The [EUR/YEN] plunges to the 117.30 level from the 118.40/37 twin peaks. Rebounds towards 120 would get difficult day by day as stocks would not be able to rise further under dismal economic conditions all over the world, and series of Q4 red figures announced by the European banks.
[AUST CPI REACTION] Whilst the numbers came in broadly as expected; the sharp pull back in consumer prices over the fourth qtr have removed any impediment to RBA continuing to cut rates aggressively at next week's meeting. Bonds and bill futures immediately traded slightly firmer in the aftermath of the data; as overnight swaps turned to nail in at least a 75bps rate cut at the next Feb 3rd meeting. Reaction in the currency market has been relatively mute, with the [AUD/USD] peaking at 0.6669 on the data; but subsequently drifting back down to its present 0.6628 level. 00:55 GMT - The [DLR/YEN] and the Yen crosses are now reversing quickly from their highs inspired by the Toushin related buying talk, with the [NIKKEI-225] easily erasing its artificial buying yesterday to fall through the 8000 mark (pension account would be buying in PM session however). Some traders note trust names are selling the Eur/Yen.
The Federal Reserve has cut rates to zero and flooded the financial system with money. Congress has spent $350 billion — and committed another $350 billion — to shore up the battered banking industry. Banks have already booked roughly half a trillion in losses, and analysts say they could be looking at a half a trillion more.
All of which has sent the Obama administration back to the drawing board to craft a new plan to save the banking system, get credit flowing again and try to pull the economy out of a deepening recession. The new plan could be announced as early as next week.
In his confirmation hearing last week, Treasury Secretary Tim Geithner said the White House is working on a new bank rescue plan. He was short on details, but the massive scope of the problem has prompted talk that the administration may be planning to "nationalize" a large portion of the banking industry.
In its most extreme form, nationalization would mean that the government buys (or takes) all the shares of stock and takes over operations of the company, keeping the profits. Such state ownership is typically a form of socialism; major oil producing countries, for example, have set up state-owned companies to produce and sell oil, using the proceeds to pay for government services.
[AUST CPI REACTION] Whilst the numbers came in broadly as expected; the sharp pull back in consumer prices over the fourth qtr have removed any impediment to RBA continuing to cut rates aggressively at next week's meeting. Bonds and bill futures immediately traded slightly firmer in the aftermath of the data; as overnight swaps turned to nail in at least a 75bps rate cut at the next Feb 3rd meeting. Reaction in the currency market has been relatively mute, with the [AUD/USD] peaking at 0.6669 on the data; but subsequently drifting back down to its present 0.6628 level. 00:55 GMT - The [DLR/YEN] and the Yen crosses are now reversing quickly from their highs inspired by the Toushin related buying talk, with the [NIKKEI-225] easily erasing its artificial buying yesterday to fall through the 8000 mark (pension account would be buying in PM session however). Some traders note trust names are selling the Eur/Yen.
The Federal Reserve has cut rates to zero and flooded the financial system with money. Congress has spent $350 billion — and committed another $350 billion — to shore up the battered banking industry. Banks have already booked roughly half a trillion in losses, and analysts say they could be looking at a half a trillion more.
All of which has sent the Obama administration back to the drawing board to craft a new plan to save the banking system, get credit flowing again and try to pull the economy out of a deepening recession. The new plan could be announced as early as next week.
In his confirmation hearing last week, Treasury Secretary Tim Geithner said the White House is working on a new bank rescue plan. He was short on details, but the massive scope of the problem has prompted talk that the administration may be planning to "nationalize" a large portion of the banking industry.
In its most extreme form, nationalization would mean that the government buys (or takes) all the shares of stock and takes over operations of the company, keeping the profits. Such state ownership is typically a form of socialism; major oil producing countries, for example, have set up state-owned companies to produce and sell oil, using the proceeds to pay for government services.
those who can, do. those who cant, talk about those who can
