World economy talk

[tidus1203]

As I have said last week, feels like 2008 doesn't it? Mas mild but somehow the same... Panic, Force selling, stop loss, low liquidity...

[uls]

yep

from banking crisis (2008) to sovereign crisis (2010)

[leonleon]

yep

from banking crisis (2008) to sovereign crisis (2010)

So any fearless predictions on what more to expect this year?

[leonleon]

Wala akong narinig sa mga major oil players.

Agree. I too am still waiting for that elusive rollback from the big players.... but alas, wala pa rin, at mukhang wala na.....

[tidus1203]

Tax collection in Greece goes via satellite

Residents in rich areas of the Greek capital Athens are scrambling to hide their swimming pools under tarpaulins as tax authorities resort to satellite images to identify the owners and make them pay, French paper Le Monde reported on its Web site Friday.

http://www.cnbc.com/id/37144941

[uls]

So any fearless predictions on what more to expect this year?

more volatility

risk aversion

kinda like 2008 all over again

[tidus1203]

http://newsinfo.inquirer.net/breakin...Monday-morning

Here is your rollback. And mukang kulang...

[Monseratto]

Oil is still going down...US$ 70.37/bbl.

MANILA, Philippines—Major oil firms Pilipinas Shell and Chevron Philippines also cut down oil prices by as much as P1.25 per liter Monday, following Petron's earlier move.

At 12:01 a.m., Pilipinas Shell slashed premium and unleaded gasoline prices by P1.25 per liter and regular diesel, kerosene, and gasoline prices by P1 per liter, said vice president for communications Roberto Kanapi.

Meanwhile, Chevron also implemented the same price cuts at 6 a.m. Monday, said communications manager Toby Nebrida.

Euro=$ gains in 2 years wiped out...

[uls]

yep

risk aversion

oil is a risk asset

it's being liquidated

money going into USD cash

[james00112233]

http://newsinfo.inquirer.net/breakin...Monday-morning

Here is your rollback. And mukang kulang...

for sure there are groups that will protest with the small rollback.

[uls]

contagion has already spread throughout the EU financial system

first, Greece and Portugal banks got shut out of international money markets

then higher cost of borrowing for Spain, Ireland, Italy banks

by friday last week, France, Germany, Netherlands banks too

there's fear of debt restructuring

EU banks will be hit hard if that happens

the contagion will spread across the Atlantic coz many big EU banks are counterparties of big US banks

that's the problem with highly interconnected systems

[tidus1203]

But Gold is a surprise... During 2008 it also fell but now its rising...

[uls]

greater demand for gold than after Lehman collapsed in Sept. 2008

Germans are more afraid of inflation

Weimar experience

Germans lead gold rush frenzy
http://www.ft.com/cms/s/0/4c2e9f3c-5...44feab49a.html

At the Rand refinery in South Africa, the phone has not stopped ringing this week.

Panicking German dealers and banks have been desperate to get their hands on krugerrands, the world's most popular gold coin.

"We have some extraordinary sales to German customers," says Deborah Thomson, the Rand treasurer. The refinery, which usually sells 2,000 coins to each customer at a time, says that last week it received an order from one German bank for 30,000 coins. Another bank requested 15,000 coins.

Frank Ziegler, head of precious metals at BayernLB, one of Germany's largest wholesale suppliers of gold, says: "People are buying krugerrands like crazy." The frenzy pushed gold prices to a nominal high of $1,248.95 a troy ounce yesterday while the euro price surged through €1,000 an ounce for the first time. Adjusted for inflation, however, gold prices are still a long way from their all-time high above $2,300 an ounce in 1980.

Although coins account for a small part of the market, they are one of the best indicators of investor sentiment towards the precious metal. And right now gold is in massive demand from investors who see it as the ultimate safe haven at a time of market turmoil and as one of the best hedges against a possible resurgence of inflation.

Other important factors are supporting prices: institutional investors are pouring billions into bullion-backed exchange traded funds; central banks have reversed 20 years of selling gold (and some, including the Chinese central bank, are buying it); and mine gold supply growth has stagnated.

Not all the factors are positive. India, the world's largest gold buyer and traditionally the best barometer of gold demand, is signalling that the rally could be near a peak. Ahead of the Akshaya Tritiya festival this weekend, when Hindus traditionally buy gold and gold jewellery for good luck, Mumbai dealers say customers are in short supply.

"Price makes a big difference," says Rajendra Gurjar, who runs a shop on Mumbai's wealthy Colaba Causeway. "We won't see many people coming in while prices are at these levels." Instead, Indians are buying cheaper silver.

Without the support of the traditional backbone of the gold market, some analysts believe bullion prices will soon fall.

But there is no indication that Germans are ready to stop buying. Panicked by the possible inflationary implications of this week's €750bn eurozone bail-out, they have been snapping up gold coins and small bars at a faster rate than in the aftermath of the Lehman Brothers bankruptcy.

The European Central Bank says its government bond purchases will be "sterilised" by operations to remove inflation risks. But Martin Siegel, manager of Westgold, a dealer of gold in Frankfurt, says people "are not as dumb as economists. They believe there is going to be inflation and are buying gold to protect themselves"."

German investors are notoriously wary about inflation. While few are old enough to remember the hyperinflation that wrecked Germany during the Weimar Republic in the 1920s, the episode remains etched into the national psyche: newsreel from the period has been running on the news in recent days.

The appetite for coins has been so intense that shortages are developing. "In the European market there is a shortage of krugerrands," says Mr Ziegler. As a result, the premium paid for krugerrands in the secondary market has risen from about 2 per cent to 6-8 per cent.

The interest has not been confined to coins and bars. ETFs, which hold physical gold and issue shares to investors, have also seen large inflows.

The world's largest, the SPDR Gold Trust, has increased its holdings by 50.5 tonnes in the past two weeks, more than in the first four months of the year.

Other funds have also been building their positions. Gijsbert Groenewegen, at Silver Arrow Capital, a New York-based precious metals hedge fund, says investors have been flooding into his fund "in swarms" in the past week.

Analysts and traders believe gold could rise even higher in the short term.

Philip Klapwijk, executive chairman of GFMS, the precious metals consultancy, believes that the current upward trend "could run a bit". Edel Tully, precious metals analyst at UBS, forecasts the gold price will hit $1,300 an ounce in the next month.

One bullish factor is the lack of physical gold, or scrap, being sold, despite the high prices. In Asia, where the gold market is especially sensitive to price, a surge in prices usually leads people to sell their old gold for scrap, boosting supply.

But that is not really happening yet. Afshin Nabavi, head of trading and physical sales at MKS Finance, a gold refining and trading company in Geneva, says: "Sales of scrap have picked up but not that much."

[tidus1203]

Weimar Republic...


Better burn money in the fireplace than wood I guess Much cheaper, I reckon!

[uls]

the ECB resorted to using the nuclear option -- buying bonds in the open market

ECB QE

that scared the hell out of the Germans

[uls]

GBP sell-off in asia (look at that plunge)

flight to USD, JPY

recovery in europe early trading

[Monseratto]

Looks like the euro problem will take some time to be resolved...

Merkel: $1 trillion rescue package only buys time

BERLIN – The euro750 billion ($1 trillion) shock-and-awe rescue package to prevent the Greek debt crisis from spreading only bought eurozone countries more time, it didn't solve their underlying debt problems, German Chancellor Angela Merkel and a European Central Bank official said Sunday.

Market turmoil over rising levels of European government debt — sparked by Greece's immediate crisis — will only calm down if the 16 nations who share the euro currency reform their economies and reduce their deficits, the German leader and ECB chief economist Juergen Stark said in different forums.

"We bought time, not more than that," Stark was quoted as saying in the Frankfurter Allgemeine Sonntagszeitung paper, adding the euro was not in danger "but in a critical situation."

[tidus1203]

The 2nd phase of the Great Recession is upon us... This thing will force Europeans to CUT SPENDING, CUT BORROWING and thus remove liquidity and slow the economy down. The first phase was the US when Americans cut the consumer spending and cut the borrowing... Brace yourselves!

And with the continuously weakening European currency (EURO and Pound to be specific, the Swiss Franc is more stable) expect China to continue resisting strengthening its currency to the dismay of the US... Chinese exports to Europe will get hit!

[uls]

yep

the crisis that began in Aug 2007 ain't over

there's too much debt in the system

[tidus1203]

WASHINGTON (AP) -- The Treasury Department said Monday it will lose $1.6 billion on a loan made to Chrysler in early 2009.
Taxpayer losses from bailing out Chrysler and General Motors are expected to rise as high as $34 billion, congressional auditors have said.

http://finance.yahoo.com/news/Treasu...&asset=&ccode=


Car bailouts have FAILED! As far as taxpayers go...