Wednesday, December 13, 2006
More than twice as high as Berlin Wall and 30 times as long...
WE'VE MOVED!!! NEW LOCATION!!! CRIMES AND CORRUPTIONS OF THE NEW WORLD ORDER NEWS http://twitter.com/mparent77772
posted by Terry Scott at 8:17 AM
Related Commodities Bull Run to Last Until 2014 - 2022 --- Markets |
Dec. 12, 2006, 12:43PM
Barclays: Investors Shift to Commodities
© 2006 The Associated Press
Barclays' second-annual commodities investor survey showed marked changes, over the course of one year, in the way investors view the commodities market and its role in their portfolios.
The survey of the investment bank's clients took place at two conferences each year in 2005 and 2006, one in Barcelona, Spain, and another in New York. Survey participants included large pension funds, retail distributors and _ carrying particular weight in New York _ hedge funds.
Investors are making "a very clear shift into having at least some commodities," said Kamal Naqvi, Barclays Capital director of commodities sales.
About 50 percent of survey respondents in Europe said their portfolios contained no commodities exposure in 2004 and 2005. When asked what percentage of their portfolio would be made up of commodities over the next three years, the number saying "zero" dropped to just 7 percent.
New York respondents indicated a significant shift into commodities, with more than 50 percent saying they'd seek to make commodities more than a tenth of their total portfolio.
The term "commodities" covers most raw materials, including precious metals such as gold, crude oil, industrial metals like copper, agricultural products and others. Aside from actual trading of physical commodities, investors often get exposure to the sector through index funds, which track the movement of a given basket of commodities without purchasing the physical asset.
However, investors are increasingly shifting their funds from passive, long-only indexes into a mixture of passive and active management and into structured commodity products, according to the survey. Those products could include one that follows Chinese demand for industrial metals or others structured more like equity investments, with a fixed-income payout.
There has been a "broadening out in the way investors can get exposure to commodities," said Barclays research analyst Kevin Norrish.
More homes are going, going, gone |
"You-know-you-will-it's-like-Nike-just-do-it," Richards said in the jammed hotel ballroom here recently as he hawked a two-bedroom, one-bath fixer-upper. Less than a minute later, the house was sold. In two hours, 61 were auctioned, all of them foreclosures — homes whose owners had defaulted on their mortgages.
The scene is being repeated coast to coast as foreclosures tick up nationally. About 4.7% of homeowners were late on their mortgage payments in July through September this year, up slightly from 4.4% in the third quarter last year, the Mortgage Bankers Association said Wednesday.
The delinquency rate has fluctuated between about 4% and 5% for the past five years. This latest rate, though, is the highest since the end of 2005, and it's expected to rise gradually through most of next year. "We do expect to see continued modest increases in delinquencies and foreclosures over the next few quarters, mid- to late-2007, as the housing market bottoms out and then begins recovering," said Doug Duncan, MBA's chief economist.
One of main factors pushing up foreclosures: the number of borrowers who've fallen behind on their adjustable-rate subprime loans — high-interest mortgages for those with impaired credit. Those borrowers account for about 4% of all mortgages. Their loans typically start with low "teaser rates" that begin rising after a year or two, pushing up the monthly payments sometimes beyond what the borrower can afford.
"In California, I saw a billboard that said, 'Own the home you want, not the one you can afford,' " says Thomas DiMercurio, a Denver real estate broker who specializes in bank-held foreclosures. "That was so silly."
ARMs cause problems
Nearly 14% of subprime borrowers with adjustable-rate mortgages (ARMs) were behind on their payments last quarter, the highest rate since the start of 2003. That figure is all but sure to rise next year, when at least $1.2 trillion in ARMs will reset to higher rates. About half that amount is expected to be refinanced into lower-rate fixed or adjustable loans, Duncan says.
Already, refinance applications have reached their highest point since September 2005, the MBA said Wednesday, as rates for 30-year, fixed-rate mortgages have unexpectedly fallen to their lowest since January.
About 1 in 10 homeowners in California with a subprime ARM was behind on mortgage payments in the third quarter. The rate is twice that in states such as West Virginia, Michigan and Alabama, where job losses have battered the housing markets.
The loss of a job is the No. 1 reason people go into foreclosure, followed by health problems and a death in the family. Typically, a lender will start foreclosure proceedings after a borrower misses payments for three months in a row. The homeowner can try to sell the property first. But that can be hard in areas where home sales are falling.
That's what happened to Bill and Dana Pittman in Denver. Dana lost her teaching job last year, then needed surgery for a brain tumor. The couple managed their mortgage payments with Bill's wages as an auto mechanic and an inheritance from Dana's parents.
When the inheritance ran out, they fell behind. "I should have tattooed across my forehead, 'Real estate stupid,' " says Dana, 51.
She says she wrote "a letter of hardship" to the mortgage company last summer, but "It was, like, 'Oh, well, too bad. We want our money.' "
To stave off foreclosure on their suburban home, the Pittmans have been trying to sell a small vacation home they own in a remote valley three hours south of Denver. But with no takers despite a cut in the asking price, they don't expect to sell it before they put their main home up for auction on Jan. 3.
If so, they say they'll have to make their vacation house their new home, even though it's more than an hour's commute from the closest towns where they could find jobs.
"It was supposed to be our retirement home," Dana says.
Hardest-hit areas
While Colorado's delinquency rate of 3.6% is below the U.S. average, there are areas such as Denver where a spike in foreclosures has caused considerable concern among residents and regulators.
Not that all foreclosures reach the auction block. Some owners are able to sell or refinance to pay off their debt. Some lenders permit borrowers who are in trouble to tack missed payments onto the end of the loan while they try to resolve their financial difficulties.
The hardest-hit states are Mississippi and Louisiana, where homeowners are still struggling to recover financially from Hurricane Katrina. But other states that have lost auto, airline and other jobs have also seen jumps in foreclosures and delinquencies. Among them: Michigan, Indiana and Ohio.
Noelle Knox reported from McLean, Va.
By Quentin Webb
LONDON (Reuters) - Financial markets are set for a rougher ride in 2007 and risk a re-run of this May's turmoil, as more dollar weakness helps spur a rise in volatility, Standard & Poor's chief European economist warned on Wednesday.
"We see 2007 as a year of temporary re-adjustment as far as real growth is concerned, but we also see financial markets experiencing much higher volatility in general, with more bumps along the way," Jean-Michel Six told a news conference.
"Those bumps could be specifically created by developments on two areas: foreign exchange markets and real estate."
After spiking earlier this year, measures of equity volatility have since fallen to their lowest levels in years. The Chicago Board Options Exchange Volatility Index, or VIX <.VIX>, dubbed Wall Street's fear gauge, hit a 12-year low in November.
S&P forecasts U.S. gross domestic product (GDP) growth will slow to 2.3 percent next year and the dollar will drop to an average of $1.37 against the euro
A combination of a high number of housing starts and slowing demand could cause housing market problems in European countries such as Spain, mirroring the housing slowdown in the United States, Six said.
"I would see increased volatility on the long end of the curve, as far as interest rates are concerned," Six said. "That is partly to do with how far the dollar is going to go down, and what will be the reactions in the U.S. to this situation.
Six said global financial markets were "still exposed" to a situation like the "emerging markets crisis" of early 2006. "That is something that could very easily repeat itself," he said.
Worries that U.S. policy-makers would have to raise borrowing costs sharply to quash rising inflation spurred a steep correction in stock and bond markets in May and June.
Emerging markets were among the hardest hit, as investors unwound "carry trades" that are based on borrowing in low-yielding currencies such as Japanese yen and investing in higher-yielding arenas like Iceland.
The MSCI index <.MSCIEF> of emerging market stocks shed 25 percent between May 10 and a low on June 14, although it has since regained almost all that ground.
In a report released simultaneously, S&P warned European credit quality would suffer in 2007 as companies continued to reward shareholders with buybacks, dividends and acquisitions.
Debt and leverage levels would rise, credit rating downgrades would again outstrip upgrades and defaults would tick up from very low levels, the rating agency warned.
"Abundant liquidities have led markets not to price credit risk in the same way they did in previous cycles," Six said.
Mordechai Vanunu is claiming that the ongoing restrictions on his freedom – including prohibition from even talking to reporters – are as a result of his having revealed that Israel has the bomb, something which the Prime Minister of Israel has now confirmed. The confirmation was not a mistake, but is a veiled threat to the rest of the world, particularly Europe (see also here or here, and here). The intentional ambiguity over the issue had been destroyed – no doubt in Zionist minds as part of a Baker-directed American Establishment ‘anti-Semitic’ plot – by Robert Gates, and the Israeli strategists had to fall back on Plan B, which is to try to make the most of the threat.
Vanunu makes an excellent point: if Israel doesn’t grant him his full freedom, shouldn’t it put Olmert in jail for at least the length of Vanunu’s sentence?
NEW YORK (Reuters) - Financial markets are vulnerable to a significant correction in the next 12 months that might be triggered by an event in the derivatives markets, a well-known municipal bond manager said on Tuesday.
"I will be very surprised if we don't get an accident in the next months," Thomas Metzold, who invests roughly $4.5 billion in the Eaton Vance National Municipals Fund, told the Reuters Investment Outlook Summit in New York.
"Whether it is in the credit default swap market or a leveraged buyout scenario, there is going to be a major default and all this liquidity that is out there can dry up pretty quickly," Metzold said.
Looking back to 1998 when hedge fund Long Term Capital Management collapsed, Metzold said the biggest problem was that LTCM had so much exposure to counterparties that none of them knew how much the others had. "And it all came tumbling," he said.
Even though lenders have become stricter since the LTCM debacle, Metzold said trillions of dollars of counterparty risk still exist "that no one really has their hands around."
In the swaps market, positions are often traded so frequently that the party that is ultimately responsible for the underlying risk is not always immediately known.
Although the fixed-income market may look "perfect on the surface," Metzold worried that "underneath it is boiling." Metzold, who has been investing in fixed-income securities for more than two decades, said he has a more bearish outlook than many of his competitors as he worries in particular that the dollar will continue to fall, foreign buyers will lose their taste for U.S. fixed-income securities, and eventually the situation will become a "snowball rolling down hill."
One of the biggest problems may be that investors no longer worry about risk, Metzold said. "I can't believe I haven't seen an editorial cartoon that shows a tombstone with the name 'risk,' rest in peace, because risk is dead," Metzold said.
"People don't believe they can lose money anymore," he added.
IAEA only worries about weapons that don't exist, see?
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13/12/2006 16:24 VIENNA, December 13 (RIA Novosti) - The UN nuclear watchdog said Wednesday it will not respond to Prime Minister Ehud Olmert's remark implying that Israel has nuclear weapons, something the Jewish state has never officially admitted.
In an interview with the SAT-2 television channel ahead of his visit to Germany Monday, Olmert said: "Iran openly, explicitly and publicly threatens to wipe Israel off the map. Can you say that this is on the same level, when you aspire to have nuclear weapons, as America, France, Israel, Russia?"
The remark, made against the backdrop of an Iran-hosted conference on the Holocaust, was widely interpreted as confirming Israel's nuclear power status, but Olmert's aides later dismissed that reading as unfounded.
Independent analysts have said Israel holds between 80 and 200 nuclear warheads, and may be the world's sixth-largest nuclear power, but Israeli authorities have never confirmed nor denied possessing a nuclear arsenal.
Israel and the West suspect Iran of pursuing a nuclear weapons program, and Olmert's hint was probably intended to deter the Islamic Republic from using its potential nuclear capability against Israel, some have argued.
Many analysts believe, however, that public confirmation of Israel's assumed nuclear status could trigger an arms race across the Middle East, undermining the global non-proliferation regime.
Sergei Markov of Russia's Public Chamber, for one, believes that Israel's going public about its nuclear arsenal would come as no revelation, and is unlikely to entail any sanctions on the part of the UN nuclear watchdog, but that it could represent a serious setback for non-proliferation.
"This may lead to a further softening of the nuclear non-proliferation regime, which, unfortunately, would be a very dangerous development indeed," Markov told RIA Novosti.
Iran and other regional foes of Israel have repeatedly accused the West of double standards in trying to prevent them from acquiring nuclear capabilities while turning a blind eye to Israel's alleged arsenal.