Malaysia's latest issue of five-year global bonds advanced on their first day of trading after yesterday's sale attracted orders for more than five times the US$1 billion (RM3.3 billion) originally sought.

The Islamic notes due June 2015 yielded 3.87 per cent early yesterday in Hong Kong, six basis points less than the 3.93 per cent the securities were priced at in yesterday's sale, according to data provided by Barclays plc, one of the deal's three arrangers. That's 171 basis points more than similar-maturity US Treasuries, nine basis points less than when the bonds were sold.

"Malaysia is oil-rich, the fundamentals are solid and they don't have funding needs," Paul Chan, the Hong Kong-based chief investment officer at Invesco Asia Ltd, said before the sale. "There will be scarcity value in Malaysia's dollar bonds. Asian countries are generally underrated" given what's happening in Europe, he said.

Malaysia's sale of so-called sukuk notes, its first international debt issue since 2002, will set a new benchmark for pricing bonds in the nation, Prime Minister Datuk Seri Najib Razak said on May 19.
The government sold US$1.25 billion (RM4.1 billion) of the securities, after attracting orders of almost US$5.5 billion (RM18.2 billion), according to a sale document obtained by Bloomberg. CIMB Group Holdings Bhd and HSBC Holdings plc, along with Barclays, arranged the offering.

Islamic bond sales are growing for the first time since 2007 as yields on securities complying with the religion's ban on interest fall more than those on emerging-market debt even as Europe's debt crisis worsens.

Offerings of sukuk have climbed 10 per cent to US$6.1 billion (RM20.2 billion) so far this year, the most since a 47 per cent increase in the same period three years ago, according to data compiled by Bloomberg.

Malaysia has the world's biggest market for Islamic bonds, which are backed by physical assets and pay profit rates instead of interest that is prohibited under syariah principles. The country accounted for 65 per cent of outstanding sukuk last year, according to CIMB Group Holdings Bhd, one of the lead arrangers for the latest notes.

The sukuk, which is of the Ijarah structure, were assigned debt ratings of "A-" by Standard & Poor's (S&P) and "A3" by Moody's Investors Service last week, the two company's fourth lowest investment grades. Greece, which sparked the European debt crisis amid concern about its ability to repay investors, has a junk, or high-risk, rating of "BB+" from S&P.

The premium investors demand to hold bonds in developing nations over US Treasuries narrowed 20 basis points yesterday to 319 basis points, according to JPMorgan Chase & Co's EMBI+ Index. A basis point is 0.01 percentage point.

Malaysia's latest bond issue would pay returns with rental income received by leasing 12 state-run hospitals, according to a sale document obtained by Bloomberg News last week.

State-owned Petroliam Nasional Bhd's (Petronas) 4.25 per cent Islamic bonds due August 2014 yielded 3.92 per cent yesterday, according to Royal Bank of Scotland Group plc, or 207 basis points more than similar-maturity Treasuries.

"Usually the trading differential between Petronas and Malaysia is 20 or 25 basis points, so that's what I was expecting," said Brayan Lai, a Hong Kong-based credit analyst at Credit Agricole CIB. "The issuer came into a rally in the markets, so they probably got a good deal." - Bloomberg

source HERE

Posted by Mr Thx Saturday, May 29, 2010 0 comments

SHARE prices on Bursa Malaysia extended their losses today on continuous selling mainly in key blue chips and banking-related stocks, dealers said.

The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) fell as much as 25.84 points amid rising concerns that Europe's debt crisis may spread and over reports of North Korea readying its military for a possible confrontation with South Korea over the sinking of a warship.

At 5pm, the FBM KLCI lost 23.56 points or 1.85 per cent to close at 1,250.13, off it intraday low of 1,247.85. It had opened 8.72 points lower at 1,264.97.

OSK Research said the fragile sentiment in the near term was likely to drive extended volatility in the market with the index possibly attempting to consolidate after the sharp losses over the past week with a downside bias.


Other Asian markets also swam in a sea of red with Tokyo's Nikkei falling 3.1 per cent to 9,459.89 -- its lowest finish since Nov 30, 2009.

The Korea Composite Stock Price Index ended down 44.10 points at 1,560.83 points, the lowest close since Feb 8, 2010, and the Hang Seng Index dropped 3.47 per cent, its biggest percentage drop in almost six months, to 18,985.5.

A dealer said renewed tensions between North and South Korea soured investor sentiment with fears of possible war.

"Investors are worried and continue trimming their positions," he said.

The FBM Emas Index fell 180.41 points to 8,381.68, the FBM70 Index dropped 193.98 points to 8,215.82 and the FBM Ace Index eased 144.30 points to 3,651.02.

The Finance Index plunged 298.68 points to 11,214.17, the Industrial Index declined 32.63 points to 2,544.25 and the Plantation Index lost 109.74 points to 5,906.87.

Losers led gainers by 846 to 82 while 152 counters were unchanged, 320 untraded and 55 others suspended.

Volume increased to 940.627 million shares valued at RM1.787 billion from 662.439 million shares valued at RM1.287 million.

Among actively traded stocks, Talam Corporation was flat at 14 sen while KNM Group shed two sen to 48 sen.

Axiata lost six sen to RM3.58, CIMB Group dropped 24 sen to RM6.58 and Maybank eased 22 sen to RM7.03. Sime Darby lost seven sen to RM7.74, Maxis shed five sen to RM5.12 and MISC slipped eight sen to RM8.42.

Among top losers were Nestle which fell 48 sen to RM34. PPB Group dropped 46 sen to RM15.74 and Tanjong eased 36 sen to RM17.10.

Main Market debutant Sarawak Cable closed lower by 2.5 sen at 67.5 sen after opening 2.5 sen higher at 72.5 sen.

The Main Market volume increased to 804.452 million shares worth RM1.763 billion from 558.770 million shares worth RM1.264 billion yesterday.

The ACE Market volume rose to 57.884 million shares valued at RM7.960 million from 54.074 million shares valued at RM8.410 million.

Warrants rose to 66.126 million units worth RM7.415 million from 38.253 million shares valued at RM5.542 million.

Consumer products accounted for 40.354 million shares traded on the Main Market, industrial products 157.536 million, construction 45.062 million, trade and services 252.455 million, technology 39.215 million, infrastructure 12.088 million, finance 89.853 million, hotels 8.895 million, properties 124.595 million, plantations 30.451 million, mining 27,600, REITs 3.620 million and closed/fund 302,900.

BERNAMA

source HERE

Posted by Mr Thx Tuesday, May 25, 2010 0 comments

KUALA LUMPUR: The Employees Provident Fund (EPF) expects its investments to reach RM500bil by end-2013, said deputy chief executive officer (investment) Shahril Ridza Ridzuan.

He said the fund's investments stood at RM385bil in the first quarter of this year compared with just RM9bil in 1980. The EPF has over RM370bil in funds.

“We are chalking up about 8% compounded annual average growth now and by this, we expect our investments will be RM500bil by the end of 2013,” he said yesterday at a media briefing and media launch of EPF corporate governance principles and voting guidelines.

“There are two things that support the 8% annual growth. One is that when we pay dividends, we don't pay in cash but credit the amount into investors' accounts and reinvest,” he said.

The other, he said, was that the country continued to grow in terms of population and this brought in a net inflow of workers.

“The total gross net income contribution exceeded the net outflow as a result of people retiring,” Shahril said.

He also said the EPF was guided by the Risk Appetite Statements, where it would not tolerate a greater than 10% chance of dividends falling below 2.5% in any year over the next 10 years.

“We too will not tolerate a greater than one third chance of the annualised dividends falling below inflation +2% over any rolling three-year period,” he said.

On the booklet launched yesterday, Shahril said it was part of the group's efforts to promote and educate companies on corporate governance. “Investors and regulators can expect to see better corporate governance from investee companies with the introduction of this booklet,” he said.

Shahril said the EPF believed that good corporate governance was not only about commitment to values and ethical business conduct but also about how an organisation was being managed. The booklet, which will serve as a guide to EPF and investee companies, was aimed at being more stringent on corporate governance issues that emphasise accountability, integrity and transparency of the boards of directors and disclosures made by listed companies.

Among the booklet's focus areas were size and composition of the boards, separation of power between the chairman and the chief executive officer, re-election of directors, board committee, authority of allot and share issues pursuant to Section 132D of the Companies Act 1965, employees share option schemes, related-party transactions and dividend policies.

source HERE

Posted by Mr Thx Thursday, May 20, 2010 0 comments

SEOUL (Reuters) – South Korea accused the reclusive North on Thursday of torpedoing one of its warships, heightening tension in the economically powerful region and testing the international position of China, Pyongyang's only major backer.

South Korea said it would take "firm" measures against its impoverished neighbor, which furiously responded that it was ready for war if Seoul or its allies imposed sanctions.

A report by investigators, including experts from the United States, Australia, Britain and Sweden, concluded that a North Korean submarine had fired the torpedo which sank the Cheonan corvette in March, killing 46 sailors.

"There is no other plausible explanation," their report said.

Financial markets in Seoul showed little reaction to the widely anticipated findings of the report but were watching nervously for any serious escalation in tensions.

"The key is what kind of measures South Korea will take and how North Korea will react to them," said Choi Seong-lak, an analyst at SK Securities.

"If things become violent it will affect foreign investors, but for today the impact from the result itself will be limited."

International condemnation was immediate, with the stark exception of China, which analysts say is desperate to avoid any action that might destabilize its reclusive neighbor and lead to a spill-out into in its territory.

A senior South Korean government official said previously that the attack appeared to have been in revenge for a firefight near the disputed North-South border late last year in which the North's navy was humiliated.

U.N. Secretary-General Ban Ki-moon called the contents of the South Korean investigation deeply troubling.

Both the United States and Britain gave their backing to the findings, with the White House calling it an act of aggression that was another sign of the North's unacceptable behavior.

Japan ruled out the resumption of nuclear disarmament talks by five regional powers and the North, and said Washington shared its view that such negotiations aimed at aiding Pyongyang in return for a promise to drop its nuclear arms were unthinkable.

Chinese Foreign Ministry spokesman Ma Zhaoxu urged both sides on the divided Korean peninsula to exercise restraint, and said Beijing would make its own assessment of the South Korean investigation.

FIRM MEASURES

South Korean President Lee Myung-bak will hold an emergency meeting of his National Security Council on Friday. His government has already made clear it has no plans for a retaliatory strike but will be pressing the international community to take action, probably more sanctions, against the North.

"We will be taking firm, responsive measures against the North, and through international cooperation, we have to make the North admit its wrongdoing and come back as a responsible member of the international community," Lee was quoted by his office as telling Australian Prime Minister Kevin Rudd.

The report, announced in a nationally televised news conference, said intelligence had shown that North Korean submarines were likely in operation near the scene of the sinking, with similar vessels of other neighboring countries all inside their territorial waters.

"The evidence points overwhelmingly to the conclusion that the torpedo was fired by a North Korean submarine," it said.

The issue has plunged already icy relations between the two Koreas deeper into the freezer.

North Korea said the South's conservative government was using the incident for political gain and to further undermine ties between the two Koreas, which have yet to sign a formal peace treaty to end their 1950-53 war.

"Our army and people will promptly react to any 'punishment' and 'retaliation' and to any 'sanctions' infringing upon our state interests with various forms of tough measures including an all-out war," its official news agency quoted the powerful National Defense Commission as saying in a typically florid statement. [nTOE64J03R].

The issue also puts China in a tricky spot. The host of on-again, off-again regional talks to rein in North Korea's nuclear weapons program is the reclusive state's only major ally and is reluctant to penalize its government.

"It's going to be very, very difficult for China to navigate this one. The South Koreans are not particularly pleased about what China's doing," said Charles Freeman, China expert at the Center for Strategic and International Studies in Washington.

Seoul is already upset with Beijing, a major trading partner, for hosting North Korean leader Kim Jong-il on a rare trip abroad before the outcome of the investigation was announced.

But there have been media reports in the South that Chinese leaders may not have given the frail-looking Kim as much support as he wanted, speculating ties may now be starting to fray.

Paik Jin-hyun, a North Korea expert at Seoul National University, said tension between the two Koreas was inevitable.

"North Korea has given out war threats before and they are doing this now because the situation has become urgent for them. They will try to block sanctions at all costs. In this heightened state of affairs, provocations may occur."

source HERE

Posted by Mr Thx 0 comments

KUALA LUMPUR: Malaysia will offer around US$1bil in a global sukuk issue to investors from Wednesday, its first international debt sale since 2002, two sources familiar with the planned issue told Reuters.

The sources said the Government was targeting about US$1bil (RM3.2bil) for the bond that would be entirely sukuk and would be launched at an Islamic economic forum.

Lead managers for the deal are CIMB and HSBC.

CIMB declined to comment while HSBC was not immediately available.

“(The government) is targeting about US$1bil,” one of the sources familiar with the deal told Reuters, adding that there would be a global roadshow for the paper.

The sale comes as global credit markets grapple with worries of another crisis after the recent sell-off sparked by credit worries in Europe.

Malaysia last tapped the global bond market in 2002 when it raised US$600mil through the sale of its first international sukuk.

Sukuk can have higher yields than conventional paper because of the relatively illiquid secondary Islamic bond market but a global sukuk offering would help reinforce Malaysia's ambitions to become an international syariah banking hub.

Prime Minister Datuk Seri Najib Razak had said in April Malaysia would likely tap global bond markets by offering a US dollar Islamic bond to test investor appetite for its assets. The country usually relies on domestic bond issuances to fund its expenditure. The government sold RM88.5bil ringgit of bonds in the country last year with Islamic paper accounting for a third of that, according to central bank data.

Malaysia has only one outstanding conventional bond -- due in 2011and worth US$1.75bil. The country ran a budget deficit of 7.4% in 2009, its highest in more than two decades. It aims to reduce that to 5.6% this year. - Reuters

source HERE

Posted by Mr Thx Wednesday, May 19, 2010 0 comments

Richard Russell, the famous writer of the Dow Theory Letters, has a chilling line in today's note:

Do your friends a favor. Tell them to "batten down the hatches" because there's a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country. They'll retort, "How the dickens does Russell know -- who told him?" Tell them the stock market told him.

That's pretty intense!

Update: By popular demand, here's more on what he sees in the market. The gist is that the markets recent gyrations are telling him that the economy is in trouble:

And I ask myself, "Am I seeing things? The April 26 high for the Dow
was 11205.03. The Dow is selling as write at 10557 down 648 points
from its April high. If business is even better than expected, then
why is the Dow down over 600 points? And why, if there were 674 new
highs on the NYSE on April 26, were there only 20 new highs on Friday,
May 14? And if my PTI was 6133 on April 26, why is it down 17 points
since its April high?

The fact is that I've been seeing deterioration in the stock market
ever since early-April, and this in the face of improving business
news
. The D-J Industrial Average is composed of 30 internationally
known top-quality blue-chip stocks. These are 30 of "America's biggest
companies." If Barron's is so bullish on the future of America's
biggest companies, then why isn't the Dow advancing to new highs?

Clearly something is wrong. But what could it be? Much as I love
Barron's, I trust the stock market more. If I read the stock market
correctly, it's telling me that there is a surprise ahead. And that
surprise will be a reversal to the downside for the economy, plus a
collection of other troubles ahead
.

About Dow Theory -- First, we saw the recent April highs in the
Averages. Then we saw a plunge in both Averages to their May 7 lows --
Industrials to 10380.43, Transports to 4298.12, next a short rally. If
ahead, the two Averages turn down and violate their May 7 lows, that
would be the clincher. Such action would signal the certain resumption
of the primary bear market.

Just as for years I asked, cajoled, insisted, threatened, demanded,
that my subscribers buy gold, I am now insisting, demanding, begging
my subscribers to get OUT of stocks (including C and BYD, but not
including golds) and get into cash or gold (bullion if possible). If
the two Averages violate their May 7 lows, I see a major crash as the
outcome. Pul - leeze, get out of stocks now, and I don't give a damn
whether you have paper losses or paper profits!

source HERE

Posted by Mr Thx 0 comments

Bob Chapman
First 6 months of 2010, Americans will continue to live in the 'unreality'...the period between July and October is when the financial fireworks will begin. The Fed will act unilaterally for its own survival irrespective of any political implications ...(source is from insider at FED meetings). In the last quarter of the year we could even see Martial law, which is more likely for the first 6 months of 2011. The FDIC will collapse in September 2010. Commercial real estate is set to implode in 2010. Wall Street believes there is a 100% chance of crash in bond market, especially municipals sometime during 2010. The dollar will be devalued by the end of 2010.

Gerald Celente
Terrorist attacks and the "Crash of 2010". 40% devaluation at first = the greatest depression, worse than the Great Depression.

Igor Panarin
In the summer of 1998, based on classified data about the state of the U.S. economy and society supplied to him by fellow FAPSI analysts, Panarin forecast the probable disintegration of the USA into six parts in 2010 (at the end of June – start of July 2010, as he specified on 10 December 2000

Neithercorps
Have projected that the third and final stage of the economic collapse will begin sometime in 2010. Barring some kind of financial miracle, or the complete dissolution of the Federal Reserve, a snowballing implosion should become visible by the end of this year. The behavior of the Fed, along with that of the IMF seems to suggest that they are preparing for a focused collapse, peaking within weeks or months instead of years, and the most certain fall of the dollar.

Webbots
July and onward things get very strange. Revolution. Dollar dead by November 2010.

LEAP 20/20
2010 Outlook from a group of 25 European Economists with a 90% accuracy rating- We anticipate a sudden intensification of the crisis in the second half of 2010, caused by a double effect of a catching up of events which were temporarily « frozen » in the second half of 2009 and the impossibility of maintaining the palliative remedies of past years. There is a perfect (economic) storm coming within the global financial markets and inevitable pressure on interest rates in the U.S. The injection of zero-cost money into the Western banking system has failed to restart the economy. Despite zero-cost money, the system has stalled. It is slowly rolling over into the next big down wave, which in Elliott Wave terminology will be Super Cycle Wave Three, or in common language, "THE BIG ONE, WHERE WE ALL GO OVER THE FALLS TOGETHER."

Joseph Meyer
Forecasts on the economy. He sees the real estate market continuing to decline, and advised people to invest in precious metals and commodities, as well as keeping cash at home in a safe place in case of bank closures. The stock market, after peaking in March or April (around 10,850), will fall all the way down to somewhere between 2450 and 4125 during the next leg down.

Harry Dent (investor)
A very likely second crash by late 2010. The coming depression (starts around the summer of 2010). Dent sees the stock market--currently benefiting from upward momentum and peppier economic activity--headed for a very brief and pleasant run that could lift the Dow to the 10,700-11,500 range from its current level of about 10.090. But then, he sees the market running into a stone wall, which will be followed by a nasty stock market decline (starting in early March to late April) that could drive down the Dow later this year to 3,000-5,000, with his best guess about 3,800.

Harold Eatmon (1990)
I had a vision of the stock market soar and then crash. After the crash, many big business corporations and private parties bought up stocks because of the low cost to buy in. Then I saw the market begin to climb again in a short period of time. Then it crashed again bringing tremendous loss, ruin and devastation to all who bought in the first time. This is what I have labeled "Two Black Mondays" . The time period between the Two Black Mondays was very close together. I could not tell exactly how close. There are some tell tale signs indicating the season and the setting. I saw the season to be when *"the leaves fall to the ground"* then the first crash would occur."Like Joseph in Genesis, I believe America will have fat years of financial blessing. I also believe there are coming lean years of financial difficulty for America. [Note: while this doesn't give an exact date, this prophecy was dead on accurate- the markets crashed -777 points on MONDAY 9/29/08, roughly 1 week into the FALL (leaves fall to the ground.) The markets then rebounded OVER A SHORT PERIOD OF TIME (from April 2009 to October 2009 the markets rallied nearly 4000 points!) and everyone bought back in. According to this prophecy, the next huge crash will happen on a Monday. Eatmon even accurately predicted the coming 'fat years' and the now present 'lean years']

Larry Randolph
... there is yet a seven-fold shaking of greater magnitude coming that will produce enormous and perhaps catastrophic disruptions on economic, political, geophysical, atmospheric, and spiritual levels.

Weather Bill
Huge earthquake in America in September 2010. This EQ to come is going to start the swift downfall of America

Andrey Rasshivaev
At the very end of the year of 2007 I have received a revelation from God that the coming 2008 year was going to be the year of the beginning of outpouring of God's judgment upon this world...About half a year ago God has given me a further revelation. He reveled me that the crisis was just the very beginning. The world is going to face the total and complete economical and financial collapse in August-September of this new 2010 year.

Greg Evensen
Economic meltdown and possible martial law in the mid summer 2010.

Rick Wiles
Use the first 6 months of 2010 to prepare for the last 3 months of 2010. Purchase everything you need while you still can. Pay off your debts. Judgment is coming upon America (she will be shaken physically, financially, and spiritually)- not the end of the USA, only TEOTUSAAWKI- supply chain will be disrupted for years, admitted insolvency- handed over to allies for pennies on the dollar. POSSIBILITIES: (not prophecies) EMP attack, China Russia NK cyber attack, delayed Y2K bug.

Sadhu Sundar Selvaraj
Starvation and famine/financial problems will develop. Terrorist attacks. Banks close. Tsunami. 7 new diseases worse than swine flu.

Amos Scaggs
The ultra-rich will go broke. I don’t mean go bankrupt I mean go broke, no money. I saw ultra rich people working for food because they were broke. This will happen by mid-February 2011.

Jimmy "Doomsday"
DOW will fall below 7,000 before mid summer 2010- Dollar will rise above 95 on the dollar index before mid summer 2010- Gold will bottom out below $800 before mid summer 2010- Silver will bottom out below $10 before mid summer 2010- CA debt implosion will start its major downturn by mid summer and hit crisis mode before Q4 2010- Dollar index will plunge below 65 between Q3 and Q4 2010- Commercial real estate will hit crisis mode in Q4 2010- Over 35 states will be bailed out by end of Q4 2010 by the US tax payer End of Q4 2010 gold will hit $1,600 and silver jump to $35 an oz.

Unnamed Economist working for US Gov't (GLP)
What we have experienced the last two years is nothing to what we are going to experience this year. If you have a job now...you may not have it in three to six months. (by August 2010). Stock market will fall = great depression. Foreign investors stop financing debt = collapse. 6.2 million are about to lose their unemployment.

Lindsey Williams
Dollar devalued 30-50% by end of year. It will become very difficult for the average American to afford to buy even food. This was revealed to him through an Illuminati insider.

Richard Mogey
Current Research Director at the Foundation for the Study of Cycles- Because of a convergence of numerous cycles all at once, the stock market may go up for a little while, but will crash in 2010 and reach all-time lows late 2012. Mogey says that the 2008 crash was nothing compared to the coming crash. Gold may correct in 2009, but will go up in 2010 and peak in 2011. Silver will follow gold.

Robert Prechter
Founder of Elliott Wave International, implores retail investors stay away from the markets… for now. Prechter, who was bullish near the lows in March 2009, now says the stock market “is in a topping area.”predicting another crash in 2010 that will bring stocks below the 2009 low. His word to the wise, “be patient, don’t rush it” keep your money in cash and cash equivalents.

John P. Hussman, Ph.D.
In my estimation, there is still close to an 80% probability (Bayes' Rule) that a second market plunge and economic downturn will unfold during 2010.

Robin Landry (Market Expert)
I believe we are headed to new market highs between 10780-11241 over the next few months. The most likely time frame for the top is the April-May area. Remember the evidence IMHO still says we are in a bear market rally with a major decline to follow once this rally ends.

Alpha-Omega Report (Trends Forecast)
Going into 2010, the trends seemed to lead nowhere or towards oblivion. Geo-politically, the Middle East was and is trending towards some sort of military clash, most likely by mid-year, but perhaps sooner...At the moment, it seems 2010 is shaping up to be a year of absolute chaos. We see trends for war between Israel and her neighbors that will shake every facet of human activity...In the event of war, we see all other societal trends being thoroughly disrupted...Iran will most likely shut off the flow of oil from the Persian Gulf. This will have immense consequences for the world’s economy. Oil prices will skyrocket into the stratosphere and become so expensive that world’s economies will collapse..There are also trend indicators along economic lines that point to the potential for a total meltdown of the world’s financial system with major crisis points developing with the change of each quarter of the year. 2010 could be a meltdown year for the world’s economy, regardless of what goes on in the Middle East.

Eric deCarbonnel
There is no precedence for the panic and chaos that will occur in 2010. The global food supply/demand picture has NEVER been so out of balance. The 2010 food crisis will rearrange economic, financial, and political order of the world, and those who aren’t prepared will suffer terrible losses…As the dollar loses most of its value, America's savings will be wiped out. The US service economy will disintegrate as consumer spending in real terms (ie: gold or other stable currencies) drops like a rock, bringing unemployment to levels exceeding the great depression. Public health services/programs will be cut back, as individuals will have no savings/credit/income to pay for medical care. Value of most investments will be wiped out. The US debt markets will freeze again, this time permanently. There will be no buyers except at the most drastic of firesale prices, and inflation will wipe away value before credit markets have any chance at recovery. The panic in 2010 will see the majority of derivatives end up worthless. Since global derivatives markets operate on the assumption of the continued stable value of the dollar and short term US debt, using derivatives to bet against the dollar is NOT a good idea. The panic in 2010 will see the majority of derivatives end up worthless. The dollar's collapse will rob US consumers of all purchasing power, and any investment depend on US consumption will lose most of its value.

WALL STREET JOURNAL- (2/2010)
"You are witnessing a fundamental breakdown of the American dream, a systemic breakdown of our democracy and our capitalism, a breakdown driven by the blind insatiable greed of Wall Street: Dysfunctional government, insane markets, economy on the brink. Multiply that many times over and see a world in total disarray. Ignore it now, tomorrow will be too late."

Lyndon Larouche
The crisis is accelerating and will become worse week by week until the whole system grinds into a collapse, likely sometime this year. And when it does, it will be the greatest collapse since the fall of the Roman Empire.

Niño Becerra (Professor of Economics)
Predicted in July 2007 that what was going to happen was that by mid 2010 there is going to be a crisis only comparable to the one in 1929. From October 2009 to May 2010 people will begin to see things are not working out the way the government thought. In May of 2010, the crisis starts with all its force and continues and strengthens throughout 2011. He accurately predicted the current recession and market crash to the month.

Richard Russell (Market Expert)
(from 2/3/10) says the bear market rally is in the process of breaking up and panic is on the way. He sees a full correction of the entire rise from the 2002 low of 7,286 to the bull market high of 14,164.53 set on October 9, 2007. The halfway level of retracement was 10,725. The total retracement was to 6,547.05 on March 9, 2009. He now sees the Dow falling to 7,286 and if that level does not hold, “I see it sinking to its 1980-82 area low of Dow 1,000.” The current action is the worst he has ever seen. (Bob Chapman says for Russell to make such a startling statement is unusual because he never cries wolf and is almost never wrong)

source HERE & HERE

Posted by Mr Thx Friday, May 7, 2010 2 comments

By Gabi Thesing and Flavia Krause-Jackson

May 3 (Bloomberg) -- Euro-region ministers agreed to a 110 billion-euro ($146 billion) rescue package for Greece to prevent a default and stop the worst crisis in the currency’s 11-year history from spreading through the rest of the bloc.

The first payment will be made before Greece’s next bond redemption on May 19, said Jean-Claude Juncker after chairing a meeting of euro-region finance ministers in Brussels yesterday. The 16-nation bloc will pay 80 billion euros at a rate of around 5 percent and the International Monetary Fund contributes the rest. Greece agreed to budget measures worth 13 percent of gross domestic product.

“It’s an ambitious program, it’s austere but it’s absolutely necessary,” Juncker told reporters. European Central Bank President Jean-Claude Trichet, speaking at the same press conference, said Greece’s plan will “help to restore confidence and safeguard financial stability in the euro area.”

Policy makers agreed to the unprecedented bailout after investors’ concerns about a potential Greek default sparked a rout in Portuguese and Spanish bonds last week and sent stock markets tumbling. At stake is the future of the euro 11 years after its creators left control of fiscal policy in national capitals.

Interest Rate

The extra yield that investors demand to hold Greek debt over German bunds surged to 826 basis points on April 28 after Standard & Poor’s cut its rating to junk. It eased to 594 points on April 30 as signs of an agreement emerged. The Portuguese spread jumped to the most since at least 1997 last week and the premium on Spain climbed to the highest since March 2009.

The euro, which fell to a 12-month low of $1.3115 on April 28, strengthened to $1.3294 two days later.

European Union leaders will meet on May 7 to discuss the pace of parliamentary approval of the Greek loans. Germany plans to debate the plan on the same day.

“The EU can afford to bail-out Greece and even Portugal, but it cannot afford bailing out Spain,” said Andrew Bosomworth, Munich-based head of portfolio management at Pacific Investment Management Co., which oversees the world’s largest mutual fund from Newport Beach, California. “Therefore a lot is resting on getting Greece right.”

Germany will provide 28 percent of the euro region’s overall contribution.

‘Not an Easy Day’

In return for rescue funds, Greece agreed to measures that the ADEDY civil servants union called “savage.” Greece will cut wages and freeze pensions for three years as well as increase the main sales tax to 23 percent from 21 percent. Progress will be monitored quarterly, the Greek government said.

“It is not an easy day,” said Finance Minister George Papaconstantinou in Brussels. “It’s not going to be easy for Greek citizens. But it’s absolutely clear that the Greek government is prepared to do what it needs to do.”

The financial lifeline lasts three years and forces Greece to cut its budget deficit below the European Union’s limit of 3 percent of gross domestic product by the end of 2014, a year later than originally planned. The shortfall was 13.6 percent last year, the second-biggest in the region after Ireland.

Greece now expects its economy to shrink 4 percent this year and 2.6 percent before returning to growth in 2012. The package will also set up a “financial stabilization” fund to help banks with potential bad loans stemming from the austerity measures. Ten billion of the total rescue package will be earmarked for the fund, said EU Monetary Affairs Commissioner Olli Rehn.

Ringfence

Policy makers are trying to ringfence the Greek crisis after yields surged across the euro region’s periphery on concern Spain, Portugal and Ireland will also struggle to cut their deficits. S&P followed its decision to cut Greece’s credit rating to junk on April 27 with downgrades on Portugal and Spain.

Rehn indicated that the Greek bailout plan can’t be seen as a blueprint for other euro nations as Greece is a “special case” because of the way previous governments fudged its deficit statistics.

At 11.2 percent of GDP, Spain’s budget deficit was the third-highest in the euro region last year and Portugal’s was the fourth-biggest at 9.4 percent.

Asked about contagion risks, Austrian Finance Minister Josef Proell said yesterday’s agreement “will send a clear signal to the markets that Europe is able” to handle the crisis and “minimize the risk” of it spreading.

Debate

The Greek bailout marks an end to nearly three months of debate among EU leaders on whether and how to rescue a euro region nation teetering on the brink of default. German Chancellor Angela Merkel has been reluctant to put taxpayers’ funds at risk as her government faces a regional election in North Rhine-Westphalia on May 9.

Fifty-six percent of Germans oppose giving Greece aid, calling such support “wrong,” Bild am Sonntag reported, citing an Emnid survey. Germany hopes to secure parliament’s approval for the plan by May 7.

Merkel yesterday said she was right to demand IMF involvement in the fund over the objections of her European peers.

“Three months ago it would have been unthinkable that Greece would accept such tough conditions,” she said in Bonn.

Austerity

Greek Prime Minister George Papandreou is likely to face his own difficulties. The austerity plan has sparked opposition in Athens, with the federation of civil servants calling a 48- hour strike starting May 4.

“They won’t manage to enforce these measures,” said Pavlos Nikolaou, 39, who runs a mini-market in Athens. ‘I don’t think this will be the end of measures, they’ll have to announce more next year. Cutting salaries is also not what’s going to solve Greece’s problems.”

“Implementation will now be investors’ foremost concern in the coming months, and Greece will have to work hard to rebuild its reputation and regain market confidence,” said Annunziata. “It will be an uphill struggle.”

source HERE

Posted by Mr Thx Monday, May 3, 2010 0 comments
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Sekapur Sirih Seulas Pinang

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