http://finance.yahoo.com/blogs/dail...GUERhaWx5VGlja2VyQmxvZwRzbGsDc3RvY2tzY29tbW9k
Sum of All Fears: Stocks, Commodities Tumble Over Risk of Recession, European Implosion
By Aaron Task | Daily Ticker – 10 hours ago
tweet43
Share16
Email
Print
Video Player Controls
Follow The Daily Ticker on Facebook here!
An extraordinary day in the financial markets ended with stocks and commodities down sharply while the dollar and U.S. Treasuries rallied, sending the yield on the 10-year note to a record low.
After trading below 10,600 intraday, the Dow closed down 391 points, or 3.5%, to 10,734 while the S&P lost 3.2%. Stocks are now on track for their worst week since October 2008, Dow Jones reports. Meanwhile, gold shed 4%, silver plummeted 11%, copper tumbled 9% and oil fell 6.7% Thursday as traders unwound "risk on" positions funded with "cheap" dollars, which rose 1% vs. the euro.
"Only two positions are working in this market: cash and fetal," writes senior portfolio manager Mark Dow of Pharo Management.
With Americans facing severe pressure from joblessness, falling home prices and stagnant incomes, it's unlikely this latest market tumult will do much damage to already fragile consumers. Still, it's yet another brick in the wall of cynicism and skepticism that's been built around the recovery generally, and the stock market specifically.
Depending on your perspective, the day's action could be attributable to a variety of factors, including:
Disappointment in Bernanke: "Today's market reaction is like a child throwing a tantrum after not getting what it wanted from daddy," gold trader Hal Paxton quipped via Twitter. The Fed's plan to spend $400 billion on 'Operation Twist' and a separate pledge to being buying mortgage-backed securities apparently left some traders wanting more — of what I have no idea. (See: Fed Action Fails To Boost Animal Spirits: "Marginally Helpful," Says Former Fed Governor)
Risks of a Global Recession: Weak purchasing managing index reports out of China and Europe, along with another disappointing U.S. jobless claims report, reinforced concerns about the global economy. "A recession is at this point unavoidable," writes NYU Professor Nouriel Roubini. "Only issue now: Will it be a mild G7 recession or a severe recession plus global financial crisis as bad or even worse than the 2008-09 one?"
Frustration with D.C. Gridlock: After the House voted down a temporary spending bill Wednesday, the U.S. government is at risk of a shutdown if Congress can't agree to a new six-week "continuing resolution" before the new fiscal year begins on Oct. 1. Considering the vote got snagged over essentially how to pay for $3.3 billion of funding for FEMA, it's worth asking if our elected officials haven't entirely gone entirely insane. (See: Totally Absurd: Government May Shutdown Over Funding For FEMA)
Worries about Europe: "The rapidly burning fuse is in the European banking system, particularly in France, and Europe is getting very close to yet another tipping point," PIMCO's Mohamed El-Erian wrote in The Financial Times, which separately reported executives of BNP Paribas plan to tour the Middle East in an effort to raise capital this week.
In the accompanying video, I discuss these and related issues with my Breakout colleague Matt Nesto, who seems to think the buck stops with Bernanke. "You have to say it was the Fed; that was the catalyst for the selling," Nesto says. "People were disappointed, right or wrong. "
My view is that Europe is the bigger issue. Yes, U.S. stocks fell sharply Wednesday following the Fed announcement but the selling accelerated in Europe amid new and renewed fears about the banking system. Once again recalling the dark days of 2008, U.S. financials like Morgan Stanley fell sharply amid concerns about systemic risk and contagion, while the price of default insurance on German and French sovereign debt hit record levels overnight, Bloomberg reports. (See: 2008 Redo? History Doesn't Repeat, But It Often Rhymes)
Notably, the market's only (feeble) rally attempt Thursday afternoon came after an FT report about European officials looking to "speed up plans to (sic) recapitalise the 16 banks that came close to failing last summer's pan-EU stress tests as part of a coordinated effort to reassure the markets about the strength of the 27-nation bloc's banking sector."
That said, there's never any "one" thing that moves the market, or even a rationale needed to explain the moves which, let's recall, follow last week's stirring rally...now a distant memory.
Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @atask or email him at [email protected]
http://finance.yahoo.com/news/Asia-...tml?x=0&sec=topStories&pos=main&asset=&ccode=
Asia stocks sharply lower as recession fears flare
Asian stock markets sharply lower as recession fears dominate sentiment
ap
tweet17
Email
Print
Display boards at the Australian Stock Exchange flash news of a falling market in Sydney, Friday, Sept. 23, 2011. Pacific stock markets are down sharply in early trading following big losses on Wall Street amid growing fears of another global recession. (AP Photo/Rick Rycroft)
Pamela Sampson, AP Business Writer, On Friday September 23, 2011, 1:38 am EDT
BANGKOK (AP) -- Investors across the globe continued to dump stocks Friday as weak economic indicators from major nations including China intensified fears of a new recession
In Asia, losses were broad-based but less severe than in the U.S. and Europe. Oil prices stabilized near $81 a barrel after diving to a near seven-week low on Thursday. The dollar was down against the yen and the euro.
Hong Kong's Hang Seng index fell 1.7 percent to 17,610.65 after losing nearly 5 percent the day before.
South Korean shares took a large hit, with the Kospi tumbling 4.2 percent to 1,724.92 amid worries over signs of weakness in China, Seoul's biggest trading partner. Japan's market was closed for a holiday.
Economic news was bad around the world. A closely watched survey in Europe indicated a recession could be on the way there, and a manufacturing survey suggested a slowdown in China, which has been one of the hottest economies. Employment figures in the U.S. remained weak.
"I think the most important thing is Europe and America are both entering into recession at the same time, and the governments failed to take decisive action to stop the decline," said Francis Lun, managing director of Lyncean Holdings Ltd. in Hong Kong. "Investors are disappointed and fear a global recession. So that's why investors are getting out of shares."
Lun also blamed "political squabbling" in the U.S. that is preventing President Barack Obama from spending the money needed to create a jobs program with real impact.
Meanwhile, Canada's finance minister had harsh words for Europe. On Thursday, he warned of a second financial meltdown on the scale of 2008 if Europe doesn't take decisive action to recapitalize its banks and deal with the Greek debt crisis.
"There's some justified frustration with respect to the lack of political decisiveness in Europe," Finance Minister Jim Flaherty said. "The markets are reacting."
Flaherty said Greece and other severely indebted nations must be made to follow through with austerity programs to bring down spending, and Europe must put up the billions of dollars that will be needed to ensure banks don't fail.
Elsewhere in Asia, Australia's S&P/ASX 200 fell 0.6 percent to 3,940.30 and China's Shanghai Composite Index dropped 1 percent to 2,418.59. Benchmarks in Singapore, Taiwan, Thailand, the Philippines and New Zealand were also lower.
In Hong Kong trade, Zijin Mining Group Co., China's biggest gold miner, fell 8.9 percent amid a price drop in the precious metal as investors sold gold to raise cash.
Stocks in Seoul slumped amid signs of weakness in China. Hyundai Heavy Industries Co., the world's biggest shipbuilder, slumped 6.6 percent. Hynix Semiconductor, the world's second-largest memory chip maker, fell 3.3 percent. Steel giant POSCO fell 6 percent.
A slowdown in China could also blunt demand for imported raw materials like iron ore. Australia's Fortescue Metals Group, a leading exporter of iron ore, plummeted 8.1 percent.
Energy shares were whipped by the tumble in oil prices. Australian oil and gas producer Woodside Petroleum Ltd. sank 2.3 percent. China National Offshore Oil Corp., known as CNOOC, fell 2.3 percent.
On Wall Street, the Dow Jones industrial average fell 3.5 percent to close at 10,733.83. It was the second consecutive rout in the stock market since Wednesday afternoon, when the Federal Reserve announced a change in strategy for fighting the economic slowdown.
The Standard & Poor's 500 index, a broader measure of the stock market, and the Nasdaq composite, which is more heavily weighted with technology stocks, both fell more than 3 percent for the day.
The Fed announced Wednesday that it would shuffle $400 billion of its own bond holdings in hopes of reducing interest rates on long-term loans, a plan known as Operation Twist. The central bank hopes that if people and businesses are able to borrow money more cheaply, they will spend throughout the economy and give it a lift.
Still, the Fed announcement troubled investors because it came with a bleak assessment of the future. The Fed said it sees "significant downside risks to the economic outlook," including volatility in overseas markets.
Benchmark oil for November delivery was up 40 cents at $80.92 in electronic trading on the New York Mercantile Exchange. Crude plunged $5.41, or 6.3 percent, to settle at $80.51 on Thursday. That was its lowest point since Aug. 9.
In London, Brent crude for November delivery was up 58 cents at $106.07 on the ICE Futures exchange.
In currency trading, the euro rose to $1.3512 from $1.3469 late Thursday in New York. Earlier on Thursday, the euro fell to $1.3384 -- its lowest point since Jan. 18. The dollar slipped to 76.33 yen from 76.40 yen.
Sum of All Fears: Stocks, Commodities Tumble Over Risk of Recession, European Implosion
By Aaron Task | Daily Ticker – 10 hours ago
tweet43
Share16
Video Player Controls
Follow The Daily Ticker on Facebook here!
An extraordinary day in the financial markets ended with stocks and commodities down sharply while the dollar and U.S. Treasuries rallied, sending the yield on the 10-year note to a record low.
After trading below 10,600 intraday, the Dow closed down 391 points, or 3.5%, to 10,734 while the S&P lost 3.2%. Stocks are now on track for their worst week since October 2008, Dow Jones reports. Meanwhile, gold shed 4%, silver plummeted 11%, copper tumbled 9% and oil fell 6.7% Thursday as traders unwound "risk on" positions funded with "cheap" dollars, which rose 1% vs. the euro.
"Only two positions are working in this market: cash and fetal," writes senior portfolio manager Mark Dow of Pharo Management.
With Americans facing severe pressure from joblessness, falling home prices and stagnant incomes, it's unlikely this latest market tumult will do much damage to already fragile consumers. Still, it's yet another brick in the wall of cynicism and skepticism that's been built around the recovery generally, and the stock market specifically.
Depending on your perspective, the day's action could be attributable to a variety of factors, including:
Disappointment in Bernanke: "Today's market reaction is like a child throwing a tantrum after not getting what it wanted from daddy," gold trader Hal Paxton quipped via Twitter. The Fed's plan to spend $400 billion on 'Operation Twist' and a separate pledge to being buying mortgage-backed securities apparently left some traders wanting more — of what I have no idea. (See: Fed Action Fails To Boost Animal Spirits: "Marginally Helpful," Says Former Fed Governor)
Risks of a Global Recession: Weak purchasing managing index reports out of China and Europe, along with another disappointing U.S. jobless claims report, reinforced concerns about the global economy. "A recession is at this point unavoidable," writes NYU Professor Nouriel Roubini. "Only issue now: Will it be a mild G7 recession or a severe recession plus global financial crisis as bad or even worse than the 2008-09 one?"
Frustration with D.C. Gridlock: After the House voted down a temporary spending bill Wednesday, the U.S. government is at risk of a shutdown if Congress can't agree to a new six-week "continuing resolution" before the new fiscal year begins on Oct. 1. Considering the vote got snagged over essentially how to pay for $3.3 billion of funding for FEMA, it's worth asking if our elected officials haven't entirely gone entirely insane. (See: Totally Absurd: Government May Shutdown Over Funding For FEMA)
Worries about Europe: "The rapidly burning fuse is in the European banking system, particularly in France, and Europe is getting very close to yet another tipping point," PIMCO's Mohamed El-Erian wrote in The Financial Times, which separately reported executives of BNP Paribas plan to tour the Middle East in an effort to raise capital this week.
In the accompanying video, I discuss these and related issues with my Breakout colleague Matt Nesto, who seems to think the buck stops with Bernanke. "You have to say it was the Fed; that was the catalyst for the selling," Nesto says. "People were disappointed, right or wrong. "
My view is that Europe is the bigger issue. Yes, U.S. stocks fell sharply Wednesday following the Fed announcement but the selling accelerated in Europe amid new and renewed fears about the banking system. Once again recalling the dark days of 2008, U.S. financials like Morgan Stanley fell sharply amid concerns about systemic risk and contagion, while the price of default insurance on German and French sovereign debt hit record levels overnight, Bloomberg reports. (See: 2008 Redo? History Doesn't Repeat, But It Often Rhymes)
Notably, the market's only (feeble) rally attempt Thursday afternoon came after an FT report about European officials looking to "speed up plans to (sic) recapitalise the 16 banks that came close to failing last summer's pan-EU stress tests as part of a coordinated effort to reassure the markets about the strength of the 27-nation bloc's banking sector."
That said, there's never any "one" thing that moves the market, or even a rationale needed to explain the moves which, let's recall, follow last week's stirring rally...now a distant memory.
Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @atask or email him at [email protected]
http://finance.yahoo.com/news/Asia-...tml?x=0&sec=topStories&pos=main&asset=&ccode=
Asia stocks sharply lower as recession fears flare
Asian stock markets sharply lower as recession fears dominate sentiment
ap
tweet17
Display boards at the Australian Stock Exchange flash news of a falling market in Sydney, Friday, Sept. 23, 2011. Pacific stock markets are down sharply in early trading following big losses on Wall Street amid growing fears of another global recession. (AP Photo/Rick Rycroft)
Pamela Sampson, AP Business Writer, On Friday September 23, 2011, 1:38 am EDT
BANGKOK (AP) -- Investors across the globe continued to dump stocks Friday as weak economic indicators from major nations including China intensified fears of a new recession
In Asia, losses were broad-based but less severe than in the U.S. and Europe. Oil prices stabilized near $81 a barrel after diving to a near seven-week low on Thursday. The dollar was down against the yen and the euro.
Hong Kong's Hang Seng index fell 1.7 percent to 17,610.65 after losing nearly 5 percent the day before.
South Korean shares took a large hit, with the Kospi tumbling 4.2 percent to 1,724.92 amid worries over signs of weakness in China, Seoul's biggest trading partner. Japan's market was closed for a holiday.
Economic news was bad around the world. A closely watched survey in Europe indicated a recession could be on the way there, and a manufacturing survey suggested a slowdown in China, which has been one of the hottest economies. Employment figures in the U.S. remained weak.
"I think the most important thing is Europe and America are both entering into recession at the same time, and the governments failed to take decisive action to stop the decline," said Francis Lun, managing director of Lyncean Holdings Ltd. in Hong Kong. "Investors are disappointed and fear a global recession. So that's why investors are getting out of shares."
Lun also blamed "political squabbling" in the U.S. that is preventing President Barack Obama from spending the money needed to create a jobs program with real impact.
Meanwhile, Canada's finance minister had harsh words for Europe. On Thursday, he warned of a second financial meltdown on the scale of 2008 if Europe doesn't take decisive action to recapitalize its banks and deal with the Greek debt crisis.
"There's some justified frustration with respect to the lack of political decisiveness in Europe," Finance Minister Jim Flaherty said. "The markets are reacting."
Flaherty said Greece and other severely indebted nations must be made to follow through with austerity programs to bring down spending, and Europe must put up the billions of dollars that will be needed to ensure banks don't fail.
Elsewhere in Asia, Australia's S&P/ASX 200 fell 0.6 percent to 3,940.30 and China's Shanghai Composite Index dropped 1 percent to 2,418.59. Benchmarks in Singapore, Taiwan, Thailand, the Philippines and New Zealand were also lower.
In Hong Kong trade, Zijin Mining Group Co., China's biggest gold miner, fell 8.9 percent amid a price drop in the precious metal as investors sold gold to raise cash.
Stocks in Seoul slumped amid signs of weakness in China. Hyundai Heavy Industries Co., the world's biggest shipbuilder, slumped 6.6 percent. Hynix Semiconductor, the world's second-largest memory chip maker, fell 3.3 percent. Steel giant POSCO fell 6 percent.
A slowdown in China could also blunt demand for imported raw materials like iron ore. Australia's Fortescue Metals Group, a leading exporter of iron ore, plummeted 8.1 percent.
Energy shares were whipped by the tumble in oil prices. Australian oil and gas producer Woodside Petroleum Ltd. sank 2.3 percent. China National Offshore Oil Corp., known as CNOOC, fell 2.3 percent.
On Wall Street, the Dow Jones industrial average fell 3.5 percent to close at 10,733.83. It was the second consecutive rout in the stock market since Wednesday afternoon, when the Federal Reserve announced a change in strategy for fighting the economic slowdown.
The Standard & Poor's 500 index, a broader measure of the stock market, and the Nasdaq composite, which is more heavily weighted with technology stocks, both fell more than 3 percent for the day.
The Fed announced Wednesday that it would shuffle $400 billion of its own bond holdings in hopes of reducing interest rates on long-term loans, a plan known as Operation Twist. The central bank hopes that if people and businesses are able to borrow money more cheaply, they will spend throughout the economy and give it a lift.
Still, the Fed announcement troubled investors because it came with a bleak assessment of the future. The Fed said it sees "significant downside risks to the economic outlook," including volatility in overseas markets.
Benchmark oil for November delivery was up 40 cents at $80.92 in electronic trading on the New York Mercantile Exchange. Crude plunged $5.41, or 6.3 percent, to settle at $80.51 on Thursday. That was its lowest point since Aug. 9.
In London, Brent crude for November delivery was up 58 cents at $106.07 on the ICE Futures exchange.
In currency trading, the euro rose to $1.3512 from $1.3469 late Thursday in New York. Earlier on Thursday, the euro fell to $1.3384 -- its lowest point since Jan. 18. The dollar slipped to 76.33 yen from 76.40 yen.
