Dollar lets give the baht a rest

[arjay]

You might be interested in this little observation:-

My LGF says that when talking about the sale price of land or houses, or house rentals, Laos people would previously talk in terms of Dollars, they are now quoting prices in baht!!

[aznyron]

I posted a apology in the wrong forum please read it on democrats abroad

[Bump]

I gues I must be simple person rates are rising on these loans that are to eb eventually defaulted. leaving nothing fo the financial institues beyond what they can get at fire slaes. It would seem to me getting some the monies back would be better then a total right off's we aer currently seeing.

It has been said that this will end when the Feds buys the mortgages estimated at 600 billion at the moment. Maybe that is what it is going to take. That means the tax payer will paying for a lot of homes they have never purchased, not have no chance of ever seeing a profit on.

But, that might just be what it takes.

Fed Efforts Foiled By Banks as Residential Mortgage Rates Rise

By Bob Ivry and Sharon L. Lynch

March 15 (Bloomberg) -- Ben S. Bernanke can't revive the housing market and the banks are no help.

The U.S. Federal Reserve cut interest rates five times, pumped $200 billion into the financial system, and yesterday its New York branch provided funds to help rescue Bear Stearns Cos.

None of that has brought down mortgage rates for residential borrowers, whose success in refinancing or buying would help bolster the U.S. economy. The interest rate on a 30- year fixed-rate mortgage has climbed to 6.37 percent from 5.5 percent since Jan. 24, according to the Mortgage Bankers Association, as financial institutions try to cover $195 billion in mortgage-related losses and save capital for future losses.

``The mortgage rate isn't down as much as it should be because the banks are in desperate straits and they need to maintain a larger spread than they normally would,'' said Alan Nevin, chief economist with the California Building Industry Association in Sacramento. ``The banks need to generate income and the easiest way to do that is to broaden the spread. If they pay 3.5 percent and charge 6 percent, that's a lot of money.''

Over the past 10 years, the average spread between 10-year U.S. Treasuries and 30-year fixed-rate mortgages has been 1.75 percent. Last week, the spread was 2.83 percent. That means a homeowner's mortgage costs are more expensive now than they have been.

Investor Trust

The Fed lowered its target for federal funds 13 times from Jan. 3, 2001, to June 25, 2003. After each cut, mortgage costs fell eight times and rose five times, according to North Palm Beach, Florida-based Bankrate.com.

That has little to do with Fed policy and everything to do with the confidence of investors, who aren't buying securities backed by home loans, said Kenneth Rosen, chairman of Rosen Real Estate Securities LLC, a hedge fund in Berkeley, California, and chairman of the Fisher Center for Real Estate at the University of California, Berkeley.

``No one wants to lend much of anything today,'' Rosen said. ``The secondary market system for many loans has broken down. People don't trust the paper. We have an investor strike going on.''

The Fed this week agreed to make $200 billion available to securities firms by lending Treasuries in exchange for mortgage- backed securities because many private investors have quit buying mortgage-backed bonds. Record home foreclosures sent premiums on Fannie Mae and Freddie Mac-backed securities to the highest in 22 years this month.

Emergency Financing

That may worsen further as JPMorgan Chase & Co. and the New York Fed agreed yesterday to provide emergency financing for 28 days to Bear Stearns. The New York-based securities firm, the second-biggest underwriter of mortgage bonds, said its cash position had significantly deteriorated. The Dow Jones Industrial Average fell 1.6 percent.

``Banks are trying to increase their reserves to get through this period where we have greater uncertainty, and also uncertainty about future losses,'' said Delores Conway, director of the Casden Real Estate Economics Forecast at the University of Southern California in Los Angeles. ``They are being much more careful.''

Home-loan issuance will drop by 15 percent this year, in part because lenders can't sell mortgages on the secondary market, according to the Washington-based Mortgage Bankers Association.

Rates Are Set

Buyers are less willing to take a risk on purchasing after U.S. home prices fell year-over-year in 2007 for the first time since the Great Depression, according to the National Association of Realtors. This year, they will probably drop 5 percent nationally, according to Freddie Mac, the second-largest provider of U.S. mortgage financing.

``The mortgage rates are set in the securities market more than they are by the banks,'' said Michael Carliner, former chief economist for the National Association of Home Builders.

The yield premium, or spread, on 30-year fixed-rate mortgage securities sold by Fannie Mae over 10-year notes reached 238 basis points on March 6, the widest since 1986. The spread was 207 basis points yesterday, compared with an average of about 112 basis points the past five years.

The spread helps determine the interest rates offered to homeowners on new prime mortgages.

TED spread

The difference between what the U.S. government and companies pay for three-month loans has also climbed in the past month. The so-called TED spread increased to 1.52 percentage points yesterday from 0.78 percentage point on Feb. 14.

The Fed has lowered its benchmark rate five times since September, to 3 percent from 5.25 percent.

The median price of an existing home fell 13 percent in January from its peak in July 2006, according to the Chicago- based National Association of Realtors.

``The Fed actions are not going to stop house prices from falling,'' said Morris Davis, a former Fed economist and professor of real estate at the University of Wisconsin- Madison's School of Business. ``In an environment with falling prices and defaults, mortgages are a lot riskier now than three years ago. In an environment where housing prices are falling you should expect spreads to widen.''

To contact the reporters on this story: Bob Ivry in New York at bivry@bloomberg.net; Sharon L. Lynch in New York at sllynch@bloomberg.net.

Last Updated: March 15, 2008 00:30 EDT

[aznyron]

[quote="LoveDaBlues"]Mods I apologize for any of my posts that were out of line; I know better and I was wrong.

It's better if I just ignore certain people which is what I intend to do in the future. When someone, anyone, says something like, "most expats budgeted for the baht at 40:1" and then later says, "oh it was 2-3 of my friends and myself"......well it's just amazing how 'most' expats in reality is 4 people. I don't think it serves anyone to throw around BS as a fact or survey; that's my point in questioning certain posts.

As far as people whining; okay it's their right to do so. It's also my right to think they're acting in a selfish manner. Let's leave it at that.

I think Bump is correct; in the future I'll just laugh at any posts I think are foolish and not respond. I have a feeling a lot of posters are doing just that; guess it's my netiquette that's lacking, sorry.

Actually my first job was delivering papers. My next job was mopping the floors of the local supermarket before school and then bagging groceries after school. I'm not ashamed of either job; I guess some folks are on too high a horse to hold such meager positions.

IMHO it's really sad when a post can't be questioned or an opposing stance taken because someones tender ego will be bruised; boo hoo hoo he's attacking me.......

Lastly, in all my years of posting on Internet Forums I've NEVER made an issue of ANYONE'S education or lack thereof. I don't give a rat's rear how educated someone is or isn't. I DO take issue with posts I feel are misleading, wrong, or just plain BS pulled from someones arse without any thought or research.[
/let me say this some times people my self included get all wound up over article or a post
and we take it to personal and I plead guilty
sadly we some times get a dislike for a person with out ever getting to know him or her
I also plead guilty
If I had met LDB maybe we would be friends with small disagreements but most important we would be friends I would like to think on those terms so my post to LDB let bury the hatchet
maybe some day we might bump in to one another a find each other to be pleasent & friendly
on my personal note about the baht it hurting me along with many Americans as well as Brits
so I do whinne & complain in here. just maybe it might help relieve my tension by exploding in here than out side on the street so I apologize to all. and I ask your forgiveness for my poor writing skills

[LoveDaBlues]

Mods I apologize for any of my posts that were out of line; I know better and I was wrong.

It's better if I just ignore certain people which is what I intend to do in the future. When someone, anyone, says something like, "most expats budgeted for the baht at 40:1" and then later says, "oh it was 2-3 of my friends and myself"......well it's just amazing how 'most' expats in reality is 4 people. I don't think it serves anyone to throw around BS as a fact or survey; that's my point in questioning certain posts.

As far as people whining; okay it's their right to do so. It's also my right to think they're acting in a selfish manner. Let's leave it at that.

I think Bump is correct; in the future I'll just laugh at any posts I think are foolish and not respond. I have a feeling a lot of posters are doing just that; guess it's my netiquette that's lacking, sorry.

Actually my first job was delivering papers. My next job was mopping the floors of the local supermarket before school and then bagging groceries after school. I'm not ashamed of either job; I guess some folks are on too high a horse to hold such meager positions.

IMHO it's really sad when a post can't be questioned or an opposing stance taken because someones tender ego will be bruised; boo hoo hoo he's attacking me.......

Lastly, in all my years of posting on Internet Forums I've NEVER made an issue of ANYONE'S education or lack thereof. I don't give a rat's rear how educated someone is or isn't. I DO take issue with posts I feel are misleading, wrong, or just plain BS pulled from someones arse without any thought or research.[
/let me say this some times people my self included get all wound up over article or a post
and we take it to personal and I plead guilty
sadly we some times get a dislike for a person with out ever getting to know him or her
I also plead guilty
If I had met LDB maybe we would be friends with small disagreements but most important we would be friends I would like to think on those terms so my post to LDB let bury the hatchet
maybe some day we might bump in to one another a find each other to be pleasent & friendly
on my personal note about the baht it hurting me along with many Americans as well as Brits
so I do whinne & complain in here. just maybe it might help relieve my tension by exploding in here than out side on the street so I apologize to all. and I ask your forgiveness for my poor writing skills

Well I guess we're both guilty of getting a bit personal; you're right over a cup of coffee we'd probably disagree but still be friends

Sometimes the Internet is too impersonal and we tend to forget there is a face with feelings behind the posts.

Don't worry too much about your writing heck I can't dance, sing, etc. etc. we all have certain things we do well and some things we suck at

I've been told more than once I'm a MASTER deBATER

Anyway I'm with you let's forget the past BS and move on.

[arjay]

.....Sounds good to me.... =D> =D>

[Bump]

Well nothing changed today no good news. Everything is pointing to we have not seen the bottom for the dollar. They are really using the R word these days ( recession) question left how deep how long. Predictions deep and lengthy. Fed is gauranteed to cut interest rates. The only bright spot I can see is the possibilty of intervention of the G-7 in the next few months.

The baht has really held up the rate of exchange over the weekend, just dropping a few satang. Why I have no idea.

Bear Stearns bought the farm in just a few days sold at $2.00 a share. listed last year in the $150.00 range JP Morgan either just hung thier butts out to dry or made a fortune.

Everything is pointing to additional drop of 4% on the dollar in the near future.

Now before anyone goes out top the balcony to prove they can fly, these things do turn around. That is not me being oppotimistic that is history

[arjay]

On CNBC this morning they are reporting the dollar in free-fall (in the Far East so far) ahead of another expected Fed rate cut and the introduction of yet more emergency measures. They are saying that action taken now, won't really stop the immediate fall, but is more to create a series of Firewalls to prevent it falling too much further into the future.

[Bump]

Bloomberg had something similar to it this morning. Didn't use the term free fall. But the firewalls you speak of must be in action as we are not seeing huge changes as of yet. I actually expected to be below 30 by now.

Apparently what the world does not want is a dollar crash, so the mechanisms are in place to prevent that. The G-7 hasn't acted yet.

I think what we are going to see a series of gradual reductions. Until the states rides out this crisis. On our end I see nothing has changed, you have to adapt.

[Bump]

I've watched the baht rate very closely today, it has depreciated against the dollar thus far today, but it is lower compared to last week. The one that really seems to be going up is the Euro.

Oil is sky high which everyone like to attribute to the dollar, but in reality it seems to be commodity buying that is really driving it. What the experts are saying is the current increases to oil is abnormal for the economic we are currently experiencing
[quote]
By JEANNINE AVERSA, AP Economics Writer
13 minutes ago



WASHINGTON - Worry about the damage a growing credit crisis is inflicting on an ailing U.S. economy led the Federal Reserve to make a rare weekend move, lowering a key lending rate before Wall Street opened Monday.

ADVERTISEMENT

The central bank approved a cut in its emergency lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created a lending facility for big investment banks to secure short-term loans. The new lending facility will be available to Wall Street firms on Monday.

"These steps will provide financial institutions with greater assurance of access to funds," Federal Reserve Chairman Ben Bernanke told reporters in a brief conference call Sunday evening.

The Fed acted just after JPMorgan Chase & Co. agreed to buy rival Bear Stearns Cos. for $236.2 million in a deal that represents a stunning collapse for one of the world's largest and most venerable investment banks. Just on Friday the Fed had raced to provide emergency financing to cash-strapped Bear Stearns through JPMorgan. Days earlier the Fed announced a set of other unconventional steps to thaw out a credit market in danger of freezing shut.

"It seems as if Bernanke & Co. are pulling out all the stops to avoid a serious financial market meltdown," Richard Yamarone, an economist at Argus Research, said Sunday evening.

However on world financial markets, Asian stocks plunged early Monday after the JPMorgan and Fed announcements. Markets in Australia and New Zealand were also off.

Oil prices hit a record in Asian trading as the value of the dollar continued its free fall and U.S. stock index futures were down sharply, suggesting Wall Street would open lower after sinking Friday.

"There is persistent credit uncertainty. Market players have been repeatedly let down which shows the subprime mortgage problems are so deep-rooted," said Atsuji Ohara, global strategist of Shinko Securities in Tokyo.

President Bush has scheduled a White House meeting Monday afternoon with his Working Group on Financial Markets, which includes Bernanke, Treasury Secretary Henry Paulson and Securities and Exchange Commission Chairman Christopher Cox.

Paulson said Sunday, "I appreciate the additional actions taken this evening by the Federal Reserve to enhance the stability, liquidity and orderliness of our markets."

The new lending facility

[trubrit]

An Asian perspective.
re/1205745505.jpg][/URL]

[Bump]

Dollar Doomsayers Draw Signs From Bernanke Rate Cuts (Update2)

By Bo Nielsen

March 17 (Bloomberg) -- Ben S. Bernanke's interest-rate cuts have touched off a vicious circle of doom for the dollar.

The Federal Reserve reduced the rate on direct loans to commercial banks by a quarter-point to 3.25 percent before Asian financial markets opened today. It will likely lower its target rate for overnight loans between banks tomorrow to at least 2.25 percent from 3 percent, according to futures traded on the Chicago Board of Trade. Lower borrowing costs work against the dollar by making fixed-income securities issued by the government less appealing to global investors.

``The relative return on U.S. assets is not attractive enough and we have moved back into looking for dollar weakness,'' said Robert Robis, a bond fund manager in New York at OppenheimerFunds Inc., which oversees $260 billion. Robis last month was betting the dollar would rally versus the euro.

If that weren't enough to make bears out of bulls, the weakest dollar since at least 1971 based on a Fed trade-weighted index is helping push oil, grains and metals, which are priced in the U.S. currency, to record highs. That in turn is causing economists to lower growth forecasts for the U.S. and preventing central banks concerned that inflation is accelerating from cutting interest rates, further undermining the dollar.

``The whole world feels there's inflation when a good part of that is the weak dollar itself,'' said Stephen Jen, head of global foreign-exchange research at Morgan Stanley in London. ``Watching the dollar plummet like this is very dangerous.''

Picking Up Steam

The dollar tumbled 6 percent in the past month against a basket of six major trading partners, the fastest pace of decline since May 2006. It fell to a record low against the euro of $1.5903 today, before trading at $1.5837, and depreciated to 95.76 against the yen, the weakest since 1995.

Barclays Capital Inc., BNP Paribas SA, Morgan Stanley, Standard Chartered Plc, Bank of America Corp. and Credit Suisse Group cut their forecasts for the dollar in the last two weeks.

European Central Bank president Jean-Claude Trichet and Japanese Prime Minister Yasuo Fukuda said last week in interviews the plunge is ``concerning'' and ``undesirable'' for growth. Goldman Sachs Group Inc. and Morgan Stanley strategists say that coordinated action by policy makers to stem the currency's slide is increasingly likely. In intervention, central banks buy and sell currencies to influence exchange rates.

`Down the Tubes'

``It's hard to stimulate an economy when the currency is going down the tubes,'' said David Malpass, the chief economist at Bear Stearns & Co. The New York-based firm expects the dollar will fall to $1.60 per euro in 12 months.

The U.S. economy may expand 1.4 percent this year, according to the median estimate of 82 economists surveyed by Bloomberg News this month. The median in March was for growth of 1.7 percent. As recently as September the Fed's target rate was 5.25 percent.

Global investors see little reason to own U.S. financial assets with the two-year Treasury yielding 1.28 percent today, or 1.97 percentage points less than similar-maturity German bunds. The gap is the widest since September 1993. Foreign purchases of U.S. financial assets slowed in each of the final three months of 2007, to a net $56.5 billion from $113.9 billion, according to the latest Treasury Department data.

As the currency fell, the UBS Bloomberg Constant Maturity Commodity Index of 26 commodities ranging from energy, metals, agriculture and live stock rose 43 percent in the past 12 months, the biggest increase since the index's inception in 1998. The price of a barrel of crude oil surged 96 percent in a year to an all-time high of $111.42 today.

Commodities Hedge

``A lot of people out there are using oil and other commodities as hedge against a falling dollar,'' said Simon Wardell, manager of energy research at Global Insight Inc. in London. ``We could get to $120 in oil if we continue to see weakness in the U.S. dollar.''

The drop in the currency is responsible for about a third of the 230 percent rise in commodities since 2002, with the rest mainly attributable to demand from developing nations such as China, according to Morgan Stanley. The ICE Dollar Index moved in unison with the price of crude oil more than 97 percent of the time in the last year, according to Bloomberg data.

Relief may be in sight. The International Monetary Fund in Washington said last month that oil prices may be peaking as growth slows. The median forecast of 34 analysts surveyed by Bloomberg is for the dollar to gain about 10 percent against the euro this year and 8 percent versus the yen as the Fed's rate cuts spark the economy in the second half of 2008.

``If the U.S. dollar turns higher or if the crude oil market reverses then we have a spiral working the other way,'' said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. The price of crude oil will at $70 by September, Evans said.

`Major Concern'

The ECB is one of more than 12 central banks that cited faster inflation as the reason for raising or keeping rates unchanged this year.

``The surge in oil prices is a major concern and I don't think it leaves us any room for a loosening of our monetary policy,'' said Axel Weber, member of the ECB's Governing Council, in Frankfurt on March 11.

Inflation in the euro zone rose at a 3.3 percent annualized pace last month, the fastest in 14 years, the European Union's statistics office in Luxembourg said March 14. Consumer prices in the U.S. were unchanged in February, the Labor Department said.

Kenneth Rogoff, the former chief economist at the IMF and now a professor at Harvard University, said the greenback may drop another 12 percent on a trade-weighted basis.

``This recession will be long and deep and when we get out of it, we'll have inflation,'' Rogoff said in an interview. ``Confidence in the dollar is down.''

To contact the reporters on this story: Bo Nielsen in New York at bnielsen4@bloomberg.net

Last Updated: March 17, 2008 01:04 EDT

[Bump]

SCB this morning 31.07 if there was a dollar ralley it sure didn't last long. Actually surprising since rate cuts are supposed to bring the dollar down, which it eventually did.

Crude Oil Falls as Dollar Rallies After Fed Interest Rate Cut

By Christian Schmollinger

March 19 (Bloomberg) -- Crude oil fell in New York as the dollar extended the biggest rally in nine years against the yen following the U.S. Federal Reserve's cut in interest rates to strengthen the economy.

The dollar surged yesterday by 2.6 percent after stocks rose on stronger-than forecast earnings from Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. The Fed reduced its benchmark rate by 0.75 percentage point to 2.25 percent, less than the full-point cut many traders expected, making the dollar more attractive.

``It's largely a dollar move with very little fundamentals behind it,'' said Gerard Burg, energy economist with National Australia Bank Ltd. in Melbourne. ``If there is further strengthening in the dollar then we generally see across commodity markets a decline.''

Crude oil for April delivery fell as much as $1.30, or 1.2 percent, to $108.12 a barrel in after-hours trading on the New York Mercantile Exchange. It was at $108.19 at 8:59 a.m. in Singapore.

Futures rose $3.74, or 3.5 percent, to settle at $109.42 a barrel on the Nymex yesterday. Oil touched $111.80 a barrel March 17, the highest since trading began in 1983. Futures are up 92 percent from a year ago. Oil was trading at about $108.01 before the Fed's move.

The April oil contract expires at the end of the day's trading on the Nymex. The more active May contract was down $1.35 to $107.15 a barrel at 9:08 a.m. in Singapore.

Brent crude for May settlement fell as much as $1.06, or 1 percent, to $104.50 a barrel on London's ICE Futures Europe exchange at 9 a.m. Singapore. The contract yesterday rose $3.81, or 3.7 percent, to $105.56.

To contact the reporter on this story: Christian Schmollinger in Singapore at Christian.s@bloomberg.net

Last Updated: March 18, 2008 21:17 EDT

[Bump]

SCB five mins ago 31.08 we are sure getting close to that 30 range. petrol 34.95, that folks unless my math is bad is over $4.00 a U.S. Gallon

Dollar Falls on Speculation Housing Slump to Swell Bank Losses

By Agnes Lovasz and Stanley White

March 19 (Bloomberg) -- The dollar fell against the euro, erasing yesterday's gains, on speculation the worst U.S. housing slump in a quarter of a century will swell credit-market losses.

The currency weakened against the Japanese yen and Swiss franc after Bank of America Corp. predicted the Federal Reserve will lower its target rate by another 75 basis points this year following a reduction to 2.25 percent yesterday. U.S. stock-index futures and European equities fell on concern banks will report more writedowns related to subprime-mortgage investments.

``We're approaching a dollar low, but we probably haven't seen it yet,'' said Adrian Schmidt, senior currency strategist in London at Royal Bank of Scotland Group Plc, the fourth-biggest currency trader. ``The market still expects the Fed to cut aggressively,'' he said, adding that the U.S. currency may fall to as low as $1.65 before rebounding later this year.

The dollar fell to $1.5713 per euro at 7:46 a.m in New York, from $1.5625 yesterday, when it rose 0.7 percent, the most since Feb. 7. The dollar declined to 99.15 yen, from 99.85 yesterday, when it surged 2.7 percent, the biggest gain since January 1999. The yen traded at 155.59 per euro, compared with 155.95 yesterday.

The dollar slipped to 0.9973 Swiss franc from 1.0024. The franc, often favored in times of crisis, has advanced 14 percent this year. The U.S. currency fell 0.6 percent to 93.24 U.S. cents per Australian dollar and slipped 0.9 percent against the New Zealand dollar to 81.40 cents.

Rand Drops

The South African rand was the worst performer among the 16 most-actively traded currencies on speculation importers are selling the currency, betting its advance to a one-week high yesterday was overdone. The rand fell 1.1 percent against the dollar to 8.0209, from 7.9325 late yesterday.

The yuan rose 0.3 percent, the most this month, to 7.0631 per dollar on speculation China's central bank is stepping up the pace of currency appreciation to curb inflation.

S&P 500 futures expiring in June fell 0.6 percent. Dow Jones Industrial Average futures sank 76 to 12,329. The Dow Jones Stocks 600 Index lost 0.8 percent.

The dollar earlier extended its declines against the euro, yen and franc on speculation some European and U.K. banks were facing funding difficulties.

``European and U.K. banks are rumored to be in trouble,'' said Adam Cole, the London-based head of currency strategy at Royal Bank of Canada, the nation's biggest lender.

`No Liquidity Problems'

HBOS Plc, Britain's biggest mortgage lender, said it has ``ready access'' to funding after the company plummeted in London trading. ``There are no liquidity problems,'' HBOS spokesman Shane O'Riordain said in a telephone interview.

The Fed has cut interest rates 2 percentage point this year to restore confidence to financial markets and avert a recession. Banks are reeling from $195 billion in assets writedowns and credit losses since the beginning of 2007, according to Bloomberg data.

``The dollar will recover,'' as soon as the housing market is showing signs of bottoming out, Jim O'Neill, head of global economic research at Goldman Sachs Group Inc., the most profitable securities company, said in a Bloomberg Television interview today. ``The Fed cutting only 75 basis points might have been dollar related.''

Goldman is recommending investors sell the euro versus the dollar because ``it has come a long way,'' O'Neill said.

Fed Bets

Futures on the Chicago Board of Trade indicate a 96 percent chance the U.S. central bank will cut its rate by another half point in April. The odds of a quarter-point cut in April were 4 percent.

The U.S. economy is facing the worst financial crisis in almost 80 years and interest-rate cuts will do little to cure the problem, Joseph Stiglitz, a Nobel-prize winning economist, said.

``More and more Americans are going to walk away from their mortgages, and that's going to undermine the foundations of these banking institutions,'' Stiglitz, a professor at Columbia University, told Radio New Zealand today from Auckland.

Mortgage applications in the U.S. decreased for the fifth time in the last six weeks, the Mortgage Bankers Association said today. Building permits fell to a 16-year low in February, the Commerce Department said yesterday.

The Fed Bank of Philadelphia's manufacturing index for March, due tomorrow, will be minus 18, signaling a fourth month of contraction, according to a Bloomberg News survey of economists.

Bank of America

Bank of America, the second-largest U.S. bank, cut its forecast for the U.S. currency to 96 yen by June 30, from 98 yen previously because of the slowing economy. The Fed will lower the target rate for overnight lending between banks to 1.5 percent this year, while the Bank of Japan is unlikely to reduce borrowing costs, said Tomoko Fujii, head of economics and strategy for Japan in Tokyo.

``Japanese investors are also losing risk appetite to send money abroad, buffeted by stock-market declines,'' Fujii said.

Dollar sales by Japanese individual investors on the Tokyo Financial Exchange Inc. rose to a record high on speculation the U.S. economy will suffer a recession.

Short positions on the dollar against the yen, wagers the U.S. currency will fall, reached 27,806 contracts yesterday, the most since July 2006, when Japan's largest financial futures market started collecting data. The exchange's share of so-called margin trading, borrowing money to buy and sell currencies, was 8.6 percent in 2007 based on figures from the Financial Futures Association of Japan.

To contact the reporters on this story: Agnes Lovasz in London at alovasz@bloomberg.net; Stanley White in Tokyo at swhite28@bloomberg.net

Last Updated: March 19,

[Krukan]

Yep, the USD is cheap now,

For 2 years ago 1 USD cost around 10 SEK, today it costs less then 6 SEK.

[Bump]

Did the Fed get it right this time? I've seen several articles like this saying it has hit bottom and time to buy. It seems to have helped the dollar, lets hope things stay positive. Hope that lessons have been learned and thngs will be done on sound business practices. But the down side is are we just adding hot air to the bubble. If not this bubble history has shown there will be another.

There wa a tiem when business was baout making a gidget or offereing a service and selling it. Not anymore today it's about paper chasing paper, which always seem to result in bubbles.

Wall St surges on hopes of easing credit crunch By Justin Grant
Thu Mar 20, 4:38 PM ET



NEW YORK (Reuters) - Stocks jumped on Thursday, capping a tumultuous week, on optimism that giving Fannie Mae and Freddie Mac a bigger role in the mortgage market will ease a credit crunch that claimed Bear Stearns (BSC.N) as its biggest victim.

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Stocks closed out their best week in nearly two months on the strength of financial shares, which bore the brunt of investors' wrath since the credit crisis unfolded last summer. The benchmark Standard & Poor's 500 gained 2.4 percent for the day and rose 3.2 percent for the week.

Fannie Mae (FNM.N) and Freddie Mac (FRE.N) delivered eye-popping gains for a third session, each rising more than 50 percent since Monday. Meanwhile, major banks such as Bank of America (BAC.N), JPMorgan (JPM.N) and Citigroup (C.N) rose between 8 percent and 10 percent each on Thursday, while the Dow Jones index of home building stocks (.DJUSHB) soared 8.3 percent.

Industrial heavyweight General Electric (GE.N) helped lead the Dow higher with a 5.3 percent gain to $37.49 after Merrill Lynch raised its rating on the stock as a safe bet in a slowing economy.

A second day of plunging oil and gold prices helped ease fears of inflation getting out of control, spurring gains across the board. Energy-sensitive sectors such as airlines and consumer discretionary companies gained about 3 percent.

Financial "stocks are moving inversely to what's been going on in the commodities markets with commodities prices falling in the last couple of days," said Matt Kaufler, portfolio manager and equity analyst at Clover Capital Management, in Rochester, New York.

"And the overarching assumption to all of this being that the worst of it is likely behind us."

The Dow Jones industrial average (.DJI) gained 261.66 points, or 2.16 percent, to 12,361.32. The Standard & Poor's 500 Index (.SPX) climbed 31.09 points, or 2.39 percent, to 1,329.51. The Nasdaq Composite Index (.IXIC) rose 48.15 points, or 2.18 percent, to 2,258.11.

Fannie Mae rose 11.7 percent to $34.30, while Freddie Mac climbed 9 percent to $32.58 after Keefe, Bruyette & Woods upgraded them, saying recent government actions will help the mortgage giants in stabilizing the ailing housing market.

Crude oil fell 70 cents to $101.84 a barrel, after earlier sliding to a session low below $99 a barrel. That pullback in oil prices alleviated worries about the effect of high energy costs on consumers and businesses.

Shares of Wal-Mart Stores Inc (WMT.N), the world's largest retailer, rose 4.8 percent to $53.23.

Stocks had rallied early in the day after a survey from the Philadelphia Federal Reserve Bank showed factory activity in the U.S. Mid-Atlantic region shrinking for the fourth consecutive month in March, but by slightly less than the median forecast.

Helping the Nasdaq were shares of Intel Corp (INTC.O), up 3.1 percent to $21.75 after the chip maker raised its quarterly dividend by 10 percent, while Apple Inc (AAPL.O) rose 2.8 percent to $133.27.

Shares of Nike Inc (NKE.N) jumped 8.8 percent to $67.27 after the company posted a third-quarter profit that handily beat estimates.

Markets will be closed for Good Friday. The U.S. bond market closed early on Thursday.

Trading was extremely heavy on the New York Stock Exchange, with about 2.77 billion shares changing hands, well above last year's estimated daily average of roughly 1.9 billion, while on Nasdaq, about 2.68 billion shares traded, above last year's daily average of 2.17 billion.

Advancing stocks outnumbered declining ones on the NYSE by about 3 to 1 and by about 2 to 1 on Nasdaq.

(Editing by Jan Paschal)

[Bump]

Hope these guys Are right

Dollar Set for Weekly Gain on Fed Steps to Restore Confidence

By Stanley White

March 21 (Bloomberg) -- The dollar headed for the first weekly advance against the euro and the yen in a month after Federal Reserve Chairman Ben S. Bernanke accepted more collateral for loans, restoring confidence in financial markets.

The U.S. currency rose against the pound and the Swiss franc this week after the Fed made an emergency cut to the rate it charges banks to borrow and said it would swap Treasuries for mortgage-backed securities. The Fed also lent $28.8 billion to U.S. securities firms, its first extension of credit to non- banks since the Great Depression.

``The dollar is enjoying a bounce,'' said Hideki Amikura, deputy general manager of currencies at Nomura Trust and Banking Co. in Tokyo, a unit of Japan's largest brokerage. ``The Fed is working to restore confidence. U.S. investment bank earnings weren't as dire as some predicted.''

The dollar traded at $1.5460 per euro, as of 8:07 a.m. in London, set for a 1.4 percent gain in the past five days, the first weekly advance in more than a month. The dollar bought 99.63 yen, little changed from late yesterday and up 0.5 percent this week, the first weekly gain since Feb. 15. The yen rose 0.8 percent this week to 154.03 per euro, touching the strongest since August.

The pound fell 1.8 percent this week to $1.9845. The dollar gained 1 percent to 1.0082 Swiss francs.

Holiday Exaggerates Moves

Currency moves may be exaggerated today as trading volume will be less than half of normal due to public holidays in the U.S., the U.K. and other financial markets, said Tsutomu Soma, a bond and currency dealer in Tokyo at Okasan Securities Co.

The dollar may rise to 101 yen in the next few days, Nomura Trust's Amikura forecast.

The dollar bought 5.2566 Norwegian kroner from 5.2630 late yesterday, when it touched the highest since Feb. 26. The U.S. currency was up 3 percent against the krone this week. Australia's dollar was little changed at 90.27 U.S. cents, close to a five-week low and on course for a 3.7 percent decline this week.

Fed officials on March 11 announced a program to swap $200 billion in Treasuries for debt including mortgage-backed securities. Yesterday, the Fed expanded collateral eligible for its auction of Treasuries to include bundled mortgage debt and securities linked to commercial-property loans.

Earlier this month, the Fed increased the size of separate funding auctions to $100 billion in March from a previously announced $60 billion.

The Fed yesterday said it had lent $28.8 billion to large U.S. securities firms under the program announced on March 16, its first extension of credit to non-banks since the 1930s.

The Fed also put taxpayer money at risk by making available up to $30 billion to JPMorgan Chase & Co. for the purchase of Bear Stearns Cos.

`Calm Look'

The Fed cut on March 18 its target lending rate by three- quarters of a percentage point to 2.25 percent, saying ``measures of inflation expectations have risen.'' The cut was smaller than the 1 percentage point traders had expected with 90 percent certainty before the meeting, according to futures traded on the Chicago Board of Trade.

The tumble in commodity prices and the dollar's rebound gained momentum after the size of the cut sapped demand for oil and gold as a hedge against accelerating inflation.

``The dollar's rise against commodities currencies is likely to extend into next week,'' Soma said. ``Traders took a calm look at their bets and realized they can't continue to buy commodities in this environment.''

The Australian dollar may fall to 89 U.S. cents in a few days, Soma forecast.

Earnings Reports

Goldman Sachs Group Inc., Lehman Brothers Holdings Inc. and Morgan Stanley all said this week first-quarter profits fell less than analysts' estimates. Banks around the world have posted $195 billion in writedowns and credit losses, according to Bloomberg data, due to rising delinquencies on mortgages to U.S. homeowners with poor credit.

The euro headed for a weekly loss on speculation growth in the 15 countries that share the currency will slow and subprime loan losses will spread at European investment banks.

Credit Suisse Group, Switzerland's second-largest bank, said it will write down $2.65 billion after a ``small number'' of its traders deliberately mispriced residential mortgage- backed bonds. Credit Suisse also said it's unlikely to make a profit this quarter.

French Growth

The French statistics office cut its growth forecast and raised its inflation forecast. Growth in France, Europe's second-largest economy, will slow to 0.3 percent in the second quarter from 0.4 percent in the previous quarter.

``The euro has some room to adjust lower,'' said Kengo Suzuki, currency strategist at Shinko Securities Co. in Tokyo. ``We're getting confirmation that subprime is shifting to the European financial sector. The euro-zone economy will start to slow from here on.''

The euro may fall to $1.53 next week, he said.

The Australian dollar may fall to 89 U.S. cents in a few days, Soma forecast. Oil has dropped 8.9 percent from a record this week, and gold fell from an all-time high.

The U.S. Dollar Index traded on ICE Futures in New York was little changed, after rising for three days. The gauge fell to a record 70.698 on March 17, the same day the dollar fell to an all-time low against the euro.

`Next In Line'

``Commodities -- one of the few remaining long trades -- have turned south,'' BNP Paribas SA strategists led by Hans- Guenter Redeker wrote in a research note yesterday. ``The currency market is next in line, forcing investors out of yielding positions. We underline our bearish commodity currency call. The dollar will rebound.''

The dollar may rise to 5.47 kroner and 85 cents per Australian dollar at the end of this year, BNP Paribas forecast.

To contact the reporters on this story: Stanley White in Tokyo at swhite28@bloomberg.net

Last Updated: March 21, 2008 04:35 EDT

[UdonExpat]

http://news.yahoo.com/s/ap/20080323/ap_ ... 0AwQEE1vAI

[aznyron]

maybe I am just biased but reading the article from udon expat it seems that when the USA get in to trouble there all ways a Republican living in the W/H and when the Dem get control and fix the mess the Rep want to take the credit
for the success and blame the Dem for the failure

[Bump]

On bloomberg TV this morning they said they believed the dollar has bottomed out hope they are right.

Checked the SCB site this morning it was showing 31.20 this morning and 31.45 now, that is a big move in a few hours. Maybe there is some hope yet I not booking any vacations yet