Monday, August 8, 2011

Markets Mayhem: Asian stocks plummet on US rating downgrade

From: RussiaToday | Aug 8, 2011

Asian stocks tumbled early on Monday, kicking of what is a string of torrid trading around the globe. It follows last week's rout and is on the back of America getting its credit rating cut, as well as the Eurozone's debt wound that refuses to heal. RT's Priya Sridhar is in Asia's third largest economy, India, with the latest outlook.

Weekend of emergency money talks

From: Euronews | Aug 8, 2011
Europe's leaders and finance chiefs spent the weekend frantically attempting to avoid meltdown in the markets after last week's mammoth global sell-off of stocks.

ECB action stems market slide

From: Euronews | Aug 8, 2011

European stock exchanges opened on a relatively positive note on Monday morning, indicating that measures taken by the European Central Bank have restored some confidence.

Doug Casey on Gold and HyperInflation

Doug Casey talks about rising Gold prices and the risks of hyperinflation in the USA with Eric King of King World News......listen here

Gold breaks through US$1700

From Bloomberg:

Gold climbed above $1,700 an ounce for the first time after Standard & Poor’s cut the top U.S. credit rating, fueling a slump in equities and the dollar amid concern that the global economy is slowing.

Futures for December delivery jumped as much as 4 percent to a record $1,718.20 an ounce on the Comex in New York and traded at $1,712.90 an ounce at 11:47 a.m. Mumbai time. Silver futures climbed as much as 5.7 percent. Spot gold soared as much as 3.1 percent to $1,715.75 an ounce, also an all-time high.

Prices have surged 21 percent in 2011, gaining for an 11th year, as the sovereign debt crisis and a faltering economy boost haven demand. While George Soros sold most of his gold in the first quarter, John Paulson, who made $15 billion betting against subprime mortgages, is still the biggest investor in the largest exchange-traded fund backed by bullion. Goldman Sachs Group Inc. raised its price forecasts in a report released today.

“There’s just a pessimism or nervousness that’s associated with economies and currencies of these major nations,” Gavin Wendt, director at Sydney-based Mine Life Pty Ltd., said by phone. “At a time when investors are nervous of currencies, they’re nervous of equities, they’re nervous of everything, the only place for them to park their money is gold.”

S&P cut the long-term rating one level to AA+ from AAA on Aug. 5 while keeping the outlook at “negative,” criticizing the nation’s political system for failing adequately to address deficit reduction. Equities sank today, extending the market’s rout, as the dollar and oil on

ASX closes below 4000

From The Sydney Morning Hearld:

Australian shares gave up another $35 billion in value as jitters over the state of the global economy sank stocks for a fifth consecutive day.

The benchmark S&P/ASX200 Index closed below the 4000-point level for the first time since July 16, 2009, ending the day down 119.3 points, or 2.9 per cent, at 3986.1. The broader All Ordinaries Index fell 113 points, or 2.7 per cent, to 4056.7.

The losses add to the $100 billion that was shed last week, with today's drop attributed in part to the decision by Standard & Poor's to cut the rating of US debt from its top level for the first time.

All the key sub-indexes fell, with materials diving 3.6 per cent, financials off 2.8 per cent and energy stocks losing 2.5 per cent.

Australian dollar drops to $US1.03
Dow futures down 2.6% to 11,108
Gold hits record $US1715 an ounce
Oil futures drop to $US83 a barrel

Other markets around the region also sank, with Japan's Nikkei 225 off 2.2 per cent, Hong Kong's Hang Seng losing 3.2 per cent and mainland Chinese bourses off between 3 per cent and 4 per cent.

Gold, meanwhile, rose to its latest record level in US-dollar terms, jumping to $US1715 in afternoon trade as investors scrambled for havens. The rally, though, did not buoy local gold miners with the ASX's gold sub-index off 1.7 per cent for the day.

The Australian dollar lost more ground, trading near four-month lows against the yen, euro and British pound, and sinking to just over $US1.03.


What happens if the US becomes bankrupt?

The Market will have the last word

Jim Sinclair interviewed by James Turk