King Dollar ...

greedy corporations that control the medical industry, (from the illustrious med)


Med....the Govt has wrested control of this industry from the participants years ago....therein lies the problem we are now up against!
Government controls have destroyed this industry!

congratulations, you have found your passion, and you do it well.

medicineman said:

This economy, the Bush economy, has made more millionaires than any other before it. It has provided the greediest people with the largest tax breaks and given welfare to the corporations like water running down hill. They are trying to pass a bill that would give big Agra billions in corporate welfare. Meanwhile the average Joe is being ever more burdened with inflation and the sinking value of the dollar. Gasoline @ 3.00+++ is now the norm. When Bush took over it was around 1.20. The rise in fuel costs effect every market item. Medical costs are spiraling out of control and the reason given, The government is to blame, I call bullshit on this, and say it is the greedy corporations that control the medical industry, the insurance companies and the HMOs that are lobbying the criminal congressmen to accept their deals. All you Ron Paul Supporters should take a long hard look at his privatization policys before you cast that all important Vote. Putting this country even more in the control of the corporations will indeed guarantee lower wages, more illegals to take your jobs, higher prices (OIL) Imports of millions of B1B imigrants to do the high tech stuff for 1/3 the wage. The corporations are not your friends, their only function is to make their stockholders and CEOs ever more wealthy. They care not about employees or retirement for workers, or for the environment, Privatization would almost guarantee a melt down of this society not seen since Hoover.

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Global overview: Credit turmoil dents sentiment

By Dave Shellock
Published: November 9 2007 17:46 | Last updated: November 9 2007 17:46

The mood in financial markets took a turn for the worse this week as mounting worries about credit losses were exacerbated by inflation fears as commodities prices soared and the dollar plunged.
“The crisis in the financial sector is deepening and this is being reflected in the markets,” said Peter Oppenheimer, European strategist at Goldman Sachs.
“There is growing uncertainty about how deep the exposure of banks is to the credit market and subprime problems.”
Wachovia, the fourth-biggest US bank, warned on Friday of about $1.1bn of losses on mortgage securities in October alone, and Barclays shares came under intense pressure from persistent rumours that it had suffered huge losses in the credit markets. The UK bank denied the talk but financial stocks across the globe suffered steep losses.
However, Julian Jessop at Capital Economics pointed out that the recent grim headlines from the financial sector should not have come as that much of a surprise.
“After all, the total losses facing the financial sector were put as high as $200bn by the International Monetary Fund as early as September, and Barclays - recently ranked the world’s second-biggest bank by asset size - might reasonably be expected to take a fair share,” he said. “The bigger picture therefore does not seem to be significantly worse than originally feared.
“Nonetheless, it looks like equity markets will continue to be rattled by headlines and rumours about what the crisis means in practice for individual banks.”
The weakness in financial stocks was the main factor behind sharp losses for global equity markets this week.
On Wall Street, the S&P 500 index was down 3.2 per cent over the week and the Dow Jones Industrial Average was 3.4 per cent weaker, However, technology stocks, previously largely immune to the credit nerves, were also hit as fears of a slowdown in capital spending accelerated. The Nasdaq Composite index shed 5.9 per cent.
In Europe, the FTSE Eurofirst 300 fell 3.1 per cent over the five-day period, while the Nikkei 225 Average in Tokyo shed 5.5 per cent.
Meanwhile, inflation concerns were stoked by strong gains for commodity prices. December West Texas Intermediate, the US crude benchmark, touched a record high of $98.62 on Wednesday before easing. Gold hit a 28-year peak of $844.65 an ounce - within a whisker of the record high of $850 struck in 1980. Silver reached a 27-year high and platinum reached a record peak.
These gains were helped by a renewed slide for the dollar, which fell to a record low against the euro and multi-year peaks against most other leading currencies amid mounting expectations of further US interest rate cuts.
The interest rate futures market was yesterday fully pricing in a 25bp cut in the Fed funds rate to 4.25 per cent in December. A week ago, it was pricing in about a 60 per cent chance of such a move.
The heightened expectations came despite a speech to Congress by Federal Reserve chairman Ben Bernanke in which he reiterated concerns about mounting inflationary pressures.
“The Fed is watching inflation expectations very closely, which have been climbing according to Treasury Inflation Protected Securities break-even rates,” said Camilla Sutton, currency strategist at Scotia Capital.
“However, Mr Bernanke said nothing to suggest that a rate cut isn’t on the table at next month’s meeting should conditions warrant.”
The Bank of England and the European Central Bank both kept interest rates on hold this week, as expected by the markets.
Government bonds were the main beneficiaries from the turmoil. The yield on the rate sensitive two-year US Treasury tumbled 20 basis points over the week and yesterday touched its lowest since February 2005.
The 10-year Treasury yield also fell to a two-year low as it retreated 9bp to 4.22 per cent. The difference between the two- and 10-year yields reached its highest for two years
The 10-year Bund yield fell 8bp to 4.17 per cent and the 10-year Japanese government bond shed 6.5bp to 1.525 per cent.

This is NOT going to be pretty for anynoe, and no one will be protected from the pain. rich, middle class or poor. the policies and actions of the US financial community have plunged world markets to a place no one wants to go - but its too late - what's done is done and the consequences will be felt for at least the next 12-18 months.

November 10, 2007


British banks’ value dives by £90bn in nine months



Miles Costello

Nervous investors have wiped more than £90 billion off the value of Britain’s eight leading banks in the past nine months on fears that they are heading for major credit losses, an analysis by The Times has found.


The two biggest casualties have been Barclays, which was hit yesterday by false rumours that it was poised to write down £10 billion, and Royal Bank of Scotland, also seen as exposed to highly geared credit markets.
The rumours about Barclays saw its shares plunge more than 9 per cent at one stage yesterday, leading to them being temporarily suspended.
Meanwhile it emerged that the damage done to London’s reputation by the Northen Rock crisis will be discussed at a meeting between financiers and Alistair Darling, the Chancellor, next week.

Barclays, which denied the latest speculation, has seen its market value tumble by £21.1 billion since February 7, when its rival HSBC first gave warning about its exposure to the American sub-prime downturn. Despite efforts by senior Barclays figures to reassure shareholders in recent months, its shares have fallen from 763p on that day to as low as 442p yesterday, a slide of 42 per cent. The bank’s market value, which stood at £53.4 billion in February, has fallen to £32.3 billion.
Diving bank prices compare with a remarkably resilient showing by the FTSE 100 over the same period. London’s blue-chip stock index closed at 6,370 on February 7. Yesterday, the FTSE ended at 6,304.9, a fall of 65.1 points, or just over 1 per cent.
Barclays’s sliding share price was one of the main reasons it lost out to RBS in its effort to buy ABN Amro, the Dutch banking group that would have turned the UK’s third-largest bank into a top-five global player.
Barclays shares rallied after it issued a formal denial of the writedown rumours. “There is absolutely no substance to these rumours,” a bank spokesman said. The shares finished the day 11½p lower at 474½p.
RBS, while victorious in the fight for ABN, has been the biggest loser in terms of market value. It has tumbled from 691½p in February to a low yesterday of 387½p, knocking £29.4 billion off its market capitalisation.
HBOS, dominant in the UK mortgage market, has fallen in value by £14.5 billion since February. The bank lost market share in mortgages during the first quarter, but is also exposed if the American housing downturn spreads to this side of the Atlantic.
HSBC, forced into its first profit warning by the credit crisis, is worth £11.8 billion less than it was in February. The UK’s biggest bank and one of Europe’s largest by assets, it still has a market worth of £100.7 billion. Other banks to fall foul of market nerves include Bradford & Bingley, the mortgage lender, Alliance & Leicester and Lloyds TSB. Valuations of these three have fallen by just over £10 billion in the past nine months.
Alex Potter, an analyst at Collins Stewart, has been bearish on the UK banking sector all year, although he retains a “buy” recommendation on Barclays. He said that if Barclays and other banks were on course to “materially miss consensus”, they would have to notify the stock market formally.
“That said, there is a lot of fear out there,” he added. “It is a pretty irrational market. People just go online and check out the credit indices. They see even decent triple A-rated paper is trading at pretty big haircuts.”
Northern Rock, the Tyneside mortgage lender, has been the highest-profile casualty of the credit market rout, forced to seek emergency funding from the Bank of England.
Rock, which is negotiating a sale or possible break-up, was worth £5.2 billion at the start of the year before its overambitious mortgage expansion drive ran out of steam. Yesterday, it was valued at just over £620 million.

The Financial Accounting Standards Board (FASB) is the referee for accounting practices. They recently issued a new rule which will be implemented November 15. Essentially, Statement 157 requires a financial firm to divide its assets into three categories called simply enough, Level 1, Level 2 and Level 3.

Under FASB terminology, Level 1 means assets that can be marked-to-market, where an asset's worth is based on a real price, like a stock quote. Level 2 is mark-to-model, an estimate based on observable inputs which is used when no quoted prices are available. You can go get several bids and average them, or base your assumption on what similar assets sold for.

Level 3 values are based on "unobservable" inputs reflecting companies' "own assumptions" about the way assets would be priced. That would be market talk for best guess, or in some cases SWAG (as in Simple Wild-***ed Guess.)

Financial companies have never had to break out this information. As you might expect, there is particular interest in how much and what kind of Level 3 assets a bank or brokerage firm might have. It turns out, that there may be more problems lurking in those assets than we realize.

Nouriel Roubini gave us some numbers earlier this week. It seems that some companies have far more Level 3 assets than they have capital. Take a look at these six banks which have already posted their Level 3 assets ahead of the deadline:

Citigroup
Equity base: $128 billionLevel three assets: $134.8 billionLevel 3 to equity ratio: 105%

Goldman Sachs
Equity base: $39 billionLevel 3 assets: $72 billionLevel 3 to equity ratio: 185%

Morgan Stanley
Equity base: $35 billionLevel three assets: $88 billionLevel 3 to equity ratio: 251%

Bear Stearns
Equity base: $13 billionLevel three assets: $20 billionLevel 3 to equity ratio: 154%

Lehman Brothers
Equity base: $22 billionLevel three assets: $35 billionLevel 3 to equity ratio: 159%

Merrill Lynch
Equity base: $42 billionLevel 3 assets: $35 billionLevel 3 to equity ratio: 38%

King Dollar Faces the Guillotine

But there is yet another problem facing the credit markets and that is the erosion of the value of the US dollar. Some argue that a falling dollar is good for the US because it makes our exports cheaper, and indeed exports are rising. But there is more to the falling dollar than improving our exports.

Look at this chart provided me by South African partner Prieur du Plessis's Investment Postcards blog (www.investmentpostcards.com). It is what a European investor would have lost if they had invested in a ten year US treasury note, down an ugly 7% in a government bond after today's bond sell-off.



If you own the Dow, you are down more than 5% after today in terms of the euro. And that is pretty much the case for most currencies. It is why one prominent Chinese official suggested this week that China should start to put more of its assets in stronger currencies, touching off a very quick drop in the dollar. The euro and the pound are almost 5% higher than they were at the beginning of September when I was in Europe.

If you are a foreign investor, why would you want to invest in dollar denominated assets in which you are not totally confident? Sure, you can hedge your currency risk, but hedging is not without cost, and that cost will be born by the borrower which is to say American businesses and consumers.

Think about this for a moment. If you are China, you could reduce your energy bill by 20% just by letting your currency rise. Not to mention the cost of copper, steel, nickel and other commodities. And did I mention all the massive food imports China requires? Yes, keeping your currency low has helped you to get a competitive advantage in manufacturing all sorts of products. But at some point it will make more sense to have a stronger currency.

ViRedd said:

Eighteen countries have replaced their income tax with a consumption tax. They have also reduced the tax rates on their corporations. The U.S. has the highest corporate tax rate on the planet.

Would one of you naysayers tell us why raising taxes is a good thing? What does raising taxes do for the economy? How do poor people benefit from tax increases on corporations and the "rich?" Please ... explain all of this, if you can.

Vi

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Well if the fed was to be abolished then that'd be about the only way to keep inflationary concerns in check - cut G, raise T to run a constant surplus. Not anything I'd be too crazy about though. The fact remains that a tax on consumption is a regressive form of taxation. There is an inverse relationship between income and consumption. As an individual's income rises their marginal propensity to consume goes down, and their marginal propensity to save goes up. It would probably be a safe assumption that relative inequality would rise because of that. I'll answer the second paragraph later.