EADS and Northrop Grumman have moved their public relations machine up a gear after Boeing decided to contest the US Air Force decision to give the US-European consortium a $35bn tanker contract Source: FT.com - US homepage | 17 Mar 2008 | 4:00 pm
NEW YORK (Reuters)- A fire sale of Bear Stearns Cos Inc stunned Wall Street and pummeled global financial stocks on Monday on fears that few banks are safe from deepening market turmoil.
NEW YORK (Reuters) - Angry Bear Stearns Co Inc shareholders have wasted no time in calling their lawyers to pursue potential legal recourse over the company's $2-a-share fire sale to JPMorgan Chase & Co.
NEW YORK (Reuters) - The Dow Jones industrial average briefly turned positive in volatile trade on Monday as shares of JPMorgan Chase led advancers after the bank bought troubled Wall Street firm Bear Stearns at a fire sale price.
The dollar hits another record low against the euro amid continued fears over the state of the US economy. Source: BBC News | Business | World Edition | 17 Mar 2008 | 3:28 pm
The Federal Reserve is putting up billions of dollars and slashing interest rates to try and calm financial markets. It's getting involved in the rescue of big Wall Street banks.
Output from US factories and mines falls in February by the biggest amount in four months. Source: BBC News | Business | World Edition | 17 Mar 2008 | 3:25 pm
The Motley Fool - In the best-case scenario, your employer offers a generous match for your 401(k) savings, and you have plenty of money left each month to fill up your IRA. You're also fabulously tanned, 20 pounds lighter, and have more hair. Source: Yahoo! News: Business | 17 Mar 2008 | 3:22 pm
The financial services sector was shaken early Monday, the first trading day following the news that JPMorgan Chase will buy Bear Stearns for just $236 million, or $2 a share, in the face of a cash crunch that brought the firm to the brink of bankruptcy.
Reuters - Angry Bear Stearns Co Inc
shareholders have wasted no time in calling their lawyers to
pursue potential legal recourse over the company's $2-a-share
fire sale to JPMorgan Chase & Co .
The prices of oil and gold hit fresh records as investors continue to move money into commodities. Source: BBC News | Business | World Edition | 17 Mar 2008 | 3:12 pm
Stocks cut losses Monday morning, with the Dow briefly turning higher, as shares of JP Morgan Chase rallied on bets that its bargain basement purchase of Bear Stearns was a good move for the company.
JPMorgan Chase & Co. said Sunday that it would acquire troubled Wall Street firm Bear Stearns amid deepening fears that Bear's demise could have sent shockwaves across the already shaky financial markets.
Reuters - NEW YORK (Reuters)- A fire sale of Bear Stearns Cos Inc
stunned Wall Street and pummeled global financial
stocks on Monday on fears that few banks are safe from
deepening market turmoil.
U.S. stocks dive at start and then trim losses, with sentiment hit by the latest fallout from the credit crisis – the distressed sale of Bear Stearns Cos. Inc. and the Federal Reserve’s extraordinary rate cut just two days ahead of Tuesday’s slated meeting.
Among the companies whose shares are expected to see active trade in Monday’s session are Bear Stearns Cos., Lehman Brothers Holdings Inc. and Conseco Inc.
AP - Oil prices fell sharply Monday, pulling back at least temporarily from record levels as investors feared that the financial crisis that forced the sale of Bear Stearns Cos. is a sign of deep economic troubles.
WASHINGTON (MarketWatch) -- The Federal Reserve is expected to engineer an extremely rare cut of one percentage point in overnight interest rates on Tuesday, Fed watchers said.
Reuters - The Dow Jones industrial average
briefly turned positive in volatile trade on Monday as shares
of JPMorgan Chase led advancers after the bank bought
troubled Wall Street firm Bear Stearns at a fire sale
price.
Oil prices fell sharply Monday, pulling back at least temporarily from record levels as investors feared that the financial crisis that forced the sale of Bear Stearns Cos. is a sign of... Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Mar 2008 | 2:44 pm
Among the companies whose shares are expected to see active trade in Monday's session are the investment banks, including Bear Stearns, Lehman Brothers and Morgan Stanley; the oil producers, Axcelis, Captaris, Carlyle Capital, I-Trax, Nymex, PMI Group, RAM Holdings, A. Schulman, and Weyerhaeuser.
Wall Street clawed back from sharp losses Monday as investors snapped up bargain stocks following JPMorgan Chase & Co.'s government-backed buyout of the stricken investment bank Bear... Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Mar 2008 | 2:38 pm
Wall Street clawed back from sharp losses Monday as investors snapped up bargain stocks following JPMorgan Chase & Co.'s government-backed buyout of the stricken investment bank Bear... Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Mar 2008 | 2:35 pm
Well, this is another fine mess Wall Street has gotten us into. It appears the markets and the economy are collapsing around our heads. What should ordinary investors do, if anything?
Europe's largest engineering group said a variety of issues including a large contract cancellation would cause earnings to be €900m lower than previously forecast Source: FT.com - US homepage | 17 Mar 2008 | 2:28 pm
Siemens, Europe's largest engineering group, dramatically issued a profit warning on Monday, saying a variety of issues including a large contract cancellation would cause earnings to be 900m lower than... Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Mar 2008 | 2:28 pm
NEW YORK (Reuters) - Financial firms face a "new world order" after a weekend fire sale of Bear Stearns and the Federal Reserve's first emergency weekend meeting since 1979, research firm CreditSights said in a report on Monday.
NEW YORK (Reuters) - Financial firms face a "new world order" after a weekend fire sale of Bear Stearns and the Federal Reserve's first emergency weekend meeting since 1979, research firm... Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Mar 2008 | 2:25 pm
CSX Corp. lifts its longer-term outlook, increases its quarterly dividend 20% and says it will buy back as much as $3 billion of shares by the end of 2009.
Wall Street retreated Monday as Wall Street and other global markets reacted to JPMorgan Chase & Co.'s government-backed buyout of the stricken investment bank Bear Stearns Cos. On top Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Mar 2008 | 2:19 pm
Weyerhaeuser Co., one of the world's largest lumber and packing producers, said Monday it is selling its containerboard packaging and recycling unit to International Paper Co. for $6... Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Mar 2008 | 2:16 pm
US equity markets fell sharply in opening trade on Monday, as financial stocks sold off amid deepening worries about the health of the world's financial institutions.The benchmark S&P 500 index fell... Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Mar 2008 | 2:14 pm
Equities and the dollar plunged as investors sought safe havens after the sale of Bear Stearns to JP Morgan for a knockdown $2 a share raised fears of further financial strife. Markets increasingly priced in the prospect of a 100-point interest rate cut when the Federal Reserve meets on Tuesday Source: FT.com - US homepage | 17 Mar 2008 | 2:14 pm
US equity markets fell sharply in opening trade, as financial stocks sold off amid deepening worries about the health of the world's financial institutions Source: FT.com - US homepage | 17 Mar 2008 | 2:14 pm
Banking stocks plummeted on Monday sending European equity markets skidding lower as investors headed for the exits on fears that a European bank may be hiding problems similar to those at US bank Bear... Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Mar 2008 | 2:14 pm
Equity markets and the dollar sold off sharply on Monday, as the rescue of stricken investment bank Bear Stearns sparked fears of further financial sector strife. The dollar tumbled to new lows against... Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Mar 2008 | 2:14 pm
Yes, the stock market is down. But you can handle it, can't you? Certainly you could do without the sick feeling you get each time the Dow takes another triple-digit dive.
NEW YORK (Reuters) - International Paper said on Monday it has agreed to acquire Weyerhaeuser Co's packaging business for $6 billion, making it North America's largest corrugated box maker.
Commodity markets came under pressure on Monday as risk aversion rose and investor confidence sank amid extraordinary turbulence in global financial markets after the Federal Reserve was forced to take... Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Mar 2008 | 2:10 pm
The Supreme Court has stepped into a legal fight between the television networks and the Federal Communications Commission over the use of curse words on the airwaves. The case is the... Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Mar 2008 | 2:08 pm
Stock markets across the globe have slumped in reaction to the emergency rescue of Bear Stearns. Source: BBC News | Business | World Edition | 17 Mar 2008 | 2:07 pm
President George W. Bush on Monday said the US economy's "challenging times" would be manageable and voiced support for the Federal Reserve's rapid moves to avert a financial meltdown. Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Mar 2008 | 2:04 pm
Oil prices tumbled Monday after briefly jumping to an all-time trading high of almost $112 a barrel as traders weighed whether to seek further shelter in the crude market amid worsening... Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Mar 2008 | 1:50 pm
Industrial output fell in February by the biggest amount in four months, providing yet another gloomy assessment of the economy's health. The Federal Reserve said Monday that output at Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Mar 2008 | 1:50 pm
Homeowners and first-time buyers may scramble to secure a mortgage in the coming months, as lending between banks and building societies deteriorates in the wake of the Bear Stearns crisis, experts have warned. Source: Telegraph Business | 17 Mar 2008 | 1:45 pm
Homeowners and first-time buyers may scramble to secure a mortgage in the coming months, as lending between banks and building societies deteriorates in the wake of the Bear Stearns crisis, experts have warned. Source: Telegraph Business | 17 Mar 2008 | 1:45 pm
A fundamental overhaul of the support given to workers who are off work through illness is needed, a government adviser says. Source: BBC News | Business | World Edition | 17 Mar 2008 | 1:26 pm
Reuters - The dollar held losses against the yen
and the euro on Monday after government figures showed
lower-than-expected overall net capital flows for January.
NEW YORK (Reuters) - The dollar held losses against the yen and the euro on Monday after government figures showed lower-than-expected overall net capital flows for January.
If Bear Stearns is worth just $236 million this morning, about 90 percent less than what it was worth last week, what's Lehman Brothers' value? Or Merrill Lynch's?
It's the dawn of a new day for shareholders of the biggest Wall Street firms, and it's an ugly one. In a report published this morning, Oppenheimer analyst Meredith Whitney predicted that brokerage stocks could see half their value wiped away today.
The market is particularly concerned about the fate of Lehman Brothers, which said last week it plans to cut about 5 percent of its workforce. This morning, Moody's lowered its ratings outlook on Lehman debt from positive to stable. Credit default swaps on Lehman, which reflect the cost of protecting the bank's debt, soared this morning.
Lehman was also punished by a rumor that traders at DBS Group, one of the biggest banks in Southeast Asia, had been instructed to avoid transactions with Lehman. A later email went out reversing those instructions, according to the Wall Street Journal.
Investors will find out if the sell-off is warranted tomorrow, when Lehman is scheduled to report its first-quarter results.
Morgan Stanley, which has seen its shares fall more than 11 percent in premarket trading, will report earnings on Wednesday.
If there is another shoe to drop among the biggest brokerage firms, investors are rightly concerned that there may not be another white knight like J.P. Morgan. The Federal Reserve can't continue to finance $30 billion bailouts. Sovereign wealth funds were already burned by their foray into these stocks, and aside from J.P. Morgan, there are few possibilities in the private sector that seem likely to step in.
Edward Hadas at Breaking Views is alarmed by the grim outlook. "One path leads to multiple financial bankruptcies, debt deflation, and depression," he writes. "Another leads to the effective nationalization of much of the financial industry, with the risk of runaway inflation."
Homeowners and first-time buyers may scramble to secure a mortgage in the coming months, as lending between banks and building societies deteriorates in the wake of the Bear Stearns crisis, experts have warned. Source: Telegraph Business | 17 Mar 2008 | 12:45 pm
Shares in British Energy rise nearly 19%, after saying it is in talks that could lead to a tie-up or acquisition of the firm. Source: BBC News | Business | World Edition | 17 Mar 2008 | 12:32 pm
Reuters - The dollar's sharp slide to 13-year lows
against the yen and fresh all-time lows versus the euro on
Monday is stoking jitters about the possibility of joint
central bank intervention to prop up the dollar.
TOKYO (Reuters) - The dollar's sharp slide to 13-year lows against the yen and fresh all-time lows versus the euro on Monday is stoking jitters about the possibility of joint central bank intervention to prop up the dollar.
Private investors were being warned not to panic as global stock markets nose-dived again, as the crisis in financial markets deepened. Source: Telegraph Business | 17 Mar 2008 | 12:20 pm
The FTSE 100 slumped below 5,500 on Monday as London joined the global sell-off and dealers were left reeling by the cut-price sale of Bear Stears.Financial stocks faced the brunt of the selling amid fears... Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Mar 2008 | 12:11 pm
The nervousness was palpaple following the weekend news that Bear Stearns has been sold in a fire sale, with the backing of the Federal Reserve. Asian and European markets were sharply lower, and the dollar tumbled, falling to 96 yen and nearing $1.60 to the euro.
The question on every one's mind: Will there be another domino to fall?
Perhaps not.
The major market measures are down only modestly, recovering most of an opening slide. Shares of financial companies are down, but off their morning lows. Even Lehman Brothers, battered by fears that it might follow Bear in losing investors' confidence, is down only 9 percent.
Still, as the experience of Bear has shown, things can change with incredible speed.
The current financial crisis is one that has no rule book. It perhaps best resembles the credit market turmoil in 1998, when the giant hedge fund Long-Term Capital Management teetered on the brink. A rescue by Wall Street banks (but not Bear Stearns, which walked away) organized by the Federal Reserve stemmed.
But Long-Term Capital was not a Wall Street bank with an 85-year history. So if Bear can disappear for a fraction of what its headquarters building is worth, won't there be others?
Edward Hadas on Breakingviews.com points to two other daunting issues:
Bear's demise will be certain to inspire others to reduce leverage and build up liquidity.
"But if everyone follows that precautionary strategy, asset prices will fall further, munching away at capital strength. What makes sense for each can be a disaster for all."
And where will all that money come from? he asks.
Still, a collapse and liquidation of Bear would have been much worse. And the role of the Fed was absolutely necessary to avoid that.
As Barry Ritholtz notes on the Big Picture blog, "Could J.P. Morgan really complete a thorough due diligence on all of Bear Stearn's crappy paper, leveraged risk, and counter-party obligations in two days? I doubt it. Hence, the $30B backstop from the Fed. Not quite free market capitalism, but definitely creative, and certainly destruction."
Shares in British banks have collapsed in the wake of the Bear Stearns crisis amid mounting fears that their funding requirements leave few safe from the turmoil of the credit crunch. Source: Telegraph Business | 17 Mar 2008 | 12:00 pm
Meredith Whitney, the Wall Street analyst who received death threats after
writing a negative report about Citigroup, has predicted that financial
stocks could plummet by as much as half in the wake of the Bear Stearns fire
sale. Source: Latest Business News from Times Online | 17 Mar 2008 | 11:50 am
Gold prices extended their foray into record territory above the $1,000 level on Monday as investors looked for a safe haven from extraordinary turbulence after the Federal Reserve was forced to take emergency... Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Mar 2008 | 11:45 am
The dollar plunged to record lows against the euro and Swiss franc and its weakest level since 1995 against the yen on Monday as fears over the state of the US financial system sent the currency tumbling... Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Mar 2008 | 11:40 am
Takeover target Rio Tinto has reiterated its mantra that it is insulated from the US slowdown, claiming strong Chinese demand for iron ore will sustain revenues. Source: Telegraph Business | 17 Mar 2008 | 11:30 am
Any deal between Yahoo and Microsoft could be "bad for the internet" says the head of Google. Source: BBC News | Business | World Edition | 17 Mar 2008 | 11:24 am
Equity markets and the dollar sold off sharply on Monday, driving investors into the safe havens of gold and Treasury bonds, as the rescue of stricken investment bank Bear Stearns sparked fears of further... Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Mar 2008 | 11:13 am
Hitachi shares fall 8.5% after the company warns it will make its second consecutive annual loss. Source: BBC News | Business | World Edition | 17 Mar 2008 | 11:12 am
The Bank of England pumped an extra 5bn into increasingly strained money markets on Monday morning, in its first emergency provision of liquidity since September.Responding to what it described as "conditions... Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Mar 2008 | 11:01 am
Société Générale faces fresh embarrassment amid claims by Jérôme Kerviel, the
rogue trader who lost €4.9 billion, that colleagues watched as he made
unauthorised bets on European stock markets. Source: Latest Business News from Times Online | 17 Mar 2008 | 10:52 am
The dollar plunged across the board as new liquidity-boosting measures launched by the Federal Reserve over the weekend failed to assuage worries about the health of the US banking sector. Source: Telegraph Business | 17 Mar 2008 | 10:45 am
Shareholders in Carlye Capital Corporation approved a court appointed liquidator to sell the remaining assets of the $22bn Amersterdam-listed fund which last week defaulted on payments to its investors Source: FT.com - US homepage | 17 Mar 2008 | 10:19 am
The FTSE 100 slumped, the dollar tumbled and stock markets across the world were left reeling after the Federal Reserve unveiled new measures designed to prevent a meltdown in global financial markets and Bear Stearns was sold at a knockdown price. Source: Telegraph Business | 17 Mar 2008 | 10:15 am
Siemens, the German technology giant, stunned investors this morning by
issuing a surprise profit warning, cutting second-quarter earning forecasts
by €900 million (£689 million). Source: Latest Business News from Times Online | 17 Mar 2008 | 10:13 am
Royal Dutch Shell today reassured investors over its oil and gas reserves
after expectations had grown that the Anglo-Dutch oil giant would report a
decline. Source: Latest Business News from Times Online | 17 Mar 2008 | 9:48 am
Siemens shares fall 10% after it issues a profit warning, blaming delays in many of its big projects. Source: BBC News | Business | World Edition | 17 Mar 2008 | 9:30 am
LONDON (Reuters) - There will be many casualties from the unfolding financial market crisis, which will lead to a large-scale overhaul of international banking regulations, codes and risk management, former Federal Reserve Chairman Alan Greenspan said.
LONDON (Reuters) - U.S. drugmaker Bristol-Myers Squibb is sounding out potential buyers for a possible sale of its Mead Johnson baby formula food business, which is valued at between $7 billion and $9 billion, the Financial Times said on Monday.
Prior to the Fed's Sunday night actions, the consensus looked for a 50 basis point Fed rate cut, but markets now have a 100 basis point cut discounted, in line with calls on Friday in the wake of the Bear Stearns liquidity injection. Source: Telegraph Business | 17 Mar 2008 | 8:45 am
Wolseley, the building materials group, added to the gloom surrounding the US
housing market this morning as it reported a 23 per cent drop in trading
profit and warned that business in the US would become more challenging. Source: Latest Business News from Times Online | 17 Mar 2008 | 8:40 am
JPMorgan Chase is to acquire ailing US bank Bear Stearns for $2 a share, a fraction of its previous value. Source: BBC News | Business | World Edition | 17 Mar 2008 | 8:34 am
Chinese authorities have sealed Lhasa, the Tibetan capital, cutting off the city from visitors with a large military and armed police presence ahead of a 'surrender deadline' of Monday at midnight Source: FT.com - US homepage | 17 Mar 2008 | 8:27 am
British Energy, the nuclear power generator, is in talks about a takeover or
merger of the £5.9 billion company. Source: Latest Business News from Times Online | 17 Mar 2008 | 8:25 am
JP Morgan Chase last night sealed an eleventh hour deal to buy stricken investment bank Bear Stearns at a bargain price of $236m (£116m) after the Federal Reserve agreed to provide a $30bn funding lifeline. Source: Telegraph Business | 17 Mar 2008 | 8:00 am
International investors were taken on a white-knuckle ride today as London and
Wall Street shares oscillated between 200 points down and a few points to
the good. Source: Latest Business News from Times Online | 17 Mar 2008 | 7:31 am
BEIJING (Reuters) - Google Inc, the world's leading search engine, said on Monday it was concerned about the free flow of information on the Internet if Microsoft Corp were to succeed in acquiring Yahoo Inc.
Bear Stearns is tripped up by its aggressive style. JPMorgan's rescue move is a return to its roots.
It weathered the 1929 stock market crash without laying off any workers. It survived the Great Depression that followed, plus wars, recessions and the 1994 bond market crash. But 85-year-old Bear Stearns Cos. met its downfall in the sub-prime mortgage crisis.
It aids a fire sale of Bear Stearns at $2 a share, cuts a key rate and broadens lending to investment houses.
NEW YORK — The Federal Reserve took extraordinary steps Sunday to bolster investors' shaken confidence, opening a lending window to securities firms, slicing a key interest rate and backing with $30 billion in emergency funds the bargain-basement purchase of ailing Bear Stearns Cos. by rival JPMorgan Chase & Co.
San Francisco eateries are angered by a healthcare law. Diners eat some of the cost.
Diners in this food-obsessed city are used to exotic offerings such as chili squid salad, risotto Milanese with oxtail ragu and marinated noisettes of venison.
'Horton Hears a Who!' opens to $45.1 million at the box office.
Twentieth Century Fox's G-rated "Horton Hears a Who!" opened to an estimated $45.1 million at the weekend box office, the studio said Sunday, the latest potent performance by a movie aimed at family audiences.
Carolyn Strauss is in discussions about taking on a new role at the cable channel, a source says.
HBO said Sunday that Entertainment President Carolyn Strauss was leaving her post at the premium cable channel, where she helped develop programs such as "The Sopranos" and "Six Feet Under" and foster an environment that attracted top-notch creative talent.
The New Zealand dollar traded in a massive US2c range today, plunging in afternoon trading after early threatening post-float highs.
The dramatic moves are all in reaction to the twists and turns in global financial markets engulfed... Source: New Zealand Herald - Business | 17 Mar 2008 | 5:48 am
Scrambling to pre-empt further potentially catastrophic disruptions to the world's financial system, the Federal Reserve cut its discount lending rate by one-fourth of a percentage point on Sunday, and announced another new lending program to prop up investment banks.
The cut in the discount rate was designed to increase liquidity for commercial banks and thrifts. The additional lending program was aimed at shoring up investment banks by letting them borrow more freely from the Fed using as collateral securities backed by mortgages, credit-card receivables, and other consumer debt.
Both programs will be available first thing Monday morning.
Facilitating the Bear Stearns takeover was designed to remove even the possibility of a chain reaction of bank failures should Bear Stearns default on its obligations to other institutions.
"These steps will provide financial institutions with greater assurance of access to funds," Federal Reserve chairman Ben Bernanke said on a conference call Sunday evening.
In its statement, the Fed said that the new lending program for investment banks "will be in place for at least six months and may be extended as conditions warrant."
"Credit extended to primary dealers under this facility may be collateralized by a broad range of investment-grade debt securities," the central bank added. "The interest rate charged on such credit will be the same as the primary credit rate, or discount rate, at the Federal Reserve Bank of New York."
Somewhere in the world, a gold bear is sleeping under a rock. Good luck finding him.
Commodities are in the middle of a raging bull market, and nowhere in the great boom of the new century has the impact been more profound than in gold, the historical safe haven and inflation hedge. While portfolio managers always favored the metal to balance investments and offset risk, individual investors are plowing fresh capital into E.T.F.'s as they look for safety, and a little momentum.
Historically high levels of investment demand pushed prices to record highs last year, levels that were eclipsed Friday when gold jumped to $1,002.50 an ounce in New York. This is great news for the savvy investors steering clear of stocks and bonds and filling their portfolios with gold-backed instruments, from structured notes and futures to bullion and exchange-traded funds.
Exchange-traded funds especially are helping to rewrite the investor playbook. They are liquid, accessible and trade like equities. Costs are all in the price, unlike the insurance, storage and premiums at purchase associated with participation in the bullion and coin markets. Shares are backed by bullion, but there is no physical delivery.
"E.T.F.'s give ready access to the gold market to a whole category of investor who wasn't involved in buying bullion, like asset managers and individual investors," says James Steel, chief commodity analyst at HSBC.
Based on 13S filings, more than 70 percent of domestic holdings are in the hands of individual investors, dominated by the high net-worth crowd that's looking at long-term strategic allocation, according to George Milling-Stanley, manager of gold market analysis at the World Gold Council.
In November 2004, the W.G.C. created StreetTracks gold shares, the E.T.F. that trades on the New York Stock Exchange under the symbol GLD and is backed by $20 billion in metal.
The American Stock Exchange trades iShares in gold and silver. It is said to hold about $2 billion in gold. In Europe, precious metals, base metals, energy, and agricultural commodities are available as exchange-traded commodities, or E.T.C.'s, through E.T.F. Securities Ltd.
Pension funds and general investment funds are moving into commodities and out of equities. So are the asset management arms of banks and brokerage houses, according to Jeffrey Christian, managing director of CPM Group. Most of the liquidity is in precious metals, and gold represents the lion's share.
"Gold is more than naked price appreciation," Steel observes. "You may want to be diversified. With the way the equity markets have performed, with a 5 percent gold position you'll have a very nice cushion."
In 2007, investor demand for gold was 43.7 million ounces, up 11.7 percent from 2006, according to CPM Group's annual gold review, the seventh consecutive year in which investors collectively bought more than 20 million ounces, and far exceeding levels in previous bull markets. This year, Christian forecasts investment demand at 38.1 million ounces, but this number could slip or climb to 45 million, depending on investor attitudes.
"It is investor attitudes toward events that matter more than the events themselves," he observes.
Since 2001, investors have bought an estimated 279.2 million ounces on a net basis worldwide—29.3 million ounces were scooped up by E.T.F.'s as those easy-to-trade securities became more popular and opened gold buying to a wider range of investors.
"The simplicity element is very important for the gold market," Steel notes. "You couldn't buy bullion below the bullion bank level. You'd need a $1 million to enter. E.T.F.'s are deeply liquid. What you see is what you get. Many of the participants today weren't involved in the bullion market at all. By and large, their entrance into E.T.F.'s has been new."
While past commodities booms have busted spectacularly, Steel says he believes the strength being show now will have staying power—primarily because of growing demand in emerging markets. "By nature, these countries are commodity-intensive," he said. "Given the emerging world will advance at an above-par pace for years to come, interest will remain strong."
Prodded by federal officials and racing the clock, J.P. Morgan Chase agreed Sunday to buy the battered and bleeding Bear Stearns for a nominal $2 a share in stock, a deal that values Wall Street's fifth-largest investment bank at a mere $236 million.
As part of the transaction, which the boards of both companies approved on Sunday, J.P. Morgan said it would guarantee the trading obligations of Bear Stearns and its subsidiaries "effective immediately."
Also as part of the deal, the Federal Reserve, eager to resolve the Bear Stearns crisis before jittery world stock markets opened on Monday, agreed to fund up to $30 billion of Bear Stearns' less-liquid assets, J.P. Morgan said.
The Fed also took the unusual step of reducing its discount rate on Sunday, between scheduled meetings of its policymaking Federal Open Market Committee; it lowered the rate, which is what it charges on loans to stressed banks, by one-quarter of a percentage point, to 3.25 percent.
The coordinated moves were designed to firm up banks' faith in one another as counterparties in the normal trading that underpins the credit markets. On TV interviews over the weekend, Treasury secretary Henry Paulson said that the government would "do what it takes" to protect the integrity of the financial system.
Jamie Dimon, J.P. Morgan Chase's chairman and chief executive, certainly played his role in trying to assure jittery markets.
"J.P. Morgan Chase stands behind Bear Stearns," Dimon said in a statement. "Bear Stearns' clients and counterparties should feel secure that J.P. Morgan is guaranteeing Bear Stearns' counterparty risk. We welcome their clients, counterparties, and employees to our firm, and we are glad to be their partner."
Dimon was equally eager to assuage any concern his shareholders had.
"This transaction will provide good long-term value for J.P. Morgan Chase shareholders," he said. "This acquisition meets our key criteria: We are taking reasonable risk, we have built in an appropriate margin for error, it strengthens our business, and we have a clear ability to execute."
Bear Stearns C.E.O. Alan Schwartz tried to put a good face on the forced sale, which brings a remarkably fast end to the 85-year-old firm he runs. "This transaction represents the best outcome for all of our constituencies based upon the current circumstances," he said.
Current circumstances are certainly grave, as reflected in Bear's plummeting value. It's shares, which had peaked at $170 in January 2007, fell steadily as its heavy bets on mortgage-backed securities turned south.
The pace of decline accelerated on Friday, when Bear was forced to accept an emergency cash bailout from the Fed through J.P. Morgan. Bear shares fell 47 percent on that news, closing at $30.
After markets closed Friday, credit-ratings firms Moody's and Standard & Poor's both downgraded Bear Stearns, which would have severely limited the bank's viability as a trading partner. That could have accelerated its collapse, which would have threatened to drag down other banks to which Bear owed money.
The Wall Street Journal website reported Sunday that Lehman Brothers chief executive Richard Fuld, cut short a trip to India and returned home after talking by phone with Lehman executives and Treasury secretary Paulson.
Workplace saving schemes have increased significantly since the introduction of KiwiSaver, Mercer Wealth Solutions said.
Mercer said research on attitudes to savings showed a growth in KiwiSaver membership had coincided with increased... Source: New Zealand Herald - Business | 17 Mar 2008 | 4:25 am
Dairy giant Fonterra is blaming high retail margins for the price of milk.
It follows a call for an investigation into whether New Zealanders are being over-charged for it. Independent MP Gordon Copeland says milk is 15 cents cheaper... Source: New Zealand Herald - Business | 17 Mar 2008 | 3:00 am
St Laurence Property and Finance Ltd (SLPF) today issued a prospectus for a signalled rights issue to raise $18.19 million to help repay maturing debentures and fund three specific development opportunities.
SLPF said the prospectus... Source: New Zealand Herald - Business | 17 Mar 2008 | 2:30 am
JPMorgan Chase agreed to pay $2 a share for the stricken US investment bank in a deal that puts an end to Bear's 85 years of independence and highlights the risks faced by banks during the credit crunch Source: FT.com - US homepage | 17 Mar 2008 | 1:49 am
NEW YORK - JPMorgan Chase & Co has today bought stricken rival Bear Stearns at the bargain-basement price of around US$236 million.
Bear Stearns' cash reserves were drained by fleeing customers on Thursday, and on Friday the bank... Source: New Zealand Herald - Business | 17 Mar 2008 | 1:30 am
The New Zealand and Australian sharemarkets have quickly felt the effects of the Bear Stearns financial catastrophe in the US.
by 3pm today, the key NZX-50 index had lost 1.96 per cent of its total value to 3433. That's almost... Source: New Zealand Herald - Business | 17 Mar 2008 | 1:30 am
New Zealand banks have dangerously high levels of exposure to the volatile housing market, according to a report published this morning.
Almost half of all bank assets in New Zealand are now exposed to the housing market, up from... Source: New Zealand Herald - Business | 17 Mar 2008 | 1:25 am
In a rare Sunday action aimed at heading off a new market upheaval, the US Federal Reserve cut a key rate for direct loans to certain financial institutions and said it would offer immediate liquidity to the brokerage system.
The... Source: New Zealand Herald - Business | 17 Mar 2008 | 1:22 am
I don't look like a financial journalist. I have deduced this because people always gapingly ask me, "How did you end up in business journalism?" as if somehow they can tell by looking at me that I gave up maths after fifth form.... Source: New Zealand Herald - Business | 17 Mar 2008 | 1:10 am
Wellington airport owner Infratil acknowledges it got good and bad feedback on its "Rock" terminal design but said construction will begin soon regardless.
The $39 million international passenger terminal has been designed to look... Source: New Zealand Herald - Business | 17 Mar 2008 | 1:05 am
<b><a href="http://business.timesonline.co.uk/tol/business/economics/">Economics</a></b><br/>
<br/>
<b>Retail sales</b> are tipped to have grown only slightly in February.
Figures due out on Thursday are expected to show that sales grew by 0.l per
cent, after a 0.8 per cent rise in January. This will push the annual rate
of growth down to 3.9 per cent, from 5.6 per cent. Source: Latest Business News from Times Online | 17 Mar 2008 | 12:00 am
The board of Alitalia, Italy's loss-making, debt-laden and partly state-owned
airline, has agreed to a €138 million (£106 million) takeover offer from Air
France-KLM, one of the world's biggest carriers. Source: Latest Business News from Times Online | 17 Mar 2008 | 12:00 am
Japan has been told that it must make radical changes to its diet and also
undertake a complete overhaul of its traditional business practices if it is
to avert a food crisis that could send Asia's biggest economy “back to the
1950s”. Source: Latest Business News from Times Online | 17 Mar 2008 | 12:00 am
Reuters - Shares of Perry Ellis International
and G-III Apparel are likely to rise this
year, barring a deep economic recession, fueled by good
management, strong finances and a healthy outlook for their
brands, according to business weekly Barron's. Source: Yahoo! News: Business | 16 Mar 2008 | 10:33 pm
Reuters - Shares of Perry Ellis International
and G-III Apparel are likely to rise this
year, barring a deep economic recession, fueled by good
management, strong finances and a healthy outlook for their
brands, according to business weekly Barron's. Source: Yahoo! News: Business | 16 Mar 2008 | 10:33 pm
Pepsi is at odds with some of its biggest US retail customers over a national marketing campaign offering free digital music downloads from online retailer Amazon Source: FT.com - US homepage | 16 Mar 2008 | 10:03 pm
Technology companies in some of the most fiercely competitive parts of the industry have decided to place fewer, bigger bets as they grapple with two conflicting pressures: how to boost profit margins, while investing in the new technologies necessary to fuel future growth Source: FT.com - US homepage | 16 Mar 2008 | 10:03 pm
Bristol-Myers Squibb is sounding out potential bidders for a possible sale of Mead Johnson, its baby formula business, valued at between $7bn and $9bn Source: FT.com - US homepage | 16 Mar 2008 | 10:02 pm
Reuters - Angry Bear Stearns Co Inc
shareholders have wasted no time in calling their lawyers to
pursue potential legal recourse over the company's $2-a-share
fire sale to JPMorgan Chase & Co .
Reuters - NEW YORK (Reuters)- A fire sale of Bear Stearns Cos Inc
stunned Wall Street and pummeled global financial
stocks on Monday on fears that few banks are safe from
deepening market turmoil.
AP - Oil prices fell sharply Monday, pulling back at least temporarily from record levels as investors feared that the financial crisis that forced the sale of Bear Stearns Cos. is a sign of deep economic troubles.
Reuters - The Dow Jones industrial average
briefly turned positive in volatile trade on Monday as shares
of JPMorgan Chase led advancers after the bank bought
troubled Wall Street firm Bear Stearns at a fire sale
price.
Reuters - The dollar held losses against the yen
and the euro on Monday after government figures showed
lower-than-expected overall net capital flows for January.
Reuters - The dollar's sharp slide to 13-year lows
against the yen and fresh all-time lows versus the euro on
Monday is stoking jitters about the possibility of joint
central bank intervention to prop up the dollar.