Markets braced for the worst (sliding dollar, equities)--- Telegraph/UK

[TexasLawyer]

I hope we're not headed toward Black Monday any time soon. But reports like this do not inspire confidence.

Markets braced for the worst
By Ambrose Evans-Pritchard (Filed: 15/05/2006)

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/05/15/cnmarkets15.xml&menuId=242&sSheet=/money/2006/05/15/ixcitytop.html

Global markets are bracing for turmoil today after an ominous slide in the US dollar and a slump in equity and bond prices late last week sent tremors through the global financial system, evoking memories of the 1987 crash. Emerging economies have led the sell-off as investors recoil from risky assets, pummelling stocks and bonds in Turkey, Hungary, Iceland and much of Latin America.

<snip>

Analysts said there were now clear signs that monetary tightening by the world's central banks was starting to crimp growth. Lombard Street Research warned the US was now heading into outright recession, with China also facing a hard landing. "Stock markets in the middle of 2006 are confronting a tight Federal Reserve and European Central Bank, sharply higher bond yields, and a downswing in potential profits," it said.

It raised the risk of "an impending financial crisis" caused by excess credit and leverage across the global economy. The group advised investors to liquidate stocks and move into cash yen until the storm has blown over. The dollar has slumped 6pc against the euro and 8pc against the yen this year as the markets anticipate an end to interest-rate rises by the US Federal Reserve, switching attention back to America's debt mountain and current account deficit of 7pc of GDP.

Volkmar Hable, chairman of Samarium Technology, said the world was now on the brink of a dollar crisis. "The crash in the autumn of 1987 started with a massive dollar and bond decline in the spring. We are experiencing exactly the same now," he said. Ominously, bonds are no longer viewed as a safe haven, a sign of fear that inflation is gaining a foothold in the major economies.

<snip>

[Kagemusha]

1. But this report's by Ambrose Evans-Pritchard.

I've been around long enough to recognize that name and recall that he was basically the big European reporter after Clinton's penis during the Monica scandal. Ominous reports are his stock in trade.

And they say Leopold has cred problems.

[grasswire]

4. yep

Part of the Vast Right Wing Conspiracy that included Richard Mellon Scaife, Matt Drudge, Rupert Murdoch, Rev. Sun Myung Moon's Washington Times, the American Spectator, and all those traitors.

[TexasLawyer]

9. Ewwww--- sorry

I just had my consciousness raised about Mr. Pritchard's work. I didn't know about him before this, so thanks for the heads up.

It sounds like he's a major Clenis-fixated rumor monger, which in this case is actually OK-- I didn't much care for the message so I'm happy to learn that the messenger is messed up. Maybe it means that the message itself is wrong.

http://www.publiceye.org/conspire/clinton/Clintonculwar8-07.html


Ambrose Evans-Pritchard

The work of British journalist Ambrose Evans-Pritchard is a mix of industrious investigative reporting and irresponsible rumor-mongering. His book, The Secret Life of Bill Clinton: The Unreported Stories, is an example of material that should remain unreported by the general media until it is corroborated with further documentation. A significant number of footnotes track back to rightist anti-Clinton sources, especially to the American Spectator, a neo-conservative magazine that ran articles on Clinton with allegations that often lacked adequate corroboration.

One chapter in The Secret Life of Bill Clinton alleges official misconduct and a cover-up in the death of Vincent Foster, tracing the conspiracy all the way to special prosecutor Kenneth Starr. Other assertions in Evans-Pritchard's book include the claimed assassination of two teenagers who, Evans-Pritchard says, stumbled across a major drug delivery tied to Clinton.

Other deaths attributed to Clinton or his operatives are discussed: "Already, people associated with the case were beginning to die in what amounted to a reign of terror among young people in...Arkansas."51 Evans-Pritchard tells the story of one parent who "joined up with a California film producer named Pat Matrisciana to make a documentary on the deaths."52 Matrisciana runs Jeremiah Films, which produces hard right Christian apocalyptic videos simmered with conspiracy theories, and made a widely circulated anti-Clinton video, The Clinton Chronicles.

<snip>

[Vincardog]

2. The dollar crash will be worth it

it it exposes the Idiot Bush as the fraud he is and stops his plans for World Domination.

[lovuian]

3. This is the general consensus that the dollar is going down

Its the federal deficit, oil, Iraq, and loss of jobs... Its the rich being so greedy that their greed completely devours them... Economic War is upon us and the Republicans has left us defenseless...

But heres the thing

Everybody is connected and so when we go down so will the world...

The Great Depression happened when 0ver 80% of the nations assests were in the hands of a few Bill gates

Economics 101

We have the same conditions as then...except we have huge debts...
Socialism is coming back with a vengence this maybe the last gasp for Capitalism

[TexasLawyer]

5. there's no real safe harbor investment out there

that I've seen. Just hunker down and do your best with what hits.

[girl gone mad]

12. All signs point to..

more inflation/stagflation on the horizon. I don't expect the Fed's "pause" in interest rate hikes to last long, nor do I see real estate crashing as much as some expect. Gold looks like too much of a gamble right now. Same with the commodities markets. It's hard to find any asset class that hasn't been run up recently. I think I would get rid of any debt with an adjustable interest rate, if I had any. Fixed rates are a hedge against inflation, as are certain large ticket items that can be easily resold.

[TexasLawyer]

14. Here's an interesting gamble--

Placing a New Bet
By Thomas G. Donlan
Word Count: 1,219
Speaking About Money

SO YOU THINK THERE'S A REAL-ESTATE BUBBLE that's about to burst? Now you can put your money where your mouth is. Protect your lifetime of paper profits in a modest $2 million home in Palo Alto, Calif., without selling it. Starting May 22, you can simply short a real-estate index on the Chicago Mercantile Exchange.

Or maybe you're bullish: If you are a young person in Los Angeles without the means to service a mortgage on a $350,000 efficiency condo, you can participate in the rising realty market anyway. Just take your down-payment fund and go long ...

<snip>

http://online.barrons.com/google_login.html?url=http%3A%2F%2Fonline.barrons.com%2Farticle%2FSB114747442983151849.html%3Fmod%3Dgooglenews_barrons

[nadinbrzezinski]

6. This si the general concensus

and it will not be pretty.

Look the trickle down has been tried several times by the Pukes in US History. The 1980s was a disaster for middle america, and so was 1929... it is PART of a pattern

[Fridays Child]

7. Not being an economics person, by any stretch of the imagination...

...I'm curious about how much this has to do with Iran's oil bourse. And, if there's a connection, is the American press addressing the issue?

[NYC]

10. I have not seen that the American press is addressing

the issue of the Iranian oil bourse.

The bourse should have an impact, but only when people start to trade there. So far, we have the knowledge it is coming, but it has not yet arrived.

The American press seems to avoid the issue totally. I don't think they talked much about Iraq selling oil for euros, either.

Edited for split infinitive. Really. :)

[Xeric]

8. Nikkei is down again in morning trading there

Another 200 points or 1%+ after last weeks big slide in tandem with the Dow. The dollar is holding steady at .774 euros, still above the old low from a year and a half ago around .74 but it's definitely in decline mode.
They may intervene and prop it up. It will be interesting to see if they can keep it all together until after the election. I doubt they can.

[TexasLawyer]

11. RMB also trading higher already

China Currency Highest Since Revaluation

By ELAINE KURTENBACH, AP Business Writer 1 hour, 22 minutes ago

SHANGHAI, China - China's official exchange rate broke through the psychologically important 8 yuan per dollar level Monday, its highest level since a revaluation in July, in a move traders said might signal Beijing's willingness to allow its currency to appreciate faster.

Analysts said the U.S. government's decision to not formally accuse China of manipulating its currency in a semi-annual report last Wednesday may have freed Beijing to let the yuan rise further.

Currency traders had been expecting the yuan, which had been hovering above 8 to the dollar for weeks, to break through sometime soon.

<snip>

http://news.yahoo.com/s/ap/20060515/ap_on_bi_ge/china_currency;_ylt=AjmmyU2nJqnUa0B3SEOx1oeyBhIF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA--

[wookie294]

13. Telegraph employs Con Couglin

The Daily Telegraph employs a reporter named Con Coughlin who has made a career in reporting about bogus documents "discovered" by U.S. military intelligence in Baghdad that "prove" a Saddam-Qaeda link and that WMDs existed. The Telegraph is Britain's print version of Fox News. However, I do think the stock market is headed for a major fall.

[muriel_volestrangler]

15. London index had lost 2.7% at one point this morning

http://news.bbc.co.uk/1/hi/business/4771495.stm

by the time I posted this, it had recovered to 1.44% below the opening level.

[Taxloss]

17. That big FTSE drop on opening was profit-taking from commodities.

Brokers cashing in on gains. We'll be able to get a clearer picture of what's going on when the Dow opens, because the FTSE will follow its lead and raise the stakes.

On edit: Did you see that pre-1992 2p coins are now worth 4p?

http://news.bbc.co.uk/1/hi/business/4766897.stm

Thank you, credit bubble! To the change jar!

[Mountainman]

16. To people like me with no money to invest, this is like watching a sport

contest with each team not a favorite of mine. As long as I can hold on to my job I think I could ride it out. After 87 I lost a job and back then there was this anti middle aged white guy thing going on that made it even harder to get another one paying what I was making. It was one of the hardest periods of my life but I'm still standing.

[AX10]

18. It's only a matter of time.