Tag Archives: global markets

Wall St Invasion?

The distress over the global financial meltdown encompasses more than just frightening 401k statements and doomsday newscasts. We’ve now another impetus for headaches and acid stomachs. This week, Libya’s Qaddafi became a major shareholder in Unicredit, Italy’s largest bank, which might have prompted the Italian Prime Minister Berlusconi’s warning. “I have news that oil producing countries with large funds are buying heavily into our markets.”

So beyond China helping the United States with its perpetually unbalanced budget, we’ve got Arabs trolling for bargains. Berlusconi elaborated: “Now there are great opportunities for those who have capital, and I think that certain sovereign funds, and ones you would oppose, are hostile.”

I take it that it isn’t just moderate Saudi Prince Al-Waleed bin Talal bargain hunting in the major indices. I use the term ‘moderate’ because apart from his support for CAIR and his comments after 9/11 which elicited a rejection of his $10 million check, he’s been a revolutionary among his fellow Bedouins. He has supported women’s rights and hired the first female pilot in Saudi Arabia.

As gas prices have ballooned and the economy has slowed, “drill baby drill,” has become an increasingly popular refrain repeated at McCain rallies. More than just cheap gas, it’s our sovereignty at stake.

According to Rand, U.S. oil shale reserves represent three times that of Saudi Arabia. Yet, we would rather buy the oil from the Saudis, making them wealthy enough to buy large chunks of our corporations.

Only in America

Global Financial Meltdown

How many more black Mondays, Tuesdays or Wednesdays are in store for the world markets? The quickie summit convened by the EU leadership over the weekend apparently inspired the same sort of confidence garnered by Paulson’s plan passed last Friday.

The U.S mortgage crisis and its resulting effect on European banks, combined with skepticism over Paulson’s plan of recovery, sent European markets tumbling. Russia and Italy were even forced to halt trading. According to Le Figaro, traders worry whether the price tag of Paulson’s plan was big enough.

As for their own plan? Reminding everyone why there hasn’t been meaningful progress in the adoption of a European Constitution, EU leaders failed to agree on a solution to the economic crisis.

From the Telegraph:

France, Germany, Italy and the UK could not agree on a single course of action because – as Mr Sarkozy effectively admitted in a characteristically irritable press conference performance – they all have different economic circumstances and needs. He described this as having “different cultures”, but it adds up to the same thing: France and Germany do not have property-owning traditions that produce house-price booms and busts, the UK population has much greater credit liabilities than the French, etc, etc.

Late Monday, the German government provided an additional 15 billion Euros in liquidity to the 35 billion already pledged to help the German lender Hypo Real Estate.

Elsewhere….

Saudi Arabia’s market, the Gulf’s largest, was off 9 percent. Dubai’s Financial Market fell almost 7 percent, its lowest fall since ’06, and Abu Dhabi’s index lost 5 percent.

The head of Al Dhafra Brokerage Vyas Jayabhanu, via UAE’s Gulf News, argued: “Uncertainty prevails despite the U.S. government passing the package, and there is this lingering fear that the $700 billion may not be enough.”

Israel’s TA-25 down 4.63%

Japan:

The Nikkei stock average tumbled 4.3 percent to a four-and-a-half-year closing low on Monday.

The Korea Exchange in Seoul, South Korea finished the day off 4.3 percent.

Singapore’s Straits Times Index was down nearly 4.9 percent in late-day trading and the Shanghai Composite fell about 5.2 percent. The Taiwan Weighted shed 4.1 percent.

The Australian Securities Exchange plunged about 3.4 percent to 4,544.70, and Hong Kong’s Hang Seng was off 4.7 percent of its value, falling to 16,853.85.

Russia’s Micex Index plunged 18 percent before trading was halted for a second time today.

Europe:

Germany’s DAX: Down 7.07%

Italy’s MIBTEL: Down 8.58%

France’s CAC: Down 9.04%

Sweden’s OMX: Down 7.24%

UK’s FTSE 100: Down 7.85%

With the crisis infecting global stock markets, it’s baffling why neither American Presidential candidate appears willing to blame government officials who fostered this failure through their social engineering and their belief that home-ownership is one of the inalienable rights guaranteed in the U.S. Constitution.

Perhaps the shock of looking at the big board and seeing the Dow off some 800 points on Monday will shock the leaders into dialogue, although I suspect one party is a bit more reluctant to discuss their role in the current fiasco.