BOE has been discussing the possibility of 200 bps rate cut

Prior to 150 bps rate cut on November 6 the board members of Bank of England actually have been discussing the possibility of 200 bps rate cut. It’s the largest single rate cut since 1997. Here is a part of the Minutes of the Meeting:

The projections in the Inflation Report implied that a very significant reduction in Bank Rate – possibly in excess of 200 basis points – might be required in order to meet the inflation target in the medium term. However, a number of arguments were discussed for not moving Bank Rate by the full extent implied by those projections.

Read the full transcript here

Related Posts :

BOE, ECB and Swiss slash interest rate

Sources :

FT.com: Bank of England discussed 200bp rate cut, November 19 2008 21:31

Please Note!

This is generally never true. Before buying or selling any asset you should do your own research and reach your own conclusion. See my Disclaimer on the bottom for more information.

You are welcome to republish this article, or any portion thereof.
Please, cite the actual/original source. I would be grateful if you could link back.

Citigroup Inc. (C) will take $3 billion write-down in the Q4

Pitt Kelton expects Citigroup Inc. (C) will write-down $3 billion in the fourth quarter as reflection of higher credit cost. The Brokerage widened its estimates for Citi’s quarterly loss for 79 cents a share from 8 cents while earning view of the company was cut to 28 cents a share from 69 cents.

Pitt Kelton doubted that Citigroup will be able to continue to find buyers for its business units, which is necessary to reinforce the capital base against further credit losses and write-downs. The Stock prices target was cut to $16 from $20.

On Wednesday, Citi acquired the remaining $17.4 billion in assets held by structured investment vehicle (SIV) it already supports as the bank moves to unwind the troubled funds. The Assets were acquired at the current fair value on net of cash. The Value fell to $17.4 billion from $21.5 billion as of September 30, fell 4.1 billion or 19%. The Fell value consists of $3 billion loss from asset sales and maturities and the remaining $1.1 billion due to market value declines.

The Bank has recorded $2.8 billion loss in the third quarter and taken more than $40 billion write-downs. Citi also announced that it was cutting 53,000 headcounts in an effort to reduce expenses.

Chart courtesy of StockChart
Related Posts :

Citigroup to raise its credit card interest rate

Sources :

CNN Money: Citi in $17.4B move on troubled assets, November 19, 2008: 11:22 AM ET
Reuters: Citi to write down $3 billion in fourth quarter: Fox-Pitt, November 19, 2008 8:53am EST

Please Note!

This is generally never true. Before buying or selling any asset you should do your own research and reach your own conclusion. See my Disclaimer on the bottom for more information.

You are welcome to republish this article, or any portion thereof.
Please, cite the actual/original source. I would be grateful if you could link back.

Analysts cut profit estimates for about 48% of worldwide stocks

According to JP Morgan Chase & Co, analysts cut profit estimates for about 48% of worldwide stocks and predicted that US Stocks earning on the next year will be reduced by 60% from their estimated in four weeks through November 11 while 44% of their Europe stocks were downgraded.

In the current economic landscape there is only very little reason that a stock will be receiving upgrade rating. In the current quarter there were about 15% of reported US companies earning that missed analysts estimated while in the Western Europe there were about 8%.

S&P 500 index is expected will post 9.5% decline of the annual profit and will be followed by 11% rebound in 2009. DJ Stoxx 600 Index is expected will post 10% decline of the annual profit while its earnings will be growing 5.6% in 2009.

ETFs/Stocks :

ProShares Ultra S&P500 (ETF)     SSO   $22.18  - 2.45 (-9.95%)
ProShares UltraShort S&P500 ETF  SDS  $112.80  +11.25 (11.08%)

Related Posts :

Nov 13, 08 Market Recap-Deleveraging still rolls over the markets

Sources :

Bloomberg: Analysts Cut Estimates for Almost Half of Stocks, JPMorgan Says, November 19, 2008 06:37 EST

Please Note!

This is generally never true. Before buying or selling any asset you should do your own research and reach your own conclusion. See my Disclaimer on the bottom for more information.

You are welcome to republish this article, or any portion thereof.
Please, cite the actual/original source. I would be grateful if you could link back.

The Fed lowered forecast of US economic growth

The Fed lowered forecast of US economic growth on Wednesday. The Fed believed that GDP could be flat or grow by just 0.3% this year and could shrink to 1.1% next year. The Projections are lower than the delivered forecast on July.

This Projection is sharply lowered because of slowing economic activity. The Economic forecast even loses traction and jolt into reverse. The Fed also predicted that unemployment number will jump higher. The Economic downturn will be significantly. Accordingly, some the fed officials suggested additional easing policy could be well appropriate at the future. Many economists expected that another rate cut could be forthcoming in the next FOMC that was scheduled on December 16 although some the fed official worried about effectiveness of the previous rate cut to stimulate the current financial market confidence.

The Fed opened direct loans to the fed for all banks on October as liquidity crisis choked all financial sectors and began to spread to industries sector.

Related Posts :

10/29/2008 Market Recap - The Fed interest rate cut
Fed Raises Interest Rate Paid For Excess Bank Reserves

Sources :

StarTribune: Fed sharply lowers economic forecasts for this year, 2009; signals another rate cut coming, November 19, 2008 01:53 PM

Please Note!

This is generally never true. Before buying or selling any asset you should do your own research and reach your own conclusion. See my Disclaimer on the bottom for more information.

You are welcome to republish this article, or any portion thereof.
Please, cite the actual/original source. I would be grateful if you could link back.

World Bank cut its forecast for Russia

The World Bank halved its forecast for 2009 of Russia economic growth yesterday as the global financial crisis push oil prices down and companies cut its investment. The latest official data released on November 12 showed that the country’s currency reserve has drained by about 20%. The Russia Central Bank has defended ruble by $57.5 billion in the period September and October. The Current foreign reserve consists of 45% in USD, 44% in Euro, 10% in GBP and 1% in JPY.

The Russian Economic Boom has been halted by dropping oil prices and foreign capital flight.

The Bank forecast that inflation will reach 13.5% this year because of $200 billion stimulus package, so the 11.8% of inflation target cannot be reached. The package is aimed to bolster banks, retailers and construction companies. The Fundamental of current macroeconomics will cause weakening ruble in the short term. But gold and foreign currency reserve should provide an adequate cushion for the economy even though the reserve fell.

The Banks expected the economy will grow 6% this year and 3% in the next year.

ETFs/Stocks :

Market Vector Russia ETF Trust  (RSX)

Related Posts :

Russia will likely face a very hard landing

Sources :

The International Herald Tribune: World Bank halves Russian growth forecast for 2009, November 18, 2008

Please Note!

This is generally never true. Before buying or selling any asset you should do your own research and reach your own conclusion. See my Disclaimer on the bottom for more information.

You are welcome to republish this article, or any portion thereof.
Please, cite the actual/original source. I would be grateful if you could link back.

Top 5 oil stocks for long-term investment

The Current global economic downturn causes weakening consumer spending, it will be affecting demand for oil. Moreover, the current credit and liquidity crisis causes companies are getting more difficult to access loans because banks are concerning to raise its capital and reserve as they are also not willing to lend because of the current high risk of default.

Accordingly, oil miners are forced to curb their budget. As a result, expansion projects of oil and gas production become more difficult to be funded. OPEC members agreed to cut its output on October 24 to prevent continuing the falling oil prices. But the action may be not enough to reverse the downside oil prices trend. Tina Vital, A Standard & Poor's analyst, expects will be there a series of supply cuts.

But the global demand for oil will start to recovery along with the global economic recovery. When oil demands bounce back to normal as oil supplies remains flat, the prices will follow to raise. In that time, oil miner shares will become very attractive for investors.

From the October 9, 2007, stock market peak through November 14, 2008, five of the seven subindustries in the S&P 500 Energy sector performed worse than the broader market, logging declines of 43% to 70%, compared a 42% drop for the S&P 500

The Integrated Oil & Gas group, which represents 65% of the market capitalization of the S&P Energy sector, is currently trading at a price-earnings ratio of only 6.4 times, based on estimated 2009 EPS, versus 9.4 times for the broader market. In addition, the subindustry is providing a dividend yield of 2.7%, vs. a 3.1% yield for the S&P 500.

The Following chart is S&P 1500 Integrated Oil & Gas Index vs. the S&P 1500, as of November 14, 2008.

Tina Vital has a positive fundamental outlook for the Integrated Oil & Gas group, reflecting attractive fundamental valuations. She expects the so-called U.S. supermajor oil companies to post 2008 profits up 36% from 2007. The Large-Cap stocks in the S&P 1500 Integrated Oil & Gas subindustry index which carry Top S&P investment rankings are:

1. Chevron Corp. (CVX) – Strong Buy
2. ConocoPhillips (COP) – Strong Buy
3. ExxonMobil (XOM – Strong Buy
4. Marathon Oil (MRO) – Buy
5. Occidental Petroleum (OXY) – Buy

Related Posts :

ExxonMobil - Big oil holds big cash
Where oil prices are heading

Sources :

BusinessWeek: Should You Explore Energy Stocks?, November 19, 2008, 12:01AM EST

Please Note!

This is generally never true. Before buying or selling any asset you should do your own research and reach your own conclusion. See my Disclaimer on the bottom for more information.

You are welcome to republish this article, or any portion thereof.
Please, cite the actual/original source. I would be grateful if you could link back.