From yesterday:
"Markets and Dollar Sink as Slowdown Worry Increases" by MICHAEL M. GRYNBAUM and PETER S. GOODMAN
Stock markets plummeted and the dollar sank to a record low against the euro yesterday as investors worldwide grew skittish over rising oil prices and the prospect of a substantial economic slowdown in the United States.
The Dow Jones industrial average fell 360 points and the broader stock market dropped nearly 3 percent, driven down by fear that the troubles in housing are likely to continue well into next year, contributing to further losses in credit markets and spreading pain to the rest of the economy. After a relatively strong summer, consumer spending is expected to tighten and business profits slow in the months ahead, analysts said.
Erik Nielsen, chief Europe economist at Goldman Sachs:
“We are experiencing among our clients an awakening that the United States is in big trouble.”
The rise in oil prices, which briefly traded yesterday above $98 a barrel before settling at $96.37, now appear to be pushing up the cost of gasoline, heating oil and jet fuel as well. That only intensified concern that American consumers may no longer be able to sustain their spending on other goods and services, particularly the large numbers of gas-guzzling vehicles still being turned out by the Detroit automakers.
The most immediate trigger for the sell-off in the dollar, traders said, was a jarring signal that suggested China might shift some of its enormous hoard of foreign currency reserves — worth more than $1.4 trillion, primarily in dollars and dollar-denominated assets — into other currencies to get a better return on its money.
Cheng Siwei, vice chairman of the Standing Committee of the National People’s Congress told a conference in Beijing on Wednesday:
“We will favor stronger currencies over weaker ones, and will readjust accordingly.”
A Chinese central bank vice director, Xu Jian, said the dollar was “losing its status as the world currency,” according to Bloomberg News.
Mr. Cheng later told reporters he was not saying China would buy more euros and dump dollars. But as markets opened across Europe, those words echoed as an invitation to sell the American currency.
The dollar fell to its lowest level against the Canadian dollar since 1950, the British pound since 1981, and the Swiss franc since 1995....
Amid the carnage, though, there were still several signs that the economy remains healthy. Productivity — a measure of how much the country produces for each worker — expanded more than expected in the summer, the Labor Department said, suggesting that the economy still has the ability to grow without stoking too much inflation.
The LYING GOVERNMENT'S Labor Dept.?
Brian Gendreau, an investment strategist at ING Investment Management:
“The mood is dreadful. People are saying, ‘Well, is that all? If they were that wrong about so much, is it possible they’re still wrong?’”
For Americans, the ramifications of a weak dollar are varied. World travelers feel the pinch as the price of European hotels and restaurants soar in dollar terms. At home, the prices of imported goods like German-made cars and French wine inch up. Some fret that a further weakening in the dollar could sow inflation, as the impact of higher-priced imports — oil in particular — filters through the economy....
A weaker dollar helps make American goods cheaper on world markets. Exports have been surging, giving companies in the United States a source of growing profits as sales soften at home.
So as you eat shit, Amurka, the MNCs are doin' JUST FINE!
Homeowners Feeling the Pinch of Lost Equity
Oh, and about that oil:
"Wide worries over oil prices; Analysts say burden could spur recession" by Robert Weisman/Boston Globe November 8, 2007
The price of crude oil is poised to cross the $100-a-barrel threshold, raising the prospect that the burden on consumers and businesses could be the final straw to tip the US economy into a recession.
How the oil market got to this historic milestone - with prices nearly doubling from their 2007 low of $50.48 and more than tripling since 2003 - is a twisting tale of hurricanes, speculators, refinery constraints, and geopolitical jitters. Many fear the fallout, long cushioned by robust growth, soon may be felt in everything from rising gasoline and heating bills to higher air fares to reduced corporate earnings.
Yeah, that last one is the important one.
Gasoline prices, which have lagged crude oil increases in recent weeks, are expected to move up as the holiday travel season approaches....
Oil refineries, squeezed by narrower profit margins, have been reducing capacity worldwide even as demand has grown, leaving the supply chain much tighter than it has been in the past.
Still GOUGING US, I see!
.... Speculators have contributed to the price run-up by snapping up oil futures, essentially betting that prices will rise."
Yeah, and bidding up the prices for no reason (except profit extraction from the American consumer).
