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.

http://www.iht.com/articles/ap/2008/03/03/america/Economy-Manufacturing.php

Survey shows manufacturing activity falling in February after slight expansion in January

The Associated PressPublished: March 3, 2008

NEW YORK: U.S. manufacturing activity declined in February to its weakest level in nearly five years, an industry group survey showed Monday, heralding more instability in the job market and frailty in the overall economy.

After reporting modest growth for January, the Institute for Supply Management said its February manufacturing index registered at 48.3 its weakest reading since April 2003, but above Wall Street's even poorer expectations.

A reading above 50 indicates expansion, and anything below that shows contraction. The February figure was a bit better than the median forecast of 48.1 of economists polled by Thomson Financial/IFR. But it was slightly worse than December's reading of 48.4.

Manufacturers have been struggling with the rising cost of raw materials and languid demand in the housing market. Industries reporting declining activity last month included furniture, textiles, machinery and chemical products; those reporting growth included apparel, leather, wood, plastics and rubber, and food and beverage.

It's too soon to determine whether economic reports prove that the nation's economy is headed for, or already in, a recession. Recession is normally defined by two straight quarters of declines in gross domestic output. But recession or not, Monday's manufacturing data supported the argument that the economy is indeed on the wane.

Today in Americas
Clinton vows to press onMcCain's evolving positions threaten image of straight talkerColombia links slain rebel leader to Venezuela"You can't paint a happy face on this data," said Wachovia Corp. economist Mark Vitner. "The economy may not be in recession, but it's not that far off."

The report's employment index fell to 46.0 from 47.1 in January, indicating accelerating contraction an inauspicious piece of news ahead of Friday's employment report for February from the Labor Department. On average, economists are forecasting a slight increase in payrolls, but some predict they will decline for a second straight month. January's net jobs loss was the first in almost four years.

And meanwhile, production stalled sharply the production index fell to 50.7 in February from 55.2 in January.

Other worrisome categories were new orders, which also showed an accelerated contraction, and prices, which continued to increase, albeit at a slower pace than in January.

The big reason manufacturing is not dropping off more severely is exports, said Norbert Ore, chairman of ISM's manufacturing business survey committee.

"It appears right now that manufacturing is weathering the storm better than other parts of the economy, particularly the financial sector," Ore said. The ISM's survey of February's service sector will be released Wednesday the group's most recent report showed the service economy contracting sharply in January.

Ore said eight of the 18 industries that the ISM manufacturing survey follows are closely tied to the export markets. Exports are holding up well due to the weak dollar, which makes U.S. goods attractive to foreign buyers.

The ISM's manufacturing index was released at the same time the Commerce Department reported that construction spending fell by 1.7 percent in January, its widest drop in 14 years. The two reports bolsters the argument for the Federal Reserve, which has already lowered key interest rates by more than 2 percent since last summer, to reduce rates again. Rate cuts tend to spur economic growth.

Going to be a nasty day ahead perhaps, Asian markets tanking 3% so far after credit worries in the US.

Not that credit worries should be a surprise, but hey, the media and various fun managers keep trying to talk the markets up so they can keep selling their large holdings down, so they have to be "surprised" every so often at "credit crunches" or "rising oil" or "falling oil" or whatever........ LOL :)

Hardly dubious anymore! here goes test of 12000...

Very good thread on TMF, with some potentially very interesting news and comment :


http://boards.fool.co.uk/Message.asp?mid=10958184&sort=whole



.

Given the number of fund managers who decided to retire before things came to a head last year....... I don't think any of them (the good ones at least) where particularly surprised.

No matter how people try to kid themselves, at the end of the day the economy has gone in cycles since the year dot, a big boom is often followed by a big bust. Monetry policy makes no difference because it's fear and greed of the market participants that cause (and often exagerate) these cycles.

In my opinion.

Strawbs.

The main difference between previous booms and busts and today, is that it is a whole lo easier to short all and sundry than ever before!

http://www.marketoracle.co.uk/Article3942.html


.

Looks like it is quite safe to buy into the market again. The Fed has certainly turn around the markets. Well done!

Don't know if anyone is interested, but I have just been informed by HBOS that from midnight on Saturday they are pulling out of subprime lending to all self certification cases and to full status cases where the proceeds are for the purpose of debt consolidation.

In order to end the sell-off and rising inflation they will have to scrap $ for oil and gas commodities. Its the only solution. US is stuck as it cant lower the rate even further, cos the whole thing will just go crazy.

Why dont they just switch the currency to euro. I remember one of the oil producing countries Venezala was in favour of this.

Cant see it, wouldn't under-estimate states, dollar wil recover later in year, as they will be further ahead in the whole global slowdown cycle than the rest of the world and the Fed's rapid actions will see them reaping the benefits... (imo)

Venezuala would be. They have no use for the dollar cos of embargos due to supporting Cuba.
They major on supplying Cuba in return for healthcare (Cuba has no money), and the old eastern bloc who didn't like the US very much.
Not saying it iosn't an answer though, but to do so means almost all the middle eastern currencies would have to either tie to the euro or go it alone, as most are tied to the dollar now.

Lets face, I think middle east would love to get rid of US dollar! It would be a solution all terrorist fanatics!

I cant see the dollar will recover this year at all. They are fighting the recession too hard, rather than it happen otherwise it is going even harder to get out with amount of money poured into it to ease the worries.

Why it is cant they regularly review the price of oil and gas on a monthly basis similarly to interest rates and cap it sensibly. The prices at the moment are not relative to demand anymore which is becoming unfair to hike the price for other reasons. Its just ridiculous.

Evening all. Hi Alan, I think Saudi Arabia is seriously considering ditching the dollar peg and Kuwait has already done so.

Just revisited this thread after a couple of months and note the initial comments. I seems that first sell-off mentioned was absolutely spot on!

;-))

I've already said this, Darradev, that Kuwait has benefit from ditching their peg to US...see post 1424

http://www.independent.co.uk/news/business/news/wall-street-fears-for-next-great-depression-796428.html

Wall Street fears for next Great Depression

Margareta Pagano, Business Editor

Sunday, 16 March 2008


Wall Street is bracing itself for another week of roller-coaster trading after more than $300bn (150bn) was wiped off the US equity markets on Friday following the emergency funding package put together by the Federal Reserve and JPMorgan Chase to rescue Bear Stearns.


One UK economist warned that the world is now close to a 1930s-like Great Depression, while New York traders said they had never experienced such fear. The Fed's emergency funding procedure was first used in the Depression and has rarely been used since.

A Goldman Sachs trader in New York said: "Everyone is in a total state of shock, aghast at what is happening. No one wants to talk, let alone deal; we're just standing by waiting. Everyone is nervous about what is going to emerge when trading starts tomorrow."

In the UK, Michael Taylor, a senior market strategist at Lombard, the economics consultancy, said on Friday night: "We have all been talking about a 1970s-style crisis but as each day goes by this looks more like the 1930s. No one has any clue as to where this is going to end; it's a self-feeding......................

Thanks Papalpower...I feel much better already...on a serious note...weird situation with South East Asia doing fine and the USA in the dumps...

Its weird all round.


March 16, 2008, 7:23 pm

Bear Stearns fetches $2 a share

Bear Stearns (BSC) got its buyout offer from JPMorgan Chase (JPM) Sunday night - but the all-stock deal is worth just $2 a share. Thats down from the $30 a share Bear closed at Friday and off from $170 last year. Earlier reports had the price ranging between $15 and $20 a share. The token price of Sundays announced deal shows how desperate Bear was to sell itself, and how concerned federal officials were about the possible knock-on effects of a Bear bankruptcy. Meanhile, JPMorgan is doing what it can to minimize the risks it is taking in buying a firm whose best customers fled last week amid a liquidity crisis, leaving behind a bunch of mostly also-ran businesses and a balance sheet full of toxic mortgage securities. A deal to merge Bear into a big rival is surely better for the markets than a Chapter 11 filing, but its hard to see this deal as a vote of confidence in the ailing financial sector.

Banks are going on cheap sale now.