Wednesday, March 2, 2011
The Australian market has received poor leads from around this world overnight, with negative US data sending Wall Street sharply lower as oil prices rose on fresh concerns about the Middle East, this time Iran.
This morning on the ASX 24, the March share price index futures contract was 58 points lower at 4767. Yesterday, the major local indices finished marginally lower.
Gold stocks could benefit after the price rose more than 1 per cent to a record high above $US1432 an ounce as chaos in Libya and political turmoil in the Arab world prompted safe-haven buying and soaring oil prices boosted bullion's inflation hedge appeal......read on
Federal Reserve Chairman Ben S. Bernanke said the surge in oil and other commodity prices probably won’t cause a permanent increase in broader inflation and repeated that borrowing costs are likely to stay low.
Experience with such price gains in recent decades, along with currently stable labor costs, suggests a “temporary and relatively modest increase in U.S. consumer price inflation,” Bernanke said today in his semi-annual monetary policy testimony before the Senate Banking Committee in Washington. He reiterated the Fed’s outlook that while growth will accelerate this year, he still wants to see a “sustained period of stronger job creation.”......read on
From The Sydney Morning Herald:
The price of gold shot up to a record high overnight as unrest in the Middle East and North Africa sent oil prices higher and stoked fears about rising inflation.
Spot prices for the precious metal touched $US1,435.60 an ounce in New York, building on a 6 per cent advance in February.
Investors fear political volatility in the Middle East may lift crude oil costs high enough to damage a fragile global economic recovery as inflation spreads and growth slow.
“The continued violence in the Middle East is bringing in new buyers and spurring gold to new territory,” Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago told Bloomberg. “The rush to economic health is fading. Crude above $US100 is an energy tax that will force governments to put more money into the system. Our old fear of stagflation returns.”
Markets are worried Saudi Arabia, the world's biggest oil producer, may be among the next nations to face a public uprising of the like that toppled leaders in Tunisia and Egypt and pushed Libya's leadership to the brink, said Bell Direct equities analyst Julia Lee.
“Gold was a big winner overnight,” Ms Lee said. “There has been a bit of panic over the Saudi market.”.....read on
The repositioning of U.S. ships and aircraft closer to Libya is widely seen as a symbolic show of force since neither the United States nor its NATO allies have shown any appetite for direct military intervention in the turmoil that has seen Gaddafi lose control of large swaths of his country.
The White House said the ships were being redeployed in preparation for possible humanitarian efforts. But it stressed it "was not taking any options off the table," diplomatic language that signals military action is still a possibility.
But beyond flexing military muscle and freezing a record $30 billion in Libyan assets, Washington has limited influence on events inside Libya. Republican lawmakers and others have pressed President Barack Obama to do more militarily, but they have focused mainly on imposing a "no-fly" zone.......read on
Pro-democracy protests in Bahrain have shown no sign of decline after almost two weeks. The protesters are demanding the resignation of the government, constitutional reforms and the king's abdication.
Witnesses said that the causeway was blocked as "15 tank carriers carrying two tanks each were heading towards Bahrain," Egypt's al-Masry al-Youm daily reported in its latest edition.
Given the popular protests in the Persian Gulf kingdom, the transfer of the military hardware from Saudi Arabia to Bahrain seems highly unusual, commuters traveling along the 25-km causeway said.
The development follows a decision by the Bahraini military on Saturday to withdraw their vehicles out of the capital's Pearl Square after a deadly police attack on protesters, a condition the opposition had set to begin talks.
The arrival of tanks from Saudi Arabia also occurs on the eve of yet another scheduled pro-democracy rally on Tuesday organized by the Bahraini opposition and protesters in Manama's flashpoint Pearl Square.
Massive protests in Bahrain, which hosts the US Navy's Fifth Fleet in the region, have shown no sign of a decline after almost two weeks.
The protesters are demanding the resignation of the government, constitutional reforms and the king's abdication.
Fears of Saudi intervention in the ongoing Bahraini uprising first came to the fore last week when unconfirmed reports emerged on Wednesday.
Saudi officials had reportedly told US authorities that they were "prepared to intervene" should such a move prove necessary to protect Bahrain's embattled government.
Serious risks to the global economic system were exposed by the crisis of 2008,raising legitimate questions regarding the cause of the turmoil. An estimated $50trillion of global wealth evaporated in the crisis with more than a quarter of that loss suffered by the United States and her citizens.
A number of potential causative factors exist, including sub-prime real estate loans, a housing bubble, excessive leverage, and a failed regulatory system.
Beyond these,however, the risks of financial terrorism and/or economic warfare also must be considered. The stakes are simply too high for these potential triggers to be ignored.......read on