Monday Morning Market Predictions

Light, sweet crude for December delivery fell 32 cents to $63.83 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore.

Investors brushed off a 1.5 million barrel-a-day cut announced by the Organization of Petroleum Exporting Countries on Friday, focusing instead on falling crude demand as economies across the globe reel from the impact of a credit crisis.

The convergence of a housing collapse and a lockup in lending has created the worst financial crisis in more than a half-century. Alan Greenspan, who ran the Fed for 18 1/2 years, called it a “once-in-a century credit tsunami,” and conceded that he made mistakes that may have aggravated the economy’s slump.

With a recession seen as inevitable, if not already under way, any Fed rate cut would be aimed at cushioning the fallout.

That number, up from 1,200 a day a year ago, is a sign that the mortgage industry and government programs have done little to help troubled homeowners.

The mortgage market’s troubles have proved to be far more serious and intractable than most in government or the private sector had predicted a year ago.

The decisions were announced by IMF Managing Director Dominique Strauss-Kahn, who stressed that the 185-nation lending agency would act with speed to provide support for countries whose economies are being buffeted by the crisis.

Strauss-Kahn said the loan for Ukraine was designed to bolster confidence and noted that the assistance was sizable in relation to the country’s borrowing rights with the IMF.

Investors were hesitant to wade back into equities, worried a stream of economic data from the U.S. this week could bring more bearish news about the world’s largest economy and trigger another round of selling, analysts said.

“Investors aren’t totally convinced the worst is over yet,” said Alex Tang, head of research at Core Pacific-Yamaichi in Hong Kong. “We’re probably moving sideways this week and will see more volatility.”

The yen was the only currency mentioned in a brief G7 statement issued as it rallied to 13-year high against the dollar, threatening Japanese exports as world’s second-largest economy tumbles toward recession.

With Tokyo’s Nikkei share average hitting a 26-year low and share of Japan’s biggest banks tumbling on fears that they would have replenish capital, Finance Minister Shoichi Nakagawa said the G7 was worried about volatility in the yen.

A flurry of comments from top lawmakers came as investors dumped banking stocks on expectations they need fresh capital to offset losses in their stock portfolios.

The Nikkei average hit a 26-year low just before Prime Minister Taro Aso said the government will expand its bank bailout scheme and strengthen regulations on short-selling of stocks.

But the 75 basis point rate cut to 4.25 percent failed to lift share prices after they dropped their most on record last week on growing fears that the economy, along with company profits, will buckle under the strain of the downturn across world markets.

“What investors really want isn’t just a rate cut but measures to cure a liquidity squeeze,” said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities. “It is the nervousness in the market that keeps credit tight.”

Little that officials said could convince panicky investors that governments can stem the fast-spreading crisis that is menacing financial markets, economic growth and company earnings.

The yen continued to gain even after Group of Seven finance ministers on Monday singled out the excessive volatility of the currency, which is battering Japanese share prices.

While there are some encouraging signs that efforts to revive credit markets are beginning to gain traction and lending is slowly resuming, companies are sounding the alarm over the damage already done to their profits.

Japan’s Sony (6758.T) is finding fewer buyers for its cameras and televisions. French carmaker PSA Peugeot Citroen (PEUP.PA) is planning “massive” production cuts as demand fades. Online retailer Amazon.com (AMZN.O) is warning that holiday sales won’t be as strong as expected.

“A substantial financing package in support of these strong policies will be announced when the program is finalized in the next few days,” IMF Managing Director Dominique Strauss-Kahn said in a statement that did not indicate the size of the package.

“Participants will include the IMF, the EU, and some individual European governments, together with regional and other multilateral institutions,” he added.

Four banks, including PNC Financial Services Group Inc (PNC.N), have already announced they are participating in the second round of capital injections.

Under the government’s $700 billion financial services rescue package, the Treasury Department will inject $250 billion of capital directly into banks in exchange for preferred shares and warrants.

So far this month, the Dow is off 22.8 percent, the S&P 500 is off 24.7 percent and the Nasdaq is down 25.8 percent — putting them on track for their worst month since the October 1987 crash. In the S&P’s case, this October could wind up being its worst month ever in the post-World War Two era.

Bears are expected to tighten their grip on Wall Street this week unless there are reassurances by the U.S. Federal Reserve and other central banks that authorities have what it takes to reduce the blows from the menacing economic downturn.

Citing people familiar with the matter, the Journal said the Fed questioned the counterparties in at least two instances in recent days.

Katie Spring, a spokeswoman for Citadel, said Citadel continues to have more than 30 percent of its investment capital in cash.

Zurich prosecutor Andreas Ochsenbein told the Sonntag newspaper his office had been in touch with UBS officials.

“There have been a few individual discussions, which, however, were not interrogations, either in form or content,” he was quoted as saying.

Japanese broadcaster NHK reported earlier that Mizuho Financial Group (8411.T) and Sumitomo Mitsui Financial Group Inc (8316.T), the country’s No. 2 and No. 3 banks, may also look to raise several hundreds of billions of yen.

Although Japanese banks have been relatively unscathed by the global credit crisis, the plunge in Japanese shares in the past few months is eating away at their capital bases because they hold a large amount of stock in client firms.

In an interview on NBC’s “Meet the Press,” McCain was asked about a suggestion by a Michigan economist that the government provide $15 billion cash to help the U.S. auto industry survive the financial crisis.

McCain noted the U.S. Congress recently authorized $25 billion in low-interest loans to help the industry retool to produce more fuel-efficient vehicles.

The rare intervention by the central bank was aimed at adding liquidity “in an illiquid market”, a Reserve Bank of Australia (RBA) spokesman said.

The Aussie was trading at 0.6194 to the greenback at midday (0100 GMT), down nearly two US cents from Friday’s domestic close of 0.6388, after hitting a five-year low of 0.6060 in US weekend trade, its weakest since April 15, 2003.

Brown said he was annoyed that other governments had not agreed to implement cross-border supervision of banks, some 10 years on since he had first argued the case.

Brown, who was Britain’s finance minister for a decade under Tony Blair until June 2007, has won international praise for his swift action plan for dealing with the current worldwide credit crunch.

The problem at Gulf Bank was revealed by the Central Bank of Kuwait (CBK), which immediately suspended the company’s shares but said it “backs the bank and fully guarantees its deposits.”

Meanwhile, the government of the oil-rich emirate pledged to guarantee deposits in all local banks as the Kuwait Stock Exchange tumbled yet again, prompting traders to walk out.

With no taxes to pay and no commission charges, spread betting has increased in popularity as nervous investors worry about expanding their portfolios of company shares. If companies do sell shares then it is important to act fast and invest as quickly as possible, for the best chance of a good investment return. You need to look up the prices of different shares and decide what is best for you. If you were investing in a Finnish company, for example, then you would be looking for osakkeen hinta, which is the share prices of their stocks, making sure that whichever company you are investing in that you are ensuring that you have gathered all the information for a successful investment.

Rather than regular betting on a precise outcome, spread betting allows punters to gamble on a range of outcomes, with the accuracy of the wager determining how much is won — or lost.

As Europe and the United States clash over their leadership role in framing a new international financial architecture at the November 15 meeting in Washington, Asians feel they have much of a stake in the stability of the global system as the industrialized countries, the experts said.

“The big question is how you can restructure the international economic regime in a way that makes countries such as India and China feel that they not only have a stake but also have real influence,” said Eswar Prasad, former head of the China division at the International Monetary Fund.

Several Belgian media outlets reported Saturday that KBC had asked the Belgian government for the 3.5 billion euro (4.4 billion dollars) recapitalisation, with meetings scheduled throughout the weekend to find a solution.

“The government will examine, along with shareholders, what actions, if need be, are necessary so that the bank can respond in an appropriate manner to an exceptional situation on the financial market,” Prime Minister Yves Leterme told Belga news agency.

It identifies the banks as Duesseldorf-based WestLB and Hamburg-based HSH Nordbank.

“We have to arm the bank against the forthcoming storms,” said WestLB’s head, Heinz Hilgert, who plans to ask its supervisory body next month to use all the help made available as part of the rescue plan.

It is checking in particular whether it needs to ask for direct recapitalisation aid, Der Spiegel said.

In an opinion piece published in Flemish- and French-language newspapers, Prime Minister Yves Leterme said the fund could be used to acquire non-liquid assets.

The European Investment Bank (EIB) could “borrow the necessary means” for the fund, Leterme said, but added that banks that could benefit from them should “contribute” as “a sort of insurance premium.”

“Some of you … have come to me in the past weeks and told me that now, because of the financial crisis, it would be time to soften or even to abandon telecoms regulation,” Viviane Reding,the EU commissioner responsible for the information society and media, told a conference of operators in Venice.

“First of all, I firmly believe that regulation taking care of competition always has a positive effect on the economy. Times of economic difficulties are thus not a reason to suspend the principles of competition law,” she said according to remarks released in Brussels.

The investment is part of plans to extend the country’s railway network from the current roughly 78,000 miles to nearly 100,000 miles by 2010, Shanghai’s Oriental Morning Post reported.

The Beijing News quoted a rail official as saying that, while the network needed extending, the massive investment of 292 billion dollars was also intended to help lift the nation’s economy as it suffers amid the global woes.