Oil reaching for the stratosphere, G8 worried!

With Oil reaching the stratosphere with prices as high as $135, the G8 have started to apply the 'squeeze' on OPEC, urging them to increase production so as to alleviate the demand on the Oil rates. OPEC as we all know, has so far refused to do so, rationalizing that any such increase in production may lead to a resource depletion.

That rationalization as well as the fact that most of the Oil producing nations have started to see benefits in the high price of Oil, falls flat especially when one considers that there are billions of gallons of Oil available. Furthermore, if inflation is set to continue the current trend on a worldwide scale, it may after all be the right time to develop an alternative to Oil. Currently there are certain projects in the initiation phase, with the goal being to render Oil worthless altogether. But any such alternate fuel developed will have to undergo years of testing and in the meantime, it seems that we cannot do anything much except to grin and bear it.

The U.S treasury secretary Henry Paulson has made it known that the current spikes in the Oil price is not on account of speculators but that it is more on account of a supply and demand problem. It is high time that OPEC realized that it cannot have it both ways and that it should take into account the growth in world population and the increasing demand on Oil, therefore it should increase the production right away. One can only hope that the G8 will ultimately prevail, let us hope so.

Stocks get floored as analyst predicts bleak outlook!

Wall Street is in the grips of the bear once again, what else is new? With the markets reacting like a yo-yo to everything that an analyst may or may not say about the markets in general, the Wall street these days are resembling a roller coaster in more ways than one. The latest round of the 'bleak summaries' on the banks and the credit crisis, sent the markets reeling and the news of surging Oil prices only further increased the pressure on the markets.
With the markets reacting to interviews like this, is it any wonder that the consumers are wary of investing even a dime in them? What we sorely need is a period of stability and a market that does not swing wildly just on the basis of a news report. With the Fed taking a proactive stand as far as the U.S economy is concerned, the latest moves by the market clearly show that the sheen is gone off the interest rate cuts. So the obvious question is what is the Fed planning to do next to give a further Filip to the markets? Let us cross our fingers and start hoping for the best.

The new credit plan gives Wall Street a boost!

The latest moves by the Fed and the banks to alleviate the credit crisis that has been haunting this country for quite some time now, has seemed to have given a boost to Wall Street today. By posting an increase of 400 points, one can say that the Wall Street is finally seeing a bit of the light at the end of the tunnel.
But one should also take care to remember that the Wall Street has been kind of twitchy of late and that one should not consider the latest increase as a change in the momentum. As far as the Wall Street goes, these days, it is better to cross the bridge when one comes to it!

Economy has weakened, says the Fed!

Now that is something most of us have known for quite a while but to actually have Bernanke, the Fed chairman say those words in a public meeting is something that must have sent shivers down the backs of every single trader in Wall Street. The fact of the matter is that consumer confidence is really low these days and no matter what rebates the government offers, it is staying really low.
One can blame it on the Iraq war or on the state of the economy at large or on the mortgage and sub prime crisis, but whatever you do blame it upon, the reality is that for the moment anyway, the consumers are following the banks. By that I mean, that they are holding very tightly onto their purse strings. Will the confidence come back? It will, without a doubt, but the only thing is that it is going to take some time for that to happen.

Visa soon to go public!

Visa has announced its plans top go public and this may well turn out to be the largest IPO offering by a card processor. This may not be the best of times to go public with the economy being as it is, but with Visa, its presence in the markets worldwide should increase the demand for Visa shares , if not by American consumers then by international ones.

Visa has made its plans and its announcement is bound to shake up the market a bit. Maybe, even a bit of the optimism that is reflected in the Visa’s offering could spill over onto the market at large and perhaps, that is a big perhaps, we may well see the Dollar do well in the coming days. Visa is planning to offer upwards of 400 million shares at the $30-$40 range with a neat option for the underwriters for some handy stock of the ‘Visa magic’.

At the moment, consumer confidence has hit some choppy waters and it is going to take something for the consumers to purchase the Visa shares. Even if the Visa IPO were to hit the low ranges, it could still surpass the target area left by its arch rival Mastercard a couple of years back when it went IPO. What is the outlook for investors as far as Visa goes? If the investors cop a loss on the Visa IPO, then in all probability the company would introduce ‘bonus shares’ to offset any loss that may have been incurred by an investor and also this way, the company can maintain customer confidence in the company. This seems to be the most popular route that is taken by IPO’s that end up getting priced lower as a result of economic pressures. All eyes are on the IPO especially to see who are going to be the underwriters on this one.

Oil on the rise on expectations of weaker demand!

With the oil prices on the rise again, the OPEC has taken the new move in an effort to shore up its losses against a perceived loss. If that sounds a mouthful, the OPEC is playing with the Crystal ball and it seems that the ball is telling them that all is not golden on the Oil front.

OPEC seems to have seen the future and has started moving towards a possible cut in the output. Naturally, this has set the Oil prices on the move once again and this time they are planning to stay up for a long while. As a private consortium, the OPEC is free to do what it wants but it should also take note that any such moves aimed only at shoring up its profits is going to increase the strident voices that are opposed to the amount of power that OPEC wields.

These voices have been getting strident of late and with reason, with the Oil prices pretty much dictating the prices of other essential items from food to clothing, more and more countries are becoming uneasy with the fact that OPEC still acts as a private body, one that controls a huge amount of power. There is talk of bringing the OPEC under the direct authority of the United Nations, one that may well see the Oil prices being regulated and the production units becoming more productive!

Wall Street gets jittery as the bond insurers reject Buffett's offer!

The Wall Street had rallied on the news that Buffett offered to prop up the Bond insurers and most of us, including me had thought that the insurers must be singing to the heavens. But all of us were mistaken as the second bond insurer had just rebuffed Buffett's offer, no pun intended!

As the bond insurers do not seem to be too eager to bite at Buffett's bait, the Wall Street is already showing signs of getting bearish for the rest of the day. With such news in the offing, all one can say is that the Bear is going to have a field day tomorrow and all that one can do is to roll the dice and look up to the stars for some inspiration!

Wall street rises on Buffett promises!

Well, the bond insurers must be feeling like the manna has started pouring, and one cannot really blame them for feeling that way after all that they have been through in the last few weeks. With the news that Buffett has promised to help ease their money problems, the bond insurers are feeling a little bit easier to breathe these days.

Not that this means that all the problems are over, but just that money has finally started to flow in a little bit to allow everyone to take a little time off. With this news, the Wall Street has started to rally. It seems that any news that is good these days seems to push the market upwards and anything that is even the least bit negative has the opposite result. One can almost imagine that the Markets have become overly sentimental as a result of the recent upheavals. Either way, the momentum for today seems to be good and one can only hope that it carries over for tomorrow as well!

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The labor market still under strain?

With the economy barely staggering along one would have hoped that things would at least look a little bit brighter in the labor market but that does not seem to be the case as the number of jobless has not decreased as per the expectations of the markets.

In reality, one can say that the labor market is stagnating and that is not good news, which ever way you swing it. All that it indicates is that the companies in general do not want to over spread themselves and that they are all bracing for more bad news. One can counter that by saying that corporate america is being pessimistic but then again none of us can really agree as to whether a glass is half full or half empty. Lets hope that the labor market shows some signs of revival soon!

Best time to buy houses?

With the housing market seeing a really dismal season, things may turn out to be the best time to buy houses. With not many people coming forward to purchase any new homes this may be the best time to buy houses as both the developers and builders alike are getting desperate.

You can start off by quoting the lowest price you can think of and given the current situation, that may just be enough to clinch the deal for your dream house. With the current scenario, this may just be the trick for you to get that dream house of yours for a throwaway price.

$146 Billion package passed by the house!

The stimulus plan of George bush has been passed and for the common man on the street this means tax rebates from $600-$1200. The stimulus package is one that had been designed in a hurry and the markets do not like it all that much. I have to say that I cannot blame in this; my personal opinion is that this stimulus package is too short sighted and it seems to serve more as a band aid to an all ready hemorraging economy than a cure for what ails it.

For one, it still does not address the huge problem of the credit crunch as well as that of the housing market, both of which are still intent on riding the economy far in to the doldrums. For one, had the administration envisioned a plan by which the housing rates were regulated and bought more pressure on the banks to increase their lending, that would have taken care of half of the problem. As it is, the housing market and the credit crisis barely got a mention in the 'state of the union' speech.

I think that we can all agree that George bush has some really good writers on his team and I am sure that they must have devoted whole sections of the state of the union speech to the current problems. I am betting that George bush forgot all about it and meandered on. Either way, the current stimulus plan is kind of like the 'Watergate' episode and they are still yet to learn that there is no point in closing the barn door long after the horses have escaped!

Recession inevitable, says Goldman Sachs

With all the indications of a meltdown at Wall street and the unemployment rate growing by the day, it seems that the chances of a recession hitting the United states has grown from 25% to that of 50%. With record numbers of defaulters on Mortgage payments, the banks are tightening the strings on all loans and other forms of credit. With the Dollar taking the plunge to new lows against a whole range of currencies, it is no wonder that most of the economists worldwide are predicting that the Recession has indeed began in the United states.Goldman Sachs believes the recession to be inevitable.

The question that everyone is asking themselves is as whether the U.S economy is strong enough to withstand the cold weather than seems to be ahead. The one thing that the president and his board of advisers are hoping to do is to reduce the taxes with the hope that this will rejuvenate the economy. By itself, it may not, but coupled with the Fed cut that is expected to happen by the end of this month, it may well give that much needed boost to the economy at large.

The Fed is hoping that a cut, even as much as 50 basis points may be what the doctor has ordered. But the Fed should also take care to remember that reducing the interest rates by a large margin could have a very negative impact on the whole. The days ahead will surely tell us if the recession has set in or not. It is no longer a question of 'will it happen' but rather a question of 'when will it happen'.

Wall street turns bleary eyes on to info for next week!

With all the battering that the Wall street had taken over the last few days, it has turned its bleary eyes on to the information like the earnings data,retail sales and the inflation data to get an inkling as to where the markets are headed. But the thing about asking for information is that it may well confirm that recession is already here.
Either way, it is going to be one roller coaster ride and there are not that many takers for the idea of the marker shaking of the 'Bear grip' that it seems to be currently under. With more and more banks coming out with fresh news as to their exposure to the Mortgage crisis, the last thing that the Wall street may need is to know that the companies are cash strapped.
Sometimes, ignorance is a bliss and that may well be the case for the Wall street this week. With indicators already pointing to the red, the ride, it seems, will be heading right to the sub levels of the financial markets.

Oil rebounds again inspite of fears of recession!

Oil rebounded today in spite of the fears of the U.S recession. It is the fear that a recession hit United states, may no longer demand that much of the 'Liquid gold' and may also start rationing the fuel out as it did in the past. It was that fear that drove the price tag down and gave a breather for the rest of us.
But now, that breather is all gone and it is back to business as usual. Of course, the recession danger is still not over and with Wall street taking a real hit today, come Monday, the Oil may start to slide all over again. This Tango over the prices and the recession fears looks set to continue for some time as the Dollar goes from weak to weaker still. With Oil going up, the metal markets especially the Gold will respond by going up a few notches itself!

Wall street hung to dry on Credit worries!

The Wall street got hung to dry today on the fears of a Credit crunch happening all over again. Whoever coined the term 'Black Friday' must have a sense of foreboding if he or she had walked into the treading hall today. On the normal days the trading hall is a mess, today it went way beyond that. With the crunch slamming the markets down, the investors were sent scurrying for cover.
Most of the worries stemmed from a fear of more debt write offs to come, as some of the major banks have already started to do that. And lets not forget the 'Countrywide episode', with that in mind, what started like a normal trading day soon escalated into a sell off! Will the situation improve, yes, it will, but not in the near future!

Paulson says no easy answers to mortgage woes?

When is the Bush administration going to wake up and smell the roses? The answer to that question is quite easy, answer: probably never. Especially as their attitude to the War on Iraq is quite well known. Now the United States economy is taking quite a hit and as far as the Bush administration is concerned, the economy is still strong and upbeat.

It is one thing to be optimistic and but totally another to be taking a walk in the clouds. And now, the treasury secretary comes along and tells us all that the recovery from the Mortgage crisis is not going to be easy - but then again this is something that we already know. What really gets me is that now the Bush administration is mouthing what we already know, it is high time that we saw some concrete action on the ground and by that I do not mean rate cuts. The rate cuts may alleviate some of the crisis but they only tend to make the Dollar weaker in the long run and as such, it is time to start thinking of regulating the Housing market!

Recession knockin' on the door of Lady Liberty!

The Government is falling over itself with trying to do its best to prevent any financial crisis, but it is too late to shut the doors after all the horses have bolted.

The beginning of the sub prime crisis should have put the government on notice, but now, it is just too late to prevent anything from taking place. What has been put into motion cannot be stopped now, all one can do is to go with the flow. Both Martin Feldstein and former Federal Reserve Chairman Alan Greenspan are urging the government to do more to prevent any further escalation. Lets not forget that this is the same Greenspan who said that the sub prime crisis would 'blow away'.

Anyway, this is not the time to point fingers, but the time to do a reassessment and see what can be done to prevent anything like this from happening again.
No government is going to hand out money from the treasury to the citizens, but instead what the president can do is to waive the taxes for the affected people and that is just a small step in the right direction. Lets all hope that we do not get into any other war, any time soon, our economy cannot take any more pressure!

money,
george bush,
alan greenspan,
economy,
sub prime crisis,
finance

Light Crude goes up by 1.90$ !

The common economics states that as the inventory falls, more pressure is exerted on the supply as the demand for that product is constant and ever increasing. What am I talking about? I am talking about the price of Oil and the price tango that it seems to go into each and every time the Energy department announces to the world that the Inventories have either fallen or risen.
The rise in inventory would make the oil prices to swing the other way about and this time around, the inventory stocks in the United states has fallen by at least 700,000 barrels last week, according to the energy dept. Naturally this has started exerting more pressure on the crude supplies and the factors that can effect the supply of Oil to the United states. Naturally as this news broke out, the immediate effect today is the rise in the price for Light Crude for January delivery which has risen by 1.90$ to 91.92$ a barrel on the NY Mercantile Exchange.

The Oil market is tight as it is with the OPEC not really into making more deliverables than the current content. And at times like this if there is any news of a skirmish in the middle east or another Palestine - Israel conflict, that will have a very resounding impact on the Oil prices or if Bush were to get more hawkish on Iran or the entire Middle east, that will most definitely make the Oil reach for fresh pastures beyond the 105$ range.

What one should remember is that inventories rise and inventories fall, but it is when the inventories fall that one should take into account the other factors like the geo political factors. It is at times like this that the price of the Light Crude as well as the entire Oil market is most vulnerable and with the way that the U.S economy is under right now, we most certainly do not need a 'bullish' Oil market as that would only extend undue influence on the already falling Dollar and may even push it into the Nether world!

oil,Iran,United states,middle east,Dollar,

The DOW surges by 200 points due to Citigroup confidence!

For a change, today saw the DOW rebound by 200 points as the news of the Abu Dhabi Investment Authority investing more than 7.5 million$ in the already beleaguered Citigroup leaked out. This move is seem as a mark of confidence in the American economy and in this gloomy times, this news was indeed a welcome one at that.
But the underlying problems still remain and the investors confidence is indeed very much shaken at the very least.
So just because the Abu Dhabi Investment Authority has invested in Citigroup does not mean that all the sub prime and the mortgage disasters are gone, sadly they are still very much there. This is one mess that we all will have to run through and there is just no way that any investment in American companies is going to make that go away!