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The GoldBugg Report – November 4, 2008
November 4, 2008
The GoldBugg Report November 4, 2008
Economic Impact of the Obama Victory What it could mean to the economy if Barack Obama becomes President, with Peter Schiff http://www.cnbc.com/id/15840232?video=916889554&play;=1
-The world tires of dollar hegemony, Paul Craig Roberts http://www.gata.org/node/6838
-Gold Futures Rise as Dollar Drops Against Euro; Silver Advances http://www.bloomberg.com/apps/news?pid=20601012&sid;=a_JD5Dj5QOvE&refer;=commodities
GOLD
-Golden Buying Opportunity and Hedge against Uncertainty Ahead. Perhaps the most interesting development during the intensification of the credit crisis is that the price of gold did not climb higher than it did. Upon the initiation of the crisis in August 2007, the price of gold surged reaching a high of $1002.95 on March 14, 2007. Since then the cost of the precious commodity has fluctuated with the most recent price action sending it to recent lows of 725.74.
However, given the pervasive uncertainty in markets we think that this represents a strategic buying opportunity on the back of our bullish call for gold to spike towards $1100 in 2009 with the potential for a much larger move over the longer term. The unwinding of positions in a panic and the intense period of deleveraging ahead has stimulated many market participants to move smartly into Yen and quite interestingly, into the dollar as safe haven moves.
Given the stability of the Japanese banking system, the move into the Yen makes sense. However, we see the recent strength of the dollar an understandably reactionary move by global investors after a half-century of a dollar hegemony, to find shelter in a global storm where no safe havens appear to exist and instead have turned to a deeply indebted US government out
of habit. Thus, once the tide begins to ebb from the storm and investors can begin to evaluate the extent to which the US, EU and global governments have moved to stem the tide we do expect that gold will replace the dollar as the preferred hedge against uncertainty ahead. Read more here-http://www.321gold.com/editorials/brusuelas/brusuelas102408.html
-John Embry: Gold’s Game-Changing Moment Could be Fast Approaching. Watch video here-http://envast.blogspot.com/2008/10/john-embry-golds-game-changing-moment.html
-Gold Fields CEO said Gold to reach $1,000 next year and stay there. Watch video here-http://envast.blogspot.com/2008/10/gold-fields-ceo-said-gold-to-reach-1000.html or http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=71774&sn;=Detail
-World gold production to decline 3% per year Cutifani. AngloGold Ashanti CEO Mark Cutifani says world gold production will continue to drop for the next five years and gold fundamentals will assert themselves. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=71781&sn;=Detail
-Gammon Gold CE0 Sees Gold at $1,500 on Inflation Threat. Read more here-http://www.bloomberg.com/avp/avp.htm?N=ceo&T;=Gammon%27s%20Marion%20Sees%20Gold%20at%20%241%2C500%20on%20Inflation%20Threat&clipSRC;=mms://media2.bloomberg.com/cache/vXFfDOP3LLvY.asf
-The bottom line is extreme circumstances, a rare global financial panic, drove the sharp rally in the US dollar. And this massive and fast dollar rally hammered gold. But once the panic abates and money managers all over the world start chasing good returns again, the dollar-long T-bill buying frenzy will reverse hard. And as the USDX sinks again to reflect its dismal fundamentals, gold will really shine. Adam Hamilton-Read more here-http://www.321gold.com/editorials/hamilton/hamilton102508.html
-Clive Maund gold market update. Read more here-http://news.goldseek.com/CliveMaund/1225087620.php
-Peter Schiff CNBC interview on gold. Watch here-http://news.goldseek.com/GoldSeek/1224829020.php
-Mints struggle to meet metals demand. Safe-haven investors are on a shopping spree for precious metals, snapping up gold and silver as an antidote to topsy-turvy markets — if they can find any, that is. Demand for physical gold and silver is gobbling up product at nearly every mint around the globe and in Canada has the Royal Canadian Mint allocating its supply among its distributors, who in turn are limiting the number of coins they sell to dealers, who sell to consumers.
“Virtually every mint in the world is sold out of product and as fast as we can produce it, all of us, there is more demand,” said David Madge, director of bullion services at the Royal Canadian Mint. The situation is causing major headaches for bullion dealers like Donald Carlson. “It’s a nightmare trying to keep enough stock in,” said Carlson, general manager of Calgary’s Albern Coins & Foreign Exchange Ltd.
In the United States, sales of the one ounce gold bullion American Eagle coins are being allocated to authorized dealers, while sales of American Buffalo gold coins were suspended in late September. In the latter case, demand depleted inventories, said Carla Coolman, spokeswoman for the U.S. Mint. “We are working very hard to resume sales as soon as we can,” Coolman said from Washington. Read more here-http://www.gata.org/node/6818
-Gold coins in short supply, command 50% premium. Read more here-http://www.commodityonline.com/news/Gold-coins-in-short-supply-command-50-premium-12471-3-1.html
-Mr. Buffett’s Market Call. In summary, there are times to be in stocks, and times to be in cash. Right now cash is the better choice, but not dollar-cash as Mr. Buffett warns. Stocks are cheap in dollar terms. The Dow industrials finished last week at a new closing low for 2008, as did the Standard & Poor’s 500 index.
So far this year the DJIA is down 37% while the S&P; 500 has lost 40% and the Nasdaq 41%. At these price levels, Mr. Buffett advises that stocks are a better choice than dollars, but in my view, stocks are not yet a better choice than gold. If history is any guide, and I believe it is and so does Mr. Buffett given that he used historical examples, the price of the DJIA measured in terms of gold has much further to fall.
Consequently, investors should stay out of the DJIA and other major indices while they continue to hold gold, thereby keeping their money safe and sound until stock prices fall to more reasonable levels when measured in terms of gold. James Turk-Read more here-http://www.kitco.com/ind/Turk/turk_oct272008.html
-Ten Reasons Why Gold Isn’t Above $1,000. Read more here-http://seekingalpha.com/article/101919-ten-reasons-why-gold-isn-t-above-1-000
-A hard look at gold from Richard Russell. Read more here-http://www.321gold.com/editorials/russell/russell102808.html
-Gold sales pick up phenomenally in India. Read more here-http://www.gata.org/node/6816
-Dubai runs out of gold on Diwali rush. Read more here-http://www.gulfnews.com/nation/Society/10255029.html
-Bangkok gold outlets stop weekend bar trade. Low world supplies and pronounced price swings have prompted local gold outlets to suspend trading of gold bars on Saturdays and Sundays until early next year, effective this weekend. Read more here-http://www.bangkokpost.com/251008_Business/25Oct2008_biz33.php
-Vietnamese seek the security of gold. Read more here-http://business.timesonline.co.uk/tol/business/economics/article5019424.ece
-It ain’t over ’til it’s over silver and gold still seem the best bets. Despite government moves around the world to allay the financial meltdown, it’s not over yet and in the meantime gold and silver may offer the best bets for capital protection. Read more here-http://www.mineweb.net/mineweb/view/mineweb/en/page67?oid=71434&sn;=Detail
-Gold jewellery demand down 21 percent in 2Q, but production down too. The World Gold Council reports that gold jewellery demand fell 21 percent year on year in the second quarter, but anecdotal eveidence suggests a sharp pick up in the third quarter. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=71491&sn;=Detail
SILVER
-Got Gold Report-COMEX Commercials Least Net Short Silver in Years. The Got Gold Report takes aim on the few big bullion banks which it contends have had a trading advantage in gold and silver futures markets and suggests investors take delivery of gold and silver from the COMEX in December to take advantage of the result of the short seller’s actions; artificially low prices. Read more here-http://www.resourceinvestor.com/pebble.asp?relid=47362
-In rural India, Silver is a hedge against inflation. Read more here-http://www.commodityonline.com/news/In-rural-India-Silver-is-a-hedge-against-inflation-12475-3-1.html
-Clive Maund silver market update. Read more here-http://news.silverseek.com/CliveMaund/1225087260.php
-New policy on purchase and sale of silver ‘Libertad’ coins. Read more here-http://www.321gold.com/editorials/price/price102808.html
-Premiums Paid for 100 Ounce Silver Bars. Read more here-http://seekingalpha.com/article/102885-premiums-paid-for-100-ounce-silver-bars?source=feed
-Premium for Silver Coins Soars. Read more here-http://news.silverseek.com/SilverSeek/1225487254.php
-In a moment, I’d like to describe a new development in silver that should prove quite bullish to the price, but first I’d like to review some continuing facts that are significant in their own right. It would appear that the confluence of many factors point to sharply higher silver prices dead ahead. Yes, I know the price has recently collapsed. Ironically, it is that very price smash that is the basis for the coming price launch higher.
In fact, as I wrote last week, it is not just that investors are likely to buy silver, there is already an historic silver investment rush in force. And this investment rush is even more significant since it has developed only in the past three years, after decades of net investment selling of silver. Again, I couldn’t make these things up if I tried. And please remember, even in a recession with lower industrial demand, if users can’t get the silver supplies they need, they will panic at some point and rush to build inventories.
I did not anticipate the brutal decline to below $9 an ounce. Fortunately, those who hold real silver on a non-margined basis, my consistent public advice, still hold their silver. The rise in premiums of many items, particularly U.S. Silver Eagles, has minimized the pain of the decline. New buyers, however, have just been given a gift beyond description. The collapse in price has had nothing to do with the merits of silver, but will have everything to do with the coming explosive rally. The uneconomic low price will shock the price higher. Ted Butler-Read more here-http://news.silverseek.com/TedButler/1225121146.php
DEFINITIONS-QUOTES-QUICK HITS
-Force majeure. (French for “superior force”) is a common clause in contracts which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as war, strike, riot, crime, act of nature (e.g., flooding, earthquake, volcano), prevents one or both parties from fulfilling their obligations under the contract.
However, force majeure is not intended to excuse negligence or other malfeasance of a party, as where non-performance is caused by the usual and natural consequences of external forces (e.g., predicted rain stops an outdoor event), or where the intervening circumstances are specifically contemplated. Read more here-http://en.wikipedia.org/wiki/Force_majeure
-A U.K. newspaper has noted that AC/DC’s Back in Black album topped U.K. charts 28 years ago when inflation was at 20% and unemployment hit 2 million. Now its latest, Black Ice, is at the top of the U.K. charts, their first ‘number one’ in 28 years. Read more here-http://www.news.com.au/heraldsun/story/0,21985,24557872-2902,00.html
-Dear Bank Manager, In view of current developments in the banking market, if one of my checks is returned marked ‘Insufficient Funds’, does that refer to me or to you? Anonymous
-I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle. Winston Churchill
-”The currency is ridiculously undervalued. I can’t think of any country in the world that has no fiscal deficit, no trade deficit and no inflation except Canada. I think the Canadian dollar should go through parity. Krishnamurthy Narayanan-CI Global Opportunities Fund
-U.S. Treasuries and the greenback. “I don’t think it can hold for that much longer.” Once the world has to absorb trillions of dollars in new U.S. debt watch out. In fact, I think the odds of the U.S. having its own currency crisis are “at least 30 per cent.” Krishnamurthy Narayanan-CI Global Opportunities Fund
-The Canadian dollar gained the most in at least 37 years as its U.S. counterpart weakened versus most of the world’s major currencies and commodities including oil, natural gas, copper and gold increased. Canada’s dollar rose the most since at least 1971, when Bloomberg records begin. It has strengthened 5.2 percent since Oct. 24, after declining during four straight weeks. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=aZt4oyouaPDA&refer;=canada
-Loonie poised for quick recovery: economist. The Canadian dollar could quickly recover more than half the massive losses it has sustained this month once banks, hedge funds and other big investors no longer have to buy vast quantities of greenbacks and yen to cover short positions in those currencies, CIBC World Markets said Friday. Read more here-
http://www.globeinvestor.com/servlet/story/RTGAM.20081024.wdollar1024/GIStory/
-”Some are beginning to extrapolate the medium to long-term consequences of central-bank monetary creation,” said Jeffrey Nichols, of American Precious Metals Advisors. “The flashing lights that they are seeing ahead are the lights of inflation and currency depreciation,” developments which will inevitably push gold higher. Casey Daily Resource
-Silver surged 12% Wednesday from extremely oversold levels, its largest jump since December 31st 1979. Gold.ie
-Silver, which saw a low of $8.40 at 5:40 a.m. NYT in London on 10/28 has broken through $10.00 and settled at $9.80 in New York on 10/29. That’s a $1.40 to the upside or a 16% Improvement in one day. Precious Metals International
-Gold has hit a low of $680.00 yet as we write this Memo we are already approaching $760.00, an 11% improvement from the $680.00 low seen only 4 Trading Days ago. Precious Metals International
-In the same time period October 24th-October 29th the US Dollar has started to come off its Highs against the Euro, British Pound and Canadian Dollar. The British Pound has gained 7% since October 24th. The Euro has gained 4 ½ in Trading of October 29th (One Day). The Canadian has improved 6% in Trading throughout the 29th (One Day). Precious Metals International
-With Silver & Gold we are seeing all the signals of the “Short Squeeze” we discussed in our Memo of October 23rd which is in our analogy to the “Perfect Storm”, the beginning of Storm #1. Now comes the beginning stages of Storm #2 the reversal of the US Dollar.
Add the catalyst “Cold Front” of the actions of the Treasury and Federal Reserve over the past several weeks, including their ½ pt rate cut on October 29th and you have the Perfect Scenario to create the “Long Term” “Perfect Storm” of Inflation, Inflation, Inflation.
Over the past 12 weeks we have been requesting that all owners of Precious Metals stay the coarse and shore up your holdings in order to get past the “Synthetic Paper Market Prices”. We now feel that what we are seeing is the beginning of the end of Paper Price manipulation and victory overall is in sight for the Owners of Physical Precious Metals Bullion. Precious Metals International
-”If and when the credit markets are functioning normally again, they’re going to start talking about inflation, and gold can spike $100 in a day. Matthew Zeman, a metals trader at LaSalle Futures Group in Chicago
-Once massive leveraged positions around the world are unwound, “gold and silver will probably rise very sharply,” said Jeffrey Christian, managing director of CPM Group in New York.
What’s happening in the paper gold market bears little resemblance to the physical world. Indian sales sharply underline the point, with about 50 metric tons of the metal sold during the first three weeks of October. That contrasts with a bit more than 80 tons sold in whole of last year’s fourth quarter. Casey Daily Resource
-The Gartman Letter, expressing some respect for gold’s relative performance, points out that there is a strong seller of gold at the $740-$745 level, quite large; quite adamant and quite intent upon asserting his or its will upon the market.” There is informed speculation that investment bank selling pressured gold at times this week. Gold.ie
-Physical demand remains near record levels internationally with rising premiums for all bullion products and delays and shortages deepening. There are now little or no gold coins or bars (1 oz and 10 oz) available for immediate delivery throughout the world. There are no silver coins or bars available besides 1000 oz silver bars.
Investors are paying far higher premiums to secure physical bullion and they are willing to wait 6 to 8 weeks due to the unavailability of gold coins and bars and as they have no choice but to wait if they wish to take delivery of physical bullion. This demand is being seen throughout the entire world but especially in the western world, in the Middle East and throughout the Indian subcontinent and wider Asia. Gold.ie
-International demand remains near record levels with deepening shortages and huge demand in much of the western world, the Middle East and India. Meanwhile, supply remains anemic at best. Gold mining production worldwide fell 6% during the first-half of the year compared with the first half of 2007, the World Gold Council said Monday. Totalling just 590 tonnes between April and July, global gold mining output was the lowest since 1996 according to data from the US Geological Survey and this despite rising gold prices in recent years. Gold.ie
-As noted this week, gold supply continues to fall with gold mining production worldwide failing 6% during the first-half of the year compared with the first half of 2007. Totalling just 590 tonnes between April and July, global gold mining output was the lowest since 1996 according to data from the US Geological Survey. The Wall Street Journal reported of “phenomenal” demand in India where in just 3 weeks Indian investors bought nearly as much tonnage of gold as they did in the entire final quarter last year.
In the first 3 weeks of October alone, more than 50 tonnes of gold was sold. Incredibly, during the whole of October-December quarter last year just 80 tonnes was sold. The Journal reported that “gold sales have picked up phenomenally following consistent steep fall in equity markets which has boosted the demand for the metal as a safe investment option.”
Demand for silver remains very robust as well internationally and in India appetite for silver bullion is extremely high as seen in the very unusual fact that silver bullion bars (1000 oz) are being air freighted to India. Silver bullion is normally moved by sea as air freight costs for silver are very high (due to weight and volume) and this shows huge demand for silver bullion throughout the subcontinent.
Record demand for bullion internationally is an international phenomenon and one that bodes well for the gold price in the coming weeks and months as materially higher gold prices will be necessary to curtail demand and increase supply into the extremely tight, unprecedented so, physical marketplace. Gold.ie
-A recession is now inevitable in the US and the question now is as to how severe the recession is and whether it leads to a depression in the US and a global recession. The risks of an international monetary crisis are increasing by the day and with Bernanke’s helicopters showering dollars on the international financial system in an effort to prevent a systemic deflationary crash and depression there is the increasing possibility of a Weimar style hyperinflation developing.
There is a titanic battle between the Scylla of a deflationary crash and the Charybdis of a Weimar hyperinflation or a particularly nasty bout of global stagflation that would make the stagflation experienced by western nations in the 1970s look benign in comparison.
Scylla and Charybdis are two sea monsters of Greek mythology who were situated on opposite sides of the narrow strait between Italy and Siciliy. The sea monsters were located in close enough proximity to each other that they posed an inescapable threat to passing sailors; avoiding Charybdis meant passing too closely to Scylla and vice versa. Gold.ie
-Since many hedge fund managers like to drive Porsche roadsters, it’s somehow appropriate that the German auto maker just ran them down. The European hedge fund community took a pounding Monday covering short positions in Volkswagen. Shares in the auto company doubled Monday on a short squeeze that came after Porsche announced it had used derivatives to build a 74 per cent stake in VW.
That move brought a long-running takeover near the finish line, and also meant portfolio managers betting on a drop in Volkswagen shares had to cover positions. In their rush to cover shorts, often at massive losses, hedge funds pushed up the value of Volkswagen by 123 per cent on Monday, briefly making the auto maker the largest company on earth. Shares subsequently slipped, but ended the day up 25 per cent.
A handful of deals gain infamy for the widespread damage they inflict on hedge funds. GE’s failed bid for Honeywell is in this hall of shame. Monday’s nightmare on Volkswagen seems certain to gain the same notoriety. Given the fragile health of the community, losses on Volkswagen positions will be a fatal blow for some European funds. The squeeze on Volkswagen is partly due to the fact that the company has a relatively small public float, with just 5.8 per cent of the stock in public hands after Porsche’s move.
The Financial Times quoted Max Warburton, an analyst at Sanford Bernstein, saying the short squeeze had brought the German market into disrepute. “It is a huge question for regulators and arguably an embarrassment for all European capital markets.” The Globe & Mail
RARE COLORED DIAMONDS
-During the current financial crisis, the global polished diamond markets were “a relative oasis of calm and tranquility amid a roiling sea of turmoil,” said IDEX Online analyst Ken Gassman. www.idexonline.com
-The diamond industry, in contrast, has been a stalwart of stability in the raging subprime tempest. Being that it is a closed market and production is limited, it has been relatively immune to financial speculation and anxiety spill over. www.idexonline.com
-Despite the tough economic times, miner Rockwell Diamonds and the Steinmetz Diamond Group succeeded in selling several large color diamonds to buyers in Southeast Asia, realizing large premiums on the value of the rough. The miner reported that a 102 carat, vivid yellow cut from a 212 carat diamond achieved a 50 percent premium on the rough diamond’s value.
Two matching 10 carat, vivid yellow diamonds cut from a 36 carat stone achieved an 80 percent premium on the rough diamond. Rockwell did not disclose how much the three diamonds sold for, reporting only that they added approximately $2 million to its revenues. Steinmetz polished the diamonds, which were recovered in South Africa. Read more here-
http://www.idexonline.com/portal_FullNews.asp?id=31376
-Christie’s Jewels: The Hong Kong Sale, taking place on December 2 at the Hong Kong Convention and Exhibition Centre, features an exquisite selection of over 300 extraordinary jewels across a spectrum of taste and style including an exceedingly rare 1.70 carat fancy purplish red diamond. Even with the notable discovery of the Argyle deposits in Australia only a number of red diamonds have been documented, examined or even discovered.
With only a few specimens of its type in existence, very few people ever have the chance to see one up close. When Ronald Winston acquired the Raj Red diamond of 2.23 carats in 1998, he commented: “I think it is one of the rarest objects on earth. My father never saw a red diamond and he’d seen everything.” Adding to the allure of the red diamond is that the cause of its color is not yet thoroughly understood; it is generally concluded that the red color results from structural features in the diamond’s crystal lattice combined possibly with minute quantities of nitrogen.
The red diamond offered in this sale boasts a luscious burgundy red color that is evenly distributed, a trait sure to appeal to distinguished collectors the world over. That there have been only 3 fancy red diamonds larger than the present diamond ever sold at auction underscores its rarity and allure. Read more here-http://www.diamondintelligence.com/magazine/magazine.aspx?id=7133 or http://www.diamonds.net/news/NewsItem.aspx?ArticleID=23875
-At the Christie’s June 2008 Hong Kong Jewellery Auction numerous records were set for rare gemstones.
-A 101.27ct F, VVS1 diamond was sold to a private collector for US$6.2million.
- World record price per carat for an emerald: A pair of Romanov emeralds sold to an Asian Private Collector for US$2,409,241 (lot 2346).
- World record price for a green diamond at auction: A square-shaped fancy green diamond of 10.36cts fetched US$3,485,281 (lot 2340).
- The Chloe Diamond, an 84-carat stone sold by Sotheby’s in Geneva last year for $16.2 million, fell just short of the world record for the most expensive diamond ever sold at auction.
- A record selling price for ruby was set at Christie’s in St. Moritz on February 15 2007 when an 8.62 carat cushion-cut ruby realized a price of $425,000 per carat $3.6million.
- In April 2007 at Christie’s New York Auction, a 22ct Kashmir sapphire sold on behalf of the Minnesota Historical Society which realized $3,064,000, making it the most expensive sapphire in the world.
-Michael Arnstein, a rare gemstone dealer with The Natural Sapphire Company, says: “We’ve never seen interest in gemstones like this before. Clients are coming out of the woodwork for larger more expensive gemstones. Half of our clients specifically ask us about ‘investment grade’. Many of our clients are disenchanted with traditional investments.
With the stock markets crashing and real estate being an unknown, people are looking for alternatives to park their cash.” Read more here-http://www.marketwatch.com/news/story/rare-gemstones-hitting-record-sales/story.aspx?guid={A86D8E5A-0070-479B-ADC9-63AEFEBEC612}&dist;=hppr
-An Inside View of the Pink Diamond Tender. September may be “back-to-school” month for most, but for me, it means seeing “the Argyle pinks.” This was my 10th year in a row to get a ringside seat, and let me tell you, it doesn’t get any less exciting as the years go on.
For 24 years running, the Argyle Diamond Mine has given up a small but incredible handful of Fancy Pink Diamonds. The numbers: Less than 50,000 carats of pink rough is found from 25 million carats mined. Of that 50,000 carats, only 65 stones were considered fancy enough to be considered “special.”
So special in fact, that this small lot is taken around the world for an invitation-only silent bid auction called the Argyle Pink Diamond Tender (aka “Rio Tinto’s Argyle Diamond Mine Pink Diamond Tender, after Rio Tinto took over the Argyle mine in roughly 2002).
This year’s collection was, yet again, an exciting example of what Mother Nature can do with just a little bit of carbon (and a whole lot of natural heat and pressure). Read more here-
http://www.jckonline.com/blog/1950000195/post/940034094.html
-The value of the worldwide diamond jewellery retail market was estimated at US$61 billion in 2005, up from US$50 billion in 2002. It is expected to grow by 3% annually to reach US$90 billion in 2015.
-One of the major drivers of diamond demand is the increased spending power of the new middle class in the major emerging markets of China, Russia, India, Asia and Latin America.
-In recent years, the diamond industry has experienced a declining reserve base and increased production costs due to lower grades and cost inflation.
-Global diamond mining cost inflation is partly driven by deeper mining and off-shore mining operations, but also general shortage of mining materials and skilled labour around the world.
-Supply constraints along with an expected growth in demand results in forecasted demand outstripping supply by up to US$7 billion by 2012 especially with larger high-quality diamonds expected to become increasingly rare. Tacy Limited Report on the Diamond Market
COMMODITIES-OIL
-World is facing a natural resources crisis worse than financial crunch. Two planets need by 2030 at this rate, warns report. Humans using 30% more resources than sustainable. Read more here-http://www.guardian.co.uk/environment/2008/oct/29/climatechange-endangeredhabitats
-Metals commodities outlook positive despite forecasts of rough going in 2009. BMO’s Bart Melek notes that the sentiment at the recent LME Week was not as bearish as one would expect given that many metal prices are so low and some miners are operating below cash costs. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=71521&sn;=Detail
-Pickens: My Energy Plan Is The “Only Plan”. Tells 60 Minutes Wind Power, Solar Energy And Domestic Natural Gas Are The Only Choices To End Country’s Oil Addiction. Read and watch video here-http://www.cbsnews.com/stories/2008/10/23/60minutes/main4541322.shtml
-Oil: Will We See $80 or $50 A Barrel? Read more here-http://www.resourceinvestor.com/pebble.asp?relid=47513
-OPEC may decrease production further. Iran’s OPEC governor says that if Friday’s cut doesn’t support prices, it may move again to decrease output. Read more here-
http://money.cnn.com/2008/10/26/news/international/iran_oil.ap/index.htm?postversion=2008102613
FINANCIAL CRISIS
-The Bet That Blew Up Wall Street. Steve Kroft On Credit Default Swaps And Their Central Role In The Unfolding Economic Crisis. Read and watch video here-
http://www.cbsnews.com/stories/2008/10/26/60minutes/main4546199.shtml
-IMF may need to ‘print money’ as crisis spreads. The International Monetary Fund may soon lack the money to bail out an ever-growing list of countries crumbling across Eastern Europe, Latin America, Africa, and parts of Asia, raising concerns that it will have to tap taxpayers in Western countries for a capital infusion or resort to the nuclear option of printing its own money.
The fund is already close to committing a quarter of its $200 billion (L130 billion) reserve chest, with a loans to Iceland ($2 billion), Ukraine ($16.5 billion), and talks under way with Pakistan ($14.5 billion) and Hungary ($10 billion) as well as Belarus and Serbia.
Neil Schering, emerging market strategist at Capital Economics, said the IMF’s work in the great arc of countries from the Baltic states to Turkey is only just beginning. “When you tot up the countries across the region with external funding needs, you get to $500 billion or $600 billion very quickly, and that blows the IMF out of the water. The fund may soon have to start calling on the West for additional funds,” he said.
Brad Setser, an expert on capital flows at the Council for Foreign Relations, said Russia, Mexico, Brazil, and India have together spent $75 billion of their reserves defending their currencies this month, and South Korea is grappling with a serious banking crisis.
“Right now the IMF is too small to meet the foreign currency liquidity needs of the larger emerging economies. We’re in a dangerous situation and there is the risk of extreme moves in the markets, as we have seen with the Brazilian real. I hope policy-makers understand how serious this is,” he said. Read more here-http://www.gata.org/node/6821
-Iceland secured an emergency bailout loan of about $2.1 billion from the International Monetary Fund after the collapse of the island’s banking system paralyzed much of its foreign exchange market. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aC1D1HLDTZSY&refer;=economy
-The European Central Bank gave Denmark access to 12 billion euros ($15 billion) in funds as the ECB steps up efforts to help neighboring countries deal with the global financial crisis. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=afLPJAmcHqzA
-The International Monetary Fund will lend Ukraine $16.5 billion and give Hungary “a substantial financing package” as the turmoil in global credit markets and recession concerns sweep across eastern Europe’s emerging markets. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=ai.iCUxotV0k
-Japan unveils $275 billion stimulus package. Package to include loans for small and medium-sized businesses and payments to households. Read more here-
http://money.cnn.com/2008/10/30/news/international/japan_stimulus.ap/index.htm
-Credit ‘Tsunami’ Swamps Trade as Banks Curtail Loans. Richard Burnett’s lumber company had started loading wood onto ships heading for China. More was en route to the docks. It was all part of an order that would fill 100 40-foot cargo containers.
Then Burnett got a call from his buyer at Shanghai VIVA Wood Products Co. The deal was dead. He told Burnett, president of Cross Creek Sales LLC in Augusta, Georgia, he couldn’t get a letter of credit to guarantee payment for at least six months.
“It was like a spigot got cut off,” Burnett said, recounting the transaction that fell apart in July. The inability of buyers in China and Vietnam to get letters of credit has cost his company as much as $4 million this year, a third of projected revenue, forcing him to lay off 15 of 35 employees, he said. Read more here-
http://www.bloomberg.com/apps/news?pid=20601103&sid;=awMvopgbSWB8&refer;=us
-U.S. has plundered world with dollar, Chinese state paper rages. The United States has plundered global wealth by exploiting the dollar’s dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday.
The front-page commentary in the overseas edition of the People’s Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies. A meeting between Asian and European leaders, starting on Friday in Beijing, presented the perfect opportunity to begin building a new international financial order, the newspaper said. Read more here-http://www.gata.org/node/6813
-Taiwan dumps Fannie, Freddie and Uncle Sam? Taiwan’s financial regulators reportedly have ordered that nation’s insurance companies to pare their holdings of the debt and mortgage-backed securities of Fannie Mae, Freddie Mac, and Ginnie Mae securities, according to a report on the Internet site of Asian Investor magazine.
Such an order would be a stunning rebuke to Washington, coming a little more than a month after the federal government effectively nationalized the mortgage giants. Fannie and Freddie last month were placed into conservatorships with the Treasury standing ready to inject up to $100 billion through purchases of preferred shares in the government sponsored enterprises. Read more here-http://www.gata.org/node/6811
RUN ON A BANK IN KUWAIT
-Customers rushed to withdraw money from Gulf Bank KSC, Kuwait’s second-biggest bank, after clients defaulted on currency contracts and the central bank was forced to guarantee deposits. In the first signs of a bank run in the Persian Gulf, some Gulf Bank customers demanded money in a panic, Fawzy al-Thunayan, general manager for board affairs, said in an interview today from Kuwait.
Trading in Gulf Bank shares was suspended for a second day on the Kuwait bourse. “Some have withdrawn funds,” said al-Thunayan, who declined to comment on the size of the losses or disclose how many depositors had withdrawn funds. “We can’t blame them.” The bank is ”concerned, definitely, but not afraid.” Kuwait’s central bank will guarantee deposits at Gulf Bank, which remains solvent after client defaulted on currency derivatives contracts, the state-run Kuwait News Agency cited Kuwait Finance Minister Mustafa al-Shimali as saying yesterday.
A guarantee of bank deposits in Kuwait will make it the second country after the United Arab Emirates who to have done so in a bid to shore up confidence. Khalid Al-Matrook, a 33-year-old civil engineer, was among customers standing outside Gulf Bank’s head office in Kuwait City today. He said he was frightened by yesterday’s news of the currency defaults. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aHofkM2HOoYw
RECESSION
-The U.S. economy is in a recession because of a financial crisis caused by excessive debt, former Federal Reserve Chairman Paul Volcker said. “I don’t think there is any doubt we are in a recession, which seems to be spreading through the developed world,” Volcker said today in a speech in Miami Beach, Florida. ”I don’t know how deep, but it will be rather long before we see robust growth.”
Volcker, known for quelling inflation during the presidencies of Jimmy Carter and Ronald Reagan, said a collapse in the housing market in 2007 triggered “cascading” declines in asset prices that led to the bankruptcy of Lehman Brothers Holdings Inc. and the seizing up of credit markets.
“I’ve lived through a lot of crises, but I’ve never seen anything as complicated as this one,” Volcker said as the keynote speaker to a conference of the Urban Land Institute, a Washington-based association of architects, planners and real estate financiers. ”We should have seen it coming.” Read more here-
http://www.bloomberg.com/apps/news?pid=20601068&sid;=aW4FyxoNscm4&refer;=economy
-The economy suffered its biggest decline since 2001 in the third quarter, ushering in what may be the worst recession in a quarter-century and boosting the chances of Barack Obama and fellow Democrats in next week’s elections.
Gross domestic product contracted at a 0.3 percent pace from July to September, according to a Commerce Department report today in Washington. The decline was smaller than forecast and stocks rose. Even so, the economy may be in for a larger drop this quarter after the record two-decade expansion in consumer spending came to an end.
“The crisis really kicked up in late September,” Ethan Harris, co-head of U.S. economic research at Barclays Capital Inc. in New York, said in a Bloomberg Television interview. ”We’re going to be looking at a very unfriendly GDP number in the fourth quarter, with a drop of 2 to 4 percent.” Read more here-
http://www.bloomberg.com/apps/news?pid=20601087&sid;=al..RukPocIo&refer;=home
-In the third quarter of 2007, Volvo AB booked 41,970 European orders for new trucks. Guess how many prospective purchases Volvo, the world’s second-biggest maker of heavy rigs, received in the third quarter of this year?
Here’s a clue. Picture a highway gridlocked by 41,815 abandoned trucks because Volvo’s order book got destroyed to the tune of 99.63 percent, with customers signing up for just 155 vehicles in the three-month period, the Gothenburg, Sweden-based company said last week.
The pathogen that has fatally infected swathes of the banking industry is now contaminating non-financial companies. ”We’re heading toward the sharpest downturn I’ve ever seen in Europe,” said Chief Executive Officer Leif Johansson. Volvo has company. Daimler AG, the world’s biggest truckmaker, said earlier this month that its U.S. deliveries slumped by a third in the first half of the year. Read more here-http://www.bloomberg.com/apps/news?pid=20601039&sid;=a7AhRhE4NJlM&refer;=home
-Personal bankruptcies on the rise. Three years after the passing of new legislation aimed at reducing personal bankruptcies, 2008 filings approach the one-million mark. Read more here-
http://money.cnn.com/2008/10/24/pf/bankruptcy_filings/index.htm?postversion=2008102711
U.S. DEBT
-David Walker, the former U.S. comptroller general, says the government has lost control of the national debt. Watch video here-http://money.cnn.com/video/ft/#/video/fortune/2008/10/29/fortune.walker.abyss.fortune
-The U.S. Treasury faces historic financing demands from a weakening economy and the added costs of a $700 billion Wall Street rescue program, the department’s top domestic finance official said today.
“This year’s financing needs will be unprecedented,” said Anthony Ryan, the Treasury’s acting undersecretary for domestic finance, at a Securities Industry and Financial Markets Association conference in New York, where he was a last-minute substitute for Treasury Secretary Henry Paulson.
Ryan’s borrowing outlook comes after Treasury officials spent much of the past month publicly praising the rescue plan’s virtues. The Treasury needs to sell debt to raise money for the new initiatives and also cope with a weaker economy, two factors analysts say may push the country’s budget deficit to more than $1 trillion for the current fiscal year.
As part of the rescue effort, the Treasury aims to boost the economy by pushing $250 billion in new capital to U.S. banks. Half of that money has been set aside for large banks, which hold about half of all U.S. deposits, in hopes of stimulating more lending to businesses and consumers. The rest will go to regional banks and smaller institutions. Read more here-
http://www.bloomberg.com/apps/news?pid=20601068&sid;=aorUd4dpNb3Y&refer;=economy
HEDGE FUND MELTDOWN
-GLG chief Emmanuel Roman warns thousands of hedge funds on brink of failure. Emmanuel Roman, the co-chief executive of Europe’s biggest hedge fund GLG, has warned that thousands of hedge funds are on the brink of failure as the global economy contracts with unexpected severity. Read more here-http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3248965/GLG-chief-Emmanuel-Roman-warns-thousands-of-hedge-funds-on-brink-of-failure-financial-crisis.html
-Soros sees ’shakeout’ downsizing hedge fund world. Read more here-http://www.reuters.com/article/americasHedgeFundsNews/idUSLNE49S05Y20081029
-Hedge funds are aggravating the worst market selloff in 50 years as they dump assets to meet investor redemptions and keep lenders at bay. U.S. hedge-fund managers may lose 15 percent of assets to withdrawals by year-end while their European rivals shed as much as 25 percent, Huw van Steenis, a Morgan Stanley analyst in London, wrote yesterday in a report to clients.
Combined with investment losses, industry assets may shrink to $1.3 trillion, a 32 percent drop from the peak in June. With the average hedge fund down 18 percent this year, as measured by the HFRX Global Index, managers are selling assets to repay departing investors and meet demands from lenders for more collateral. Others including Paulson & Co. and Winton Capital Management LLC are hoarding cash to soothe nervous clients and wait for signs the worst is over.
When stocks rally, hedge funds take advantage to unload what they can. “I have never seen a market as full of panic as I’ve seen in the last seven or eight weeks,” Kenneth Griffin, founder of Citadel Investment Group LLC, a Chicago-based hedge-fund firm, said this week. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a8.xpaCUzHSI&refer;=home
CREDIT CARDS NEXT CRISIS
-Consumers Feel the Next Crisis: It’s Credit Cards. First came the mortgage crisis. Now comes the credit card crisis. After years of flooding Americans with credit card offers and sky-high credit lines, lenders are sharply curtailing both, just as an eroding economy squeezes consumers. The pullback is affecting even creditworthy consumers and threatens an already beleaguered banking industry with another wave of heavy losses after an era in which it reaped near record gains from the business of easy credit that it helped create.
Lenders wrote off an estimated $21 billion in bad credit card loans in the first half of 2008 as more borrowers defaulted on their payments. With companies laying off tens of thousands of workers, the industry stands to lose at least another $55 billion over the next year and a half, analysts say. Currently, the total losses amount to 5.5 percent of credit card debt outstanding, and could surpass the 7.9 percent level reached after the technology bubble burst in 2001.
“If unemployment continues to increase, credit card net charge-offs could exceed historical norms,” Gary L. Crittenden, Citigroup’s chief financial officer, said. Faced with sobering conditions, companies that issue MasterCard, Visa and other cards are rushing to stanch the bleeding, even as options once easily tapped by borrowers to pay off credit card obligations, like home equity lines or the ability to transfer balances to a new card, dry up. Read more here-http://www.nytimes.com/2008/10/29/business/29credit.html?_r=3&oref;=slogin&ref;=business&pagewanted;=print&oref;=slogin
-Russia begins to refuse credit cards in worsening global financial crisis. Russian businesses have begun to refuse credit cards as the global financial crisis worsens. Read more here-
INTEREST RATES
-Peter Schiff Says Fed Should Raise Rates, Sees Dollar Risk. Watch video here- http://news.goldseek.com/EuroCapital/1225398621.php or
-Fed official can see interest rates close to zero. Read more here-http://www.gata.org/node/6826
-European Central Bank President Jean-Claude Trichet said the bank may cut interest rates again at its next policy meeting on Nov. 6 as the financial market crisis damps inflation pressures. “I consider it possible that the Governing Council would decrease interest rates once again at its next meeting,” Trichet said in a speech in Madrid today. ”It is not a certainty, it is a possibility.” Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a8SUtjTg7E1U&refer;=home
-The Federal Reserve cut its benchmark interest rate by half a percentage point to 1 percent, matching a half-century low, in an effort to avert the worst U.S. economic downturn in the postwar era. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=awpa6f1vDwlg
-Iceland’s central bank unexpectedly raised the benchmark interest rate by six percentage points to the highest level in at least seven years to boost the currency after reaching a loan agreement with the International Monetary Fund. The rate was lifted to 18 percent, the Reykjavik-based bank said in a statement this week, taking it to the highest since the bank began targeting inflation in 2001. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=ajq1U3.FwHJY&refer;=economy
-Norway’s central bank cut the benchmark interest rate by half a percentage point for the second time this month and forecast further reductions as it slashed its forecast for economic growth next year. The bank reduced the overnight deposit rate to 4.75 percent, the lowest in a year, it said on its Web site this week. Read more here-
http://www.bloomberg.com/apps/news?pid=20601068&sid;=aFiQwUD_4T0Q&refer;=economy
-The Bank of Israel cut the benchmark lending rate by a quarter of a percentage point, the second reduction in three weeks, as global financial turmoil imperils domestic economic growth and inflation expectations fall. The rate was reduced to 3.5 percent, a spokeswoman for the Jerusalem-based central bank said today. Read more here-
http://www.bloomberg.com/apps/news?pid=20601110&sid;=a32sZExq2emE
-China cut interest rates for the third time in two months to stimulate growth in the world’s fourth-largest economy after the global financial crisis curbed exports and production. The key one-year lending rate will drop to 6.66 percent from 6.93 percent, the People’s Bank of China said on its Web site today. The deposit rate will fall to 3.60 percent from 3.87 percent. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aTS7_VmUNvxI&refer;=home
-The Bank of Korea slashed interest rates by a record at an emergency meeting in an attempt to restore confidence after stocks lost a fifth of their value and the won fell to a decade low last week. Governor Lee Seong Tae lowered the seven-day repurchase rate by 75 basis points to 4.25 percent and cut rates on special loans for small and medium-sized companies to 2.5
percent from 3.25 percent, the central bank said in a statement in Seoul this week. It will also accept bonds issued by commercial banks as collateral in its money-market operations, giving them access to more funds. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=ajTDUEAb7J14&refer;=home
NOURIEL ROUBINI
-Nouriel Roubini: I fear the worst is yet to come. When this man predicted a global financial crisis more than a year ago, people laughed. Not any more. Read more here-
http://business.timesonline.co.uk/tol/business/economics/article5014463.ece
-Roubini Says U.S. Needs $400 Billion Stimulus Package. Watch video here-http://www.bloomberg.com/avp/avp.htm?N=av&T;=Roubini%20Says%20U.S.%20Needs%20%24400%20Billion%20Stimulus%20Package&clipSRC;=mms://media2.bloomberg.com/cache/vq44wyEF3URM.asf
-Roubini Says S&P; May Fall 30% More Over 2-Year Recession. Watch video here-http://www.bloomberg.com/avp/avp.htm?N=av&T;=Roubini%20Says%20S%26P%20May%20Fall%2030%25%20More%20Over%202-Year%20Recession&clipSRC;=mms://media2.bloomberg.com/cache/v.8Wcra7zbSE.asf
ARGENTINE PENSION SEIZURE WILL SPUR BRAZIL STOCK SALE
-Argentina’s planned nationalization of its retirement system will trigger a fire sale of Brazilian stocks this week as private pension funds are forced to shed foreign holdings. The funds must unload all foreign assets by Oct. 31, “particularly those in Brazil,” Amado Boudou, the head of the country’s social security agency, said in an interview Wednesday with America 24. La Nacion reported that the AFJPs might have to dump the securities as soon as this week.
“That’s not news we like, but I don’t think it will cause problems,” Carlos Kawall, chief financial officer of Brazil’s securities exchange BM&FBovespa; SA, said in an interview in New York. Pension funds in Argentina, known as AFJPs, owned 1.8 billion pesos ($536 million) of Brazilian stocks including Cia. Vale do Rio Doce, Petroleo Brasileiro SA and Banco Bradesco SA as of Oct. 15, according to the regulator’s Web site. Although that’s only about 0.1 percent of Brazil’s total market value, it represents 21 percent of average daily trading in the past week.
The requirement to repatriate Brazilian funds will ”take pressure off of the exchange rate,” Sergio Chodos, the head of the AFJP regulator, said in an interview published in Wednesdays edition of Argentine newspaper Cronista. The peso fell to the weakest against the dollar since December 2002 this week. Read more here-
http://www.bloomberg.com/apps/news?pid=20601110&sid;=aPHDu0m4.K10
-A New York federal judge blocked Argentina from transferring out of the U.S. investments held by its pension funds, granting a request by bondholders holding a $553 million judgment against the South American country. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aJjlFXnqromQ&refer;=home
REAL ESTATE
-House prices in 20 U.S. cities declined at the fastest pace on record as foreclosures climbed before the credit crisis deepened this month. The S&P;/Case-Shiller home-price index dropped 16.6 percent in August from a year earlier, as forecast, after a 16.3 percent decline in July. The gauge has fallen every month since January 2007, and year-over-year records began in 2001.
The decrease in property values, which helped boost sales last month to the highest level of the year, will probably intensify in coming months as the latest tightening of credit markets threatens to dry up mortgage financing. Prolonged price declines may push even more houses into foreclosure, weakening consumer spending and the economy.
“There’s still quite a bit further for prices to go down, even though the volume has probably bottomed out,” William Cheney, chief economist at John Hancock Financial Services Inc. in Boston, said in a Bloomberg Television interview. “Prices will probably find a bottom sometime next year.” Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=a22yrweGD74o&refer;=invest
-A majority of U.S. homeowners believe the value of their property fell over the past year, according to a survey of real estate market confidence by data company Zillow.com. The survey of 1,388 homeowners between Oct. 7 and Oct. 9 found 51 percent said their houses had lost value, while 49 percent believed the value had stayed the same or increased, Seattle-based Zillow found. In an earlier survey, taken June 30 to July 2, 38 percent said their homes had lost value and 62 percent said they had gained or stayed the same.
Three quarters of homes have actually fallen in value over the past year, Zillow said. ”The bad news on the general economy front is getting through to people and certainly is making their perception of home values more accurate,” Zillow’s Vice President of Data and Analytics Stan Humphries said in an interview. The median price of an existing home dropped to $191,600 in August, down from a record high of $230,200 in July 2006, according to the Chicago-based National Association of Realtors.
The disconnect between owners’ perception of value and actual market conditions makes it harder for real estate agents to price homes to sell, Humphries said. Homeowners ”have a larger sense of the personal wealth of their portfolio than is actually the case,” he said. Zillow’s Home Value Misperception Index shrank to 16 in the third quarter from 32 in the second quarter.
An index value of zero indicates homeowner perceptions are in line with actual values. Homeowners also were less optimistic about the future. About 21 percent said they believe their home’s value will rise over the next six months, compared with 32 percent who predicted price appreciation in the previous survey. About 57 percent said they thought property values in their local market will fall. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=aE04JJV9jIWA&refer;=invest
FORECLOSURES-MORTGAGES-RENTS
-The U.S. Treasury and the Federal Deposit Insurance Corp. are considering a program that may offer about $500 billion in guarantees for troubled mortgages to stem record foreclosures, people familiar with the matter said.
The plan, which might put as many as 3 million homeowners into affordable loans, would require lenders to restructure mortgages based on a borrower’s ability to repay. Under one option, the industry would keep lower monthly payments for five years before raising interest rates, the people said. Read more here-
http://www.bloomberg.com/apps/news?pid=20601109&sid;=aPFaqO.S_m.g&refer;=home
-Rents in the Boston area spiked 4.2 percent over the past year, the biggest increase in seven years, while rising foreclosures and a slumping housing market pushed more people into apartment living. Read more here-http://www.boston.com/business/articles/2008/10/29/areas_rents_up_42_in_one_year/
-U.K. mortgage approvals stayed close to a record low and consumer credit rose at the weakest pace since 1993 after the worsening financial crisis prompted banks to tighten lending, pushing the country towards a recession. Lenders approved 33,000 loans for house purchase in September, up from 32,000 in August, the lowest since comparable data began in 1999, the Bank of England said.
Economists expected approvals to be unchanged, according to the median of 26 forecasts in a Bloomberg News survey. Consumer borrowing rose 0.1 percent on the month, the least since April 1993. The outlook for the U.K.’s struggling economy deteriorated after the collapse of Lehman Brothers Holdings Inc. last month made banks more wary about lending to each other and to households.
The economy contracted for the first time in 16 years in the third quarter and as the housing slump worsens, the Bank of England predicts that 10 percent of mortgage holders may soon owe more than their homes are worth. “The U.K. didn’t sneak into recession, it jumped,” said Alan Clarke, an economist at BNP Paribas SA in London. “There are worse figures yet to come.” Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=a4mnLOZNW0Wc&refer;=economy
-Manhattan office rents may fall by about 25 percent between now and mid-2010, Colliers ABR predicted, as the city sheds tens of thousands of jobs in a financial industry-led recession. “The next 12 to 24 months will be a struggle for the NYC commercial real-estate market,” wrote Robert Sammons, managing director for research at the New York-based real estate brokerage, in a report today.
“While we are bullish on the city and the region in the long-term, like the rest of the country we will have to buckle down for some time.” Sammons cited projections by the New York City comptroller’s office of 165,000 private sector job losses through the end of 2010, up from a forecast of 85,000 job losses in July. About 35,000 of those may be in financial services, comptroller William Thompson Jr. said on Oct. 15.
Three of the five biggest New York-based investment banks, Bear Stearns Cos., Lehman Brothers Holdings Inc. and Merrill Lynch & Co. have either gone bankrupt or are being taken over, as losses on residential mortgage securities have taken their toll. There will be ”further consolidations” as the financial industry learns new ways of conducting business, Sammons wrote. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aAp57UpT8Mto
IRAN OPENS BASE AT HORMUZ STRAIT FOR GULF DEFENSE
-Iran opened a naval base on the Strait of Hormuz that’s capable of keeping foreign forces out of the Persian Gulf, the chief of the Iranian navy said. “With this naval base, a new line of defense was created in the Persian Gulf,” Admiral Habibollah Sayyari was cited today as saying by state-run Fars News.
“If necessary, we can prevent any enemy from entering the Persian Gulf’s strategic area.” The naval chief said the facility, which was inaugurated this week, is needed because of the presence of foreign forces in the region. The base in the southern port of Jask, 1,050 miles (1,690 kilometers) south of Tehran, is in the eastern part of the strait at the entrance to the Gulf.
The Strait of Hormuz has been the focus of increasing tension in recent months. Iran has said it may close the strait should the U.S. attack the country over its refusal to halt uranium enrichment as part of a nuclear program. Some 20 percent of the world’s oil is shipped through the strait, according to the U.S. Department of Energy. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aEodCjKUbes0
© 2012, Worldwide Precious Metals Canada Ltd.
www.wwpmc.com
The GoldBugg Report – November 4, 2008
Posted by Worldwide Precious Metals on Tuesday, November 4, 2008
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