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A Crashing Dow and Rampant Fear
Is The Worst Over … Or Is There More to Come?
You’ve no doubt noticed the bloody red ticker symbols streaming across the TV screen and your web pages recently. The bad news is relentless, even good stocks and other securities are getting murdered, and nobody seems to really know what to do.
The Federal Open Market Committee, Treasury and government in general has been putting on a fine show of incompetence these past two weeks.
For example, the U.S. Federal Reserve is considering making unsecured loans with the intention of directly purchasing commercial paper. This would be a historical first, but the Fed…
8Oct2008 | Oxbury Research | Comments Off | ContinuedStrong Dollar Rally Causes Gold Prices to Tumble
Gold prices tumbled below $800 per ounce for the first time since late 2007 Friday, as the continuing U.S. dollar rally sparked an across-the-board retreat in commodity prices.
Gold closed Friday at $792 an ounce, a decline of $22.40, or 2.75%. Gold prices have plummeted 23% since the “yellow metal” hit an all-time record of $1,032 an ounce on St. Patrick’s Day.
“The dollar’s continuing uptrend is a key factor depressing commodities in general and triggering heavy sales in gold,†Shuji Sugata, manager at Mitsubishi Corp. Futures and Securities Ltd. in Tokyo told Reuters.
Investors who had been using precious-metals investments as a…
19Aug2008 | Money Morning | Comments Off | ContinuedTurbulence in the European Economy Sparks a Dollar Rally
The U.S. greenback surged Friday, capping off the biggest weekly dollar rally in three and a half years, as the euro slumped on speculation the European economy would continue to weaken.
The euro fell as low as $1.5008 Friday afternoon, dropping more than 2% from $1.5325 Thursday – the biggest one-day drop since Sept. 6, 2000. Against the yen, the European currency traded at 165.84, from 167.70. In the dollar rally, the euro has declined 3.1% against the greenback in its fourth weekly decline.
In addition to rising against the euro, the greenback climbed 0.5% to 109.97 yen after touching 110.08, the…
11Aug2008 | Money Morning | Comments Off | ContinuedU.S. Energy Prices and the Declining Dollar
On the energy front, we’ve seen several days of declining prices. Oil has led the way, falling from about $146 to $126. Coal and natural gas sold down, as well, as did many energy companies and service firms.
So we’ve seen quite a tumble, led by declining oil. But then again, oil had quite a run-up. I’ve said before that oil was climbing too far, too fast. And over the past few weeks, oil tested the $150 mark. But like Gen. Pickett at Gettysburg, this charge to $150 failed.
What seems pretty clear is that at $140, a lot of things in…
25Jul2008 | Energy and Oil | Comments Off | ContinuedFed Chair Comments Boost Greenback
U.S. Federal Reserve Chairman Ben S. Bernanke came out in support of a stronger U.S. dollar yesterday (Tuesday), indicating the Fed would remain on pause at its next meeting.
Speaking via satellite at the International Monetary Conference in Barcelona, Spain, Bernanke said the Fed is working with the Treasury to “carefully monitor developments in foreign exchange markets.†The Fed Chair said he was aware the effect of the dollar’s decline on inflation and price expectations, Bloomberg News reported.
Also, interest rates are currently “well positioned†to promote both growth and stable prices, he added.
“I can’t recall such a strong defense of the dollar from a…
4Jun2008 | Money Morning | Comments Off | ContinuedA Currency Conundrum: Beware of the U.S. Dollar’s “Head Fake†Rally
Don’t mistake the U.S. dollar’s recent rally for strength. If anything, it’s a head fake of legendary proportions.
In fact, the dollar’s recent run-up is actually a warning that risks are escalating.
To better understand what I mean here, let’s look at the greenback’s recent performance against the euro. After bottoming at an all-time low of $1.6019 versus the euro on April 22, the dollar has soared nearly 4% and was trading at $1.5428 per euro early yesterday (Wednesday).
Now many of the Wall Street types expect that rally to continue. Just yesterday, UBS AG (UBS) predicted the greenback would rise to $1.47…
8May2008 | Money Morning | Comments Off | Continued
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