre-eminent economic power. It means you can get away with more. In the U.S.'s case, it's massive current-account and budget deficits, negligible household savings and a pricy military quagmire in the Middle East.

Even so, the U.S.'s $41 billion of currency reserves seem puny compared with China's $1.07 trillion, Japan's $884 billion and even Malaysia's $82 billion. At the moment, the U.S. has fewer reserves than Nigeria's $42 billion, Indonesia's $46 billion and Poland's $49 billion.

All this makes the U.S. look (a) highly confident about its financial condition, (b) complacent amid a growing number of global imbalances, or (c) arrogant. There's little doubt that, if asked, U.S. President George W. Bush and his Treasury secretary, Henry Paulson, would say (a) is the right answer.

Bretton Woods II

There's some merit to the view, considering the so-called Bretton Woods II world in which we live. The breakdown of the post-World War II system centered on the gold standard led to a kind of dollar standard. Many nations adopted the dollar as a new anchor, either formally or informally pegging currencies to it. When you're the U.S., who needs reserves?

Yet in a world littered with risks -- from slowing U.S. growth to global imbalances to terrorism to bird flu to the yen- carry trade to overheating in the Chinese economy -- one wonders how wise it is for the U.S. to have so few reserves.

That's especially true when you consider that the U.S. has arguably lost control of the dollar. With its economy facing big challenges, the U.S. probably wants a weaker currency for the same reasons everyone else does. How much control does the U.S. have, though, when overseas investors -- Asian governments among them -- own its bond market?

Perhaps that's why the U.S. tries to influence other currencies; it realizes it has lost control of its currency and interest rates to foreigners. Given that arrangement, the U.S. may want to be careful slapping around China and Japan, its two biggest debt customers.

info:
http://www.bloomberg.com/apps/news?pid=20601039&sid=aJtWumpYQCbk&refer=columnist_pesek

[Ichiro]

6 apr- JAPAN'S ECONOMY EXPERIENCES DEFLATION AGAIN IN FEBRUARY
by Monty Guild
Guild Investment Management, Inc.
April 2, 2007


Believe it or not, this is positive news, as it will probably keep interest rates from rising in Japan too soon. Many in Japan are criticizing the monetary authorities for raising interest rates twice in recent months.

This probably delays any more interest rate rises in Japan for quite a while. Japan has been trying to reignite a small amount of inflation in their nation for several years. They were finally successful, but now have slipped into deflation again. Monetary authorities rarely tolerate price deflation, believing that a small inflation keeps the national psychology stronger, as people see wages and prices rise slowly.

This is positive for global stock market and bond market demand. With Japanese interest rates remaining low, the yen carry trade will continue to provide global investment liquidity.

U.S. IMPOSES DUTIES ON CHINESE PAPER INDUSTRY

It is generally believed that President Bush needs to work towards compromise with Democrats, and to steal some of the Democratic political thunder in the upcoming election campaign. The Republicans are trying to pre-empt Democratic members’ calls for tough treatment for countries with large trade surpluses with the U.S.

This is a politically expedient thing to do, because U.S. voters are notoriously ignorant of economic wisdom. There is no doubt, that this is also an enormously risky course of action. If Congress and the president begin to sanction U.S. trading partners for real and imagined unfair practices, these trading partners will eventually retaliate. This could set off a “beggar thy neighbor” trade war, which would be devastating to the standard of living of everyone on earth.

Most economists believe that the Great Depression of the 1930’s was an economic recession, which became exacerbated by the the high tariffs of the Smoot-Hawley Tariff Bill passed by the U.S. in 1930. The high U.S. tariffs were equaled, and expanded by foreign trading partners. As a result trade slowed substantially, and the world slipped into a major depression. This depression created widespread suffering and poverty in much of the developed world.

Let us hope that U.S. politicians are wise enough to avoid the same disaster for the world. May I remind you that this happened during the supposedly pro-business Herbert Hoover administration, and by Republican Senator Smoot and Congressman Hawley. They thought they were helping business by decreasing competition; instead they were creating a downward spiral for business among the U.S. and its trading partners. Free trade has been proven time and again to be the greatest spur for economic growth. However, it remains difficult for the average politician, and for many citizens, to comprehend this economic truism.

BAD FOR THE DOLLAR AND PROBABLY GOOD FOR GOLD

U.S. protectionism could also set off a very unpleasant chain of events, sending the U.S. dollar much lower, and gold much higher.

info:http://www.financialsense.com/editorials/guild/2007/0402.html

[Ichiro]

6apr-KEY CHARTS & MAJOR CLUES
by Jim Willie CB
April 5, 2007

Home: Golden Jackass website
Subscribe: Hat Trick Letter

Jim Willie CB is the editor of the “HAT TRICK LETTER”

Use the above link to subscribe to the paid research reports, which include coverage of several smallcap companies positioned to rise like a cantilever during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by heretical central bankers and charlatan economic advisors, whose interference has irreversibly altered and damaged the world financial system. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy. A tad of relevant geopolitics is covered as well. Articles in this series are promotional, an unabashed gesture to induce readers to subscribe.

Some extremely important charts follow, each with an equally important message. The story can be told from a series of painted pictures. The USEconomy is in deep trouble. The US Federal Reserve is caught in a box. Bankers are one step from being snared in a quagmire, with vivid memories of the insolvent bank system endured by Japan for over a full decade. The US bank problems seem worse by comparison, when factoring in mortgages, huge spread trades sure to go bad, a mountain of credit derivatives growing at 80% annually in size, and a raft of collateralized debt obligations sitting like an ominous cloud. The Bank of Japan simply cannot continue with rate hikes, given the vulnerable shaky state of all matters financial on a global basis. Gold and silver are moving to center stage, undeterred by the recent shock waves. The main shock is to the Powers That Be (King Henry & His Court of Market Manipulators), who are losing grip at the helm. A wider war, surely beneficial for many private interests, would kill the future economic prospects.

This holiday piece is intended to read like a magazine, with brief messages like captions under key charts. The sequence tells a story highly bullish for gold & energy, as well as its investments. The April full reports for the Hat Trick Letter tell the story in much more detail, delivered at the time of the US income tax deadline in mid-month. You know? That voluntary tax donation system which people are intimidated into thinking is part of law and existing statutes. Increasingly, taxpayer money supports private enterprise on a visible basis on Wall Street and a clandestine basis with defense contracts linked to the war on terrorism.

HOUSING SECTOR SPIRALS DOWN

Housing is a disaster and debacle already, soon to become a major meltdown crisis. On the tangible side is the lost opportunity to raid home equity, the lost sense of wealth, the primary piggy bank suffering erosion. On the banking side is the mortgage calamity, which is the inevitable final chapter of Greenspan’s self-directed bailout from the stock bust bearing his signature also. The downward spiral for housing and mortgages must be addressed. So far the sleepy crew await further information from the patient, prone and firmly bedded in the cancer ward. The next move is for rate cuts, whether they want them or not. A major USDollar devaluation lies directly ahead. If not, national bankruptcy is assured.

BANKERS IN CEMENT SHOES

The banker stock index shows a major message of reversing prospects. This is an ugly chart, with a February shock, a flirt with an uptrend breakdown, and an odd bouncing ball decline in the stochastix cyclical measure. The combination of huge bank losses from mortgages, together with absent profit margins from the borrow & lend yield spreads, make for poison. The bankers will next demand a rate cut in order to attempt a housing rescue and avert a mortgage meltdown. The rate cut will accomplish neither. However, lower official USFed rates would assist the adjustable mortgage holders, whose ARM rate is tied to the official rate. Most important, remember that bankers dictate to the USFed, or else the USFed caters to the bank sector.



info:
http://www.financialsense.com/fsu/editorials/willie/2007/0405.html

[Ichiro]

6apr-SHOW ME THE MONEY
by Dominick
a.k.a."spwaver"
TradingTheCharts.com
April 2, 2007
Surprise, surprise, another volatile week. The bears got their big selloff, but it was in corn, not in the S&P’s! Corn opened down lock limit as the S&P’s created great trading opportunities for the “unbiased” trader.

As we ended 2006, I promised 2007 would be the year of volatility, and hasn’t that been the truth?! It feels like only yesterday we were grinding up each day point by point. Friday’s closing bell wrapped up March, as well as the first quarter, but investors who were pegged to the S&P are in for a surprise when they receive their quarterly statements. The S&P closed 2 points from its 2006 close.

I’m sure many traders did better, but I’m also sure many are in the red this year. After all the juicy swings we’ve seen so far, that can only happen by being with the “in crowd” and following the wrong sentiment all over town. In January and February, bulls stayed too long and bears shorted too early. As we fell from the diagonal, Bulls bought back too early and bears stayed too late. Meanwhile, unbiased traders are making money on both ends.

But not only did the bears stay short too long when the market turned back up recently, they’ve been buying puts everyday as the S&P’s retrace a full 75% off the lows. Traders have been playing this broken record for the last 4 years! Isn’t this setup played out by now? Sure, this could be the real one, but why give back 75% when we have no confirmation yet?

Since March 14th, where we saw our SPX 1360 area validated, it’s been a challenge to educate our rapidly growing number of new members. Old members who’ve successfully made the transition from bear to trader are just fine. Many new members still seem to want to follow the crowd and are having a tough time because the streets are filled with “crash” counts. I can’t really blame them as it’s a hard sentiment to escape from. That said, they are also starting to recognize that going long from 1360’s to 1440 also makes your portfolio grow rapidly. Don’t get me wrong, I’ll be on the bearish side as soon as I see the market grow some fur, but not before that.

A good case in point for the bear camp was the drop in February. Readers all knew that I had an S&P target 1462/1470 and was ready to short it, but not before confirmation. After getting short close to the top, I sensed that a low was being built in March, rather than a trapdoor for continuation of the drop. This week, we might have the same situation, but on a smaller degree. Has the market topped out in a second wave retracement on March 23rd, or are we about to set a huge bear trap to finally get that run to new highs that sets up the classic capitulation?

As we’ve basically nailed these last two swings, we think we have the correct possible patterns and are waiting for a bit more price action to confirm. It might only take another day or two. I believe we will have a decent move within the next 20 points that we are ready to trade.

Let’s talk a bit about last week. I had stated the following on last week’s update:

“Next week we have some work to do in the short term patterns. We should’ve already seen a pullback, but the market still has a bid from trapped shorts. My short term trend charts have already weakened”

The market wasted no time in dropping a big 13 points in the first hour of the week. Expecting that drop, as a 4th wave pattern, we were able to go long the bottom as it screamed to the upside, escaping another bear trap. From that high, the shorts were able to trap bulls into thinking that a triangle 4th wave was forming and used Bernanke’s speech to execute. I also had that same triangle and unfortunately missed the selloff into the speech but as “traders”, we then got back aboard that low which almost made it back up to another high.

And boy did we trade this week! 10-15 point swings are now almost a sure thing. With the aid of my Proprietary Fibonacci methods, we were able to zone into targets that were 1 tick away of highs and lows of a fast-moving market. One example was a low target of 1423 on Thursday (actual low was 1423.25) and resistance at 1440 on Friday (actual high was 1439.75). Friday morning’s pre-market post had warned that 1440 was a key area and that stopping there could be a problem. The S&P futures seemed to know that. After a gap up, they reversed to sell off into a low of 1418. Those 2 swings alone totaled 38 points, and prove how much there is to take from a market that closed flat for the day, and the year!

info:
http://www.financialsense.com/fsu/editorials/dominick/2007/0402.html

[Ichiro]

9apr-Dollar Trades Near Six-Week High Against Yen Before Price Data

By Stanley White and Ron Harui

April 9 (Bloomberg) -- The dollar traded near a six-week high against the yen on speculation reports this week will show gains in producer and import prices, suggesting U.S. interest rates are less likely to fall in coming months.

The U.S. currency last week rebounded from a two-year low against the euro as a report showed employers added more workers than forecast in March. Federal Reserve Chairman Ben S. Bernanke has said inflation is a greater concern than slowing growth. Yields on Treasuries last week rose to the highest in eight weeks, boosting the appeal of holding the dollar.

``Traders will try to test the dollar's upside,'' said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. ``The Fed is willing to leave rates unchanged for now but is flexible enough to raise rates should the threat of inflation increase.''

The dollar traded at 119.26 yen at 10:30 a.m. in London from 119.25 late in New York on April 6. Against the euro, it was at $1.3370 from $1.3379. It may rise to 120.10 yen and $1.3310 per euro this week, Soma said.

Trading was subdued as markets in New Zealand, Australia, Hong Kong, France, Germany and the U.K. are closed for a holiday, said Hiroyasu Hirayama, head of foreign-exchange sales in Tokyo at the Royal Bank of Scotland Group Plc.

The U.S. currency may snap a two-week slide versus the euro as analysts expect import prices rose 2.3 percent on year in March and producer prices gained 3 percent, according to Bloomberg News surveys.

Yield Disadvantage

Japan's yen traded near a record low against the euro on speculation Bank of Japan Governor Toshihiko Fukui will signal interest rates will stay low after a two-day board meeting starting today. It was last at 159.56 versus the euro from 159.53 on April 6, when it fell to an all-time low of 159.69.

Volatility on one-month yen options against the euro, a gauge of expected exchange-rate swings, dropped to a three-week low of 7.35 percent today from 8.40 percent a week ago. Lower volatility may encourage investors to borrow yen to buy higher- yielding securities because it exposes bets to less currency risk.

info:http://www.bloomberg.com/apps/news?pid=20601083&sid=adE6JASgFkXE&refer=currency

[Ichiro]

9apr-Euro May Rally to Record, Traders and Analysts Clash (Update1)

By Agnes Lovasz and Bo Nielsen

April 9 (Bloomberg) -- The euro's rise has taken analysts by surprise and traders expect more gains as the region's economy grows and interest rates climb.

Investors in futures have $15.9 billion more in bets on the euro strengthening than on a decline, data from the Washington- based Commodity Futures Trading Commission show. Options traders are paying more for the right to buy euros than to sell the currency.

Traders sending the euro toward record highs are clashing with economists, who predicted in December that the currency would trade at $1.328 by the end of the first quarter and fall 1 percent to $1.305 this year, according to a Bloomberg News survey. They stuck to their calls in March, saying the euro would weaken to $1.31 by 2008.

``The euro's the safest bet,'' said Peter Lucas, who's been buying euro forwards as chief investment officer at Ashburton Ltd., which manages $1.7 billion in Jersey, in the Channel Islands. ``We let the market do the talking.''

Europe's single currency traded at $1.3362 at 10:50 a.m. in Tokyo from $1.3379 in New York on April 6. It rose to a two-year high of $1.3442 and a record 159.69 yen last week.

The euro is up 1.8 percent against the dollar and 3.6 percent versus the yen since European Central Bank President Jean-Claude Trichet followed a March 8 interest-rate increase by saying borrowing costs were still low enough to fuel expansion. The 13-nation European currency rose 0.2 percent to the dollar last week, following a 1.9 percent gain the past month. It reached a record $1.3666 on Dec. 30, 2004.

Group of Seven

The currency's strength likely will be addressed at the Group of Seven industrialized nations meeting starting April 13 in Washington, D.C., said Jim O'Neill, head of global economic research in London at Goldman Sachs Group Inc.

info:http://www.bloomberg.com/apps/news?pid=20601083&sid=a2KpyKbejF.w&refer=currency

[Ichiro]

9apr-Asian Stocks Rise After U.S. Unemployment Drops; Toyota Gains

By Patrick Rial and George Hsu

April 9 (Bloomberg) -- Asian stocks rose to a six-week high, led by Toyota Motor Corp., after a drop in the U.S. unemployment rate eased concern the region's exports will slow.

``The U.S. is the world's biggest market, so the healthier its economy, the better the business prospects for Asian exporters,'' said Liu Juming, who helps manage $1.7 billion at Ta Chong Investment Trust Corp. in Taipei.

Wuliangye Yibin Co., China's biggest spirits maker, paced Chinese stocks to a sixth straight record after the Xinhua News Agency said retail sales will grow. Doosan Heavy Industries & Construction Co. led gains in South Korean developers on a government report that showed their overseas contracts surged.

The Morgan Stanley Capital International Asia-Pacific Index added 0.6 percent to 147.07 at 7:31 p.m. in Tokyo, the highest since Feb. 27. Japan's Nikkei 225 Stock Average advanced 1.5 percent. All markets gained, except in Thailand. Benchmarks in South Korea, Singapore and China climbed to records.

Taiwan's Bank of Overseas Chinese rose after Citigroup Inc. agreed to buy the lender. Pentax Corp. gained on Hoya Corp.'s plans to increase a takeover offer. Samsung Electronics Co., due to report first-quarter earnings on April 13, fell after Kyobo Securities Co. cut its profit estimate for the chipmaker.

India's Sensitive Index surged 2.5 percent, the biggest gain in the region. Hong Kong, Australia, New Zealand and the Philippines were closed for holidays.

Unexpected Drop

Toyota, the world's largest automaker by value, rose 1.9 percent to 7,540 yen. Sony Corp., the maker of the PlayStation 3 game console, jumped 3.9 percent to 6,440 yen. Toyota generated more than a third of its fiscal 2006 revenue in North America while Sony made 70 percent of its sales overseas last year.
http://www.bloomberg.com/apps/news?pid=20601080&sid=augXpVkhl46Y&refer=asia

[Ichiro]

9apr-China's Trade Surplus Probably Doubled in March to $20 Billion

By Nipa Piboontanasawat

April 9 (Bloomberg) -- China's trade surplus probably almost doubled in March, adding to friction that may prompt the U.S. to file a World Trade Organization complaint as early as this week.

The gap swelled to $20 billion from $11.2 billion a year earlier, according to the median estimate of 18 economists surveyed by Bloomberg News. The figures may be released as early as today.

U.S. lawmakers charge that China keeps its currency undervalued, protects piracy and subsidizes products sold overseas. The Commerce Department last month levied duties on coated paper imports from China and the government may file a WTO complaint over what it calls piracy of copyrighted movies and books, according to four people briefed by the Bush administration.

This ``raises the specter of a future escalation of protectionist sentiment and action,'' said Paul Sheard, global chief economist at Lehman Brothers Holdings Inc. in New York.

U.S. officials have prepared two separate trade cases against China, the people said. One case says that the Asian nation sets too high a value on pirated movie or music disks before prosecuting violators, and another objects to China's restrictions on the sale of foreign books and movies, they said. The people, three industry officials and one lawyer, spoke last week on the condition they not be named.

Imports, Exports

China's commerce ministry called the coated-paper tariffs ``unacceptable'' and said it reserved the right to take ``necessary'' action. The U.S. trade deficit with China jumped to a record $232.5 billion last year.

China's exports probably gained 27.4 percent in March from a year earlier and imports likely climbed 20 percent, the Bloomberg News survey showed.

``It isn't easy for the U.S. to back down during an election year especially when the trade deficit with China continues to soar,'' said Chris Leung, senior economist at DBS Bank Ltd. in Hong Kong.

http://www.bloomberg.com/apps/news?pid=20601089&sid=at3K5JQ50aOY&refer=china

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9apr- AP-Wall Street Looks to Open Higher
Monday April 9, 7:10 am ET
By Joe Bel Bruno, AP Business Writer
Wall Street Looks to Open Higher As Investors Positive About Jobs Report

NEW YORK (AP) -- U.S. stock futures rose Monday, pointing to a higher opening on Wall Street, as investors reacted to last week's robust jobs data and a report that Dow Chemical Co. is the target of a $50 billion buyout offer.


The Labor Department reported Friday, a stock market holiday, that nonfarm payrolls rose by 180,000 in March, above forecasts of 135,000. The unemployment rate fell to 4.4 percent, a five-month low.

Should the economy be stronger than some analysts estimated, it could dissuade the Federal Reserve from lowering interest rates in the near term. The report caused the bond market to fall sharply during a shortened trading day on Friday.

Meanwhile, it was reported by British tabloid The Sunday Express that a consortium of Middle Eastern investors and American buyout will launch a bid to acquire Dow Chemical. Kohlberg Kravis Roberts & Co., one of the biggest U.S. private equity firms, is said to be among the bidders.

http://biz.yahoo.com/ap/070409/wall_street.html?.v=3

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11apr-Asia's Major Markets Rise
Wednesday April 11, 6:50 am ET
Asia's Major Markets Rise, With Chinese and Korean Stocks Climbing to New Records

HONG KONG (AP) -- Most major Asian stock markets advanced Wednesday, with retail investors pushing Chinese stocks to their eighth consecutive record close and South Korean shares hitting a new high on expectations for better earnings.

Japan's bourse -- the region's biggest -- rose, bolstered by select electronics and pharmaceutical issues. The benchmark Nikkei 225 index gained 5.38 points, or 0.03 percent, to finish at 17,670.07 points on the Tokyo Stock Exchange.

Canon Inc. advanced 1.07 percent, while Eisai Co. added 0.51 percent. Real estate stocks also did well, with Mitsubishi Estate Co. gaining 0.28 percent.

But the day's best trading was in Seoul and Shanghai. South Korean shares climbed to their fourth record high in the past six sessions as the Korea Composite Stock Price Index rose 14.26 points, or 1 percent, to 1,513.42.

The index was boosted by LG.Philips LCD Co., which surged 8.2 percent on expectations for better earnings in the second quarter. LG.Philips, the world's second-largest manufacturer of liquid crystal displays, posted a smaller-than-expected first quarter net loss Tuesday.

In China, a recent rally inspired retail investors to snap up shares, pushing up the benchmark Shanghai Composite Index 1.5 percent to 3,495.22 -- the eighth straight record high.

Turnover was a record 157.82 billion yuan (US$20.4 billion, euro15.19 billion). Ample liquidity has helped Shanghai's index rise 20 percent since mid-March.

The Shenzhen Composite Index also hit an eighth straight record in as many sessions, climbing 1.1 percent to 928.28.
http://biz.yahoo.com/ap/070411/asian_markets.html?.v=1

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11 apr- AP-Dollar Rises in Asia
Wednesday April 11, 2:34 am ET
Dollar Rises in Asia on Weak Japanese Economic Data

TOKYO (AP) -- The dollar rose in Asia Wednesday as the yen got sold following surprisingly weak data on Japanese machinery orders.

The dollar was trading at 119.22 yen midafternoon, up slightly from 119.12 yen late Tuesday in New York. The euro rose to US$1.3428 from US$1.3424.


Japanese bank players sold the yen broadly after the release of data showing machinery orders dropped 5.2 percent in February from January, much weaker than economists' forecast for a 0.2 percent fall.

Investors were awaiting the release later in the day of minutes of the most recent U.S. Federal Open Market Committee meeting for clues on currency trading. The dollar could weaken if the Fed signals that it may start cutting interest rates.

http://biz.yahoo.com/ap/070411/asia_dollar.html?.v=1

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11apr-AP-Euro Largely Holds on to Gains Vs Dollar
Wednesday April 11, 5:22 am ET
Euro Largely Holds on to Gains Against U.S. Dollar

BERLIN (AP) -- The euro on Wednesday held on to most of the gains it made the previous day against the U.S. dollar as markets awaited minutes from the Federal Reserve's latest meeting on interest rates.


The 13-nation euro bought US$1.3421 in morning European trading, compared with US$1.3424 in New York late Tuesday. The British pound rose to US$1.9785 from US$1.9716, while the dollar edged up to 119.19 Japanese yen from 119.12 yen.

The euro rose above US$1.34 on Tuesday amid worries over trade troubles between the U.S. and China -- which expressed "strong dissatisfaction" over a U.S. move to file two new complaints against it at the World Trade Organization -- and persistent concern over the strength of the U.S. economy.

U.S. economic data are being watched closely for hints on the Fed's future interest rates course. The bank has left rates unchanged over recent months even as the European Central Bank has increased its rates.

http://biz.yahoo.com/ap/070411/euro_dollar.html?.v=1

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11apr- AP-U.S. Stocks Seen Opening Higher
Wednesday April 11, 6:52 am ET
By Joe Bel Bruno, AP Business Writer
U.S. Stock Headed for Slightly Higher Opening As Investors Weigh Earnings, Fed

NEW YORK (AP) -- U.S. stocks headed toward a slightly higher opening Wednesday as investors waited for details about a major restructuring at Citigroup Inc. and minutes of the Federal Reserve's last meeting.

Citigroup, the nation's largest financial institution, is expected to announce thousands of job cuts in a bid to lower the company's expenses. There have been reports that some 15,000 jobs might be on the line, which represents about 5 percent of the company's payroll.

Charles Prince, Citi's CEO, has been under pressure to lift profits and the company's share price. The stock closed Tuesday at $52.40, and has traded within a 52-week range of $46.22 and $57.

In economic news, the Fed will release the minutes from its last meeting where central bankers left interest rates unchanged. The minutes might give Wall Street a better idea about a possible rate cut sometime this year.

Also, Fed Chairman Ben Bernanke is scheduled to speak Wednesday afternoon on discipline and regulation. He is also expected to touch on the mortgage industry, which is battling weakness in the subprime loan market.

http://biz.yahoo.com/ap/070411/wall_street.html?.v=3

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15apr- AP-IMF Calls for Better Currency Monitoring
Saturday April 14, 7:10 pm ET

By Harry Dunphy, Associated Press Writer

IMF Should Strengthen Monitoring of Currency Exchange Rates, Officials Say

WASHINGTON (AP) -- Finance officials expressed satisfaction Saturday with the robust expansion of the global economy but said more must be done to correct trade imbalances.

Meeting at the International Monetary Fund, finance ministers and central bankers said in a policy statement growth is expected to remain strong this year and in 2008, underpinned by solid economic foundations.


In their communique, the ministers said continued vigilance of the world economy was required in case there was a sharper than expected downturn in the U.S. economy, the world's largest, and a revival of inflationary pressures if oil prices rebound.

In a separate statement, four governments -- including the United States and China -- renewed promises to enact policies aimed at rebalancing global trade.

They said an orderly reduction in the U.S. trade deficit and trade surpluses in Asia would benefit the world by defusing protectionist trade action.

For the past year representatives of the United States, China, the euro currency zone, Japan and Saudi Arabia have been meeting regularly to discuss trade imbalances in a formal consultation organized by the IMF.

"It was agreed that a rebalancing of domestic demand growth across economies would be key to reducing imbalances while sustaining the robust global expansion," said the statement, issued on behalf of the group by the IMF.

China pledged to take steps to increase domestic demand, deepen financial reforms and increase the flexibility of its currency, a step long demanded by the United States and other industrialized nations.

Critics of the Bush administration policies contend the White House must take a tougher approach against unfair practices such as China's currency system, which keeps the yuan artificially low against the dollar, giving Chinese companies price advantages over U.S. producers.

The statement said China's exchange rate mechanism "will be improved in a gradual and controllable manner. "Exchange rate flexibility will gradually increase with attention paid to the value of a basket of currencies."

The U.S. trade deficit with China declined by 13.3 percent to $18.4 billion in February, the smallest gap since last May. Still, it is 25 percent above the pace set at the beginning of 2006, when the imbalance for the entire year was $232.5 billion. That was the largest deficit the U.S. has ever recorded with a single country.
http://biz.yahoo.com/ap/070414/finance_meeting.html?.v=23

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15apr- AP-Dollar Trades Near Record Low V. Euro

Friday April 13, 6:50 pm ET

By Jackie Farwell, AP Business Writer

Dollar Holds Near 2-Year Low Against Euro, but Rises Against Yen

NEW YORK (AP) -- The dollar traded near a record low against the euro on Friday, as concern persisted that the European Central Bank will raise interest rates later in the year.

But the dollar rose against the yen, as worries dissipated that the Group of Seven would press Japan to hike its own rates to buoy its currency.

The G-7's position on yen carry-trading, which involves borrowing money at Japan's low interest rates to invest in higher-yielding assets elsewhere, likely won't rise to the level of inclusion in the G-7's communique, said Michael Woolfolk, senior currency strategist at the Bank of New York.

"This may be something of a tempest in a teacup," he said.

Higher interest rates, used to combat inflation, can bolster a currency by making certain types of investments relatively more attractive.

The dollar strengthened to 119.12 yen from 119.06 yen.

Meanwhile, the euro bought $1.3539 in afternoon trading after climbing as high as $1.3547 earlier in the session -- its highest level since January 2005. That compared with the $1.3480 it bought in New York late Thursday, and was about one cent short of its all-time high from December 2004 of $1.3667.

http://biz.yahoo.com/ap/070413/dollar.html?.v=14

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15apr- Reuters-Major economies promise to reduce imbalances
Saturday April 14, 7:49 pm ET
By Lesley Wroughton and Emily Kaiser

WASHINGTON (Reuters) - China on Saturday pledged to gradually increase the flexibility of its currency as part of broader policy measures agreed by five major economic players to address global economic imbalances.

A list of the measures was released after meetings of the International Monetary Fund's policy-setting committee by the five -- the United States, Japan, Saudi Arabia, China and euro-area nations -- following year-long talks led by the IMF.

But the policies simply represent an inventory of existing plans to reduce a gaping trade shortfall in the United States, introduce growth-enhancing reforms in the euro area and Japan, improve investment in oil-producing countries like Saudi Arabia, and cut China's heavy reliance on exports.

An IMF official noted the plans were more detailed than the Agenda for Growth, an initiative by the Group of Seven rich countries to address issues in their own countries that were generating imbalances.

"The implementation by each participant of these policies would in combination constitute a significant further step toward sustaining solid economic growth and resolving imbalances," the five parties said in a joint statement.

http://biz.yahoo.com/rb/070414/imf_communique.html?.v=1

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16apr-Nikkei up 1.7 pct, exporters rise on yen, Wall St
Sun Apr 15, 2007 10:53pm ET140

By Aiko Hayashi

TOKYO, April 16 (Reuters) - The Nikkei average rose 1.67 percent on Monday with exporters such as Canon Inc. (7751.T: Quote, NEWS , Research) climbing as the yen weakened after the Group of Seven meeting and similar stocks gained in the United States, one of the biggest markets for Japanese goods.

But advances may be limited as investors await a string of corporate earnings results and economic indicators due this week in the U.S., said Yutaka Miura, deputy manager of the equity information department at Shinko Securities.

"For now, investors are buying stocks to recover losses from last week, encouraged by gains in the U.S. market and the currency," he said.

The yen fell to a record low against the euro on Monday as the G7 meeting of finance ministers and central bankers did not single out the Japanese currency's weakness.

The euro edged up 0.1 percent to 161.50 yen but eased from a record high of 162.43 yen <EURJPY=>, the highest since the single currency was first launched in 1999.

A weaker yen is a boon to companies that make the bulk of their sales abroad because it boosts profits when earnings from abroad are brought home. Continued...

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070416:MTFH11868_2007-04-16_02-53-39_T286150&type=comktNews&rpc=44

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16apr-FOREX-Yen recovers from new lows vs euro after G7
Sun Apr 15, 2007 9:45pm ET148

By Chikako Mogi

TOKYO, April 16 (Reuters) - The yen hit a record low against the euro on Monday as Group of Seven finance officials did not single out the Japanese currency's weakness at a weekend meeting, before trimming losses on profit taking.

The G7 communique on Saturday repeated a call for exchange rates to reflect economic fundamentals, and cited China again by name in calling for greater currency flexibility, using the exact same wording after a meeting in Germany in February.

Traders said the lack of surprises from the G7 Washington meeting appeared to give a green light to carry trades, where investors borrow funds in low-yielding currencies such as the yen to invest in higher-yielding currencies and assets.

European officials seemed to have softened their complaints about the weak yen after this meeting compared with the last gathering in February, when some warned about markets building up one-sided bets in carry trades, analysts said.

"The market's reaction to sell the yen is natural as players saw the G7 as allowing the euro to strengthen further against the yen and the dollar due to the strong euro zone economy," said Nobuo Ibaraki, a deputy general manager at Nomura Trust and Banking.

Although risks are building for one-sided bets, the yen remains pressured against other currencies for now due to expectations that the carry trade will continue, he said.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070416:MTFH11239_2007-04-16_01-45-03_T339151&type=comktNews&rpc=44

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17apr- Reuters-Futures rise after tame core CPI data
Tuesday April 17, 8:49 am ET

NEW YORK (Reuters) - U.S. stock futures rose on Tuesday after data showed March core consumer prices rose less than expected, easing concerns about the outlook for interest rates.

S&P 500 futures (SPc1) were up 3.50 points, about even with fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures (DJc1) were 23 points higher and Nasdaq 100 (NDc1) futures rose 3.50 points.

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17apr-U.S. March Core Prices Rise Less Than Forecast (Update2)

By Joe Richter

April 17 (Bloomberg) -- A measure of prices paid by U.S. consumers rose less than forecast last month, supporting the Federal Reserve's call that inflation will subside as the economy slows.

The 0.1 percent increase in core consumer prices, which exclude food and energy costs, was the smallest this year and follows a 0.2 percent February gain, the Labor Department said today in Washington. Prices overall rose 0.6 percent in March, led by a jump in fuel costs.

Less inflation may give Fed Chairman Ben S. Bernanke and his colleagues more latitude to lower interest rates to reinvigorate the economy in coming months, economists said. Cheaper clothing and hotel stays and a smaller gain in medical care costs restrained price gains last month, suggesting a slowing economy is starting to help alleviate price pressures.

``This buys the Fed some time so they can sit tight for a little while longer,'' said Lindsey Piegza, a market analyst at FTN Financial in New York. ``We're going to have to get a few more months of declining core inflation before the Fed can start to cut interest rates.''

Housing starts unexpectedly rose for a second month in March, bolstering expectations the worst housing slump in 15 years may be easing, a report from the Commerce Department showed. Builders broke ground on new homes at an annual rate of 1.518 million last month, an increase of 0.8 percent from February. Building permits, a sign of future construction, also rose 0.8 percent.

Rates Fall

The yield on Treasury securities fell after the reports on speculation less inflation may give the Fed leeway to lower interest rates if necessary. The yield on the benchmark 10-year note fell to 4.70 percent at 8:47 a.m. in New York from 4.74 percent late yesterday. The dollar weakened.

Economists forecast consumer prices would rise 0.6 percent after a 0.4 percent February gain, according to the median of 73 projections in a Bloomberg News survey. Estimates ranged from increases of 0.4 percent to 1 percent. Core prices were projected to rise 0.2 percent, according to the survey median.

Core prices were up 2.5 percent in the 12 months ended in March, the smallest year-over-year gain since May. Overall prices were up 2.8 percent from the same time last year, compared with a 2.4 percent gain in February.

Broadest Measure

The CPI is the government's broadest gauge of costs because it includes goods and services. Other inflation reports this week showed wholesale prices jumped 1 percent in March, while prices of U.S. imports rose by the most in almost a year.

http://www.bloomberg.com/apps/news?pid=20601068&sid=aMyH1y12ptr4&refer=economy

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17apr-Asian Stocks Fall From Seven-Week High; BHP, China Life Drop

By Chen Shiyin and Chua Kong Ho

April 17 (Bloomberg) -- Asian stocks fell from a seven-week high, with benchmarks in Australia and South Korea retreating from records. BHP Billiton and China Life Insurance Co., drivers of the recent rally, led declines.

``Investors are stepping back and waiting for the next indicators, whether it's corporate earnings or economic numbers, before going back in,'' said Nicole Sze, a Singapore-based investment analyst at Bank Julius Baer & Co., which manages about $360 billion worldwide.

Sumitomo Mitsui Financial Group Inc., Tokyo Electric Power Co. and East Japan Railway Co. paced declines in Japan on concern earnings forecasts from companies reliant on domestic demand will disappoint.

Japan's Nikkei 225 Stock Average and the broader Topix index both lost 0.6 percent. Declines were limited after Goldman, Sachs & Co. raised its ratings on Tokyo Electron Ltd. and Nikon Corp., pushing shares of semiconductor-equipment makers higher.

The Morgan Stanley Capital International Asia-Pacific Index lost 0.1 percent to 147.69 as of 7:11 p.m. in Tokyo. The measure earlier gained as much as 0.6 percent to 148.63, just shy of the record close of 148.69 set Feb. 27. About two stocks fell for each that gained among the index's 1,067 constituents.

Key indexes in China and Singapore extended records, while Philippine stocks posted the biggest gains in the region after overseas workers sent more money home. Concern that currency appreciation will hurt exporters contributed to declines in India and South Korea.

BHP, China Life

The 14-day relative strength index for measures in Malaysia and South Korea yesterday climbed above 70, the level that indicates to some analysts that prices are set to fall. The reading for Australia's benchmark was at 67.

http://www.bloomberg.com/apps/news?pid=20601080&sid=ayzAjZxjVPiY&refer=asia

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17apr- AP-Dow, Nasdaq Point to Higher Opening
Tuesday April 17, 8:56 am ET
By Madlen Read, AP Business Writer
Dow, Nasdaq Point to Higher Opening on Surprising Climb in Home Construction

NEW YORK (AP) -- Stocks pointed to a higher opening Tuesday after a surprising climb in home construction encouraged investors to buy into the stock market.

The Commerce Department reported that housing starts for March rose 0.8 percent, a feeble rise compared to February's 7.6 percent advance, but much stronger than the drop that investors had been bracing for. The stock market has experienced several tumultuous weeks this year due to worries about the financial troubles of the subprime lending sector spilling into the already sluggish housing market.


Also giving investors some relief, the Labor Department reported that its consumer price index rose 0.6 percent in March. The core index, which strips out energy and food costs, climbed 0.1 percent. The figures were mostly in line with expectations, alleviating some anxiety about the Federal Reserve raising interest rates to curb rising costs.

Along with economic data, investors were watching for first-quarter results from various companies, notably technology heavyweights Intel Corp. and International Business Machines Corp.

Nearly half the component companies of the Dow Jones industrial average release earnings this week. Analysts expect the earnings reports to show corporate growth is slowing, but on Monday, many companies' financial results surpassed expectations, helping push the Dow Jones industrial average up more than 100 points.

http://biz.yahoo.com/ap/070417/wall_street.html?.v=9

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19apr-BOE Policy Makers Voted 7-2 to Keep Rate Unchanged (Update3)

By Jennifer Ryan

April 18 (Bloomberg) -- Bank of England policy makers voted 7- 2 to keep interest rates unchanged for a third month in April, with Timothy Besley and Andrew Sentance in favor of a quarter- point increase.

The majority of the Monetary Policy Committee said the rate should stay at 5.25 percent, with some members predicting inflation to slow to the 2 percent target in the next few months and others cautioning that investors had only a ``limited expectation'' of higher borrowing costs. Besley and Sentance said inflation risks were strong enough to warrant a rate increase.

Policy makers at the April meeting didn't see yesterday's data showing inflation in March at the fastest pace in a decade. The report forced Governor Mervyn King to assure Chancellor of the Exchequer Gordon Brown that the bank ``remains determined'' to contain consumer prices, and sent the pound above $2 for the first time since 1992.

``With two members voting for a hike, it suggests the bank is going to raise rates in May,'' said James Knightley, an economist at ING Financial Markets in London. ``There's also a risk of another hike further out.''

http://www.bloomberg.com/apps/news?pid=20601068&sid=a4au7zm9b10Q&refer=economy

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19apr-U.S. Bank Stocks Lift Dow Average to Record; JPMorgan Advances

By Michael Patterson

April 18 (Bloomberg) -- U.S. bank stocks sent the Dow Jones Industrial Average to a record and the Standard & Poor's 500 Index to its highest since September 2000 after JPMorgan Chase & Co. and Washington Mutual Inc. reported earnings that beat analysts' estimates.

JPMorgan was the best performer in the Dow industrials after the third-largest U.S. bank said profit was the most ever for a quarter. Washington Mutual, the biggest U.S. savings and loan, staged its steepest rally since May 2004 after posting a rise in profit at its card-services and retail-banking units.

About 68 percent of the S&P 500 companies that reported first-quarter results beat analysts' estimates, according to data compiled by Bloomberg. Financial shares, which account for a fifth of the S&P 500's value, erased their 2007 losses for the first time since the Feb. 27 global equity sell-off.

``The financial stocks have absolutely been better than the worst fears,'' said Doug Peta, market strategist at J&W Seligman & Co. in New York, which manages $20 billion. ``We've gotten to where earnings expectations are manageable.''

The Dow average added 64.03, or 0.5 percent, to 12,837.07 as of 3:28 p.m. in New York. The measure surpassed its record close of 12,786.64 for a second day and its intraday high of 12,795.93. The S&P 500 rose 5.04, or 0.3 percent, to 1476.52.

http://www.bloomberg.com/apps/news?pid=20601084&sid=aO2AD0Md67dk&refer=stocks

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19apr- Dollar Trades Within Cent of Record Low Versus Euro on Growth

By Min Zeng and Bo Nielsen

April 18 (Bloomberg) -- The dollar traded within a cent of its record low against the euro and near the weakest in more than a quarter century versus the pound on speculation slower U.S. inflation and growth has dimmed the allure of the currency.

Investors are betting the Federal Reserve may cut borrowing costs to spur growth as the European Central Bank and Bank of England raise rates further. The yen rallied as investors reduced holdings in higher-yielding assets funded by loans in Japan. The unwinding of what are known as carry trades helped the dollar erase its decline against the pound and cap its drop versus the euro, according to traders.

``We are trading on the soft dollar side,'' said Jens Nordvig, a senior currency strategist in New York at Goldman, Sachs & Co. ``The U.S. data is not looking very good. I think the market will swing toward the view of at least one rate cut from the Fed this year. It is possible for the euro to test $1.3666 this week.''

The U.S. currency fell 0.04 percent to $1.3573 per euro at 2:30 p.m. in New York, and earlier reached $1.3616, the weakest since Dec. 31, 2004. The currency set a record low of $1.3666 the previous day. The dollar also dropped 0.23 percent to 118.64 yen, falling from a seven-week high of 119.87 yen on April 16.

The unwinding of some of the carry trade pushed up the yen against all 16 of the most active currencies tracked by Bloomberg. The Japanese currency rose 0.16 percent to 161.07 per euro, rebounding from a record low of 162.43 set April 16. The Swiss franc, another funding currency for carry trades, also gained against the dollar, euro and the pound.

`Covering Short Yen'

Reuters, citing Bank of Japan sources, reported today the Bank of Japan is likely to say in an April 27 report that core consumer prices will rise at a faster pace.

http://www.bloomberg.com/apps/news?pid=20601083&sid=a3FKsg.wDPXo&refer=currency

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19apr-he Genius of Paying Politicians $1.6 Million: William Pesek

By William Pesek

April 13 (Bloomberg) -- Singapore is getting lots of flack for boosting the pay for new government ministers to S$2.5 million ($1.6 million).

That seems like a huge paycheck for anyone who isn't acting in front of a movie camera or who isn't an ``American Idol'' finalist. George W. Bush makes $400,000 a year, and some say he's the leader of the free world. Shouldn't the U.S. president make as much as Justin Timberlake, J.K. Rowling or Jackie Chan?

Well, perhaps not that much, though Singapore is acting to narrow its own gap. It's increasing the pay of Prime Minister Lee Hsien Loong and President S.R. Nathan by 25 percent. Lee will get S$3.1 million annually. Amid public criticism, Lee said he will accept only his 2006 salary level for the next five years and give the rest to charity.

Controversy aside, Asia might be better off if governments paid top officials more.

One reason: It's hard to get the best and brightest to enter politics when they can make infinitely more money in the private sector. Many of us Americans would be happy to pay more to a president who knows better than to invade other countries without provocation, hire incompetent people or dismiss global warming as a conspiracy.

Yet the most important reason relates to rooting out corruption.

Money in Politics

There's an old saying in Asia that the real money is in government. Not the paychecks, but the kickbacks. That reality was summed up by the latest corruption-perceptions index by Berlin-based Transparency International. Out of the 163 nations ranked in 2006, Indonesia came in 130th, level with Ethiopia, the Central African Republic and Burundi. The Philippines ranked 121st, along with Nepal, Honduras and Guyana.

http://www.bloomberg.com/apps/news?pid=20601039&sid=a.iLeP2t_V08&refer=columnist_pesek

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19apr-Wolfowitz, Like Global Imbalances, Won't Go Away: William Pesek

By William Pesek

April 18 (Bloomberg) -- Call them the ``Wolfowitz meetings.''

Last weekend's spring meetings of the International Monetary Fund and World Bank were supposed to offer a forum to address global imbalances. Instead, the fate of Paul Wolfowitz was all anyone could talk about.

Would the World Bank president resign? Would he be sacked? Might he survive a scandal over his role in promoting his girlfriend and giving her a huge pay raise?

Whether a man who acted in such a manner has credibility to root out corruption in developing nations is another question we're still grappling with in Asia. The reason: Wolfowitz, unfortunately, refuses to go away.

Sadly, the same is true of the imbalances World Bank- and IMF-meeting attendees should have been discussing. Thanks to the denial pervading the halls of power from Tokyo to Washington, the global system may be even riskier than it was a week ago. Its problems will merely fester below the surface a bit longer.

Japanese officials, for example, returned to Tokyo thinking they had gotten a green light to maintain a weak yen. U.S. officials returned to Washington lacking urgency to reduce their current-account and budget deficits. European policy makers headed home after making vague pledges for structural change.

Sunny View

Finance chiefs from the Group of Seven nations -- which met April 13 -- chose to accentuate the positive, expressing confidence that global growth will reduce lopsided trade and investment flows. Demand in Asia and Europe, they said, is strong enough to offset a slowdown in the U.S., ease trade gaps and extend the strongest world expansion since the 1970s.

http://www.tsptalk.com/mb/newreply.php?do=newreply&noquote=1&p=90209

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20apr- AP-Chinese Economy Jolts Stock Markets
Thursday April 19, 12:32 pm ET
By Matt Moore, AP Business Writer
Jitters Over Chinese Economy Trigger Share Declines in World Markets

FRANKFURT, Germany (AP) -- Worries that officials will take measures to cool China's booming economy pushed shares lower across Asia on Thursday, with slight declines spilling into European markets. U.S. stocks fell modestly.

The declines were an abrupt turnaround from a day earlier, when the Dow Jones industrial average closed above 12,800 for the first time, signaling Wall Street's recovery from its decline in February as investors rewarded strong earnings reports.

Some indexes pared their losses as the day went on, with analysts expecting markets could shrug off the initial shock this time, compared to when a plunge in Chinese shares in February caused a global market selloff.

"The market has heeded the lesson of late February and is not going to leave it to China to set the agenda for global selloff," said Saxo Bank equity strategist Torben Krogh Nielsen in Copenhagen. "This is an intraday washout and we expect the market to regain its footing again fairly quickly."

In London, the FTSE 100 index dropped more than 50 points in early trading, losing much of the recent gains that had seen it reach six-and-a-half-year highs just days ago. But it recovered to close at 6,440.60, down just 0.1 percent.

Germany's DAX Xetra 30 index dropped 0.5 percent to 7,242.73 and the French CAC-40 index fell 0.1 percent to 5,829.04.

In late morning New York trading, the Dow Jones industrial average fell 0.12 percent to 12,787.91. The Standard & Poor's 500 index fell 0.13 percent and the Nasdaq composite index fell 0.15 percent.

http://biz.yahoo.com/ap/070419/world_markets.html?.v=5

[Ichiro]

20apr- AP-Dollar at 2-Year Low Versus Euro
Thursday April 19, 3:53 pm ET
By Jackie Farwell, AP Business Writer
Dollar at 2-Year Low Against Euro As ECB Stresses Likely Interest Rate Increase in June

NEW YORK (AP) -- The dollar hovered near a record low versus the euro Thursday after the European Central Bank reiterated the likelihood of a June interest rate hike.

The British pound continued to trade above the $2 mark, ensuring that dollar-spending visitors to the country would pay twice as much for purchases. It rose as high as $2.0092, then settled back to $2.0019 -- dipping from the $2.0057 it fetched late Wednesday in New York.


The 13-nation euro climbed to $1.3616, a level last reached in December 2004, before falling back to $1.3603 in late New York trading. That was up from $1.3580 late Wednesday in New York, although still less than a penny short of its all-time high of $1.3667, also from December 2004.

Historic levels of healthier European growth, continuing interest rate increases by the ECB and concern over the strength of the U.S. economy have boosted the euro. That means a price shock for some visitors to the continent.

The euro's jump came after the Conference Board in New York said its index of leading economic indicators rose a tepid 0.1 percent to 137.4 last month. The index, designed to forecast economic activity in the next three to six months, remains below its most recent high of 138 in January 2006.

http://biz.yahoo.com/ap/070419/dollar.html?.v=4

[Ichiro]

22apr-Paulson Says China Must Yield `Tangible Results' on Yuan, Trade

By Kevin Carmichael and Matthew Benjamin

April 21 (Bloomberg) -- U.S. Treasury Secretary Henry Paulson said China must accelerate its commitments on trade and a market-set exchange rate to head off protectionist legislation in Congress.

Paulson, who hosts the second session of a new bilateral economic dialogue next month, said yesterday that the talks need to yield ``tangible results.'' He said in a speech in New York that Chinese policy makers ``are not moving, in my judgment, quickly enough'' on the yuan.

The Treasury chief is under pressure to produce benefits from the Strategic Economic Dialogue he established last year as lawmakers consider about half a dozen bills to protect American companies. Tensions with China also threaten to rise after the Commerce Department imposed duties on Chinese paper last month.

``The American people are concerned, Congress is concerned and there's a lot of protectionist sentiment'' toward China, Paulson said in an interview on the ``Charlie Rose'' show on PBS television following his speech in New York. ``The more tangible reforms we see, the easier it is for me to deal with Congress.''

Paulson, 61, told the Committee of 100, a group that consists of prominent Chinese-Americans, including cellist Yo-Yo Ma and architect I.M. Pei, it was ``natural'' for problems to develop as trade increases. ``There's going to be tension and we have to manage through it.''

China passed Mexico last year to become the second-largest U.S. trade partner, after Canada. The U.S. trade deficit with China widened 15 percent to a record $232.5 billion in 2006.

`Unnatural Act'

Paulson, who has traveled to China three times since taking office in July, said the focus on Chinese policies centers on the exchange rate because that's the most ``visible'' gauge of the speed of change. As China integrates with the global economy, it's ``an unnatural act'' to keep managing its currency, he said.

China prevents the yuan from gaining more than 0.3 percent a day against a basket of currencies that includes the dollar, euro and yen. The yuan has risen only 7.2 percent since the government ended a link to the dollar and introduced the current system in July 2005. It closed at 7.72 per dollar yesterday in Shanghai.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ajolGIe7te5A&refer=home

[Ichiro]

22apr-U.S. Stocks Gain, Pushing Dow to Record Three Times, on Profits

By Nick Baker

April 21 (Bloomberg) -- U.S. stocks rose, pushing the Dow Jones Industrial Average to a record, after profit and economic reports were better than expected.

Honeywell International Inc., Caterpillar Inc. and JPMorgan Chase & Co. led the Dow average's rally this week after their earnings increased more than analysts estimated. Countrywide Financial Corp. paced gains by financial shares, which climbed the most since October 2004, on optimism the so-called subprime lending crisis is contained. The Standard & Poor's 500 Index is on pace for the biggest monthly advance since December 2003.

Profits that exceeded estimates spurred analysts to double their projections for first-quarter earnings growth at S&P 500 companies, suggesting expectations for a slowdown were excessive. Data showing slower-than-anticipated inflation boosted chances the Federal Reserve may reduce interest rates.

``Corporate profits are still growing,'' said Neil Hennessy, who helps manage $2.2 billion as chief executive officer of Hennessy Funds in Novato, California. ``I'm bullish to say the least. We've got a long way to go from here.''

The Dow average this week added 2.8 percent to 12,961.98, an all-time high. The S&P 500 rose 2.2 percent to 1484.35, the highest since September 2000. The Nasdaq Composite Index climbed 2.2 percent to 2526.39, the highest since February 2001.

The Dow and S&P 500 had their third straight weekly gain, the longest stretch since October. The S&P 500 has risen 4.5 percent in April, which would be the most for a month since December 2003.

Beating Estimates

About 66 percent of companies in the S&P 500 that have reported first-quarter results topped analysts' estimates, according to data compiled by Bloomberg. In the fourth quarter, about 61 percent of S&P 500 members beat estimates.

Profits increased 6.2 percent during the first quarter at S&P 500 companies, according analyst estimates compiled yesterday by Bloomberg. A week prior, growth of 3.1 percent was projected.

Economic reports aided the market this week. U.S. consumer prices grew less than economists predicted in March and new home construction unexpectedly rose, encouraging investors that the economy may keep expanding without prompting the Fed to raise interest rates. Retail sales, which account for almost half of all consumer spending, rose the most in three months in March.

The economy ``looks very good,'' said Kenneth Brusda, who manages $930 million at North Star Asset Management in Menasha, Wisconsin. ``We've been a little more upbeat than average about the economy, and it's starting to show up in better earnings reports than people expected.''
http://www.bloomberg.com/apps/news?pid=20601087&sid=a.tG4ECOJpa4&refer=home

[Ichiro]

22apr-Dollar Drops to 27-Month Low Versus Euro on U.S. Growth, Rates

By Min Zeng

April 21 (Bloomberg) -- The dollar dropped to a 27-month low against the euro as signs of slowing inflation and growth lessen the currency's appeal.

The U.S. currency also tumbled to the weakest against the British pound in 26 years as investors bet the Federal Reserve will cut borrowing costs later this year while the European Central Bank and Bank of England raise rates. The dollar dropped this week against 14 out of 16 most actively traded currencies tracked by Bloomberg.

``It's interest rate differentials that are carrying the day against the dollar,'' said Paresh Upadhyaya, who helps manage $29 billion in currency assets in Boston at Putnam Investments. ``The downward trend in the dollar remains in place'' as concern on slowing growth weighs in.

The dollar fell 0.46 percent to $1.3590 per euro this week and 0.82 percent to $2.0026 per pound. The U.S. currency also declined 0.49 percent to 118.68 yen over the period.

The U.S. currency touched $1.3638 per euro yesterday, the lowest since Dec. 31, 2004. The all-time low, $1.3666, was recorded Dec. 30, 2004.

The dollar tumbled to $2.0133 per pound on April 18, the weakest since June 1981. The dollar also reached a 17-year low of 83.92 U.S. cents April 19 against the Australian currency. It fell to 74.94 U.S. cents April 18 versus the New Zealand dollar, the lowest since June 16, 1982.

`Fairly Fragile'

``The dollar is fairly fragile right now,'' said Nick Bennenbroek, head of currency strategy at Wells Fargo Bank in New York. ``The market is getting more conviction that the ECB will continue to raise rates. It is only a matter of time for the euro to test the all-time high.''

Bennenbroek said the euro may test the record next week, and the currency may rise to $1.3750 to $1.38 within three months.

The dollar's losses this week accelerated after a U.S. government report showed consumer prices excluding energy and food moderated last month. That contrasted with reports from U.K. and New Zealand indicating accelerating price pressure.

Core consumer prices in the U.S., excluding energy and food, rose 0.1 percent last month after a 0.2 percent increase in February, the U.S. Labor Department reported in Washington on April 17. Core prices rose 2.5 percent from a year earlier, compared with a 2.7 percent increase in February. Separate U.S. economic reports this week showed declining industrial production and weakness in the labor market.

http://www.bloomberg.com/apps/news?pid=20601083&sid=a2CNtds_7CxI&refer=currency

[Ichiro]

22apr-apan's Corporate Activists Are Getting Restless: William Pesek

By William Pesek

April 20 (Bloomberg) -- ``Shareholder Activists Reactivated.''

How many times have analysts made this claim, only to see Japan Inc. circle the wagons and reassert itself? Yet when Kathy Matsui, chief strategist at Goldman Sachs (Japan) Securities Ltd., titled a recent report with these words, she was on solid footing.

Asia's biggest economy may be experiencing its most important wave of shareholder activism in decades. Long-silent and largely ignored shareholders are finding their voice and speaking out. If it continues, Japan's stock market may soar and its economic recovery could shift into a higher gear.

It's a big ``if,'' though. If anything can be said about the seven-month-old premiership of Shinzo Abe it's that economic change isn't high on his priority list. Hopes he would accelerate the efforts of predecessor Junichiro Koizumi to make Japan more efficient are fading fast.

This might be another episode involving Lucy, Charlie Brown and the football. Time and time again, as those familiar with Charles Schulz's characters will recall, Lucy convinces Charlie she won't yank away the ball as he runs to kick it. Each time, Charlie ends up in the mud as Lucy does just that. Japan's reform efforts often seem to be this way.

This wave of shareholder activism is different. It's not just about Gordon Gekko-like Wall Street raiders shaking things up, but Japanese investors fed up with the establishment's clubby, insular ways. And since fewer companies are owned largely by banks or chummy business partners than in the past, executives are being forced to listen.

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=aReRaUo0ss4A

[Ichiro]

22apr-European Stocks Gain on Takeover Speculation; ABN Amro Climbs

By Ludwig Burger

April 21 (Bloomberg) -- European stocks rose for a third week, buoyed by takeover speculation after banks said they would compete for ABN Amro Holding NV and Alliance Boots Plc, the U.K.'s largest drugstore chain, received sweetened offers.

Societe Generale SA, France's second-biggest bank by market value, had the biggest gain in four years following reports that the company is in merger talks with Italy's UniCredit SpA.

``Mergers and acquisitions will certainly continue for a while because companies' coffers are filled,'' said Rolf Biland, who oversees the equivalent of $4.1 billion as chief investment officer at VZ Vermoegenszentrum in Zurich. ``That's a rather positive backdrop for further gains.''

So far in 2007, mergers in Europe have totaled $668 billion, according to data compiled by Bloomberg. They reached a record $1.6 trillion in 2006.

The Dow Jones Stoxx 600 Index added 1.6 percent to 389.26. The Stoxx 50 rose 2.2 percent and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, climbed 2.3 percent.

National benchmarks gained in all but one of western Europe's 18 major markets. The U.K.'s FTSE advanced 0.4 percent, France's CAC 40 rallied 2.6 percent and Germany's DAX increased 1.8 percent.

Societe Generale surged 16 percent. Dow Jones Newswires reported UniCredit and Societe Generale are in preliminary merger talks, citing unidentified people familiar with the situation. Germany's Handelsblatt also reported the two banks are holding talks in early stages, without saying who provided the information.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aAGrBl_VRjmQ&refer=worldwide

[Ichiro]

22apr-ARE WE READY FOR ANOTHER YEN CARRY STOCK FLUE?
by Christopher Laird
PrudentSquirrel.com
April 19, 2007


With the Asian markets all down heavily last night, and the Yen strengthening again, I thought to talk about another possible Yen carry related market sell off.

China bubble trigger

A month or so ago, Premier Wen of China said that their manufacturing and financial bubbles were unsustainable and out of control. This was in light of recent financial tightening in China, increasing reserve requirements for banks to over 10% now, and raising interest rates moderately. It is important to realize that China is determined to do something about their financial bubbles.

The trouble is, there is so much hot money flowing into China, and that combined with a bubble mania in financial assets as well as manufacturing and stocks by Chinese has created a flood of money flowing into their markets.

Since the last year the Shanghai stock index is up over 150% - again at an all time high right now. The recent panic 9% sell off that Tuesday a month or so ago led to a about of panicky selling in Asian markets in general. That both led to and was caused by a rising Yen after the EU stated several months ago that investors should not ‘make one way bets on a weak Yen’. Soon after that statement, there was the Shanghai stock sell off, Asian stock sell offs, and other world sell offs. Eventually, things stabilized, but it took over two weeks of Central bank efforts and calming to stem the repeated bouts of selling into markets world wide.

The US stock market at that time, though initially falling 500 points in the beginning of the mess, stabilized, and every time it failed to follow through on Asian sell offs the night before, the Asian markets subsequently calmed the next day.

That was our last bout of sell offs

But, that was that bout of selling. Now, with markets again at new highs, the Dow, and Shanghai, (up to today when it dropped over 4% again) seemed to flow ever higher, oblivious of the danger of any new bouts of Yen strengthening.

Well, we again have many of the same factors gathering for another bout of Yen strengthening, and related stock and financial market sell offs….

First, the Yen has been very weak and is very undervalued for YEARS. China, the EU, and every major trade partner of Japan is not liking this one bit. The Yen has a lot of reason to strengthen, not to mention the gigantic scale of the Yen carry that has built up in RISING stock markets all over the world in the last years.

The overall situation is that markets are heavily infected with leverage. I don’t care if many of them mare making new highs again. Well, a few months ago they all made new highs, then we had that bout of Asian selling and Yen carry unwinding that led to weeks of stock drops a month or so ago that bad Tuesday. Now, markets have recovered to new highs, - except that now the Asian markets are just crashing again now – and maybe all we saw was a double top in these new highs?

It certainly would fit the idea of a pending second wave of Yen carry unwinding to come.

In the last few days, the Yen has strengthened very roughly 1%. It had been on a rather long downwind to about 83.5 on the $XJY.

IF the Yen begins another bout of strengthening, look out. We may have just seen the beginning of another –rather overdue- bout of Yen strengthening and Yen carry unwinding.

The thing is, with markets to toppy right now, it does not take a lot to cause new Yen carry unwinding…

Yen Carry monster is a hungry one!

Either there is a push to sell and capture profits – which puts upward pressure on the Yen as carry is paid off, and then puts more downward pressure on the financial markets, and or, because Yen strengthening itself causes more selling of Yen carry and then more Yen strengthening.

http://www.financialsense.com/fsu/editorials/laird/2007/0419.html

[Ichiro]

22apr-BRITISH POUND FINALLY AWAKENS TO INFLATION
FEEDING RISING UK INTEREST RATES
by Nadeem Walayat
themarketoracle.co.uk
April 18, 2007

Inflation as measured by the CPI jumped above 3% to 3.1%, which now virtually guarantees a hike in UK interest rates to 5.5% at Mays Bank of England MPC Meeting. The British Pound surged through the $2.00 barrier, having flirted with it for nearly 2 years now, each attempt at a break having held, but no more !

Both the rise to 5.50% at the May meeting and the Pounds jump above $2.00 have been long forecast and expected.

The Story of 2007 has been and will continue to be of higher interest rates across the world. Not just for the UK but for most major economies. The resulting effect is already being seen in the currency markets with a selling of the US dollar especially against the Euro and Sterling.

The Target for UK interest rates, set way back on 7th November 2006, is for UK interest rates to hit 5.75% this year, (UK Interest Rates could rise to 5.75% in 2007) . The time line for this is a rise to 5.5% in May, with the following rise to 5.75% scheduled for August / Sept 07.

The underlining reason for this remains the surging money supply, relative strength of the UK housing market and economy which continues to force inflation ever higher. This was expanded upon in the article of 26th Dec 06 UK Interest Rate forecast for 2007 - Bank of England to do battle with inflation ,

The rise to 5.50% for May 07, was reinforced in March 07, with the failure of the subprime mortgage fallout to impact on the UK housing market, and expectations of the UK housing market gathering strength as it moved into the traditionally strong summer demand period. UK strong house price growth signals further rises in interest rates

UK interest rates in real terms remain at historic lows. We have the CPI index (the fake inflation indices) at 3.1%, which despite being manipulated has nudged above its upper band of 3%, which basically automatically calls for a rise in UK interest rates. The closest thing the UK has to an accurate measure of inflation is the RPI index , this index is the one people actually pay attention to with regards all aspects of the UK economy, from pay deals to indexation of government bonds to increases in social benefit payments. The CPI is by and large ignored by the 'real' economy.

http://www.financialsense.com/fsu/editorials/walayat/2007/0418.html

[Ichiro]

22apr-CENTRAL BANKS ARE THE PRIMARY BUBBLE-CREATORS AND EQUITY MARKET MANIPULATORS!!
by Stephen Tetreault
April 17, 2007

Manipulation of the global markets is directly tied to central banks around the globe and their wild levels of liquidity creation, as the overall global money supply is on a mega-hyper growth trend and there seems little anyone can/will do about it, until it’s to fricking late and the global economies crack! Remember the basic definition of inflation folks:

The modern definition of inflation is: A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money... The American Heritage® Dictionary of the English Language, 4th Edition, goes on to say: ...caused by an increase in available currency and credit beyond the proportion of available goods and services. I have often told my students that inflation is the consistent rise in the money supply followed by a rise in the cost of goods, commodities and services; as more dollars are chasing fewer goods…. However, it’s is also somewhat accurate to say that inflation is the weakening of the purchasing power of the dollar. As your dollars are worth less as more and more money hits the economy, you’re hit with this hidden tax because your purchasing power is being eroded, and most folks do not even understand this principle.


We have seen lately folks that there appears to be a huge disconnect with the Asian markets these past weeks following the belt tightening measures by their central banks, though it will be very difficult for just a couple of central banks of a developing country to continue tightening while others stay on course with their easy and almost free easy money regime.

Currently according to my technical and fundamental analysis the Chinese Shanghai Composite and other emerging market indexes (Hang Seng, Taiwan Weighted, Bovespa, and México to name a few) are displaying significant bubble like formations but it is difficult to guess when this bubble will be get pricked, and hopefully they deflate gradually, or we could see a global melt-down of the markets.

This wild global bull-run the world over is primarily driven by an enormous glut of excess LIQUIDITY. One is reminded that around mid-March this year the Australian money supply is 13% higher from a year ago, Brazil's M3 is up 18%, Canada's M3 is up 10.5%, China's M2 is up 17.8%, England's M3 is up 13%, the Euro Zone's M3 is up 9.8%, India's M3 is up nearly 22%, Korea's M3 is up 11%, Russia's M2 is up 49% and the US M3 as best as it can be calculated is up 11%. In the midst of such an enormous run-up in "global liquidity” this new-glut is responsible for most of the global bullish trying to keep markets down, for any extended period of time, is like pushing down a helium balloon under water. With most if not all of the major central banks having been "asset targeting" with their manipulated maneuvers until the fierce inflation monster rears its ugly head in a manor that will frighten the proverbial crap out of the global markets. Their ongoing manipulation could/might continue for some time, more until they press to hard on the accelerator and are unable to stay on course and they run off the cliff.

The global markets have been kept afloat by these huge inflows of liquidity folks and such is the overall power of easy and ever increasing monies chasing fewer goods, it’s this liquidity that has been propping up the asset markets. It would be a misnomer or being down right delusional to believe that asset markets all over the world are on a bull-run going longer than it should of, despite deteriorating fundamentals; earnings and consumer ballooning debt-loads and crumbling credit opportunities. Some investors are reluctant to consider the macro factors of the investing landscape and they consider only company specific fundamentals, momentum-players and general-market-hypsters. For the most part most of these factors do not really matter (as I have come to realize, many times) that in the near-term the macro factors don't significantly matter, price will follow money flows folks. However, when you see as I have that the equity markets all over the globe has risen and most of the major indexes and new host of ETF’s have been behaving in the same manner having begun their run from early 2003 (when the liquidity streams turned into tsunami’s) then the overall market movements have as I have been pointing out for several years now not based only on economic or company specific fundamentals; there has to be the underlying insurgency of these huge streams of liquidity….This is goldilocks scenario in progress when it will end only the central banks would know, but I can tell you this folks; if I’m only partly right this manipulation will create a mega negative economic tidal wave that will engulf most economies.

There is going to be a real-and increasing volatile component to the US and global markets that is just starting to raise its ugly head and be seen….despite the recent bullishness there is in my opinion a looming and growing concern and wall-of worry that has been plaguing veteran and very seasoned traders/investors like myself…yes its been almost 6+ weeks since the Shanghai stock market plunge sent shock waves vibrating throughout the global markets, like the waves of a first shock earthquake that triggered the first Tsunami in a pattern of larger ones. Although most of the indexes have since stabilized and as of Friday’s close have regained most of their losses albeit on significantly less volume than the selling waves we witnessed. It’s this type of volatility that I have been writing about, which could/should increase is frequency and probably in the days and weeks that lay ahead. Stock markets now are very prone to synchronized global down-turns or should I saw plunges when new and most often under-reported and ignored external shocks appear. But it is my opinion that the greatest factor behind the markets' recent problems on a global basis is the huge excess liquidity being pumped in by the central banks around the globe.

http://www.financialsense.com/fsu/editorials/tetreault/2007/0417.html

[Ichiro]

22apr-Ding, Dong, The Witch Isn't Dead
by Peter Schiff
Euro Pacific Capital
April 20, 2007

With this week's release of an apparently benign CPI report, Wall Street resembled Munchkin Land celebrating the death of the Wicked Witch of Inflation. Amidst the revelry few spared much concern that the Index actually registered a monthly gain of .6%. Since such a rise equates to an annualized inflation rate of 7.5%, how could the Wall Street Lollipop Guild be so euphoric? Simple; to pronounce the Witch sincerely dead, one needs only to consistently strip out marginally needed items such as food and energy. Without these "distractions" the core CPI increase can be shown to be only .1%: “way” below the .2% that had been forecast.

In the face of what was in reality a horrific March CPI report, Wall Street once again demonstrated its ability to spin economic straw into gold. The trick to making a 7.5% annualized inflation rate disappear is simply to misdirect attention towards meaningless monthly core numbers instead.

However, Wall Street’s power to make high inflation disappear before our very eyes will not last forever. If a magician repeats the same trick over and over, his audience is bound to get wise. The idea that the “core CPI” should trump the actual "headline number" is an example of a lie being repeated often enough that it becomes the truth. Originally, the emphasis on the core was supposed to smooth out month-to-month volatility. But putting primary weight on "year-over-year core CPI" is another matter entirely. Year-over-year changes are not volatility, they are reality! Of course, your typical Wall Street strategist could have figured this out, if they only had a brain.

Making the illusion all the more brazen is the fact that on the same day the CPI was released the dollar broke down to a 26-year low against the British pound, an 18-year low against the Australian dollar, and a near record low against the Euro. Since dollar weakness will inevitably exert additional upward pressure on already rising consumer prices, the ability to celebrate victory over inflation is premature in the extreme. As an added twist, gold finished the week with an impressive gain, rising to a new eleven-month high. Yet this tried and true measure of inflation was barely noticed, no doubt dismissed as representing a sign of increased global affluence resulting in higher jewelry demand, particularly in India.

http://www.financialsense.com/fsu/editorials/schiff/2007/0420.html

[Ichiro]

22may-FOREX-Dollar jumps, yen weakens as focus shifts from China

By Natsuko Waki

LONDON, May 21 (Reuters) - The dollar hit a five-week high on Monday as investors pared back aggressive bets against the currency after limited reaction to China's move on the yuan and rates last week shifted focus to U.S. economic fundamentals.

The yen hit a record low against the euro and a three-month trough versus the dollar as calm investor response to China's move boosted risk appetite and

The Canadian dollar hit its highest level in almost 30 years against the U.S. currency after recent robust data boosted expectations of higher rates.

Recent U.S. data showed improving consumer morale and a rebound in manufacturing activity, which pared expectations for a yield-harming interest rate cut. This helped investors cut back their overstretched positions against the dollar.

"We've seen speculative positioning carry on building in euro/dollar. Now these positions are being pared back. We are not seeing an environment where the dollar is damaged. U.S. data has been positive," said Adrian Hughes, currency strategist at Societe Generale.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070521:MTFH98398_2007-05-21_11-35-00_L21581409&type=comktNews&rpc=44

[Ichiro]

22may-FTSE gains on oil, mining stocks; banks weigh

By Ana Nicolaci da Costa

LONDON, May 21 (Reuters) - Britain's FTSE 100 .FTSE rose on Monday as oil and mining stocks, benefiting from firm prices and consolidation talk, fuelled gains in a market that rallied to its highest closing level in nearly 7 years last week.

The FTSE was up 0.3 percent at 6,663.5 at 1103 GMT after rising to its highest close since September 2000 on Friday.

BG Group (BG.L: Quote, Profile , Research) was the top performer, rising 3.7 percent on speculation ExxonMobil Corp. (XOM.N: Quote, Profile , Research) may be interested in the gas producer. BG Group declined to comment.


Oil stocks contributed nearly 22 points to the index, also benefiting from talk of a possible tie-up between BP (BP.L: Quote, Profile , Research) and Royal Dutch Shell (RDSa.L: Quote, Profile , Research), and oil prices <LCOc1> at above $70 a barrel.

"We are seeing some good buying on the oil sector across the board. Bit of takeover speculation this morning (surrounding) Exxon-BG, that might be another reason," one London trader said.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070521:MTFH98469_2007-05-21_11-38-09_L21522336&type=comktNews&rpc=44

[Ichiro]

22may- AP
Dollar Edges Up Against Euro
Monday May 21, 7:15 am ET
Dollar Edges Up Against Euro As 13-Nation Currency Strikes Record High Against Yen

FRANKFURT, Germany (AP) -- The dollar edged higher against the euro, as currency from the 13-nation block hit a record high against the Japanese yen on moves by China.

The euro bought $1.3500, down nominally from the $1.3505 it bought in New York trading late Friday.

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Against the yen, the euro rose after the Japanese currency was ignored by a weekend meeting of finance officials with the Group of Eight near Potsdam, Germany.

The euro was up some 0.15 percent to buy 163.91 yen, its highest point since it was introduced in 1999.

The yen's fall came after China on Friday agreed to let its yuan rise faster against the dollar and to cool its sizzling economy ahead of what are expected to be contentious talks in Washington over Beijing's soaring trade surplus.

The free-floating yen sometimes acts as a proxy to the tightly managed yuan on currency markets.

The U.S. dollar bought 121.33 yen, compared with 121.15 yen late Friday.

http://biz.yahoo.com/ap/070521/dollar.html?.v=3

[Ichiro]

22may-CNN money-Pushing into uncharted waters
Stock futures point to a higher open after deal for Alltel, as Dow starts at record level and S&P nears its zenith.
May 21 2007: 6:20 AM EDT

NEW YORK (CNNMoney.com) -- Stocks appeared poised to make another run at record highs Monday, helped by news of a major telecom deal.

Stock futures were mixed in early trading, but a comparison to fair value, which predicts the direction of stocks, pointed to a slightly higher open for both the blue chip S&P 500 and the tech-heavy Nasdaq.

The S&P starts the day only five points away from what would be a record high close, while the Dow Jones industrial averaged ended at yet another record high in Friday trading.

The buyout unit of Wall Street investment bank Goldman Sachs (Charts, Fortune 500) and private equity firm TPG Capital announced early Monday they are buying wireless telecom Alltel (Charts, Fortune 500) for $25 billion, or $71.50 a share, a premium of nearly 10 percent from Friday's close. Shares of Alltel are up 9.4 percent in Frankfurt trading early Monday.

http://money.cnn.com/2007/05/21/markets/stockswatch/index.htm?source=yahoo_quote

[Ichiro]

21may- Reuters-Stocks may fly on M&A; oil clouds view
Sunday May 20, 10:06 am ET
By Kristina Cooke

NEW YORK (Reuters) - If bulls have their way, U.S. stocks will extend their streak of gains this week with another wave of takeovers expected and worries about a housing fallout diminishing.

But rocketing crude oil prices along with disappointing outlooks from major retailers, could spoil the party.

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U.S. gasoline prices may climb to $4 a gallon by Memorial Day, analysts have said. And if that happens, it could force consumers to curtail discretionary spending as they pay more to fill up their gas tanks.

Apparel retailer Gap Inc. (NYSE:GPS - News) and Target Corp. (NYSE:TGT - News)are among major retailers due to post quarterly results this week.

They follow hot on the heels of heavyweight retailers Wal-Mart (NYSE:WMT - News) and Home Depot (NYSE:HD - News), which reported lackluster earnings last week. Wal-Mart said its second-quarter earnings could miss targets.

"We will be looking for insight into what the second quarter will look like for retailers and whether there is a conscious consumer pullback," said Edward T. Maraccini, portfolio manager at Johnson Asset Management in Racine, Wisconsin.

"But every time the market starts to sell off, M&A activity props it back up. And if you sell stocks, where do you go? You're going to be hard-pressed to find another asset class people are going to get excited about."

http://biz.yahoo.com/rb/070520/column_stocks_outlook.html?.v=1

[Ichiro]

22may-AP Stocks Point to Higher Open
Tuesday May 22, 6:57 am ET
By Joe Bel Bruno, AP Business Writer
U.S. Stocks Point to Higher Open on Acquisitions, Earnings

NEW YORK (AP) -- Stock futures signaled an upbeat start on Wall Street Tuesday, as investors remained confident that continued takeover activity and the last blast of first-quarter earnings reports will drive the market higher.


An advance after the opening bell would add to yet another record-setting session on Monday. The Standard & Poor's 500 index briefly passed its record close of 1,527.46 for the first time in more than seven years.

Futures trading early Tuesday indicated stocks will have enough momentum to again cross that mark.

Standard & Poor's 500 index futures rose 2.20, or 0.07 percent, to 1,529.00. Nasdaq 100 index futures rose 3.25, or 0.17 percent, to 1,929.50. Dow futures expiring in June was rose 7, or 0.05 percent, at 1,3578.00.

There was little in the way of economic news expected during the session. The Richmond Federal Reserve Bank's manufacturing index will be released in the morning.

Investors may begin to take positions ahead of the Commerce Department's report on durable goods that is scheduled for Thursday. The department also reports on new home sales Thursday, while the National Association of Realtors releases data on existing home sales Friday.

In corporate news, MGM Mirage Inc. may rise after Tracinda Corp. -- the investment arm of billionaire investor Kirk Kerkorian -- said it entered into negotiations to buy the casino operator's Bellagio Hotel and CityCenter properties. Shares of MGM surged 16 percent in after-hours trading on Monday.
http://biz.yahoo.com/ap/070522/wall_street.html?.v=4

[Ichiro]

22may-AP-Most Asian Markets Rise
Tuesday May 22, 7:03 am ET
Most Asian Markets Rise; China, South Korea, Singapore, Philippines Hit New Highs

HONG KONG (AP) -- Most Asian markets advanced Tuesday as Chinese investors lifted stocks to new records, shrugging off authorities' efforts to cool market.

Stocks in South Korea, Singapore, Indonesia and the Philippines also rose to new highs.


China's stock markets forged higher despite moves Friday by the central bank to raise interest rates and reserve requirements. The Shanghai Composite Index gained 0.9 percent to 4,110.38, breaking above 4,100 for the first time. The Shenzhen Composite Index climbed 1.4 percent to 1,198.41, also a record high.

Analysts said that despite being packaged to appear significant, the measures were too small to have any meaningful effect, given the strong appetite for shares among retail investors, who have been flooding into the market seeking higher returns than they can get from bank deposits and other limited investment options.

"Unfortunately in this crazy investment environment, those kinds of indirect signals get ignored," said Qu Hongbin, an economist at HSBC.

http://biz.yahoo.com/ap/070522/asian_markets.html?.v=1

[Ichiro]

22may- AP-Euro Slips Slightly Against U.S. Dollar
Tuesday May 22, 5:51 am ET
Euro Slips Slightly Against U.S. Dollar but Expected to Rise on German Sentiment

FRANKFURT, Germany (AP) -- The euro slipped slightly against the dollar on Tuesday but analysts said the common currency was set to rise if a key report on German investment sentiment reports more gains.



The 13-nation euro bought US$1.3464 in morning trading, down nominally from the US$1.3467 it bought in New York trading late Monday.

But traders were looking to the monthly index of German investor sentiment that is expected to report a sixth consecutive increase in confidence in Europe's biggest economy, which will likely push the euro higher against the dollar.

http://biz.yahoo.com/ap/070522/euro_dollar.html?.v=1

[Ichiro]

22may-AP-Dollar Rises in Asia
Tuesday May 22, 2:53 am ET
Dollar Rises in Asia on Fading Concern About U.S. Economy

TOKYO (AP) -- The dollar rose slightly in Asia Tuesday as strength on Wall Street and healthy earnings reports from American companies eased worries about the U.S. economy.

The dollar was trading at 121.48 yen midafternoon, up from 121.46 yen late Monday in New York. The euro slipped to US$1.3465 from US$1.3467.

But the dollar-buying seemed to run out of steam fairly quickly, traders said. Investors were keeping an eye on the two-day U.S.-China strategic economic dialogue that starts later in the day in Washington, D.C., they said.

http://biz.yahoo.com/ap/070522/asia_dollar.html?.v=1

[Ichiro]

23may- AP-Japanese Stocks Climb; Dollar Up vs. Yen
Wednesday May 23, 4:50 am ET
Japanese Stocks Climb for 3rd Straight Day, Lifted by Bank Shares; Dollar Up Against Yen

TOKYO (AP) -- Japanese stocks rose slightly Wednesday for a third straight session, led by bank shares.

The benchmark Nikkei 225 stock index rose 25.07 points, or 0.14 percent to finish at 17,705.12 on the Tokyo Stock Exchange. On Tuesday, the index added 0.7 percent.

Traders said the market is vulnerable to overseas factors, particularly a drop on Wall Street or signs of a slowdown in the U.S. economy, Japan's biggest export market.

"The Nikkei is still top-heavy at 17,500, so banks may be sold on dips if negative factors hit, such as a U.S. stocks fall overnight," said Yutaka Miura, manager at Shinko Securities.

http://biz.yahoo.com/ap/070523/japan_markets.html?.v=3

[Ichiro]

23may- AP
Dollar Moves Again on Euro
Wednesday May 23, 6:46 am ET
Dollar Gains Ground Against Euro Ahead of Economic Date Due From U.S. and Germany

BERLIN (AP) -- The dollar gained on the euro Wednesday as markets looked ahead to economic data due from the U.S. and Germany, Europe's largest economy.

The euro bought $1.3437 in morning European trading, down slightly from $1.3454 late Tuesday in New York. The dollar rose to purchase 121.71 Japanese yen from 121.57 the night before, while the British pound rose to $1.9775 from $1.9716.

The rise in the British currency came after the Bank of England released the minutes of its May 10 Monetary Policy Committee meeting, which showed that the decision to hike interest rates 25 basis points to 5.5 percent was unanimous. The minutes also said another increase might be necessary if events proceed as the bank expects.

http://biz.yahoo.com/ap/070523/dollar.html?.v=2

[Ichiro]

23may-European Stocks Rise on Bid Speculation; Vodafone, Rio Gain

By Sarah Jones

May 23 (Bloomberg) -- European stocks rose, sending the Dow Jones Stoxx 600 Index to the highest since September 2000, buoyed by takeover speculation in the telecommunications, utilities and mining industries.

Vodafone Group Plc led phone shares to their biggest gain in 10 months as investors speculated the companies may be attractive to private equity firms. Pennon Group Plc rallied to a record on expectations the British water company is a takeover target. Rio Tinto Group climbed after BHP Billiton Ltd. Chief Executive Officer Charles Goodyear said he's considering acquisitions and OAO GMK Norilsk Nickel raised its bid for LionOre Mining International Ltd.

``There is a lot of cash around and investors want the market to go higher,'' said Philip Manduca, who helps oversee about $500 million as managing partner at Titanium Capital in London. ``There is a lot more mergers and acquisitions to come.''

The value of takeovers in Europe has reached $1.22 trillion so far this year, according to data compiled by Bloomberg. Deals reached a record $1.6 trillion in 2006.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aNJizOPYfw1Q&refer=home

[Ichiro]

23may-BOE Policy Makers Voted 9-0 to Raise Interest Rate (Update3)

By Brian Swint

May 23 (Bloomberg) -- Bank of England policy makers voted unanimously to raise the benchmark interest rate by a quarter- point this month and said that borrowing costs may need to increase again to contain inflation.

``The committee agreed that, should the economy continue to develop broadly in line with the central expectation, bank rate could be raised further as necessary,'' the nine-member Monetary Policy Committee said in the minutes of the May 9-10 meeting published in London today. They changed the rate to 5.5 percent, a six-year high, and some members considered a half-point move.

Investors added to bets on more increases today after the central bank's forecasts last week suggested that higher borrowing costs may be needed to bring inflation back to the 2 percent target. Governor Mervyn King said that companies may have more room to raise prices now, which could lead to faster wage growth and trigger an inflationary spiral.

``This marks quite a decisive hawkish shift,'' said Ross Walker, an economist at Royal Bank of Scotland Group Plc in London. ``It's raised the chances that there will be another hike. The risks are clearly to the upside.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJa1TA_VWYMc&refer=home

[Ichiro]

23may-U.S. Stock-Index Futures Gain; Alcoa and Medtronic Advance

By Andreas Hippin

May 23 (Bloomberg) -- U.S. stock-index futures rose after Alcan Inc. said that Alcoa Inc.'s hostile bid was designed in part to protect itself from a takeover, intensifying mergers and acquisitions speculation.

Shares of Alcoa, the world's largest aluminum producer, gained in Germany, while Alcan, Canada's largest aluminum producer, climbed in France. Alcan has started talks with BHP Billiton Ltd. to fend off the Alcoa bid, the Globe and Mail reported. LionOre Mining International Ltd. advanced as OAO GMK Norilsk Nickel raised its bid for the Canadian nickel producer.

Financial and real-estate companies gained yesterday after Treasury Secretary Henry Paulson said the slump in the housing market is ``largely'' over. The advance may broaden today on takeovers, with some $1.05 trillion in deals involving U.S. companies having been announced this year.

``Mergers and acquisitions should continue to be a main driver of the rally,'' said Steffen Bender, who helps oversee the equivalent of $21 billion at LBBW Asset Management in Stuttgart, Germany. ``Looks like nothing's going to derail the positive sentiment for stocks.''

Medtronic Inc., the biggest maker of electronic heart devices, increased after fourth-quarter profit beat analysts' estimates. Target Corp. may be active. The second-largest U.S. discount chain reports earnings.

http://www.bloomberg.com/apps/news?pid=20601084&sid=aW0f0lQax_Q0&refer=stocks

Standard & Poor's 500 Index futures expiring in June added 6 to 1531.30 as of 11:02 a.m. in London. Dow Jones Industrial Average futures climbed 51 to 13,610. Nasdaq-100 Index futures increased 5.25 to 1925.50.

[Ichiro]

24may-aP-Stocks Retreat After Home Sales Data
Thursday May 24, 4:13 pm ET
By Joe Bel Bruno, AP Business Writer
Wall Street Slides As Investors Worry Interest Rate Cut Not Needed After Economic Data

NEW YORK (AP) -- Wall Street retreated Thursday after housing data showed sales surged in April by the largest amount in 14 years, damping hopes that an interest rate cut would be needed to stimulate the economy.

Investors were originally enthusiastic after the Commerce Department reported sales of single-family homes rose 16.2 percent last month after falling slightly in March. Even though the report showed the economy continues to expand, investors became unnerved by a record drop in home prices.

http://biz.yahoo.com/ap/070524/wall_street.html?.v=52

[Ichiro]

25may- AP-Japane Stocks Fall for 2nd Straight Day
Friday May 25, 4:04 am ET
Japanese Stocks Fall for 2nd Straight Day; Banks and Autos Decline

TOKYO (AP) -- Japanese stocks dropped Friday for a second straight day, dragged down by bank and auto shares.

The benchmark Nikkei 225 stock index fell 215.76 points, or 1.22 percent, to finish at 17,481.21 points on the Tokyo Stock Exchange. On Thursday, the index dipped 0.05 percent.


Speculation that the U.S. Federal Reserve may not cut interest rates weighed on exporters as they followed Wall Street's overnight drop lower.

Toyota Motor Corp. fell 1.49 percent to 7,280 yen (US$60.17), while and Nissan Motor shed 1.8 percent to 1,334 yen (US$10.98) Among electronics names, Sony Corp. fell 1.3 percent to 6,860 yen (US$56.47).

Still, continued strength in the Chinese stock market after comments earlier this week by former Federal Reserve Chairman Alan Greenspan about an impending correction for mainland shares was interpreted positively by many analysts.

"Investors here aren't pessimistic about Chinese stocks," said Teruhisa Ishikawa, manager of Investment at Mizuho Investors Securities.

http://biz.yahoo.com/ap/070525/japan_markets.html?.v=1

[Ichiro]

25may-AP-Dollar Slips in Asia
Friday May 25, 3:52 am ET
Dollar Slips in Asia As Traders Take Profit

TOKYO (AP) -- The dollar slips in Asia Friday as traders took profits, although they said they recent strong U.S. economic data would support the dollar.

The dollar was trading at 121.26 yen midafternoon, down from 121.39 yen late Thursday in New York.

The euro also fell as declines in global stock prices made traders cautious about keeping large holdings of euros. The common currency fell to US$1.3422 from US$1.3433, and to a two-week low against the yen of 162.20 from 162.86 yen late Thursday.

http://biz.yahoo.com/ap/070525/asia_dollar.html?.v=1

[Ichiro]

25may-U.S. Stocks Rise on Takeovers; NYSE Euronext, MGM Shares Gain

By Eric Martin

May 25 (Bloomberg) -- U.S. stocks rebounded after Nasdaq Stock Market Inc. and Coca-Cola Co. announced acquisitions, adding to this year's unprecedented pace of takeovers.

NYSE Euronext, owner of the world's largest stock market, advanced after Goldman, Sachs & Co. upgraded the shares on speculation of more consolidation among exchanges. MGM Mirage shares rose after the second-biggest casino company hired UBS AG to advise on a possible breakup being considered by Kirk Kerkorian.

Nasdaq's $3.7 billion offer for Swedish stock-exchange OMX AB and Coca-Cola's $4.1 billion purchase of Energy Brands Inc. are the latest of more than $1 trillion in deals announced so far this year, 64 percent more than at the same time last year. Today's acquisitions helped the stock market pare its weekly decline, the first since March.

``M&A activity continues to be an important driver of the market,'' said Michael Malone, a trading analyst at Cowen & Co. in New York. ``Equally important are expectations with regard to announcements over the weekend.''

The S&P 500 increased 5, or 0.3 percent, to 1512.51 as of 10:09 a.m. in New York. The Dow Jones Industrial Average added 35.27, or 0.3 percent, to 13,476.40. The Nasdaq Composite Index climbed 10.56, or 0.4 percent, to 2548.48.

U.S. exchanges will be closed Mon., May 28, for the Memorial Day holiday.

Stocks fell yesterday as bond yields continued a two-week surge. Both the S&P 500 and Dow average are poised to snap seven straight weeks of gains. In the past five days, the S&P 500 has dropped 0.7 percent and the Dow average has declined 0.5 percent. The Nasdaq has retreated 0.4 percent in the period.

http://www.bloomberg.com/apps/news?pid=20601087&sid=adWscXrGC55s&refer=worldwide

[Ichiro]

25may-Yuan Isn't the Cause of U.S. Trade Deficit, Wu Says (Update3)

By Yanping Li

May 25 (Bloomberg) -- The yuan isn't the cause of the U.S. trade deficit and a ``large'' appreciation would hurt China's economy, Vice Premier Wu Yi said, signaling the nation won't cave in to demands for faster gains.

``China will continue to reform its exchange rate on its own initiative, gradually,'' Wu said at a dinner in Washington after two days of talks with U.S. Treasury Secretary Henry Paulson that yielded no agreements on the currency and failed to quell calls in Congress for sanctions against China.

About 85 percent of China's trade surplus with the U.S. is generated by foreign companies such as Wal-Mart Stores Inc. exporting products from China that are no longer made in the U.S., Wu said, citing textiles, shoes and furniture. Imposing protectionist measures to cut last year's record $232.5 billion U.S. deficit with China would harm both nations, she said.

``The U.S. government also doesn't want a trade war with China,'' Chen Xingdong, chief China economist at BNP Paribas SA in Beijing. ``If that really happens, the losses for the Americans might not be lower than those for the Chinese.''

The yuan closed little changed at 7.6527 against the dollar in Shanghai from 7.6519 late yesterday, completing its second- biggest weekly gain since February. China has allowed the currency to rise 8.2 percent since abandoning a fixed link to the dollar in July 2005.
http://www.bloomberg.com/apps/news?pid=20601083&sid=aGdGZQPjavxw&refer=currency

[Ichiro]

25may-Treasuries Head for 3rd Weekly Decline on Signs of U.S. Growth

By Deborah Finestone and Annie Pinkert

May 25 (Bloomberg) -- Treasuries headed for a third week of declines as signs of recovering economic growth reduced bets the Federal Reserve will cut borrowing costs this year.

The notes briefly pared their losses after an industry report showed sales of previously owned homes in the U.S. fell in April to the lowest level in almost four years, dimming prospects for a quick recovery in housing.

http://www.bloomberg.com/apps/news?pid=20601009&sid=a2dk5EnZJQys&refer=bond

[Ichiro]

25may-Japan's Consumer-Price Declines Slow to 0.1% (Update6)

By Mayumi Otsuma

May 25 (Bloomberg) -- Japan's consumer prices fell at a slower pace in April, signaling gains may soon resume, making it easier for the central bank to raise interest rates.

Core prices, which exclude fresh food, declined 0.1 percent from a year earlier, the statistics bureau said today in Tokyo, matching economists' estimates. The measure of inflation fell 0.3 percent in March, the steepest drop in two years.

Rising prices would shore up support for the Bank of Japan's policy of increasing its 0.5 percent benchmark interest rate, the lowest among major economies. Governor Toshihiko Fukui said last week that the bank could raise rates even with prices falling to prevent excessive investment and sustain growth.

``The improvement of consumer prices certainly provides relief and gives the BOJ's arguments some conviction,'' said Eishi Yokoyama, an economist at AIG Global Investment Corp. in Tokyo. ``We're going to see more speculation among investors about an early rate hike.''

The yen traded at 121.34 per dollar at 4:58 p.m. in Tokyo from 121.41 before the report was published, and earlier climbed as high as 120.86. The yield on Japan's five-year note rose 3 basis points to 1.3 percent, the highest level in four months.

Fukui has said prices will rise again once the effect of a gain in oil prices last year fades. The bank needs to increase the key rate as the economy expands and inflation gathers pace, he said.

http://www.bloomberg.com/apps/news?pid=20601080&sid=ad1uXV8pcw_8&refer=asia

[Ichiro]

25may-European Construction Stocks Drop, Led by Bouygues; OMX Gains

By Adria Cimino

May 25 (Bloomberg) -- European construction stocks slid, led by Bouygues SA and CRH Plc on concern that accelerating growth in Europe will keep interest rates rising.

OMX AB had its biggest rally in 4 1/2 years after Nasdaq Stock Market Inc. agreed to buy Europe's fifth-largest equity market. Carrefour SA jumped on speculation that Colony Capital and French billionaire Bernard Arnault may increase their stake.

Regional indexes were little changed.

``We have to be cautious in the short term,'' said Christian Dargnat, chief investment officer at BNP Paribas Asset Management in Paris, which oversees $462 billion in assets. ``Interest rates are on the rise in Europe. That can weigh on stocks.''

The Dow Jones Stoxx 600 Index slipped from a 6 1/2-year high this week as investors speculate rates will rise in Europe and cuts in the U.S. look less likely. New home sales in the U.S. climbed the most in April since 1993 and durable-goods orders gained for a third month, reports showed yesterday.

The Stoxx 600 dropped 0.1 percent to 392.99 as of 3:02 p.m. in London. The Stoxx 50 was little changed and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, fell 0.1 percent.

National benchmarks declined in 12 of the 18 western European markets. The U.K.'s FTSE 100 lost less than 0.1 percent. France's CAC 40 added less than 0.1 percent and Germany's DAX rose 0.3 percent.

http://www.bloomberg.com/apps/news?pid=20601085&sid=agFbmqAqmtCg&refer=europe

[clester]

"May 25 (Bloomberg) -- Japan's consumer prices fell at a slower pace in April, signaling gains may soon resume, making it easier for the central bank to raise interest rates."

This may be a bump in the road for all markets. Remember the "carry trade " talk. When is the next BOJ decision? anyone?

[Ichiro]

The next GOJ meeting is on 14 June 07 (Thursday). I would not be surprised if the yen appreciates to 117 due to the carry trade in the near future should the GOJ raise the interest rate.

[clester]

I heard an analyst lately say he thought the next increase would be in september. Do you have a feeling about June? thanks

[Ichiro]

I really don't think that GOJ will increase the rate in June but most likely in September. Besides, I don't see inflation heating up in Japan at this time expect for the increase of the gas price. However, if the interest rate is increased in the future, I think that the effect of the carry trade will be short term because the interest rates are higher iin Europe and the USA. And that is one of the reasons why the yen is at 121 plus.

[Ichiro]

26may- AP-Dollar Trades Mixed
Friday May 25, 3:54 pm ET
Dollar Mixed Against Major Currencies After U.S. Home Sales Data, German Economic Report

NEW YORK (AP) -- The dollar traded mixed against other major currencies Friday after a disappointing report on U.S. home sales and strong consumer confidence data out of Germany.

The 13-nation euro rose to $1.3447 in late New York trading from $1.3433 late Thursday.

The British pound fell to $1.9844 from $1.9858, while the dollar rose to 121.74 yen from 121.39 yen.

Sales of existing homes fell more than expected in April while the median home price dropped for a ninth straight month, the National Association of Realtors reported Friday.

Crawling to the slowest pace since June 2003, sales of existing homes fell by 2.6 percent last month to a seasonally adjusted annual rate of 5.99 million units.

The median price of a home fell to $220,900, dropping 0.8 percent from a year ago.

http://biz.yahoo.com/ap/070525/dollar.html?.v=1

[Ichiro]

26may-Greenspan Is Wary of China's Casino-Like Market: William Pesek

By William Pesek

May 25 (Bloomberg) -- Alan Greenspan and Li Ka-Shing may understand more than most what comedian Rodney Dangerfield meant when he said ``I don't get no respect.''

Here you have Greenspan, the man often called the greatest central banker who ever lived, and Li, Asia's richest man, worrying aloud about asset bubbles in China. And yet, the benchmark CSI 300 Index closed only 0.5 percent lower yesterday.

That doesn't compare with the 9.2 percent plunge on Feb. 27. That one, oddly, became a buying opportunity for an index that has jumped 92 percent this year after more than doubling in 2006.

Rational decision makers would normally quake at warnings about the casino mentality in Shanghai. Greenspan, after all, is a very cautious fellow who doesn't utter a word before considering what damage it might do. So when the former Federal Reserve chairman said May 23 that stocks in China face a ``dramatic contraction,'' he's probably far more concerned than he lets on.

Li, meanwhile, spoke volumes on May 17 when he said: ``As a Chinese, I'm worried about the stock market in China.''

Those words should matter because of Li's investment acumen; folks in Hong Kong don't call the billionaire ``Superman'' for nothing. Yet parsing Li's warnings gets at a more important point: His considerable business interests would be directly affected if China hits a wall.

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=aoHE5wlTGnSg

[Ichiro]

26msy-Blackstone + China = Bubble Marriage: William Pesek (Correct)

By William Pesek

(Corrects job title in third paragraph.)

May 23 (Bloomberg) -- It would be fascinating to see what Mao Zedong would make of China's $3 billion investment in Blackstone Group.

Here you have the world's most-watched communist nation investing in perhaps the most capitalist of Wall Street vehicles: a private-equity firm. China is doing so with foreign-exchange reserves, which it uses to ensure employment for its 1.3 billion people.

For Asia's No. 2 economy, ``the Blackstone investment represents a supreme business irony,'' Donald Straszheim, vice chairman of Newport Beach, California-based Roth Capital Partners, told clients in a report yesterday.

China's embrace of the private-equity movement, which the country's regulators have long viewed with suspicion, is about expediency. Officials in Beijing have $1.2 trillion of reserves they want to invest more profitably than in U.S. Treasuries. They lack the expertise to do it themselves and don't want to pay money managers millions in fees.

Enter New York-based Blackstone, an institution with the expertise that Chinese bureaucrats lack: running globally competitive companies. For Blackstone, the deal is a way of improving private equity's image in Beijing.

http://www.bloomberg.com/apps/news?pid=20601039&sid=aU7bs9CJazGI&refer=columnist_pesek

[Ichiro]

26may-Korea Aims to Build a Goldman Sachs of Its Own: William Pesek

By William Pesek

May 16 (Bloomberg) -- A shakeup is afoot in South Korea and it could raise the stature of Asia's No. 3 economy.

That's not the common perception these days. With China growing 11 percent, India booming and Japan holding its own, many investors are paying less attention to Korea than they should be.

Samsung Group Chairman Lee Kun-Hee encapsulated things when he said in March that ``we are sandwiched'' between high- tech Japan and low-cost China. So did Hynix Semiconductor Inc. Chief Executive Officer Kim Jong Kap when he said in April that Korea needs an innovation boom if it's going to hold on to decades' worth of hard-won achievements.

This is an election year, which only exacerbates the challenge. President Roh Moo Hyun and those jockeying to replace him after December's contests should be trying to raise the economy's game, yet they are distracted to the detriment of Korea's 49 million people.

Korea's regulators are engaged in an enterprise of sorts that may leave the economy better off in the years to come. It also might get the country closer to its goal of becoming a key financial center in the world's most vibrant region.

This year, lawmakers are expected to approve the so-called Capital Markets Consolidation Act. The legislation, which relaxes restrictions preventing brokerages, futures traders and asset managers from entering each other's businesses, is being called Korea's ``Big Bang.''

Big Bang

Spend some time chatting with Choi Sang-Mok, who directs the division of Korea's Finance and Economy Ministry that will implement the changes, and you will see how revolutionary all this could be for a conservative business culture. By breaking down the walls between banks, brokerages and insurers, Korea is fostering an environment to create financial giants to compete with global rivals.

http://www.bloomberg.com/apps/news?pid=20601039&sid=aPxB5w2QZn5s&refer=columnist_pesek

[Ichiro]

26may-Singapore's Real-Estate Bubble Won't Be Pricked: Andy Mukherjee

By Andy Mukherjee

May 22 (Bloomberg) -- Asset-bubble vigilantes will find little to cheer about with Singapore's falling interbank lending rate.

They will be partly right: Cheaper capital is about the last thing the island's frenzied property market needs.

According to official statistics, housing loans by Singapore banks reached S$64.3 billion ($42.2 billion) in March. That's the highest on record.

With prices of private homes surging the most in seven years in the first quarter, and with rents having already climbed to levels not seen since 1998, it isn't surprising that more people are rushing to take out mortgages.

The trend may amplify if borrowing costs fall: The key three-month interest rate was at a 19-month low of 2.25 percent yesterday, a percentage-point drop since the end of February. It might be a matter of time before long-term rates follow suit.

Singapore yesterday reported that the economy expanded at a faster-than-expected annualized 7.6 percent pace in the first quarter. The momentum is coming from a revival in construction, which grew at its briskest rate in nine years.

If the U.S. economy rebounds in the second half of 2007, Singapore's flagging electronics exports may get a boost. That will be a bonus. In such a scenario, cheap money will appear both incongruous and dangerous.

Yet, bubble vigilantes will also be wrong.

http://www.bloomberg.com/apps/news?pid=20601039&sid=acv7Zo0hBK1M&refer=columnist_mukherjee

[Ichiro]

26may-Next Emerging-Market Crisis Is Five Years Away: Andy Mukherjee

By Andy Mukherjee

May 9 (Bloomberg) -- Harvard University economist Jeffrey Frankel has an interesting theory about the timing of the next emerging-market meltdown.

Capital flows into developing economies, he says, follow a 15-year pattern: ``seven fat years followed by seven lean years.'' The year between the two phases is when the flow of money suddenly stops.

Why 15 years?

``After 15 years have gone by, there is somebody new on the trading desk who did not personally live through the last crash,'' Frankel said at an April 27 globalization forum, organized by the International Monetary Fund in Washington. ``They sort of know about it, but it is easier for them to say the world has changed than if they lost money in it.''

There have been two such cycles in the recent past, according to Frankel. The first wave began around 1975, following a sharp increase in oil prices in 1973-74.

After seven years of frenzied recycling of petrodollars into emerging-market securities, Mexico blew up in 1982.

Then there were seven slow years, before investors came back to these markets with renewed vigor in the early 1990s.

That boom, which again went on for seven years, ended with the Asian crisis in 1997.

By this logic, the next blow to emerging-market economies will come in 2011 or 2012. So all those who envision that the current subprime mortgage crisis in the U.S. will lead to investors bailing out of risky, emerging-market securities may be disappointed.

Another Asian Crisis?

http://www.bloomberg.com/apps/news?pid=20601039&sid=a.SrrlvKK7cY&refer=columnist_mukherjee

[Ichiro]

28may- Reuters-Asian markets rebound
Sunday May 27, 9:56 pm ET

HONG KONG (Reuters) - Asian stock markets rebounded on Monday, with South Korea reaching a new peak as gains on Wall Street helped soothe worries about overheating in China's red-hot share markets.

Takeover news, such as Nasdaq's (NasdaqGS:NDAQ - News) plan to buy Nordic exchange company OMX (Stockholm:OMX.ST - News), had helped lift optimism on Wall Street Friday, driving the blue-chip Dow (DJI:^DJI - News) and tech-heavy Nasdaq Composite Index (Nasdaq:^IXIC - News) higher.

At 0021 GMT, Tokyo's Nikkei average (Osaka:^N225 - News) had climbed 0.5 percent as Sony (Tokyo:6758.T - News) gained 0.7 percent, auto maker Honda Motor (Tokyo:7267.T - News) also added 0.7 percent and photo film maker Fuji Film Holdings (Tokyo:4901.T - News) rose 1.4 percent.

"Stocks here are likely to see a rebound after the gain in U.S. markets and as the yen remains in the region of 121 yen to the dollar," said Yutaka Miura, a senior technical strategist at Shinko Securities.

A weak yen is good for exporters as it boosts the value of their overseas sales.

In South Korea, the benchmark KOSPI (KSE:^KS11 - News) rose nearly 0.5 percent to touch a new high of 1,652.05, recovering from Friday's 0.1 percent fall, thanks to strength in top lender Kookmin Bank (060000.KS) and Shinhan Financial Group (055550.KS).

"Global markets are still doing well, and that's encouraging investors to buy stocks every time there are falls," said Kim Hak-kyun, an analyst at Korea Investment and Securities.]]

http://biz.yahoo.com/rb/070527/markets_asia.html?.v=3

[Ichiro]

28may-Japanese Stocks Rebound on Weaker Yen, Higher Commodity Prices

By Patrick Rial

May 28 (Bloomberg) -- Japanese stocks rebounded from their biggest loss in a month, led by exporters after the yen weakened against the dollar and euro, boosting the value of their overseas sales. Trading companies gained after commodities prices rose at the end of last week.

Nintendo Co., Japan's second-largest video-game maker, rose for the first time in three days. Mitsubishi Corp., the nation's biggest trading company, jumped 2 percent.

Japan's currency weakened 2.3 percent this year as of last week's close. Investors borrow money in Japan, which has the lowest interest rates among developed economies, to buy securities with better returns overseas. This so-called carry trade works to depress the yen, while boosting the value of overseas currencies.

``There's was some speculation about a rate cut by the Federal Reserve, but now those expectations are being pushed back,'' said Yasuhiro Kunii, who helps manage about $38 billion in assets at Dai-Ichi Mutual Life Insurance Co. in Tokyo. ``Carry trade investors are taking that as a sign that they can continue what they're doing. I don't think the currency will be anything but supportive going forward.''

The Nikkei 225 Stock Average advanced 89.32, or 0.5 percent, to 17,570.53 as of 1:02 p.m. in Tokyo. The broader Topix index added 5.41, or 0.3 percent, to 1720.95.

Indexes pared gains in the afternoon after Kyodo News reported Japan's agriculture minister, Toshikatsu Matsuoka, made a suicide attempt.

On May 25 the Nikkei dropped the most since April 25, while the Topix had its biggest decline since April 19.

Weaker Yen Trend

Nintendo added 550 yen, or 1.3 percent, to 41,500. Honda Motor Co., the most dependent of Japan's big three automakers on overseas sales, gained 50 yen, or 1.2 percent, to 4,220. Sharp Corp., Japan's largest maker of liquid-crystal display televisions, jumped 50 yen, or 2.2 percent, to 2,305.

http://www.bloomberg.com/apps/news?pid=20601101&sid=aDUcsTImU95k&refer=japan

[Ichiro]

28may-Dollar May Gain as Stronger Data Are Likely to Keep Fed on Hold

By David McIntyre and Stanley White

May 28 (Bloomberg) -- The dollar may strengthen on speculation housing and job reports this week will ease pressure on the Federal Reserve to reduce interest rates this year.

The U.S. currency last week reached a six-week high against the euro and the strongest in three months versus the yen as traders cut bets the Fed will lower borrowing costs from 5.25 percent. U.S. reports this week may show consumer confidence increased, employment growth accelerated and home sales gained.

``We have the dollar strengthening into the end of the year,'' said Stephen Halmarick, co-head of economic and market analysis at Citigroup Australia in Sydney. Data this week ``will signal the Fed is on hold for quite a number of months.''

The dollar traded at $1.3457 per euro at 1:54 p.m. in Tokyo from $1.3442 late in New York May 25, when it reached $1.3412, the highest since April 11. It will rise to $1.32 by year-end, Halmarick said. The U.S. currency was at 121.69 yen from 121.79 last week, when it reached 121.88, the most since Feb. 13. The euro was quoted at 163.73 yen from 163.71 at the end of last week.

The dollar has risen 0.4 percent against the euro as the odds of a quarter-percentage point cut by the Fed over the next year declined to 26 percent from 37 percent May 18, according to a Credit Suisse index based on trading in interest-rate swaps.

http://www.bloomberg.com/apps/news?pid=20601085&sid=anCHxxCt7aGM&refer=europe

[Ichiro]

28may-Dollar May Gain as Stronger Data Are Likely to Keep Fed on Hold

By David McIntyre and Stanley White

May 28 (Bloomberg) -- The dollar may strengthen on speculation housing and job reports this week will ease pressure on the Federal Reserve to reduce interest rates this year.

The U.S. currency last week reached a six-week high against the euro and the strongest in three months versus the yen as traders cut bets the Fed will lower borrowing costs from 5.25 percent. U.S. reports this week may show consumer confidence increased, employment growth accelerated and home sales gained.

``We have the dollar strengthening into the end of the year,'' said Stephen Halmarick, co-head of economic and market analysis at Citigroup Australia in Sydney. Data this week ``will signal the Fed is on hold for quite a number of months.''

The dollar traded at $1.3457 per euro at 1:54 p.m. in Tokyo from $1.3442 late in New York May 25, when it reached $1.3412, the highest since April 11. It will rise to $1.32 by year-end, Halmarick said. The U.S. currency was at 121.69 yen from 121.79 last week, when it reached 121.88, the most since Feb. 13. The euro was quoted at 163.73 yen from 163.71 at the end of last week.
http://www.bloomberg.com/apps/news?pid=20601083&sid=anCHxxCt7aGM&refer=currency

[Ichiro]

28may-South Korean Won Drops After North's Short-Range Missile Test

By Jake Lee and Yumi Teso

May 28 (Bloomberg) -- South Korea's won fell after North Korea test-fired missiles late on May 25 as part of routine annual exercises, fueling concern tensions in the region may increase.

The short-range missiles were launched after the close of won trading last week. Japanese Prime Minister Shinzo Abe said his country's patience ``isn't limitless'' and retains the option of further sanctions against the communist nation. The won slid 1.5 percent on Oct. 9 after the North tested its first nuclear bomb.

``The North Korean missile story is weighing on the won,'' said Minoru Shioiri, a senior manager of currency trading and credit division at Mitsubishi UFJ Securities Co. in Tokyo.

The won fell 0.3 percent to 930.55 against the dollar at 9:36 a.m. local time, according to Seoul Money Brokerage Services Ltd. The won may weaken close to 934 this week, Shioiri said.

http://www.bloomberg.com/apps/news?pid=20601013&sid=a.Bf3hyyiEg8&refer=emergingmarkets

[Ichiro]

29may-GLOBAL MARKETS-Yen, global stocks up after strong Japan data
Tue May 29, 2007 4:56am ET25
Company Market News

By Lincoln Feast

LONDON, May 29 (Reuters) - Signs of strength in the Japanese economy boosted the yen and global stocks on Tuesday while government bonds fell after the data and after hawkish comments on interest rates from the European Central Bank.

Oil prices rebounded above $70 a barrel as worries continued about supplies from Nigeria and base metals were also firmer, with lead hitting a record high following a delay in exports from Australia.

The yen rallied from a three-month low versus the dollar after data showed Japan's jobless rate sank to a nine-year low and consumer spending topped expectations in April, fuelling expectations the Bank of Japan will raise borrowing costs in the coming months.

"BOJ rate hike expectations are intensifying," said Tomoko Fujii, senior economist and strategist at Bank of America. "The market is pricing in an earlier-than-expected rate rise."

The dollar was down 0.3 percent from late European dealings on Monday at 121.25 <JPY=>, while the euro was down 0.3 percent at 163.15 yen <EURJPY=R>.

Japan's unemployment rate fell to 3.8 percent in April from 4.0 percent in March, while household spending in the world's number-two economy rose by 1.1 percent from a year earlier, compared with just 0.2 percent expected in a Reuters poll.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070529:MTFH84036_2007-05-29_08-56-10_L29512523&type=comktNews&rpc=44

[Ichiro]

29may-Europe shares rise as Vodafone stars, banks eyed
Tue May 29, 2007 4:46am ET15

By Sitaraman Shankar

LONDON, May 29 (Reuters) - European shares ticked up early on Tuesday, as Vodafone (VOD.L: Quote, Profile , Research) pleased investors with its dividend and banking stocks moved into focus after a Royal Bank of Scotland (RBS.L: Quote, Profile , Research)-led group unveiled details of a bid for ABN AMRO (AAH.AS: Quote, Profile , Research).

At 0809 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was up 0.07 percent at 1,600.49 points, with Germany's DAX <.GDAXI> outperforming its peers with a 0.2 percent rise and bluechips in France down 0.3 percent.

Vodafone (VOD.L: Quote, Profile , Research) climbed 3.8 percent to top European gainers after it posted annual dividends and earnings per share towards the top end of expectations, though it warned it expected market conditions to remain challenging in Europe.

Traders also cited vague market talk of a bid from AT&T (T.N: Quote, Profile , Research). Vodafone declined to comment.

A consortium led by RBS and including Spain's Santander (SAN.MC: Quote, Profile , Research) and Belgium's Fortis (FOR.BR: Quote, Profile , Research) unveiled a 71.1 billion euro bid for ABN that included its disputed U.S. bank and a higher cash component than indicated.

The bid trumps an agreed offer for ABN from Barclays (BARC.L: Quote, Profile , Research).

The news sent RBS down 2.1 percent to top losers in Britain, while ABN AMRO dipped 0.3 percent and Fortis slipped 0.9 percent. Santander

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070529:MTFH83842_2007-05-29_08-46-15_L29222707&type=comktNews&rpc=44

[Ichiro]

30may-European Stocks Retreat on China Concern, Led by LVMH, Bulgari

By Sarah Jones

May 30 (Bloomberg) -- European stocks dropped the most in two months after China increased taxes on securities trades, sparking concern that global shares face another sell-off.

LVMH Moet Hennessy Louis Vuitton SA, Standard Chartered Plc and BHP Billiton Ltd. led a decline by companies most dependent for revenue in the world's fastest growing major economy. Total SA and BP Plc fell after oil slumped yesterday.

Chinese stocks tumbled the most in three months after the government tripled the tax on securities transactions to slow a market that has almost doubled this year. A plunge in the nation's equity market in February triggered a global rout that wiped $3.3 trillion from the value of stocks.

``Anything that has a China label attached to it is going to come under pressure,'' said Chris Tinker, head of equity research at ICAP Plc in London. ``We have to keep in context the market's response to Chinese developments back in February. It did have something of a contagion affect.''

The Dow Jones Stoxx 600 Index dropped 0.8 percent to 391.18 as of 1:04 p.m. in London. All 18 industry groups slid. The Stoxx 50 declined 0.9 percent as did Euro Stoxx 50, a measure for the 13 nations sharing the euro.

Stamp duty on share trades was lifted to 0.3 percent ``to promote the healthy development of the securities market,'' China's finance ministry said. The central bank this month raised interest rates for the second time this year.

http://www.bloomberg.com/apps/news?pid=20601085&sid=as5reRj1zlmw&refer=europe

[Ichiro]

30may-China Stocks Drop as Stamp Duty Triples: World's Biggest Mover

By Zhang Shidong and Darren Boey

May 30 (Bloomberg) -- China's stocks tumbled the most in three months after the government tripled the tax on securities transactions to cool a rally that's drawing more than 300,000 new investors a day.

The CSI 300 Index dropped 281.83, or 6.8 percent, to close at 3886.46 in Shanghai, the biggest fluctuation among markets included in global benchmarks. The value of local stocks has more than doubled this year to $2.47 trillion and brokerage accounts topped 100 million for the first time this week.

``The Chinese government is concerned that there's too many people in the market, and they're gambling,'' Mark Mobius, who oversees some $30 billion as managing director of Templeton Asset Management Ltd., said in an interview in Hong Kong. ``It's good for people to not expect that markets go up continuously.''

More than half of the shares included in the CSI 300 fell by the 10 percent daily limit today, including Citic Securities Co., the nation's largest publicly traded brokerage, and China Shipping Development Co., the biggest oil tanker operator.

http://www.bloomberg.com/apps/news?pid=20601080&sid=aov7tk7g9L9A&refer=asia

[Ichiro]

30may-U.S. Stock-Index Futures Slip; General Electric, Honeywell Fall

By Ludwig Burger

May 30 (Bloomberg) -- U.S. stock-index futures retreated after the Chinese government tripled the tax on securities transactions, sparking concern that another global rout may be in the making following drops in Asian and European indexes today.

General Electric Co., the world's biggest provider of power- plant turbines, and Honeywell International Inc., the largest maker of airplane controls, paced a decline in Europe of companies dependent on China for revenue growth.

U.S. real-estate shares surged yesterday on takeover speculation, propelling the Standard & Poor's 500 Index to within 10 points of a record. European and Asia stocks slid today after China raised the transactions tax to 0.3 percent.

``You have to be prepared for a correction at any time,'' said Oliver Hagen, who manages $135 million in U.S. stocks at LGT Capital Management in Bendern, Liechtenstein. ``We are overbought. A slump in Chinese stocks has the potential to trigger a short-term reaction in the U.S.''

CDW Corp. shares surged in Germany after Madison Dearborn Partners LLC agreed to buy the computer reseller for about $7.3 billion.

S&P 500 futures expiring in June lost 6.1 to 1516.4 as of 11:28 a.m. in London. Dow Jones Industrial Average futures fell 58 to 13,500. Nasdaq-100 Index futures declined 9 to 1897.75

China

China's CSI 300, a benchmark measure for Asia's best performing equity market so far this year, posted the biggest slump in three months today, leading Asian markets lower. The index lost 6.8 percent, the biggest fluctuation among markets included in global benchmarks.

http://www.bloomberg.com/apps/news?pid=20601103&sid=a9bULOlTIxco&refer=us

[Ichiro]

31may-China's Olympian stock-market sprint

Current thinking is that Chinese markets will rally at a furious pace through the 2008 Summer Olympics -- and then investors should take the money and run. Don't bet your gold medal that strategy will work.

By Jim Jubak

I read something in The Wall Street Journal last week that really scared me (besides the editorial page, I mean): "In Beijing, investors talk of a one-way bet on the market until at least next year's Olympics."

In other words, even though the Shanghai stock market is up 52% this year, was up 130% in 2006 and is up 305% since this rally began back in June 2005, and even though everyone knows this speculative bubble isn't sustainable, it's smart to keep pouring money into Chinese stocks -- no matter their price -- because the government won't intervene and risk crashing the market until after the showcase Beijing Olympics are over.

So invest as much as you can in anything you can until Aug. 24, 2008, the day the Beijing games come to an end. Then run -- don't walk -- in an orderly fashion to the exit.

Yeah, like that will work.
Watch out for stampede
Speculative markets that think they've got a green light to run from excess to excess until a specific date scare me. The possibility of a stampede for the exits on the Shanghai exchange starting a wave of fear that spreads around the globe scares me. And the very real possibility that the Beijing government will make a mistake and crash the Chinese stock market scares me.

Everything is not black, however. Because the Chinese stock market is, so far, only tenuously connected to the global financial market, any crash in Shanghai is likely to have only modest global effects.

With those cheery thoughts fresh in mind, let's take a look at why speculators in Shanghai think they've got a green light until August 2008.

http://articles.moneycentral.msn.com/Investing/JubaksJournal/ChinasOlympianStockMarketSprint.aspx

[Ichiro]

31may- AP-Stocks Up Slightly After GDP Reading
Thursday May 31, 2:20 pm ET
By Madlen Read, AP Business Writer
Stocks Little Changed After More Takeover Deals, Feeble GDP Growth

NEW YORK (AP) -- Stocks posted slight gains Thursday after a weak reading of the nation's gross domestic product muted Wall Street's enthusiasm over a new spate of acquisitions.

The Commerce Department's latest estimate of first-quarter GDP was 0.6 percent, lower than the average economist estimate of 0.8 percent and the 1.3 percent projected in April.


The fact that first-quarter growth has been the most sluggish since the last quarter of 2002, but that the Dow Jones industrial average has nonetheless surged more than 9 percent this year, caused some investors to pause.

"There's friction between those two numbers. That's why investors are a little bit worried, and why we're not hitting home runs every day," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors.

Still, most on Wall Street expect growth to pick up later in the year, and remain optimistic about the stock market thanks to the unrelenting wave of takeovers, which are on track to beat last year's record tab of $4 trillion.

On Thursday, banking company Wachovia Corp. said it would acquire A.G. Edwards Inc. for $6.8 billion in cash and stock to form the second-largest retail stock brokerage in the country. And payroll processor Ceridian Corp. said late Wednesday it will be bought out by investment firm Thomas H. Lee Partners LP and insurance provider Fidelity National Financial Inc. for about $5.3 billion.

http://biz.yahoo.com/ap/070531/wall_street.html?.v=30

[Ichiro]

31may-U.S. Economy: First Quarter May Have Been Low Point (Update2)

By Shobhana Chandra

May 31 (Bloomberg) -- The U.S. economy grew last quarter at the slowest pace in more than four years, a 0.6 percent annual rate that may prove to have been the low point of the expansion.

The gain in gross domestic product, announced by the Commerce Department today in Washington, was lower than the 0.8 percent rate economists had forecast, and less than the government's previous 1.3 percent estimate. A private report from Chicago today showed a jump in business activity, while figures since the March 30 end of the quarter show a rebound in corporate spending and consumer confidence.

Traders further reduced bets that Federal Reserve Chairman Ben S. Bernanke will need to cut interest rates this year. The prospect of a recession, given a one-in-three chance by former Fed Chairman Alan Greenspan, looks less likely as business investment and manufacturing strengthen.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aguRviOo2DoI&refer=home

[Ichiro]

31may-European Stocks Rise to 6 1/2-Year High; E.ON, Iberdrola Climb

By Sarah Jones and Ludwig Burger

May 31 (Bloomberg) -- European stocks rallied, sending the Dow Jones Stoxx 600 Index to the highest since September 2000, after E.ON AG said it will buy back $9.4 billion in shares and Belgian billionaire Albert Frere bought a stake in Iberdrola SA.

E.ON and Iberdrola led utility shares to a record. Scottish & Southern Energy Plc rose after earnings beat analysts' estimates. ASML Holding NV climbed the most in six weeks on plans to pay cash to shareholders. BHP Billiton Ltd. paced a rebound in mining stocks as copper advanced and the company named a new chief executive officer.

http://www.bloomberg.com/apps/news?pid=20601085&sid=aIkZiSiuSHfo&refer=europe

[Ichiro]

31may-Dollar Heads for Best Month Versus Euro in a Year on Economy

By Min Zeng and Bo Nielsen

May 31 (Bloomberg) -- The dollar headed for its biggest monthly gain versus the euro in more than a year as signs of economic strength reduced the likelihood of cuts in interest rates later this year by the Federal Reserve.

The U.S. currency rebounded in May from an all-time low on reports showing gains in new home sales and manufacturing. The central bank said in minutes of its May 9 meeting released yesterday that it still expects a pickup in the economy this year and views inflation as its main concern.

``We are starting to see some recovery in the U.S. economy, which increases the risks that the Fed's next move is a hike rather than a cut,'' said Matthew Strauss, senior currency strategist in Toronto at RBC Capital Markets Inc., a unit of Canada's biggest bank by assets. ``The dollar is gaining strength.''

http://www.bloomberg.com/apps/news?pid=20601083&sid=aVvIBI1Ey0S0&refer=currency

[Ichiro]

31may-India's Economy Grows at Fastest Pace in Two Decades (Update5)

By Cherian Thomas

May 31 (Bloomberg) -- India's economy grew at the fastest pace in almost 20 years as companies lifted production to meet surging consumer demand.

South Asia's largest economy expanded 9.4 percent in the year ended March 31, the biggest gain since 1989 and more than the government's initial estimate of 9.2 percent, the Central Statistical Organisation said in New Delhi today.

http://www.bloomberg.com/apps/news?pid=20601013&sid=aIDBNk_D1iR4&refer=emergingmarkets

[Ichiro]

31may- AP-Stocks Are Flat After Weak GDP Report
Thursday May 31, 4:25 pm ET
By Madlen Read, AP Business Writer
Stocks Finish Flat After More Takeover Deals, Feeble GDP Growth

NEW YORK (AP) -- Stocks finished largely flat Thursday after a weak reading of the nation's gross domestic product muted Wall Street's enthusiasm over a new spate of acquisitions. Technology stocks fared better than most, however.


The Commerce Department's latest estimate of first-quarter GDP was 0.6 percent, lower than the average economist estimate of 0.8 percent and the 1.3 percent the government projected in April.

http://biz.yahoo.com/ap/070531/wall_street.html?.v=38

[Ichiro]

1jun- AP-Dollar Rises in Asia on Yen-Carry Trades
Friday June 1, 3:09 am ET
Dollar Climbs in Asian Trading as Investors Step Up Yen-Carry Trades

TOKYO (AP) -- The dollar rose in Asia Friday as investors stepped up yen-carry trades to take advantage of low Japanese interest rates to buy other currency with the yen.

The dollar was trading at 121.92 yen midafternoon, up from 121.73 yen late Thursday in Tokyo. The euro fell to $1.3450 from $1.3453.


Traders said the yen may fall further because worries about financial market risks are fading, prompting a resumption of yen-carry trades.

Earlier this week, they had been carefully monitoring the Chinese stock market, which slumped Wednesday after the government raised a tax on trading.

But such worries have been reduced lately as it became clear that global stock markets remain solid, they said.

China's markets have rebounded from Wednesday's losses with two straight days of gains, and most Asian markets have made gains Friday, with index records hit in South Korea and the Philippines.

"As long as stock markets remain firm, risk appetite will remain intact and yen-carry trade will continue," said Shuichi Kanehira, senior trader at Mizuho Corporate Bank.

http://biz.yahoo.com/ap/070601/asia_dollar.html?.v=1

[Ichiro]

1jun- AP-Stocks Head Toward Higher Opening
Friday June 1, 7:27 am ET
By Madlen Read, AP Business Writer
Stocks Point to Higher Opening Ahead of May Jobs Report

NEW YORK (AP) -- Stocks pointed toward a higher opening Friday as Wall Street awaited the government's employment report for May and a widely-followed survey on manufacturing.

Investors will be trying to glean from the data any clues about the future of the economy and the direction of interest rates. The market is steadfastly hoping that the weakening economy will force the Federal Reserve to eventually lower rates, but at the same time expecting growth to bounce back later this year.


The Labor Department will release its unempoyment and jobs creation figures at 8:30 a.m. EDT.

According to the median estimate of economists surveyed by Thomson Financial, the market anticipates that nonfarm payrolls rose by 138,000 in May, a bigger increase than in April, and that the unemployment rate held steady at 4.5 percent. Any number showing significantly stronger employment could take stocks lower, because investors would interpret it as pointing away from a rate cut.

http://biz.yahoo.com/ap/070601/wall_street.html?.v=5

[Ichiro]

4jun-China's Stocks Post Record Drop; Extend Rout Past $350 Billion

By Zhang Shidong

June 4 (Bloomberg) -- China's key stock index plunged by a record number of points after the government's main securities daily signaled officials won't try to halt a slump that's erased more than $350 billion of market value in four days.

The CSI 300 Index dropped 292.52, or 7.7 percent, to close at 3511.43. The measure, which doubled in the past six months, has plunged 16 percent from its May 29 peak after the government tripled the tax on share trades to 0.3 percent.

The speed that stock prices soared by was ``extremely unusual'' and highlighted ``structural bubbles'' in the market, the state-owned China Securities Journal wrote in an editorial.

More than half of the stocks included in the CSI 300 plunged by the 10 percent daily limit, including Huaneng Power International Inc., the nation's largest electricity producer, and Air China Ltd., the biggest international carrier.

``There's panic selling,'' said Yan Ji, an investment manager at HSBC Jintrust Fund Management Co. in Shanghai, which manages about $517 million. ``Investors are convinced the government won't do anything to support the market.''

http://bloomberg.com/apps/news?pid=20601087&sid=au9qV8VcFjO8&refer=worldwide

[Ichiro]

4jun-Fed Faces Growing Pressure to Raise Rates, Options Market Says

By Daniel Kruger

June 4 (Bloomberg) -- In the options market where the savviest investors take apart conventional wisdom, the Federal Reserve is facing growing pressure to consider raising interest rates as soon as December.

Options on Federal Fund futures at the Chicago Board of Trade indicate a 41 percent chance the central bank will lift its target rate for overnight loans between banks to 5.5 percent from the current 5.25 percent, according to data compiled by Bloomberg. A month ago, they showed no expectations for an increase.

While the economy expanded at the slowest pace in more than four years in the first quarter, inflation remains at the top of the Fed's comfort zone, business activity has rebounded, the jobless rate is near the lowest in six years and stock indexes are setting record highs. Just three months ago, options traders speculated the weakest housing market in 16 years would force the central bank to cut interest rates to 4.5 percent by January.

http://bloomberg.com/apps/news?pid=20601087&sid=avIYhj2Cj8kE&refer=worldwide

[Ichiro]

4jun-Asian Stocks Rise to Record on Spending, Growth; Toyota Gains

By Chen Shiyin and George Hsu

June 4 (Bloomberg) -- Asian stocks advanced to a third straight record after Japanese companies increased spending and reports showed U.S. employment and manufacturing expanded more than expected.

Toyota Motor Corp., the world's biggest carmaker by market value, climbed to a 10-week high after reporting a jump in sales. China's CSI 300 Index slumped, taking its losses to 16 percent in the four days since the government tripled stamp duty on share trades to try to cool a surging market.

``Solid economic growth is the bedrock of good corporate earnings and stock prices,'' said Liu Juming, who helps manage $1.7 billion at IBT Securities Co. in Taipei. ``China's a secluded market, so its plunge will have limited regional impact.''

The Morgan Stanley Capital International Asia-Pacific Index added 0.6 percent to 152.31 as of 4:14 p.m. in Tokyo. Energy and materials stocks including BHP Billiton Ltd., the No. 1 mining company, posted the biggest gains among the measure's 10 industry groups, tracking an advance in the price of crude oil and metals.

Japan's Nikkei 225 Stock Average added 0.1 percent, while the broader Topix gained 0.3 percent. Benchmarks in South Korea, Australia, Singapore, the Philippines and Indonesia climbed to new highs. New Zealand's market was closed for a holiday.

http://bloomberg.com/apps/news?pid=20601080&sid=aB.Y.vljTIqc&refer=asia

[Ichiro]

4jun-European Bank Stocks Decline, Led by Deutsche Bank, BNP Paribas

By Adria Cimino

June 4 (Bloomberg) -- European bank stocks dropped, led by Deutsche Bank AG and BNP Paribas SA, after JPMorgan, Chase & Co. cut its recommendation on the investment-banking industry.

Tiscali SpA gained on speculation the Italian Internet provider may be bought. Clariant AG, a Swiss chemical company, also paced advancing shares.

Europe's Stoxx 600 climbed to the highest since September 2000 last week as a rebound in metals prices buoyed mining companies and economic reports in the U.S. suggested growth in the world's biggest economy is picking up. The measure is within 6 points of a record.

``The risk is linked to the euphoria we've seen in the stock market,'' said Guillaume Duchesne, a Luxembourg-based equity strategist at Fortis Private Banking, which manages $76 billion. ``We're nervous about the evolution of the market and fear a correction.''

The Stoxx 600 fell 0.1 percent to 399.98 as of 8:25 a.m. in London. The Stoxx 50 also lost 0.1 percent and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, slipped 0.2 percent.

JPMorgan downgraded investment banks to ``underweight'' from ``neutral.'' The analysts cut shares of Deutsche Bank, Germany's biggest bank, to ``underweight'' from ``neutral.'' JPMorgan also lowered BNP Paribas, France's largest bank, to ``neutral'' from ``overweight.''

``We believe we are witnessing a `near-perfect' fixed-income market environment that is unlikely to get much better,'' analysts led by Kian Abouhossein said in a note to clients today.

http://bloomberg.com/apps/news?pid=20601085&sid=aCvA2L5jZ48E&refer=europe

[Ichiro]

5Jun- AP-Stocks Eke Out Gain Despite China Drop
Monday June 4, 5:21 pm ET
By Joe Bel Bruno, AP Business Writer
Wall Street Finishes Slightly Higher Despite Chinese Stock Market Plunge

NEW YORK (AP) -- Wall Street recovered from a mostly down session Monday, eking out a gain as investors brushed off another slide in Chinese stocks.

The market had little in the way of corporate or economic news to give it direction, but while it was in negative territory for much of the day, in the end it shook off an 8.3 percent slide in the benchmark Shanghai Composite Index. The Chinese index had its biggest one-day drop since the Feb. 27 plunge that set off a brief global market selloff as the Chinese government attempts to cool the country's market boom.

Investors used Monday to adjust positions after both the Standard & Poor's 500 index and Dow Jones industrial average surged to record closes in the previous session. The market was encouraged by economic data released last week that suggested the economy was slowing, but not too quickly, and inflation remained in check.

However, the Commerce Department reported Monday that orders to U.S. factories were weaker than expected in April. Investors might find some information to trade with the release of the Institute of Supply Management's service sector index on Tuesday, but not much other information is expected.

http://biz.yahoo.com/ap/070604/wall_street.html?.v=39

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5jun- AP-Dollar Falls on U.S. Factory Orders Data
Monday June 4, 4:56 pm ET
Dollar Drops Against Major Currencies After Weaker Factory Orders Reported in U.S.

NEW YORK (AP) -- The dollar weakened Monday, dragged down by weaker-than-expected factory orders in the United States.

The 13-nation euro climbed to $1.3488 in late New York trading from $1.3443 late Friday after the U.S. Commerce Department reported orders to factories rose less than expected in April.


Orders were up 0.3 percent. It was the weakest result in three months and less than half of the 0.8 percent increase that analysts expected.

Markets are closely watching U.S. economic data for pointers to the Federal Reserve's future interest rate course.

http://biz.yahoo.com/ap/070604/dollar.html?.v=4

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5jun-Asian Stocks Rise to a Record, Led by Cnooc; Hon Hai Advances

By Darren Boey and Makiko Suzuki

June 5 (Bloomberg) -- Asian stocks climbed, sending a regional benchmark to a record, after crude-oil prices traded near a two-week high and HSBC Holdings Plc raised its targets for Cnooc Ltd. and PetroChina Co.'s shares.

``Money is heading to commodity-related shares, pushing the level of the overall market higher,'' said Terunobu Kinoshita, who helps manage $785 million at Fund Creation Co. in Tokyo. ``Investors should anticipate further gains.''

Hon Hai Precision Industry Co. led technology shares higher after brokerage and media reports prompted speculation that industry demand is picking up. China's CSI 300 Index gained 3.5 percent, rebounding from a 7.5 percent slump earlier. The measure had lost $402 billion of market value in the four days through yesterday since the government tripled a tax on stock trading.

The Morgan Stanley Capital International Asia-Pacific Index added 0.3 percent to 152.89 at 7:19 p.m. in Tokyo, set to surpass yesterday's record close of 152.43. Japan's Nikkei 225 Stock Average gained 0.5 percent. Benchmarks in South Korea, Malaysia and Pakistan climbed to records.

MSCI's index of Asia-Pacific energy stocks rose 1.6 percent after oil futures in New York yesterday climbed 1.7 percent to $66.21, the highest since May 21. Prices were recently at $65.82 in after-hours trading.

http://www.bloomberg.com/apps/news?pid=20601080&sid=aCvMz2a35vY4&refer=asia

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5jun-China's Stock Index Rebounds From Loss: World's Biggest Mover

By Zhang Shidong and Xiaowei Li

June 5 (Bloomberg) -- China's key stock index rose 3.5 percent, rebounding from an earlier loss, on speculation the government will take steps to halt a rout that wiped out more than $400 billion of market value in less than a week.

Datong Coal Industry Co. and Hong Yuan Securities Co. were among 20 stocks on the index that rose by the 10 percent daily cap. Only two members fell by the maximum, down from about 100 at the midday break.

``It is likely the government will do something to support the market,'' said Xie Yan, an analyst at Haitong Securities Co. in Shanghai.

Speculation the government will announce a market stabilization fund and rule out the introduction of a capital gains tax boosted stocks in the afternoon, Xie said. The benchmark fell by as much as 7.5 percent in morning trade.

Citic Securities Co. rose after the brokerage said it plans to sell shares valued at about $2.5 billion.

The benchmark CSI 300 Index gained 123.20 to 3634.63 at the close, the biggest fluctuation among markets included in global benchmarks. The measure, having fallen as much as 22 percent from a peak on May 29, has now dropped 13 percent since the government tripled its tax on securities trading.

http://www.bloomberg.com/apps/news?pid=20601080&sid=aJTsUQifvm1o&refer=asia

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5jun-China Will Likely Raise Lending, Deposit Rates Again (Update1)

By Nipa Piboontanasawat

June 5 (Bloomberg) -- China may raise lending and deposit rates at least once more this year to cool investment and curb asset bubbles, a survey showed.

Benchmark one-year borrowing costs will rise from 6.57 percent and deposit rates from 3.06 percent, according to 21 of 25 economists surveyed by Bloomberg News. The central bank may order lenders to set aside more money as reserves at least two more times, 16 economists said.

China is trying to stop money from record trade surpluses fueling stock or property bubbles and overcapacity in manufacturing. Inflation has outpaced after-tax returns on bank deposits, encouraging stock market speculation that's driven the CSI 300 Index to a 70 percent gain this year. The benchmark fell 7.7 percent yesterday and dropped another 1.1 percent as of 1:39 p.m. in Shanghai today.

``Raising deposit rates by 27 basis points to quell the liquidity inflow into the stock market is like trying to dam the Yangtze River with a matchstick,'' said Glenn Maguire, chief Asia economist at Societe Generale SA in Hong Kong. ``And if equity markets cool, the risk is of a rebound in property.''

The People's Bank of China last month raised the key one- year deposit rate by 0.27 percentage point to just above April's inflation rate of 3 percent.

http://www.bloomberg.com/apps/news?pid=20601089&sid=aOdq8vtZJ3mc&refer=china

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5jun-apanese Stocks Rise; Toyota, Auto-Related Shares Lead Gains

By Makiko Suzuki

June 5 (Bloomberg) -- Japanese stocks rose, with the Nikkei 225 Stock Average closing above 18,000 for the first time since February. Automakers such as Toyota Motor Corp. led gains as concern eased a slowdown in the U.S. economy will drag on the companies' profit growth.

Energy producers advanced after the price of crude oil climbed above $66 a barrel in New York.

Denso Corp., an auto-parts maker affiliate of Toyota, jumped 2.3 percent. AOC Holdings Inc., Japan's second-largest oil explorer by sales, surged 7.4 percent.

``The U.S. economy has shown signs of recovery and automakers rose, reflecting people's easing worries over the companies' earnings,'' said Naoki Fujiwara, who oversees $720 million at Shinkin Asset Management Co. in Tokyo. ``Rising oil prices provided a good support for commodity-related shares.''

Fast Retailing Co. dropped, leading losses by retailers, after saying its same-store sales declined last month.

http://www.bloomberg.com/apps/news?pid=20601101&sid=asDtVFSVBn0w&refer=japan

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5jun-Euro Rises to Record Against Yen; ECB May Signal Higher Rates

By Anchalee Worrachate and David McIntyre

June 5 (Bloomberg) -- The euro strengthened to a record against the yen and advanced versus the dollar on expectations the European Central Bank will raise interest rates tomorrow and signal further increases this year.

The euro has gained for four straight days against the yen as the extra yield investors earn on European two-year debt over similar maturity Japanese bonds widened to near a five-year high. The yen is the world's worst performing currency against the dollar so far this quarter, declining 3.2 percent, as Japanese investors seek higher-yielding assets overseas.

``It's not just an ECB story that's driving euro-yen higher, it's Japanese investors investing abroad,'' said Adam Myers, currency strategist at UBS AG in London. ``They're putting significant amounts of their own capital offshore to generate a higher yield.''

The European currency rose to an all-time high of 164.61 yen and was at 164.44 as of 11:07 a.m. in London, from 164.27 in late New York yesterday. It was at $1.3508 to the dollar from $1.3489. The dollar bought 121.74 yen, from 121.77. The euro may rise to as high as $1.40 by the end of the year, Myers said.

http://www.bloomberg.com/apps/news?pid=20601101&sid=aDBducNcjna8&refer=japan

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5jun-European Stocks Rise, Led by Vodafone; Standard Life Gains

By Adria Cimino

June 5 (Bloomberg) -- European stocks advanced on takeover speculation in the telecommunications industry and after brokerages advised investors to buy insurers and mining companies.

Vodafone Group Plc climbed after the Wall Street Journal said the mobile-phone company might be worth more split into parts, fueling speculation it may be taken over. Standard Life Plc and Old Mutual Plc gained after Merrill Lynch & Co. raised its recommendation on both shares. Mining stocks rose after Xstrata Plc said it's prepared to make an acquisition and Citigroup Inc. raised its recommendation on BHP Billiton's shares.

``Equities should perform well,'' said Toby Nangle, who helps manage $37 billion in assets at Baring Investment Service in London. ``The mergers and acquisitions boom is set to continue in Europe.''

The Dow Jones Stoxx 600 Index gained 0.1 percent to 399.49 as of 11:35 a.m. in London, with the industry group for raw- materials companies leading advances. The index lost 0.3 percent yesterday, halting a rally that pushed the measure to its highest since September 2000.

http://www.bloomberg.com/apps/news?pid=20601085&sid=adKyjWfv2zV0&refer=europe

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5jun---Bill Gross, China Have Roles in Brazil's Revival: William Pesek

By William Pesek

June 1 (Bloomberg) -- Call it BRICs envy.

The BRICs -- Brazil, Russia, India and China -- are poised to be the superpowers of tomorrow. The grouping has no doubt led to hard feelings among those promising economies not in it. South Korea, anyone? What about Mexico or Turkey? How about Indonesia, Iran or Nigeria?

A more intriguing envy dynamic seems to be afoot among those that did make the BRICs cut, Brazil in particular.

With China growing 11 percent and India not far behind, Brazil is getting serious about catching up. With January's election well behind him, President Luiz Inacio Lula da Silva is using his second term to put the world's 11th-biggest economy on firm footing once and for all.

Here, China's rise might be far more advantageous than many of Brazil's 190 million citizens tend to believe. In recent years, the focus has been on how China is killing local industries and eroding support for free trade in developing economies. Yet China may be playing a different -- and beneficial -- role: catalyst for change.

http://www.bloomberg.com/apps/news?pid=20601039&sid=ap4BUwsb6dvI&refer=columnist_pesek

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6jun-European Stocks Drop on Interest-Rate Concern; E.ON Shares Fall

By Adria Cimino

June 6 (Bloomberg) -- European stocks headed for the biggest decline in more than two months on expectations the European Central Bank will raise interest rates today and signal further increases.

E.ON AG and Iberdrola SA led a decline by utilities, while BNP Paribas SA and Spain's Banco Popular Espanol SA pushed banking shares lower. Thales SA, Europe's largest defense- electronics company, fell after Societe Generale SA downgraded the stock.

Mounting concern that interest rates will rise in Europe and the U.S. halted a rally that sent the Dow Jones Stoxx 600 Index to within 6 points of a record. U.S. stocks slipped for the first time in a week yesterday after bond yields surged to a nine-month high amid signs the economy may be gaining momentum.

``We are in a period of rising interest rates and that obviously has an impact on the market,'' said Andrea Williams, a fund manager at Royal London Asset Management, where she helps manage about $2 billion.

All 18 industry groups in the Stoxx 600 fell, except for a measure for health-care. GlaxoSmithKline Plc led drugmakers higher after a company-run study found its diabetes drug didn't increase the likelihood of heart attack and death.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGAA15iT.c8M&refer=home

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6jun-Asian Stocks Rise, Led by Japan's Mitsubishi; Canon, Toll Fall

By Darren Boey and Makiko Suzuki

June 6 (Bloomberg) -- Asian stocks rose, led by Mitsubishi Corp. and BHP Billiton Ltd., companies that may report higher earnings as commodity prices climb.

Mitsubishi, which trades in goods ranging from oil and fuel to food, advanced after Daiwa Institute of Research Ltd. raised share-price targets on Japanese trading companies, citing gains in prices of crude and copper. Marubeni Corp. soared the most in three years after it said it was close to winning a contract to build a power and water plant in the United Arab Emirates.

``Trading companies have been eyeing various profit-making opportunities where they can use earnings from their commodities business,'' said Tomokatsu Mori, who helps oversee $7.4 billion at Fukoku Capital Management Inc. in Tokyo.

Canon Inc. paced exporters lower as the yen gained and on concern a cut in U.S. interest rates will be delayed.

The Morgan Stanley Capital International Asia-Pacific Index climbed 0.2 percent to 153.18 at 7:27 p.m. in Tokyo, set for a record close. About three stocks fell for every two that rose. Japan's Topix Index added 0.1 percent while the Nikkei 225 Stock Average dropped 0.1 percent.

http://www.bloomberg.com/apps/news?pid=20601080&sid=aPuM8NRitPsI&refer=asia

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6jun-uro Trades Near Three-Week High Against Dollar Before ECB

By Anchalee Worrachate and Kosuke Goto

June 6 (Bloomberg) -- The euro traded near a three-week high against the dollar on expectations the European Central Bank will lift interest rates today and signal further increases for the rest of the year.

The single currency has rebounded this month from the lowest in seven weeks against the dollar after a report showed economic growth in Europe was faster than expected, outpacing the U.S. The euro is also trading near a record high against the yen after the ECB lifted rates to a six-year high of 3.75 percent.

``Rates will almost certainly be raised by 25 basis points,'' said David Simmonds, head of global currency research at Royal Bank of Scotland Plc in London. ``It's unlikely the ECB sees 4 percent as neutral, so the tone of the press conference should make it clear that it maintains a tightening bias.''

The euro traded at $1.3515 to the dollar as of 11:38 a.m. in London, from $1.3524 in New York late yesterday, when it reached $1.3554, the highest since May 16. It was at 163.69 yen from 164.16 yesterday, when it rose to a record of 164.61 yen. The dollar traded at 121.11 yen, from 121.39 yen.

The yen was buoyed against the dollar and euro today after European equities and U.S. stock futures declined, prompting investors to reduce investments funded with cheap borrowing in Japan. Benchmark rates in Japan are at 0.5 percent.

http://www.bloomberg.com/apps/news?pid=20601083&sid=aX8eGEiy0edM&refer=currency

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6jun-U.S. Stock-Index Futures Drop Before Reports; Citigroup Falls

By Ludwig Burger

June 6 (Bloomberg) -- U.S. stock-index futures fell before productivity and labor-cost reports that may validate the Federal Reserve's concern that inflation is accelerating.

Shares of Citigroup Inc., the biggest U.S. bank by market value, dropped in Europe. Financial-services stocks are among the most sensitive to higher interest rates. Utilities including FPL Group fell in Europe as higher yields reduced the attractiveness of their dividends.

TD Ameritrade Holding Corp., the third-largest online brokerage, rose after two hedge funds urged it to consider a tie-up with other securities firms.

Benchmark indexes posted their first decline in a week yesterday after bond yields surged and Fed Chairman Ben S. Bernanke said core inflation ``remains somewhat elevated.'' Reports today may show labor costs increased and productivity growth slowed, adding to speculation that interest rates will rise to cool inflation.

http://www.bloomberg.com/apps/news?pid=20601084&sid=aj7VHlQJsS6E&refer=stocks

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7jun- AP
Euro Drifts Lower Against U.S. Dollar
Thursday June 7, 6:52 am ET
A Day After ECB Raises Interest Rates, Euro Drifts Slightly Lower Against U.S. Dollar

BERLIN (AP) -- The euro drifted below $1.35 on Thursday, a day after the European Central Bank raised interest rates but sent moderate signals on its future course.

The 13-nation euro bought $1.3493 in morning European trading, compared with $1.3506 in New York late Wednesday. The British pound dropped to $1.9915 from $1.9928 before an interest rate decision by the Bank of England.

The dollar rose to 121.28 Japanese yen from 121.01 yen.

http://biz.yahoo.com/ap/070607/euro_dollar.html?.v=2

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6jun-Bank of England Keeps Main Rate at Six-Year High of 5.5 Percent

By Brian Swint and Jennifer Ryan

June 7 (Bloomberg) -- The Bank of England left its benchmark interest rate unchanged at a six-year high, giving four previous increases time to slow inflation.

The nine-member Monetary Policy Committee, led by Governor Mervyn King, kept the Bank Rate at 5.5 percent today, as predicted by 58 of 62 economists in a Bloomberg News survey. The rest predicted a quarter-point increase.

``They would like to wait and see how things progress before raising rates again,'' said Matthew Sharratt, an economist at Bank of America Corp. in London. ``We still expect them to move to 5.75 percent in the third quarter because they are worried about underlying inflation.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=a261mSGzwTdE&refer=home

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7jun-Asian Stocks Are Little Changed; Sony Declines, Cnooc Jumps

By Chen Shiyin

June 7 (Bloomberg) -- Asian stocks were little changed as concern global interest rates will rise dragged on technology and property shares, offsetting gains among oil producers.

Sony Corp. and Sino Land Co. led declines after U.S. labor costs rose more than economist forecasts, while energy shares including Cnooc Ltd. tracked oil higher. China's CSI 300 Index climbed for a third day, damping speculation a rout that erased more than $400 billion of market value will resume.

``We are moving into a phase whereby long-term interest rates will go a lot higher,'' said Chua Soon Hock, who manages about $400 million at Asia Genesis Asset Management Pte in Singapore. ``You need to be defensive and preserve your capital.''

http://www.bloomberg.com/apps/news?pid=20601080&sid=aBEIEuY7OgOE&refer=asia

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7jun-Yen, Swiss Franc Weaken as Rising Global Rates Spur Carry Trade (here comes carry trade again!!!)

By Anchalee Worrachate and Ron Harui

June 7 (Bloomberg) -- The yen and Swiss franc weakened for the first day this week on expectations rising global interest rates will spur investors to borrow in Japan and Switzerland and buy higher-yielding assets elsewhere.

The currencies slid after New Zealand unexpectedly raised rates and the European Central Bank lifted its benchmark to a six-year high. Japan and Switzerland have the lowest borrowing costs among major economies. Steen Elverdal, managing director of hedge-fund Hamton Asset Management Ltd., said he uses Swiss francs to fund European investments that have higher yields.

http://www.bloomberg.com/apps/news?pid=20601101&sid=alU5hRQyhraY&refer=japan

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7jun-apan's 10-Year Bonds Fall; Yields Rise to Highest Since August

By Issei Morita

June 7 (Bloomberg) -- Japan's bonds fell, pushing 10-year yields to the highest since August, on speculation a report tomorrow will show machinery orders rose the most in 10 months.

Debt declined before the Cabinet Office report that may show orders for April ended two months of declines, according to a Bloomberg News survey. Government data earlier this week showed business investment increased to a record, signaling growth may be accelerating in the world's second-largest economy.

``The bearishness in Japan's bond market does not stop,'' said Kotaro Morota, a fund manager in Tokyo at the Pension Fund Association, which has more than 1,600 corporate funds as members. ``I anticipate yields will head higher.''

http://www.bloomberg.com/apps/news?pid=20601101&sid=a1ByjlGgyEOM&refer=japan

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7jun-Karl Marx Is Back, and Punting on Chinese Stocks: William Pesek

By William Pesek

June 6 (Bloomberg) -- Karl Marx is back in China, and the philosopher is arguably bigger than ever.

Yes, yes, Asia's No. 2 economy is barreling ahead on the free-market highway. Beijing has even gotten hip to the private- equity craze, buying a $3 billion stake in Blackstone Group LP. Now that, as Milton Friedman might say, is capitalism.

It's interesting, then, that China's markets in some respects are looking more like the kinds envisioned by Marx than by laissez-faire champion Friedman.

Mao Zedong fancied himself an heir to Marx. Today, when investors look at China's 11 percent growth and domestic reforms, the Marxist theory China subscribed to back in the 20th century seldom comes to mind.

http://www.bloomberg.com/apps/news?pid=20601039&sid=aS1ymHqJh_xU&refer=columnist_pesek

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8jun-Treasury 10-Year Note Falls Most in 3 Years as Yield Tops 5%

By Elizabeth Stanton

June 7 (Bloomberg) -- The benchmark 10-year U.S. Treasury note fell the most in more than three years after New Zealand unexpectedly raised interest rates, igniting concern other central banks will respond to faster global growth.

Interest-rate futures and options showed traders who as recently as December were betting on three quarter-percentage point rate cuts by the Federal Reserve this year boosted bets on an increase in borrowing costs. Ten-year yields surpassed 5 percent for the first time since August and exceeded two-year yields by the most in a year.

``We've had a global interest-rate structure that's been trading extremely rich to historical norms for years and years,'' said Tom McGlade, who trades 30-year Treasuries at RBS Greenwich Capital in Greenwich, Connecticut. Signs of faster global growth ``are driving a repricing of the global interest-rate complex back to areas that are still rich but somewhat more reasonable.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=aOfETUyU9CDE&refer=worldwide

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8jun-U.S. Stocks Drop as Bond Yields Rise; Exelon, Wal-Mart Retreat

By Michael Patterson

June 7 (Bloomberg) -- U.S. stocks fell the most in almost three months after the yield on 10-year Treasury notes rose above 5 percent.

Exelon Corp. and Southern Co. led utilities to the steepest drop in the Standard & Poor's 500 Index as higher bond yields make their dividends less attractive. All 16 homebuilders in S&P indexes declined on concern rising interest rates will diminish demand for mortgages. Wal-Mart Stores Inc., Macy's Inc. and J.C. Penney Co. retreated after May sales trailed estimates.

Stocks extended a three-day plunge from a record after benchmark bond yields advanced to the highest since July 19 on speculation central banks will increase borrowing costs in response to faster global growth. Higher interest rates may reduce profits and make takeovers more expensive.

http://www.bloomberg.com/apps/news?pid=20601084&sid=aXyxAF3iXCtg&refer=stocks

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8jun- AP-Rates on 30-Year Mortgages Jump (With the increase in the mortgage rate, this will increase the sub-prime rates and slow the economy in the long run. )
Thursday June 7, 10:45 am ET
By Martin Crutsinger, AP Economics Writer
Rates on 30-Year Mortgages Jump to the Highest Level in 10 Months

WASHINGTON (AP) -- Rates on 30-year mortgages rose for a fourth straight week, hitting the highest level in 10 months, as bond markets responded to strong employment growth.

Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.53 percent this week. That was up sharply from 6.42 percent last week and represented the highest point for 30-year mortgages since they averaged 6.55 percent on Aug. 10.


Analysts attributed the increase to recent signs of economic strength outside of the slumping housing market including last week's report that the economy created 157,000 jobs in May, nearly double the April pace.

"Mortgage rates climbed this week owing to market concerns of a tight labor force and wage growth," said Frank Nothaft, Freddie Mac's chief economist.

He said that bond markets have also grown concerned about renewed inflation pressures, reflected in a report this week that unit labor costs rose at a 1.8 percent annual rate in the first three months of this year, double the government's initial estimate.

http://biz.yahoo.com/ap/070607/mortgage_rates.html?.v=1

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8jun-ARE WORLD BUBBLES PEAKING?
by Christopher Laird
PrudentSquirrel.com
June 6, 2007


Get this:

* China is serious about slowing their stock bubbles. They just increased a stamp tax to .3% on stock sales, formerly a .1% rate. This is not a miniscule amount because it is assessed on every trade - they add up. China has raised interest rates repeatedly, and their senior economic leaders have stated that their stock bubbles are rising too fast. China intends to cool their bubbles. More on that, but they may be the ones to break the entire world financial bubbles - first - judging on the reaction to their February 9% stock declines that led to two weeks of serious Asian market crashes - and one 500 point drop in the US DOW - that led to so much volatility that Dow fell behind in the quotes for several hours that day.

* China’s manufacturing purchasing index declined from 58.6 to 55.7. I posited last week or so that China manufacturing boom will be telegraphed by dropping base metal demand in things like copper, and that commodities would likely telegraph any slowing in China before economic data does.

* ECBs Trichet, and Bernanke, have just stated - again - that the world financial markets are not taking into account the risk out there - ie they are in a semi euphoria. The last time we heard comments such as these from the ECB - within a month or two, we saw the February stock crashes in Asia led by the Chinese.

* The BOJ Fukui just stated that hedge funds add welcome liquidity to markets, but also add unwelcome volatility in stress presently.

* The Hong Kong monetary authority recently stated that they are concerned that derivatives are an increasing danger and that it is of unknown extent. (Fed has also stated this, as has the ECB and the BOJ.)

* A month or so ago, I wrote an article that stated that world stock collapses will likely lead to the next world recession. Reason: stock gains worldwide have buffered the real estate declines here in the US and also abroad. When the stocks let go, the last remaining buttress of US consumer confidence will flag. Certainly, US GDP performance of about .3% annualized is not behind any consumer confidence at this time.

http://www.financialsense.com/fsu/editorials/laird/2007/0606.html

[Ichiro]

8jun-THE CHINA SYNDROME
by Joe Average
aka Dr. William R. Swagell
June 6, 2007

“The issue on the table is not whether the US needs to take action to respond to the interventionist policies of China and Japan in this key area, but what form that action should take.” Sander Levin, Chairman trade subcommittee House Ways & Means Committee.

“The time for talk has passed; we must act now to end this unfair trade practice that cripples American industries.” Charles Rangel, Chairman House Ways & Means Committee.

“…by going after China, you in the Congress are playing with fire…(risking) a policy blunder of monumental proportions…if the China bashers get their way.”

“If Congress changes its mind and backs away, it fears it will lose all credibility on this key issue with American workers. With respect to China, I am afraid that means the US Congress has now gone past the point of no return.” Stephen Roach, chief economist Morgan Stanley.

“China’s breakneck industrialization is placing it on a collision course with the entire world. Tomorrow’s China Wars will be fought over everything from decent jobs, liveable wages and leading technologies to strategic resources such as oil, copper and steel…even food, water and air.”
Jim Puplava, www.financialsense.com .

The Looming Trade War with China.

China’s ongoing massive trade surpluses with America (a record $233 billion last year) have incited demands in the U.S. Congress for the Chinese to revalue their currency by up to 40 per cent, amid claims that undervaluation of the Yuan is giving China’s exporters an unfair advantage. Among some of the tough measures being mooted are a 44 per cent duty on polyester fibre imports, an across-the-board 27 per cent tariff on all Chinese goods, and a recently introduced tariff of 11 to 21 per cent on glossy paper.

Reasons given as to why “strong action” is called for include China’s “unfair currency manipulation” and that “China is illegally subsidizing some of its exports”.

So how did we get to this present situation?

The China miracle of the past decade has in large part been a result of globalization which has seen a nation of nearly 1.4 billion Chinese move rapidly from a poor, agricultural based economy to become the industrialized low-cost manufacturer to the world. The lowered manufacturing costs of most of the goods consumed in the world today has helped drive down inflationary forces, which in turn have allowed Central Banks to open the spigots further and flood the world with easy credit and liquidity in order to keep markets booming and to avoid any painful recession. The fact that this fiscal loosening also sent the U.S. dollar falling has continued the virtuous cycle as imports into America became even cheaper and more plentiful.

With a torrent of U.S. dollars pouring into its coffers, China has recycled these dollars back into U.S.D. securities (as Japan has also been doing) so as to artificially keep the exchange rate in its favour as well as to receive a better return than their own very low interest rates. This in turn has neutralized the “Bond Vigilantes” (preventing them from trying to keep an ever more profligate Federal Reserve honest) by keeping downward pressure on inflation and interest rates. The virtuous cycle has continued.

But now it appears the rules of engagement are changing.

http://www.financialsense.com/fsu/editorials/swagell/2007/0606.html

[Ichiro]

8jun-INFLATION, INFLATION, INFLATION
by David N. Vaughn
Gold Letter, Inc.
June 7, 2007

Are you feeling sorry for gold lately? 'Fraid it doesn’t need your sorrow with its present price action. As I have said before and will say again gold will do what gold wishes to do.

Click to enlargeHere’s a subject that brings humor to the table. Inflation.

The humor is the fact that inflation is the huge elephant in the living room that everyone wants to ignore and pretend its not there. Well, not exactly. The middle class, lower class, the upper class and every class in between knows that prices are rising across the board.

“GDP up at 0.6% annual rate, worst since '02.” The U.S. economy grew at the slowest pace in more than four years…”

“On the inflation front, the Commerce Department says the Federal Reserve's preferred price gauge, which measures consumer prices excluding food and energy, was up 2.2% in the first quarter, vs. 1.8% at the end of 2006 and above what several Fed officials, including Chairman Ben Bernanke, have called their inflation comfort zone.” Click

The humor is how our government attempts to hide it by playing with subtle numbers and hoping that the mere thought of inflation will disappear from the minds of the voters. And I guess this is true pretty much.

The reason the general public accepts inflation without a big fuss is that for 10 years the public has seen inflations effects primarily in the value of their home going up. And the big joke is that the classes have been convinced that their home is an investment and that there fore a rising home price means rising personal net worth.

Plus, the loan market added to the bubble by making cheap loans to all. Why not use cheap money to acquire an asset that is “guaranteed” to go up in value. How can you lose? Of course you lose when the asset quits appreciating and actually begins to go down in value. What? Does anything actually ever go down in the throes of an inflationary environment? Yes, some or many things will go up while a few things go down.

http://www.financialsense.com/fsu/editorials/vaughn/2007/0607.html

[Ichiro]

8jun-P
Oil Prices Decline in Asian Trading
Friday June 8, 5:31 am ET
Oil Prices Decline in Asian Trading After Big Gain on Lingering U.S. Gasoline Supply Worries

SINGAPORE (AP) -- Oil prices fell in Asian trading Friday after a big gain Thursday amid concerns that U.S. refineries are still not making enough gasoline to meet demand.

Light, sweet crude for July delivery fell 30 cents to $66.63 a barrel on the New York Mercantile Exchange mid-afternoon in Singapore.


The contract jumped above $67 a barrel early Thursday and settled 97 cents higher at $66.93 a barrel following a U.S. government report that showed refinery utilization fell 1.5 percent last week to 89.6 percent of capacity.

Brent crude contract for July fell 37 cents to $70.63 a barrel on the ICE Futures exchange in London.

Even an unexpectedly large gain in gasoline and distillate fuel stocks didn't alleviate concerns that the refinery run rates were too low.

Analysts said, though, that the inventory increases weighed on the prices.

http://biz.yahoo.com/ap/070608/oil_prices.html?.v=5

[Ichiro]

8jun- AP-Asian Markets Follow Wall Street's Slide
Friday June 8, 5:37 am ET
By Thomas Hogue, AP Business Writer
Asia's Major Markets Tumble After Shares on Wall Street Fell Sharply for 3rd Straight Session

BANGKOK, Thailand (AP) -- Asian markets tumbled Friday after shares on Wall Street fell sharply for a third straight session amid growing speculation a U.S. interest rate cut was unlikely.

The declines in Asia also came on the heels of recent rallies in many regional markets, some to record highs.


"This has to be seen in the perspective that we've had a very nice price rally," said David Cohen, Director of Asian Economic Forecasting with Action Economics in Singapore. "They were due for a little bit of a fall."

In Tokyo, the Nikkei 225 average fell 274.29 points, or 1.52 percent, to 17,779.09, while Hong Kong's Hang Seng Index was down 1.4 percent at 20,509.

Singapore shares were down 1.2 percent and Australian stocks lost 1.3 percent. Other markets, including Thailand, Taiwan and Malaysia fell less than 1 percent, and Philippines shares ended little changed.

Earlier this month, benchmark indexes in Australia, Indonesia, the Philippines, Singapore and South Korea all hit records.

Asian markets remain sensitive to moves on Wall Street and indicators about the U.S. economy because it one of the biggest markets for the region's exporters.

U.S. stocks fell sharply as investors' hopes for an interest rate cut later this year began to fade. The cut began to look unlikely because of rising bond yields. Many believe the higher yields will make the Federal Reserve less interested in reducing short-term interest rates.

The Dow fell 198.94, or 1.48 percent, to 13,266.73, bringing its three-day loss to about 410 points. The Nasdaq composite index also sank, losing 45.80, or 1.77 percent, to 2,541.38.

"People have been a little naively hoping for a rate cut," Cohen said. "When they began to suspect that wasn't in the cards, they pulled back."

In Tokyo, weaker-than-expected Japanese machinery data hurt investor confidence. Core machinery orders climbed 2.2 percent in April from March, but that was less than economists' forecast for a 4.4 percent rise.

Decliners included Nippon Steel Corp., which lost 1.59 percent to 865 yen ($7.15), and machine tool maker Fanuc Ltd., which shed 1.64 percent to 11,420 yen ($94.38).

"We can expect that the Nikkei will again trade above the 18,000-mark next week, but there still are lingering fears that the Fed may raise interest rates depending on indicators coming out next week," said Hiroyuki Fukunaga, chief strategist at Rakuten Securities.

http://biz.yahoo.com/ap/070608/world_markets.html?.v=9

[Ichiro]

8jun- AP-Dollar Rises in Asia on Yen-Carry Trades (Folks, yen-carry trades is back again!!!)
Friday June 8, 4:02 am ET
Dollar Rises in Asian Trading as Investors Swap Yen for Higher Yield Overseas Assets

TOKYO (AP) -- The dollar rose in Asia Friday as investors swapped the yen for higher yield overseas assets to take advantage of low Japanese interest rates.

The dollar was trading at 121.16 yen midafternoon, up from 121.11 yen late Thursday in New York. The euro fell to $1.3422 from $1.3432.


Traders said the dollar's climb likely wouldn't last, with a global stock fall expected to hurt sentiment for the dollar and the euro.

If the global stock sell-off continues, investors will reduce risks by unwinding the yen-carry trades, in which they borrow yen at low interest rates to earn higher returns elsewhere, said Masashi Matsuzawa, a senior dealer at Mizuho Corporate Bank.http://biz.yahoo.com/ap/070608/asia_dollar.html?.v=1

[Ichiro]

8jun-BANK OF JAPAN SIGNALS SUMMER RATE HIKE
by Gary Dorsch
Editor, Global Money Trends Magazine
June 7, 2007

The Bank of Japan has kept its overnight call rate target at 0.50% since January, but speculation of another rate hike to 0.75% this summer, have already been factored into the Tokyo money markets. BOJ chief Toshihiko Fukui suggested that the central bank would raise rates gradually, and is undeterred by a low consumer price index.

“If markets expect the BOJ to keep rates low even while the economy achieves 2.4% growth, it could distort the BOJ’s policy scenario. We need to adjust interest rates despite near-term weak price growth, if we can confirm that long-term price moves are strong and the economy and prices are heading towards a good direction," Fukui told a news conference on May 10th.

Referring to “yen carry” positions worldwide, “If people have a fixed idea that interest rates are going to stay low for a long time regardless of economic conditions, it could lead to a buildup of extreme positions in financial and capital markets and distribution of resources to inefficient economic activities,” he added.
http://www.financialsense.com/fsu/editorials/dorsch/2007/0607.html

[Ichiro]

8jun-PATIENCE, AN INVESTOR'S VIRTUE
by Hans Wagner
TradingOnlineMarkets.com
June 7, 2007

Patience is one of the most difficult skills to learn as an investor and trader. The best investors and traders understand the importance of patience. One of Warren Buffett’s rules of investing is

“The Stock Market is designed to transfer money from the Active to the Patient." The best returns come from those who wait for the best opportunity to show it self before making a commitment. Those that chase the current hot stock are destined to loose more than they gain. Remain active in your analysis looking for quality companies at discounted prices, but be patient waiting for them to reach their discounted price before buying.

Dennis Gartman, a highly successful trader and publisher of “The Gartman Letter” as well as Rules of Trading has this to say about the value of Patience:

“Be Patient with good positions. If you miss an entry trade, wait until a correction occurs before entering.” Often the price will return to its breakout point, so you do not have to chase the price. Also, your technical charts show support and resistance levels to help identify good entry points. Volume expansion and contraction also provides a good indication.

http://www.financialsense.com/fsu/editorials/wagner/2007/0607.html

[Ichiro]

9jun- AP
Stocks Extend Rebound After Selloff
Friday June 8, 2:48 pm ET
By Tim Paradis, AP Business Writer
Stocks Strike Higher Following Global Selloff, Weak Bonds

NEW YORK (AP) -- Stocks pushed higher in jittery trading Friday as Wall Street tried to recover from a three-day selloff triggered by a surge in bond yields. The Dow Jones industrial average at times showed gains of more than 100 points, and the Standard & Poor's 500 index crossed back above the 1,500 mark.

After briefly dipping into negative territory in late morning, stocks advanced as yields on the benchmark 10-year Treasury note backed off of five-year highs of 5.25 percent. Recently, the yield hovered around 5.12 percent.

Yields, which move in the opposite direction as bond prices, rose in recent sessions as investors grew less optimistic that the Federal Reserve would lower short-term interest rates. A move above the 5 percent level Thursday in the 10-year bond yield sent stock market investors rushing to bonds. In the previous three sessions, the Dow Jones industrials had given up about 410 points.
http://biz.yahoo.com/ap/070608/wall_street.html?.v=37

[Ichiro]

11Jun-Prices, Retail Sales Probably Rose in May: U.S. Economy Preview

By Bob Willis

June 10 (Bloomberg) -- Consumer prices in the U.S. rose at a faster pace in May, propelled by record gasoline costs that also inflated retail-sales figures, reports this week may show.

Prices rose 0.6 percent last month after a 0.4 percent gain in April, according to the median estimate in a Bloomberg News survey of economists before the Labor Department's June 15 report. A Commerce Department report two days earlier may show retail sales rose 0.6 percent in May after a 0.2 percent decline.

Rising prices highlight why the Federal Reserve remains preoccupied with the threat of inflation, suggesting policy makers will keep interest rates unchanged in coming months. Record fuel costs, combined with falling home values, may slow consumer spending, which accounts for 70 percent of the economy.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aqcZWxllMtjs&refer=home

[Ichiro]

11jun-China's Inflation Probably Accelerated as Pork Prices Soared

By Nipa Piboontanasawat

June 11 (Bloomberg) -- China's inflation probably accelerated in May as pork prices soared, increasing the likelihood that interest rates will be raised.

Consumer prices gained 3.3 percent from a year earlier, according to the median estimate of 19 economists surveyed by Bloomberg News. April's inflation rate was 3 percent, matching the central bank's target for the year. The statistics bureau will release the figures at 10 a.m. tomorrow.

Inflation is outpacing after-tax returns on bank deposits, hampering government efforts to stem the flow of money into the stock market and avoid a bubble. The benchmark CSI 300 Index has climbed 9.3 percent in four days as investors discount the likelihood of stronger measures than last week's tripling of the share-trading tax.

http://www.bloomberg.com/apps/news?pid=20601080&sid=aVLSSjvJWhbY&refer=asia

[Ichiro]

11jun-ollar Rises to Two-Month High Against Euro on Yields, Growth

By Min Zeng

June 9 (Bloomberg) -- The dollar strengthened to a more than two-month high against the euro as rising Treasury yields and economic growth triggered speculation international investors will be attracted to U.S. assets.

The U.S. currency had its biggest weekly advance versus the euro since January and rose against the British pound and Swiss franc as the yield of the U.S. 10-year note reached a five-year high. Reports showing advances in the services sector and record exports led traders to increase bets the Federal Reserve will boost interest rates by December.

``We are in an almost perfect storm for the dollar because the dollar tends to benefit when you get higher yields,'' said Adrian Schmidt, senior currency strategist in London at Royal Bank of Scotland Group Plc.

http://www.bloomberg.com/apps/news?pid=20601083&sid=a2rBIT48OHWA&refer=currency

[nnuut]

Not really good news for the "I" Fund folks!!:suspicious:

[Ichiro]

11jun-European Stocks Advance, Paced by BHP, Centrica; Axa Advances

By Andreas Hippin

June 11 (Bloomberg) -- European stocks rose for the first time in six days as renewed takeover speculation lifted mining, power and steel companies.

BHP Billiton Ltd. led mining companies higher after UBS AG said mergers and acquisitions in the industry ``will continue to accelerate.'' Centrica Plc, the U.K.'s largest energy supplier, climbed after OAO Gazprom said it will announce an acquisition in Britain. Axa SA, Rodamco Europe NV and Deutsche Bank AG led gains by financial-related companies, among the hardest hit in last week's sell-off.

``As long-term investors we don't believe this is the end of the bull market,'' said Philippe Gijsels, senior equity strategist at Fortis Global Markets in Brussels, which manages $62 billion. ``We are at the middle of the economic cycle and at the end of the year we'll be higher than today. If we correct a bit further, this creates a buying opportunity.''
http://www.bloomberg.com/apps/news?pid=20601087&sid=apbJtj7dFiF8&refer=worldwide

[Ichiro]

11jun-apan Economy Grows 3.3%, More Than First Estimate (Update3)

By Lily Nonomiya

June 11 (Bloomberg) -- Japan's economy expanded more than the government initially reported in the first quarter after higher-than-expected spending by companies.

The world's second-largest economy grew at an annual 3.3 percent rate in the three months ended March 31, the Cabinet Office said in Tokyo today, faster than the 2.4 percent preliminary number. The revision was in line with the median estimate of 27 economists surveyed by Bloomberg News.

Faster growth may persuade the Bank of Japan to raise its 0.5 percent overnight lending rate, the lowest among major economies. Machinery orders rose for the first time in three months in April, a report showed last week, signaling business investment will probably keep driving the expansion.

http://www.bloomberg.com/apps/news?pid=20601080&sid=anHs.d.6Hfc8&refer=asia

[Ichiro]

11jun-China's Trade Surplus Soars, Adding Currency Pressure (Update4)

By Nipa Piboontanasawat

June 11 (Bloomberg) -- China's trade surplus swelled a bigger-than-estimated 73 percent in May, increasing pressure on the government to allow faster currency gains.

The gap widened to $22.45 billion, the customs bureau said on its Web site. The median estimate of 18 economists surveyed by Bloomberg News was for a $19.5 billion surplus. For the first five months, the surplus grew 84 percent to $85.72 billion.

The yuan today had its biggest decline in 10 months and has reversed gains made in May when Chinese and U.S. officials met for trade talks in Washington. A stronger currency would reduce tensions with trading partners and help to prevent the world's fastest-growing major economy from overheating.

http://www.bloomberg.com/apps/news?pid=20601089&sid=aNc5uh5eUh70&refer=china

[Ichiro]

11jun-Dollar Rises as Inflation, Retail Sales Suggest No Rate Cut

By Stanley White and Ron Harui

June 11 (Bloomberg) -- The dollar strengthened on speculation reports on U.S. consumer prices and retail sales this week will provide further evidence the economy is strong enough not to warrant a cut in interest rates this year.

The dollar rose against 12 of the 16 most-traded currencies this month as Treasury yields touched a five-year high, widening the spread over German and Japanese debt. Retail sales likely rebounded in May and consumer price inflation held above the range Federal Reserve policy makers have indicated they are comfortable with.

http://www.bloomberg.com/apps/news?pid=20601083&sid=ak2J1e.jjqHw&refer=currency

[Ichiro]

11jun-Fukui Pressured to Raise Rates as Yen Is Sent Abroad (Update1)

By Mayumi Otsuma

June 11 (Bloomberg) -- In Japan, sending yen overseas for higher returns is no longer just a game for banks and hedge funds. Michiko Takeda is playing too.

Takeda, a 46-year-old homemaker from Sapporo City, is among a growing number of individual investors joining fund managers in shifting money out of Japan, where interest rates are the lowest of any major economy. Last year she put 2 million yen ($16,500) in an Australian bank, and ``even with exchange-rate risks, I'd like to invest more,'' she says.

The exodus of yen is driving the currency to record lows -- and ratcheting up pressure on Bank of Japan Governor Toshihiko Fukui and fellow policy makers to increase interest rates as soon as next month to encourage a controlled rise in the yen.

http://www.bloomberg.com/apps/news?pid=20601014&sid=aZHTbrY78gL0&refer=funds

[Ichiro]

11jun-U.S. Stock-Index Futures Are Little Changed; Caterpillar Falls

By Adria Cimino

June 11 (Bloomberg) -- U.S. stock-index futures were little changed before economic reports this week that may provide clues about the Federal Reserve's next move on interest rates.

Caterpillar Inc., the world's biggest maker of earthmoving equipment, and Alcoa Inc., the second-largest aluminum producer, declined in Europe. Shares of Boeing Co. climbed after the second-biggest maker of commercial aircraft won an order valued at about $3 billion from OAO Aeroflot.

The Fed's Beige Book will be published June 13 and data on producer prices is set for release on June 14. A report the following day may show that consumer prices in the U.S. rose at a faster pace in May, propelled by record gasoline costs that also inflated retail-sales figures.

``There are questions about whether the cycle of interest- rate cuts will be farther away than expected,'' said Virginie Robert, a fund manager at Montpensier Finance in Paris, which oversees $1 billion. ``The stock market will be focused on the producer and consumer price data.''

Consumer prices increased 0.6 percent last month after a 0.4 percent gain in April, according to the median estimate in a Bloomberg News survey of economists. The report may also show core inflation, which excludes food and energy, climbed 0.2 percent in May for a second month.

http://www.bloomberg.com/apps/news?pid=20602003&sid=a7etfen_sHSw&refer=world_indices

[Ichiro]

13jun- TheStreet.com-Keep Your Eye on Money Supply
Tuesday June 12, 11:12 am ET
BySam Patel, TheStreet.com Ratings Manager of Mutual Fund Research

Investors are regularly bombarded with a plethora of economic data relating to unemployment, consumer confidence, housing starts, inflation measures and more.

Some people might feel this is more information than they need, but the fact is it might not be enough. That's because there's one useful economic indicator that is frequently overlooked: the nation's money supply -- in particular, the narrowest definition of money supply, M1.


M1 is a particularly good way to get an honest angle on how the economy is performing. It includes all hard currency in circulation as well as in people's checking accounts.

For example, anyone paying attention to this indicator might not have been surprised by the unexpectedly weak reading on the economy earlier this month. Real gross domestic product rose by just 0.6% -- the slowest rate in four years. That was a big revision of the initial report last month, which showed an increase in real, or inflation-adjusted, GDP of more than twice that, or 1.3%.

http://biz.yahoo.com/ts/070612/10361865.html?.v=1

[Ichiro]

13jun-UPDATE 1-China's Wen vows steps to prevent overheating
Wed Jun 13, 2007 8:37am ET28


BEIJING, June 13 (Reuters) - Chinese Premier Wen Jiabao sent out a warning call on Wednesday that China will tighten policy further to prevent the economy from overheating and to keep inflation in check.

In a statement issued following a regular meeting of the State Council, or cabinet, Wen said rising upward pressure on prices was one striking problem facing the economy, along with excessive liquidity in the financial system, runaway investment growth and an oversized trade surplus.

To address those challenges, Beijing would "appropriately tighten" monetary policy, adjust export tax rebates on some products, and place strict controls on approvals of new investment projects, among other measures, Wen said.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070613:MTFH45283_2007-06-13_12-37-11_PEK182687&type=comktNews&rpc=44

[Ichiro]

13jun-Nikkei edges lower on rate worry but exporters up
Wed Jun 13, 2007 3:23am ET27


By Aiko Hayashi

TOKYO, June 13 (Reuters) - The Nikkei average slipped 0.16 percent on Wednesday as Mitsui Fudosan Co. Ltd. (8801.T: Quote, NEWS , Research) and other property firms fell on concerns about rising interest rates, while a slide in metals prices hit metal shares.

But the market received support from exporters such as Sony Corp. (6758.T: Quote, NEWS , Research) after the dollar struck a 4-1/2-year high against the yen on Wednesday as a sharp rise in U.S. bond yields boosted the dollar's allure while carry trades proved resilient.


Trading houses, which have large investments in the metal industry, were also hit, with Mitsubishi Corp (8058.T: Quote, NEWS , Research) down 1.8 percent to 3,130 yen and Mitsui & Co. (8031.T: Quote, NEWS , Research) falling 1.6 percent to 2,405.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20070613:MTFH38111_2007-06-13_07-23-20_T173712&type=comktNews&rpc=44

[Ichiro]

13jun- AP
Retail Sales Surge 1.4 Pct. in May
Wednesday June 13, 8:36 am ET
By Martin Crutsinger, AP Economics Writer
Retail Sales Surge in May by the Largest Amount in 16 Months

WASHINGTON (AP) -- Consumers brushed off rising gasoline prices and slumping home sales to storm the malls in May, pushing retail sales up by the largest amount in 16 months.

The Commerce Department reported that retail sales surged by 1.4 percent last month, compared to April, double the increase that analysts had been expecting. Retail sales had fallen by 0.1 percent in April.


The May strength was widespread with auto dealers, department stores, specialty clothing stores and hardware stores enjoying an especially good month.

Sales would have been strong even without last month's big jump in gasoline prices, which saw prices top $3.20 per gallon. Excluding sales at gasoline stations, overall retail sales would still have been up 1.2 percent.

The strong showing caught analysts by surprise. They had been forecasting a more moderate rebound of 0.7 percent.

http://biz.yahoo.com/ap/070613/economy.html?.v=7

[Ichiro]

13jun- AP-Treasury 10-Year Yield Hits 5-Year High
Wednesday June 13, 8:13 am ET
Treasury 10-Year Yield Hits 5-Year High As Bond Slump Continues

NEW YORK (AP) -- The yield on the 10-year Treasury note reached its highest level in more than five years Tuesday afternoon, as prices continued to slump amid broad market selling.

The yield tapped as high as 5.27 percent, a level it last reached in mid-May 2002.

At 5 p.m. EDT, the 10-year Treasury note was down $10.63 per $1,000 in face value, or 1 2/32 point, from its level at 5 p.m. Monday. Its yield, which moves in the opposite direction, rose to 5.30 percent from 5.16 percent.

The 30-year bond fell 2 1/32 point. Its yield rose to 5.40 percent from 5.26 percent.

The 2-year note fell 6/32 point. Its yield rose to 5.10 percent from 5.01 percent.

Yields on 3-month Treasury bills were 4.68 percent as the discount rate fell 0.07 percentage point to 4.55 percent.

Treasurys have been under sustained pressure for the last couple of weeks, amid stronger economic data, selling from the mortgage community and the paring back of long positions -- exposure that assumes Treasury prices will rise -- all weighed on the market.

Tuesday's selling again came most heavily in longer-term Treasurys.

There was no particular trigger for Tuesday's selling although some traders pointed to hawkish overnight comments from foreign central banks and an uptick in Chinese inflation. There were no major U.S. data.

http://biz.yahoo.com/ap/070613/bonds.html?.v=2

[Ichiro]

13jun-U.S. Stock-Index Futures Gain as Treasury Bonds Erase Losses

By Lynn Thomasson

June 13 (Bloomberg) -- U.S. stock-index futures gained after the yield on the 10-year Treasury bond retreated from a five-year high.

Merrill Lynch & Co., the world's biggest brokerage, and Wachovia Corp., the fourth-biggest U.S. bank, advanced in trading in Europe. Bond yields fell even after retail sales and import prices rose more than forecast in May.

Stocks plummeted yesterday after the 10-year note's yield surged to its highest since 2002, heightening concern that the pace of takeovers may have peaked along with corporate profits.

``In a liquidity-driven market such as we're in, bond yields play a critical role,'' said Michael Malone, a trading analyst at Cowen & Co. in New York.

http://www.bloomberg.com/apps/news?pid=20602003&sid=axzfQQzlpnYk&refer=world_indices

[Ichiro]

13jun-Asian Currencies: Rupiah, Ringgit and Peso Fall After Greenspan

By Ron Harui

June 13 (Bloomberg) -- Asian currencies slid, paced by the Indonesian rupiah, the Malaysian ringgit and the Philippine peso, after former Federal Reserve Chairman Alan Greenspan predicted a slump in emerging-market debt.

The rupiah snapped a two-day rally, the ringgit fell to near a three-month low and the peso dropped to the weakest since May 18 as declining global equities and rising U.S. Treasury yields prompted investors to reduce holdings of assets in the region.

``The move higher in U.S. yields creates a higher hurdle for investment in emerging markets,'' said Adrian Foster, director of capital markets at Dresdner Kleinwort in Beijing. ``Asian currencies are likely to remain under modest downward pressure.''

The rupiah fell as much as 1.4 percent to 9,115 against the dollar before trading at 9,082 at 3:20 p.m. in Jakarta. The ringgit dropped 0.8 percent to 3.4725 and the peso declined 1.1 percent to 46.715.

The Morgan Stanley Capital Asia-Pacific index of leading regional stocks slid 0.6 percent as investors pared back holdings in smaller markets. Speculation the Fed may raise rates this year helped push U.S. bond yields to the highest in five years, increasing returns from holding less risky securities.
http://www.bloomberg.com/apps/news?pid=20601083&sid=aG7pfs6qbbb0&refer=currency

[Ichiro]

13jun-China's Retail Sales Accelerate on Rising Incomes (Update6)

By Nipa Piboontanasawat

June 13 (Bloomberg) -- China's retail sales unexpectedly accelerated at the fastest pace in three years, buoyed by rising incomes and a stock market that's doubled this year.

Sales rose 15.9 percent from a year earlier to 715.8 billion yuan ($94 billion) after gaining 15.5 percent in April, the statistics bureau said today. That beat the 15.3 percent median estimate of 19 economists surveyed by Bloomberg News.

A $1 trillion increase in the value of the stock market this year has helped spur sales for retailers from low-cost clothing chain Giordano International Ltd. to luxury Mercedes- Benz and Audi car dealers. China is the world's fastest-growing retail sales market, according to McKinsey & Co.

http://www.bloomberg.com/apps/news?pid=20601013&sid=amNwvjVxzh48&refer=emergingmarkets

[Ichiro]

1 aug- AP
Dollar Drops Sharply Vs Yen in Asia
Wednesday August 1, 4:35 am ET
Dollar Drops Sharply Vs Yen in Asia on Worries Over U.S. Housing Loans

TOKYO (AP) -- The dollar fell sharply against the yen in Asian trading Wednesday as non-Japanese investors sold the U.S. currency to lock in profits amid expectations that subprime mortgage woes will continue to weigh on U.S. shares.


The U.S. dollar was trading at 117.94 yen Wednesday afternoon, down from 119.30 yen late Tuesday in New York.

"Concerns over U.S. stock falls triggered by a credit crunch will likely remain deeply rooted in the financial markets," said Osao Izuka, head of foreign-exchange trading at Sumitomo Trust & Banking. "Under such circumstances, it's difficult (for investors) to buy the dollar."

http://biz.yahoo.com/ap/070801/asia_dollar.html?.v=1

[Ichiro]

1 aug- AP-Japanese Stocks Drop to 4 1/2 Month Low
Wednesday August 1, 3:19 am ET
By Kozo Mizoguchi, Associated Press Writer
Japanese Stocks Drop to 4 1/2 Month Low on Concerns Over Banks, Plunging U.S. Market

TOKYO (AP) -- Japanese stocks tumbled to a four-and-a-half month low Wednesday on disappointing earnings from the nation's megabanks and in reaction to another drop on Wall Street caused by woes in U.S. housing loans.

Political concerns also weighed on the market after the country's farm resigned to take responsibilty for the ruling party's crushing defeat in weekend elections.

Agriculture Minister Norihiko Akagi, who was embroiled in a funding scandal, is the fourth minister to leave an increasingly unpopular Cabinet.

"In addition to overnight declines in U.S. shares and banks' pulling down the Nikkei, such domestic factors as the farm minister's resignation may be discouraging foreign investors," said Fumiyuki Nakanishi, strategist at SMBC Friend Securities.

The Nikkei 225 fell 377.91 points, or 2.2 percent, on the Tokyo Stock Exchange, to finish at 16,870.98 points. The index last ended below the 17,000-point mark on March 16.

Investors dumped shares after U.S. stocks sank Tuesday on persistent worries that souring subprime mortgages could take a toll on the U.S. economy, a key export market for Japan. The Dow Jones industrial average fell 1.1 percent, to 13,211.99.

http://biz.yahoo.com/ap/070801/japan_markets.html?.v=2

[Ichiro]

1aug-uropean Stocks Decline on Subprime Concern; RBS, ING Slide

By Andreas Hippin
Enlarge Image
Signage at the Royal Bank of Scotland head office

Aug. 1 (Bloomberg) -- European stocks dropped after Macquarie Bank Ltd. of Australia and Bear Stearns Cos. said funds may post losses as concern mounted a sell-off in the U.S. subprime-mortgage market may spread.

Royal Bank of Scotland Group Plc and ING Groep NV led financial stocks lower. Cadbury Schweppes Plc, the world's largest confectionery maker, fell the most in more than four years after earnings were less than analysts estimated.

``No one knows where the ultimate subprime risk resides so investors across the globe are ducking for cover,'' said Simon Carter, head of North American equities at Aegon Asset Management in Edinburgh, where he helps oversee $3 billion. ``Incremental news of hedge funds and subprime issuers experiencing margin calls and shutting their doors will likely continue.''

Macquarie, Australia's largest securities firm, tumbled the most in five years in Sydney after saying investors in some of its high-yield funds may lose as much as 25 percent of their money. Bear Stearns, manager of two hedge funds that collapsed last month, blocked investors from pulling money out of a third fund, sending futures on U.S. share indexes lower.

The Dow Jones Stoxx 600 Index lost 1.9 percent to 372.83 at 9:02 a.m. in London. The Stoxx 50 slid 1.8 percent, while the Euro Stoxx 50, a measure for the euro region, fell 1.9 percent.

http://www.bloomberg.com/apps/news?pid=20601085&sid=ad9pS.aC90jE&refer=europe

[Ichiro]

1aug-nvestors Are Big Losers as Japan's Abe Stays On: William Pesek (lets all hope that Abe resigns in the near future... he is bad for the Japanese stock market).

By William Pesek


July 30 (Bloomberg) -- There's no better way to judge a man, the old saying goes, than by the caliber of his critics. Just ask Japan's Prime Minister Shinzo Abe, who's getting grief even from the man who arguably paved his route to the premiership.

The drubbing Abe took yesterday from the Japanese electorate is getting most of the headlines, of course. As of 6:40 a.m. Japan time, his Liberal Democratic Party and its coalition partner had won 46 seats, well short of the 64 needed to keep their majority, public broadcaster NHK reported.

The thrashing was no surprise. What was unexpected was hearing Abe's political benefactor, Yoshiro Mori, appear to give up on him. In a speech over the weekend, Mori, 70, suggested Abe lacks experience and said future LDP leaders will need to have proven themselves in longer careers.

The comments raised eyebrows around Nagatacho, Japan's equivalent of Washington's Capitol Hill, for two reasons. One, it indicates Abe's support is dwindling within the political faction -- Mori's -- that championed his rise. Two, when even a dud like Mori is criticizing you, it's time to quit and write your memoirs.

http://www.bloomberg.com/apps/news?pid=20601039&sid=a5vvE6qFrob0&refer=columnist_pesek

[Ichiro]

Come Back Koizumi -- All Is Forgiven After Abe: William Pesek (lets all hope that Koizumi returns as the prime minister of Japan.. the stock market will go wild again if he returns).

By William Pesek

Enlarge Image
Junichiro Koizumi, former Japanese prime minister

July 12 (Bloomberg) -- Here's something many of us Japan observers never thought we would be saying: Bring back Koizumi.

Japan's prime minister from April 2001 to September 2006, Junichiro Koizumi was always a unique character. With his lively mane of hair, blunt comments and Richard Gere looks, he captivated a nation hungry for the strong, forward-looking leadership Asia's biggest economy hadn't seen in years.

By the time Koizumi left office, he was far less popular. One reason is the way he damaged relations with China and South Korea by visiting Yasukuni shrine, which critics say glorifies Japan's World War II militarism. Many also felt he was more talk than action on boosting living standards.

What voters really should be miffed about was Koizumi's anointing of Shinzo Abe as his successor. His scandal-ridden and erratic leadership is thwarting much of what the Koizumi era promised to fix. Things such as cross shareholdings between companies and poison pills against mergers are more common now than at the end of Koizumi's tenure. Japan Inc. is making a comeback.
http://www.bloomberg.com/apps/news?pid=20601039&sid=aZJT1ovNMgjY&refer=columnist_pesek

[Ichiro]

1aug-Euro Trades Little Changed Before Central Bank Decides on Rates

By Aaron Pan and Kosuke Goto
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A woman arranges Japanese currency.

Aug. 2 (Bloomberg) -- The euro was little changed against the dollar before a European Central Bank rate-setting meeting where policy makers are forecast to leave borrowing costs as a six-year high.

The European single currency pared declines versus the yen on speculation the ECB will signal an increase in borrowing costs. The bank said today President Jean-Claude Trichet will explain its decision on the benchmark rate, which is forecast to stay at 4 percent. The bank typically doesn't hold a briefing in August. Policy makers will lift rates a quarter of a point in September, according to economists surveyed by Bloomberg News.

``The consensus view remains that the bank will raise rates at the September meeting,'' said Stuart Bennett, senior euro- region strategist at Calyon in London. ``With the market virtually pricing in a near-term rate hike, the bank has little to lose by pushing ahead with a further increase next month.''

The euro traded at $1.3664 as of 11:50 a.m. in London. It was at 162.29 against the yen, after earlier touching 161.57.

http://www.bloomberg.com/apps/news?pid=20601101&sid=a8Ja8iERs1js&refer=japan

[Ichiro]

1aug-apanese Stocks Rise as Cheap Shares Attract Buyers; Banks Drop

By Patrick Rial and Makiko Suzuki
Enlarge Image
A woman walks past an electronic stocks board in Tokyo.

Aug. 2 (Bloomberg) -- Japanese stocks advanced, led by property developers such as Mitsubishi Estate Co. on speculation recent losses were excessive and after a report land prices rose 8.6 percent in 2006.

Mitsubishi Estate climbed 6.3 percent and Urban Corp. jumped 11 percent, its steepest gain in more than 14 months. A measure of real estate shares rose 4.4 percent, the biggest advance among the 33 Topix industry groups, after falling 20 percent in the last two months.

Companies reporting earnings that exceeded investor expectations rose. Astellas Pharma Inc. said first quarter net income advanced by 52 percent and Benesse Corp. boosted its full- year forecast.

Banks declined for a second day, led by Mizuho Financial Group Inc. after the company said its first-quarter profit fell by half and on speculation lenders may also become embroiled in the U.S. subprime crisis.

``The valuation levels have become so cheap after the correction that people have started bargain hunting for discounted shares,'' said Masaki Iso, who oversees about $7.3 billion as head of Japanese equities at Yasuda Asset Management Co. in Tokyo. ``Banks' first quarter earnings were much, much worse than we had expected.''

The Nikkei 225 Stock Average added 113.13, or 0.7 percent, to 16,984.11 at the close in Tokyo. The average earlier fell as much as 1.3 percent. The Topix index rose 0.48 point to 1,669.33, after gaining as much as 0.6 percent and slumping 1.6 percent.
http://www.bloomberg.com/apps/news?pid=20601101&sid=ajQTgYV7rrRc&refer=japan