•Stocks Worldwide Sink Most Since 1997; Government Bonds Rise on Bailouts
It's difficult to keep track of all the collapsing bank problems around the world. Banks in Belgium, UK & Germany needed to be saved by the governments. Citigroup (C) is taking over Wachovia (WB) at a bargain basement price. All this confusion among the biggest banks in the world is just too much for the markets to take.
•Citigroup to Take Over Wachovia Bank Business, Absorb Losses With FDIC Aid
•Morgan Stanley Agrees to Sell 21% Stake to Mitsubishi UFJ for $9 Billion
•Fortis, Bradford & Bingley, Hypo Real Estate Rescued as Bank Crisis Widens
•Goldman, Merrill Get Billions After Federal Reserve's AIG Bailout Loans
Economic reports keep coming, more are coming this week. Consumer spending was flat in Aug, worse than up 0.2% forecasted. Aug represents the back-to-school selling season (without the benefit of tax rebates), very dismal.
Oil is back down to 100 among all the confusion in the financial markets. If there is a reason, it is that economic slowdown will hurt demand for oil. Yesterday China said it was revising down its forecast for exports. They buy a lot of oil & much of their production is for export to the US. The Alerian MLP index dropped 11 to 225.
CLX08.NYM | Crude Oil Nov 08 | .. 100.09 | .. 6.80 (6.4%) |
GCV08.CMX | Gold Oct 08 | .. 895.40 | .. 12.50 (1.4%) |
In all this chaos, gold is back on the rise. Hate to give myself a plug, but my article at SeekingAlpha last week may be getting more attention as the flight to safety emotion kicks in:
http://seekingalpha.com/article/97160-buying-gold-what-is-high-and-what-is-low
Here's what it all comes down to, getting the package signed off by Congress & the President. One way or another it will happen, but agreeing to what is a fuzzy & confusing mess which can not solve all financial issues is not what markets want to see & hear.
•U.S. House Begins Debate on $700 Billion Financial Rescue; Close Vote Seen
Dow is starting the week below 11K, a level which had provided support in the past. This week, it may represent the ceiling.
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