Tuesday, 3 June 2008

:: Jun 3 GLOBAL MARKETS-Asian shares fall on credit woes, Lehman report

Tue Jun 3, 2008 3:17am EDT

Market News

(Repeats to more readers in Asia) (Updates prices, adds European outlook, comment)

By Jason Subler

SINGAPORE, June 3 (Reuters) - Asian stocks fell on Tuesday, led by financial firms and exporters, as renewed worries about further damage from the global credit crunch prompted investors to seek shelter in safer assets such as government bonds.

Shares extended early losses after the Wall Street Journal reported that Lehman Brothers (LEH.N: Quote, Profile, Research) may raise another $3-4 billion in fresh capital, suggesting it could post its first quarterly loss since going public. (Click on [nBNG236497] for more details.)

European stocks also opened lower, with the FTSEurofirst 300 index of that region's top stocks falling 0.4 percent in early trade.

The Lehman report added to credit worries triggered by a spate of negative news overnight, including ratings agency Standard & Poor's downgrading the debt ratings of three major U.S. investment banks, sparking selling in the dollar, weighing on Asian stocks and boosting demand for safe-haven government bonds.

"We're going to go back perhaps to a more fragile view about credit markets and equity markets," said Sean Darby, an equity strategist at Nomura in Hong Kong.

"Summer's around the corner, and I suspect that markets are going to drift off. They won't necessarily touch the January levels, but we'll see these markets still produce negative returns for the best part of Q2," he said.

/... http://www.reuters.com/article/marketsNews/idCNTSP2422920080603?rpc=44&sp=true

ozymandius Donating Member (1000+ posts) Click to send private message to this author Click to view this author's profile Click to add this author to your buddy list Click to add this author to your Ignore list Tue Jun-03-08 10:41 AM
Response to Original message
1. Market WrapUp: Fish or Cut Bait

Last week the buzz was all about Scott McClellan’s new tell-all book, What Happened. One of the key points former Press Secretary McClellan made in his book – which is frequently mentioned on this site and in this space -- was ‘the failure of the press to ask the critical questions and report accordingly.' In referencing how the Bush Administration generally viewed the press, McClellan added,

“If the press had any useful role at all, writes McClellan, it was as intermediaries in a propaganda campaign…”

Speaking of propaganda campaigns, haven’t we all heard enough utterances of Federal Reserve lackeys? On May 28, 2008, Dallas Fed President and current FOMC member Richard Fisher had the gall to ‘lay on’ this disingenuous clap-trap last week as he stood before the Commonwealth Club of California:

“I am also not going to engage in a discussion of present monetary policy tonight, except to say that if inflationary developments and, more important, inflation expectations, continue to worsen, I would expect a change of course in monetary policy to occur sooner rather than later, even in the face of an anemic economic scenario. Inflation is the most insidious enemy of capitalism. No central banker can countenance it, not least the men and women of the Federal Reserve.”

Notice how Fisher speaks about the importance the Federal Reserve places on inflation expectations? Here, Fisher reveals how the Fed could care-a-less about people’s reduction in living standards through actual debilitating price increases which have already occurred, so long as they don’t realize what is occurring and incorporate this reality into their expectations going forward. Ladies and gentlemen, this is akin to worrying about the welfare of horses AFTER they’ve bolted from the barn. It was the Fed’s solemn duty to ensure that the barn doors were secure in the first place!


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