The market seems to be selling-off on the back of limited bad news imo, apart from the dollar that is.

If you can hold your nerve and apart from any short term requirements to offload poor performing stocks, I have a couple!!, my advice would be sit tight. This does not have the feel of the tech(mining!) bubble at all. Difference being there are a lot of good fundamentals, unlike in 2000 when there were a lot of over rated nothing companies.

from where did you get that info ... not apparent on cnn site

and the dollar becomes a tin pot currency - i think the fed will have a big problem deciding what to do

fed futures , see kyoto,s posting

Tune into squark!

70% chance now of a half cut.

The dollar falling of late, even with rising interest rates perhaps pointed to those in the know knowing that it was short term rises, and that they would be lowered again shortly after.

With regards to volatility, expect it to continue for the next two weeks, as we move into Option Expiry and Rollover time.........

Only once that is clear, and with an interest rate reduction on the 18th can the markets start to be on more solid ground for a real bounce back imo.

Coming two weeks, lots of volatity......again.

just for those who trade or use $ in biz, it is far from impossible that we'll see 2.0700 before $ strengthens again .... it approached this level about a month back, but never quite got there ...... there is based on (very) long term chart indication

* Britain's biggest banks could be forced to cough up as much as 70 bln stg over the next 10 days, as the credit crisis that has seized the global financial system sparks a fresh wave of chaos; almost 20 pct of the short-term money market loans issued by European banks are due to mature between September 11 and September 19 - Sunday Torygraph

* Leading bankers are warning of the worst crisis in the money markets for 20 years, which will come to a head this week when 113 bln usd (57 bln stg) of commercial paper -- market IOUs -- comes up for refinancing - Sunday Torygraph

Snatched from driver's post on the other side.

Can't always believe what you read in newspapers of course but food for thought all the same, another interesting week ahead no doubt.

http://observer.guardian.co.uk/business/story/0,,2165080,00.html


Sunday September 9, 2007
The Observer

Global stock markets are set for a 'big, big rally'; retail investors will pile into shares; companies will indulge in landmark strategic takeovers; and there will be a 'real mania' for commodities, infrastructure companies and emerging markets.
That may sound a rather unlikely end to the current market turmoil, which has seen banks refusing to lend to each other, a surge in short-term interest rates and growing unease about the prospects for the US economy. But Teun Draaisma, equity strategist at Morgan Stanley, thinks that is how markets are most likely to behave over the next year or so - and he was one of the few analysts who correctly predicted the tumble in shares over the past few months.

It is not quite as far-fetched as it seems. If the banking sector can untangle the raft of CDOs, CLOs, SIVs and other incomprehensible acronyms that have been ricocheting around the financial markets without too much damage to their profits or financial strength, then it should remain largely a liquidity crisis, rather than an economic one.
But that does not mean the economy will escape unscathed: the banks have had a painful reminder that lending is risky and, while it will undoubtedly make them less enthusiastic about parcelling up and securitising sub-prime loans, it is also likely to make them warier about lending in general.

The impact of that has already been seen by both companies and individuals: when drugs group GlaxoSmithKline raised $8bn last week, it had to pay as much as 0.6 per cent above base rate, rather than the 0.15 per cent it was accustomed to, while the riskier mortgage prospects have seen their costs rise by as much as 2 per cent as a number of lenders have pulled out of the market.

Robert Waugh, head of UK equities at Scottish Widows, thinks all borrowers are likely to see a rise in mortgage costs, even without another increase in base rates, as banks' ability to raise money cheaply through securitisations diminishes. While the corporate sector is generally cash-rich, consumers have record borrowings - the average household debt is almost one-and-a-half times earnings - and a raft of fixed-rate mortgage deals, struck when interest rates were lower, are about to unwind.

Already-fragile consumer confidence is, therefore, likely to suffer a further blow. The US is even more downbeat as falling house prices have sent demand for homes down to six-year lows and there are already signs in trading statements from retailers such as Home Depot and Wal-Mart that consumer spending is being affected.

That is worrying Trevor Greetham, director of asset allocation at Fidelity. He sees the week after next as a key one: the US Federal Reserve will announce whether interest rates will fall, American investment banks will announce their third-quarter figures - thereby also giving some indication of the extent of the losses from the credit crisis precipitated by defaults in sub-prime lending - and a raft of private equity deals need to be refinanced. And he is reluctant to dismiss it all as a liquidity crunch.

'Banks should open up more, as that would restore confidence in the interbank market,' he says. Pointing to the surge in the rate at which banks are willing to lend to each other, he adds: 'If they are so worried about lending to each other, they must know something about the state of their own balance sheets.'

But Richard Batty, global strategist at Standard Life, points out that the Federal Reserve is likely to cut interest rates at its meeting on 18 September and, while the Bank of England held rates last week, there is a growing feeling that they could fall rather than rise, as had been expected. 'In 18 months' time, the economy could be bottoming, there would be more confidence about mortgage repayments. Investors are simply lengthening their time horizons,' Batty says.

He adds that economic growth is already healthy: the Bank of England's estimates are for 3.5 per cent this year, well ahead of the 2.5 per cent trend level and so allowing plenty of room for slippage, while, even with a sluggish US, the global economy is expected to grow by at least 5 per cent this year and next. However, not everyone is quite so sanguine.

Waugh likens the stock market to the aftermath of a moderate earthquake: 'there is a lot of mess to clear up and a big risk of aftershocks'. He is avoiding banks, where he expects profits to fall sharply as the huge arrangement and trading fees that were being generated from securitisations disappear.

But he adds: 'There are plenty of stocks out there we like, such as First Group, which have stable cash flows and which we have been able to pick up cheaply in the past month or so.'

It is this kind of company that has performed best since the market turbulence started: stable, defensive businesses such as Rentokil, the pest control and office services business, and brewer SABMiller have been among the best performers, along with resources companies such as miners Vedanta and Antofagasta, which are expected to be continued beneficiaries of soaring demand from China and other emerging markets.

The laggards include companies where speculation about a bid from private equity has evaporated as the cost of borrowing has spiralled, such as Experian, Smiths Group, and Cadbury Schweppes, which pulled the sale of its beverages business. The surprise is that, apart from Northern Rock, which has traditionally raised more than two-thirds of its funds from the wholesale markets and so faces a rise in costs, there are no banks among the worst performers. That reflects the fact that investors hope the lack of emergency trading statements means losses will be contained - and because their valuations are already very low and yields high.

Indeed, the whole market has bounced back since its August lows and, while still nervous, there is no sign of panic selling by retail investors. Turnover across the market has been low.

'It would be foolish and arrogant to believe there are not more effects to come out of this unwinding,' says Edward Bonham Carter, joint head of Jupiter Asset Management. 'There will be a world growth slowdown and equities will remain volatile. But corporate earnings are good, balance sheets are healthy and ratings are low.'

But the final word should go to Draaisma. Even if he is right that the bull market will quickly pick up again, he accepts it cannot go on forever: 'Of course, it won't be different this time, and, as always, it will all end in tears, probably when higher inflation and rates lead to the next recession. But if we get through the current crisis, it is highly likely that the next phase in equities is a mania of epic proportions.'

Experts' views

Gavyn Davies
Chairman, Fulcrum Asset Management

I am reasonably optimistic that the markets will self-correct, with the passage of time and a little more help from the central banks. Time will help because the investment banks will come clean on where the losses lie in the upcoming results season, thus restoring confidence. And the central banks are injecting more and more liquidity into the market, on less and less restrictive terms. At least the Federal Reserve seems likely to follow this with a cut in its key policy rate on 18 September, while the European Central Bank and the Bank of England abandon earlier plans to raise policy rates. Even with this action, the financial sector will contract for a time, and this will hit the London economy and housing market. But the wider UK economy still looks fairly healthy, and I hope it can again weather this financial shock without tumbling into recession.

Andrew Smithers
Chairman, Smithers & Co

Nobody knows whether stock markets will rise or fall over the next year - swings almost invariably go with the economy. The world economy may continue to enjoy uninterrupted prosperity for a bit longer but investors should remember that forecasts are fallible and that a major reason for this fallibility is that stock markets tend to rise and fall in advance of changes in the real economy. So long as stock markets hold up, a serious recession is unlikely. But this tells us nothing about the markets' prospects.

Gerard Lyons
Chief economist, Standard Chartered Bank

Throughout this year financial markets have not priced for risk. Clear signs of a US slowdown were ignored. In early summer I had one of the weakest US growth forecasts, expecting the Fed to cut rates by year-end. Since then, optimists have become pessimists, losing all sense of perspective. Recent weeks are a catch-up with reality, not the start of an economic bust.

UK 3-month interbank lending rate continues to inch higher - AFX


LONDON (Thomson Financial) - The cost for UK banks to borrow money amongst themselves over a three-month period kept rising today, suggesting the credit problems in the financial sector are not improving.

The London interbank offered rate (Libor) fixing for three-month sterling deposits rose to 6.90375 pct, up from 6.89625 yesterday and a full 115 basis points above the Bank of England's 5.75 pct bank rate.

This is the largest spread in 20 years and reflects the fact that banks are afraid to lend to one another as long as it remains unclear who was hurt by the US property market meltdown, and by how much.

The overnight rate eased slightly, to 5.90 pct from 5.91 pct yesterday, a level it has hovered around since last Wednesday, when the BoE said it would boost liquidity in the overnight market.

carlo.piovano@thomson.com

I have remained a bull throughout, i havent panicked, havent sold a single share, always remained positive. I think if more did this, many may not feel like they have been ripped off. I fully understand we are not safe yet and bears could be out in force tomorrow.

"Haven't sold a single share" - But that doesn't mean you are in profit! Could mean any number of scenarios.
The market is very tricky to predict at the moment imo, but locking in profit seems the most sensible way forward at present, I think.

I sort of agree Harry but if in a years time my shares are well ahead of what they were before the 'mini-crash' i can still sell at a profit and much better dealing costs. Experience shows time after time investing should be for the longer term.

WASHINGTON (MarketWatch) -- In the first significant borrowing from the Fed since it lowered the discount rate last month, U.S. banks had borrowed $7.2 billion from the Federal Reserve as of Wednesday, the most since just after Sept. 11, 2001, the Fed said Thursday.
The average borrowing for the week was $2.7 billion per day.
The Fed data don't detail the names of the borrowers. The data indicate that $4.9 billion in loans were owed to the Federal Reserve Bank of New York, $1.6 billion to the Cleveland Fed, and $550 million to the Richmond Fed.

not just nrk

This way UP one day and way DOWN the next is pathetic. What has changed so massively from 3 months ago. The large insutions who can afford to buy a nd sell massive amounts of ftse 100 shares must be raking it in. I bet it will be back up again Monday or Tuesday!

this is all feeling very bad indeed ...... unsure of best way forward; for sure not buying!

totally agree. One moment there is negative reaction to the BOE not intervening to alleviate the credit squeeze; now it has intervened, look what reaction it gets i.e NRK ......

Come come chaps - don't say you weren't well forewarned.


The last time the FTSE100 reached the heady heights of 2006 was in 2000.
The chart below shows what happened then. It took the best part of 3 years before it finally hit rock bottom.
From this, you may well deduce that this months downturn could well be the beginnings of something that will last a while yet.
My own feeling is that the FTSE100 won't begin to recover again until it has first breached 4800 - sometime next year.

Looks like the friend of our ex-PM (or poodle), Bush is to blame for this financial turmoil...


Greenspan faults Bush over spending - AFX


WASHINGTON (AP) - Former Federal Reserve Chairman Alan Greenspan, in his upcoming book, bashes President Bush for not responsibly handling the nation's spending and racking up big budget deficits.

A self-described 'libertarian Republican,' Greenspan takes his own party to task for forsaking conservative principles that favor small government.

'My biggest frustration remained the president's unwillingness to wield his veto against out-of-control spending,' Greenspan wrote.

Bush took office in 2001, the last time the government produced a budget surplus. Every year after that, the government under Bush has been in the red. In 2004, the deficit swelled to a record $413 billion.

'The Republicans in Congress lost their way,' Greenspan wrote. 'They swapped principle for power. They ended up with neither. They deserved to lose.'

In 2006, voters decided to put Democrats in charge of Congress for the first time in a dozen years.

Greenspan's memoir, 'The Age of Turbulence: Adventures in a New World, is scheduled for release Monday. The Associated Press purchased a copy Saturday at a retailer in the Washington area.

The book is a recollection of his life and his time as Fed chief.

Greenspan, 81, ran the Fed for 18 1/2 years and was the second-longest serving chief. He served under four presidents, starting with his initial nomination by Ronald Reagan.

He says he began to write the book on Feb. 1, 2006, the day his successor -- Ben Bernanke -- took over.

The ex-Fed chief writes that he laments the loss of fiscal discipline.

'Congress and the president viewed budgetary restraint as inhibiting the legislation they wanted,' he wrote. '`Deficits don't matter,' to my chagrin, became part of Republicans' rhetoric.'

Greenspan long has argued that persistent budget deficits pose a danger to the economy over the long run.

At the Fed, he repeatedly urged Congress to put back in place a budget mechanism that requires any new spending increases or tax cuts to be offset by spending reductions or tax increases.

The large projected surpluses that were the basis for Bush's $1.35 trillion, 10-year tax cut approved in the summer of 2001 'were gone six to nine months' after Bush took office that year, Greenspan wrote.

There were projections the government would run a whopping $5.6 trillion worth of surpluses over the subsequent decade after the cuts. Those surpluses, the basis for Bush's campaign promises of a tax cut, never materialized.

'In the revised world of growing deficits, the goals were no longer entirely appropriate,' Greenspan noted. Bush, he said, 'continued to pursue his presidential campaigns nonetheless. Most troubling to me was the readiness of both Congress and the administration to abandon fiscal discipline.'

Greenspan, in testimony before Congress in 2001 gave a major boost to Bush's tax-cut plan at the time, irking Democrats. 'The tax cut testimony proved to be politically explosive,' Greenspan wrote.

At that time, Greenspan made the argument before Congress that a tax cut could help the economy deal with sagging growth. The economy slipped into a recession in March 2001. The downturn ended in November of that year.

Surpluses quickly turned to deficits after the bursting of the stock market bubble and the 2001 recession cut into government revenues.

'How could the forecasts have been so colossally wrong?' Greenspan wondered.

Government spending increased to pay for the fight against terrorism and receipts declined because of a string of tax cuts.

As children we emulate the actions of others and try to learn from our mistakes to avoid future pain. Many will have been burned in the past with the collapse of BCCI, LTC and the end of the dotcom boom, not to mention more recent stockmarket wobbles. But could our fear bring about the very cotastrophes we worry about? Just as there was no petrol shortage before long queues formed at the start of the fuel crisis, could we see a similar outcome from queues outside Northern Rock? At a time when liquidity is poor the last thing banks need is people demanding their money back. Only time will tell I guess, but when logic is divorced from reality the strangest things can happen.....

In my opinion.

Strawbs.

D'accord.
Anyone with <30k in there has nothing at all to fear.
The banks problems were caused by not having enough deposited.A media fired scrum outside the branches all asking for their money back can only make it worse.
Still sensible people acting logically and a bank slowly recovering from a world wide problem has never made particularly good headlines, in my very cynical opinion.
Reading some of the media crap in the populist press, one would assume the entire banking system was about to collapse and we would be bartering half a pig for a bushel of corn by christmas. Better headlines but bullshit of the highest order.
The FSA would be well advised to read the editorials and journalistic comments in some of the last couple of days papers and ask what exactly qualifies these people to cause such mayhem.
They would be pretty quick if a bunch of senior financial advisors suddenly started writing popular press painting doom laden pictures of a particular investment, without very good reason.