Thursday, June 2, 2011
The Australian sharemarket has suffered its worst day since June last year as renewed worries about the strength of the global economy wiped about $33 billion off the value of the market.
At the close, the benchmark S&P/ASX200 index was down 106.9 points, or 2.3 per cent, at 4600.4, while the broader All Ordinaries index slumped 105.4 points, or 2.2 per cent, at 4683.2.
The size of the retreat is the most since almost 3 per cent was lopped off the market's value on June 7, 2010.
Goldman Sachs managed to lose nearly all of the money it had been given to invest by the Libyan government, which eventually led the giant Wall Street bank to offer shares as compensation that would have effectively made Colonel Gaddafi one of its largest single investors.
The Libyan Investment Authority, a sovereign wealth fund worth tens of billions of dollars into which the Gaddafi administration poured the money it made from oil sales, handed over $1.3bn to the bank in 2008 with a mandate to invest in foreign currency markets and other structured products. The deal was struck months before the onset of the financial crisis, and sources close to the bank yesterday claimed that the LIA had initially been uninterested when Goldman told it that the value of the investment had lost several hundreds of millions of dollars.But by early 2009 Goldman Sachs had lost 98 per cent of what it had been given, according to a report in The Wall Street Journal. It is believed that senior Goldman Sachs officials were then summoned to Tripoli, and were told that, after losing the cash in just a handful of complex trades, the bank would need to offer some sort of compensation......read on
Citing a growing risk that the government will fail to stabilize its debt position without a debt restructuring, Moody's cut Greece's rating to Caa1 from the previous level of B1, bringing it seven notches into junk territory.
The outlook on the new rating is negative, in a sign that another downgrade is likely in the short- to medium-term.
"The first trigger for today's downgrade is Moody's view that Greece is increasingly likely to fail to stabilize its debt ratios within the timeframe set by previously announced fiscal consolidation plans," the ratings agency said in a statement......read on