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Record Rate Cuts and Economic Props Light up Europe
A spree of economic props dominoed across Europe today (Thursday) all sharing the same theme – stopping the global financial crisis from getting worse.
The European Central Bank took a drastic step to protect the Eurozone economy from shrinking further by lowering its benchmark interest rate by three-quarters of a percentage point to 2.5%.
As ECB President Jean-Claude Trichet announced the largest cut in the Eurozone’s 10-year history, he said that the region is bracing for negative growth next year.
"Global and euro-area demand are likely to be dampened for a protracted period of time," Trichet said at a press…
5Dec2008 | Money Morning | 0 comments | ContinuedGlobal Markets Nosedive as Credit Crisis Washes Over Europe
Major indices around the world plunged yesterday (Monday), as the credit crisis picked up momentum in Europe and markets in Asia began bracing for a deep recessionary environment in the West.
The Dow Jones Industrial Average careened below 10,000 points for the first time since 2004 yesterday, after plummeting 500 points in the first hour of trading. The Dow closed down 369.88 points, or 3.6%, on the day at 9,955.50, after earlier surrendering as much as 800 points.
The Standard & Poor’s 500 Index shed 42.38 points, or 3.95%, to 1,056.85 and the Nasdaq Composite Index tumbled 137.52, or 7%, to close at 1,809.
The Dow…
7Oct2008 | Money Morning | Comments Off | ContinuedSurprise Rejection of Bailout Deal Causes Record Decline in U.S. Stocks, Paves the Way for a Better Accord
In a move that will reverberate from Wall Street to Main Street, the U.S. House of Representatives yesterday (Monday) voted to reject a compromise $700 billion banking-bailout bill, an act of stunning defiance that eradicated $1.2 trillion in shareholder wealth as U.S. stocks endured their biggest one-day point loss in history.
The blue-chip Dow Jones Industrial Average Index plunged 777.68 points, or 6.98%, to close at 10,365.45. The tech-laden Nasdaq Composite Index plummeted 199.61 points, or 9.14%, to close at 1,983.73. And the broader Standard & Poor’s 500 Index plunged 106.59 points, or 8.79%, to finish the day at 1,106.42.
All sectors…
30Sep2008 | Money Morning | Comments Off | ContinuedGovernment Gold Control
Operation Meltdown, Part II:
Hoarding for War, Vaulting for Victory
It seems an odd quirk of history that Washington’s post-War obsession with its nationalized gold reserves — an obsession which Ian Fleming neatly tapped into with Goldfinger in 1959 — came so long after what historians call the “classical†Gold Standard ended.
Indeed, central bank gold reserves worldwide rose almost five-fold over the 50 years following the start of WWI in 1914 — the date traditionally given as the death of the international Gold Standard.
That system, running roughly between Bismarck’s defeat of France in 1871 and the bloody stand-off at Ypres a half-century…
9Sep2008 | Whiskey and Gunpowder | Comments Off | ContinuedBuried Treasure at the Federal Reserve?
Every market cycle has its genius.
Even a market cycle as wild and volatile as this one has been.
And the latest genius might be just what the U.S. Federal Reserve needs to restore order around here: She might even be able to bring credibility back to the global financial markets.
Elizabeth Duke goes by “Patsy.” And while the nickname may be soft, the person behind the moniker isn’t soft. In fact, we believe that Patsy Duke – a career commercial banker – is the only Federal Reserve insider that understands how the global money markets actually work.
Story continues below…
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Make Way for the Emerging Consumer
Finally, Americans are getting some relief. They no longer have to carry the whole world economy on their shoulders…
But we’ll come back to this….
First, a look at Wall Street.
The Dow tumbled more than 200 points yesterday. Oil rose $5. The euro rose against the dollar – to $.155. Gold shot up $11. And the yield on the 10-year note fell to 4.07%.
No biggie.
So, let’s go to today’s two top stories:
The first from Bloomberg: “China exports unexpectedly grow 28%.”
And this from the Wall Street Journal:
“Global inflation’s bite worsens.”
What is going on? The world economy is supposed to be slowing down. Inflation rates should…
13Jun2008 | Money Morning | Comments Off | ContinuedHSBC Chief Calls for Tougher Inflation Fight, Industry Changes
The chief executive officer of HSBC Holdings PLC (ADR: HBC), Europe’s biggest lender, today (Tuesday) called on the U.S. Federal Reserve and other central banks to make fighting inflation a priority.
“Inflation is a long-term problem because there is no long-term will to solve it,” Chief Executive Officer Michael Geoghegan said during an informal shareholders meeting in Hong Kong.
He went on to criticize central banks that have kept interest rates low in response to curtailed economic growth and weak housing markets. But due in part to low interest rates, inflation has escalated as costs for food and energy soar, dampening consumer…
27May2008 | Money Morning | Comments Off | Continued
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