-Caveat Lector-
Begin forwarded message:
From: [EMAIL PROTECTED]
Date: September 20, 2007 1:18:33 PM PDT
To: [EMAIL PROTECTED]
Cc: [EMAIL PROTECTED], [EMAIL PROTECTED], [EMAIL PROTECTED]
Subject: Dollar Bottoms; Oil to $100/Barrel; CARLYLE & Arabs Will
OWN the STOCK MARKET
U.S. dollar sinks to lifetime low versus euro
Thu Sep 20, 2007 7:29pm BST
http://uk.reuters.com/article/usDollarRpt/idUKN2042711620070920
By Vivianne Rodrigues
NEW YORK, Sept 20 (Reuters) - The dollar tumbled to a record low
against the euro on Thursday and reached parity with the Canadian
currency for the first time in 31 years on expectations of more
cuts in U.S. interest rates after this week's sharp reduction.
The sell-off started in Europe and continued later in the day in
New York as investors and analysts concluded lower benchmark rates
in the world's largest economy will hurt the return on dollar-
denominated assets, diminishing the greenback's appeal.
Against the euro, the dollar breached the key $1.40 level and
almost touched $1.41 at around noon in New York. The euro zone
single currency also rose above 70 pence against sterling for the
first time in one and a half years.
Also on Tuesday, the Canadian dollar briefly reached parity with
the U.S. dollar for the first time since 1976, supported by lofty
commodity prices, a strong domestic economy and concerns about the
U.S. economic slowdown.
The Federal Reserve on Tuesday slashed rates for the first time in
four years by a half percentage point to 4.75 percent to shield the
U.S. economy from a deepening housing slump and credit market
turbulence.
"People are convinced the Fed will have to cut by more than 50
basis points," said Matthew Strauss, senior FX strategist at RBC
Capital Markets, in Toronto. The dollar's sell-off "is a
continuation of selling seen after the Fed's rate cut, and with the
dollar index closing in on all-time lows, people are looking for
reasons to target that level."
Remarks by Fed chief Ben Bernanke before a Congressional committee
had limited impact.
In midafternoon trading in New York, the euro had risen to a record
high of $1.4099, before surrendering some gains to trade up 0.8
percent on the day at $1.4074. The dollar was down 1.2 percent
against the yen to trade at 114.56 per dollar, on track for its
biggest one-day percentage decline in two weeks.
The dollar set a 15-year low against a basket of six major
currencies, at 78.45, in its biggest one-day drop in more than a
year. A move below 78.190 would take the dollar index to record lows.
The dollar touched a two-and-a-half-year low against the Swiss
franc. Dollar/Swiss franc was last at 1.1715, after going as low as
1.1688, its lowest level since March 2005.
BERNANKE'S WARNING
Fed Chairman Bernanke warned Congress on Thursday that raising the
ceiling on the size of loans government-sponsored mortgage finance
companies Fannie Mae and Freddie Mac can buy could undermine market
discipline.
He also said soft home prices and mortgage rate resets mean that
subprime adjustable-rate home loan delinquencies will rise further.
"It's pretty clear (Bernanke) expects more weakness in the housing
sector but the fact that he says the market is self-correcting
leads me to believe he expects the system to work itself out
without too much help from the Fed," said Dustin Reid, senior
currency strategist at ABN AMRO in Chicago.
Of the euro move, Reid said, "It's uncharted territory, and when
you're in uncharted territory, it's difficult to look at every
little wobble in price and try to attribute it to a specific event
or fundamental."
Sterling edged higher versus the dollar after Bank of England
Governor Mervyn King said that cutting interest rates at first
sight of every problem was not the way to go. Sterling/dollar rose
0.5 percent at $2.0099.
The dollar fell 1.2 percent against the Canadian dollar and last
traded around C$1.0018.
(Additional reporting by Steven C. Johnson and Nick Olivari in New
York)
---------------------
Gold hits 28-yr high on dlr fall, inflation fears
Thu Sep 20, 2007 8:44 PM BST
By Frank Tang and Atul Prakash
http://investing.reuters.co.uk/news/articleinvesting.aspx?
type=goldMktRpt&storyID=2007-09-20T194414Z_01_L20119906_RTRIDST_0_MARK
ETS-PRECIOUS-UPDATE-7.XML
NEW YORK/LONDON, Sept 20 (Reuters) - Spot gold prices surged to a
28-year high in European trade on Thursday as the dollar sank to an
all-time low against the euro and new highs in crude oil bolstered
inflation concerns.
Gold rose more than 2 percent to $738.30 an ounce, its highest
since January 1980, when it hit a record high of $850. By 3:09 p.m.
EDT (1909 GMT), bullion was quoted at $734.50/735.30, compared with
$721.10/721.90 in New York late on Wednesday.
Most-active December gold on the COMEX division of the New York
Mercantile Exchange settled up $10.40 or 1.4 percent at $739.90 an
ounce, dealing between $728.90 and $746.50 which marked the
loftiest level since 1980.
"The market was in two minds yesterday, jumping between $722 and
$726, but the euro's push through $1.40 against the dollar gave the
market fresh impetus to break up again," said Tom Kendall, metals
strategist at Mitsubishi Corporation in London.
Bill O'Neill, a partner in commodity consultant LOGIC Advisors in
Upper Saddle River, New Jersey, said that the Fed's latest rate cut
reignited investor fears about inflation and extended support to gold.
U.S. crude broke above the record $84 a barrel in afternoon
trading. Oil prices have been rising sharply this week on U.S.
supply concerns and storm worries.
Gold is usually seen as a hedge against inflation.
"Technically speaking, we are moving through to uncharted waters if
we breach $730 cleanly. And that would be very positive for gold
because it does open up the upside," said David Holmes, director of
metals sales at Dresdner Kleinwort.
"The scenario is quite bullish. There is still an underlying credit
concern that makes gold a sensible investment," he said.
A global credit crunch stemming from the U.S. high-risk mortgage
sector has left investors looking for safe parking places for their
cash, magnifying bullion's safe-haven status.
"Gold's fundamentals are very strong. The rate cut by the Federal
Reserve has brought more gold buyers back into the market on
expectations of a weaker dollar," said Michael Widmer, director of
research at Calyon Corporate and Investment Bank.
ETF GROWTH
Growth in bullion exchange-traded funds (ETFs) continued as
investors diversified their portfolios. Gold used to back
StreetTRACKS Gold Shares hit a record high of 577.10 tonnes on
Wednesday.
London-based ETF Securities said investment in its gold ETF had
jumped 240 percent in the past seven weeks, with total assets under
management exceeding $300 million. The product now holds nearly
350,000 ounces of gold, or around 11 tonnes.
"In light of the prospects for further Fed (rate) cuts and
potential for further U.S. dollar weakness, the recent increases
into the gold ETFs could continue," said John Reade, head of metals
strategy at UBS Investment Bank.
In investment news, Lyxor Gold Bullion Securities said on Thursday
it has introduced its bullion-backed exchange trade fund (ETF) in
Belgium and the Netherlands.
---------------------
Former Shell Exec Sees Oil Hitting $150
The past chairman of a major oil producer says diminishing
resources will accelerate the cost beyond reach but the industry is
ignoring the problem
by David Strahan and Andrew Murray-Watson
http://www.businessweek.com/globalbiz/content/sep2007/
gb20070917_292517.htm?chan=top+news_top+news+index_global+business
Lord Oxburgh, the former chairman of Shell, has issued a stark
warning that the price of oil could hit $150 per barrel, with oil
production peaking within the next 20 years.
He accused the industry of having its head "in the sand" about the
depletion of supplies, and warned: "We may be sleepwalking into a
problem which is actually going to be very serious and it may be
too late to do anything about it by the time we are fully aware."
In an interview with The Independent on Sunday ahead of his address
to the Association for the Study of Peak Oil in Ireland this week,
Lord Oxburgh, one of the most respected names in the energy
industry, said a rapid increase in the price of oil was inevitable
as demand continued to outstrip supply.
He said: "We can probably go on extracting oil from the ground for
a very long time, but it is going to get very expensive indeed. And
once you see oil prices in excess of $100 or $150 a barrel, the
alternatives simply become more attractive, on price grounds if no
others."
--------------------
Battle heats up btwn U.S. Nasdaq and Dubai Borse
Vivek Ahuja
20 Sep 2007 updated at 18:07
http://www.financialnews-us.com/?page=ushome&contentid=2348784729
Gulf arch-rivals Dubai and Qatar today threw their weight behind
competing Western factions on both sides of the Atlantic in a fresh
wave of global stock exchange consolidation.
Nearly half of the outstanding shares in the London Stock Exchange,
which has already agreed a European tie-up with Borsa Italiana, are
now in the hands of Gulf-based shareholders, after the investment
arm of Qatar's government snapped up a 20% stake this morning.
The move by the Qatar Investment Authority, which it confirmed in a
statement to the stock market, followed a breakthrough in the
battle between Borse Dubai and Nasdaq for control of Nordic
exchange group OMX. The Dubai group is to buy 28% of the LSE from
Nasdaq as part of a complex deal that will give control of OMX to
the US exchange.
Larry Tabb, founder and chief executive of consultancy TABB Group,
said: "My personal thought is that agreement is not the endgame.
The endgame is that eventually either Dubai buys both Nasdaq and
LSE or one of these exchanges winds up the parent and creates an
effective competitor to the New York Stock Exchange."
President Bush said a national security review will be conducted on
Borse Dubai's planned investment in Nasdaq. He said in a press
conference cited by Reuters: "We are going to take a good look at
it as to whether it has any national security implications involved
in the transaction."
The LSE, whose chairman Chris Gibson-Smith was among the original
board members of the Qatar Financial Centre Authority in April last
year, welcomed the Qatari investment.
The UK exchange said today: “The QIA and the exchange have a long-
standing relationship based on plans to develop the Qatar
marketplace for regional leadership in financial services.”
LSE chief executive Clara Furse said: “The QIA has an impressive
track record of making substantial long-term investments in growth
companies. We look forward with confidence to delivering a full
agenda and our wider global strategy.”
Today’s developments leave the LSE allied with Borsa Italiana in
Europe and with Qatar in the Gulf, while Nasdaq, the LSE’s former
hostile suitor, is set to join forces with OMX in Europe in a move
that will hand Borse Dubai a near-20% stake in the combined group.
----------------
Carlyle appoints new regulatory chief
By Stephanie Kirchgaessner in Washington
September 18 2007
http://www.ft.com/cms/s/
6f80104e-6631-11dc-9fbb-0000779fd2ac,dwp_uuid=e8477cc4-c820-11db-
b0dc-000b5df10621,Authorised=false.html?_i_location=http%3A%2F%
2Fwww.ft.com%2Fcms%2Fs%2F6f80104e-6631-11dc-9fbb-0000779fd2ac%
2Cdwp_uuid%3De8477cc4-c820-11db-
b0dc-000b5df10621.html&_i_referer=http%3A%2F%2Fnews.google.com%
2Fnews%3Ftab%3Dwn
Carlyle will break new ground in the US private equity industry on
Wednesday when it announces the appointment of a top Washington
lawyer to manage its dealings with regulators and politicians
around the world.
The appointment of David Marchick, a partner at Covington &
Burling, underlines how the expansion of Carlyle, which now holds
more than 50 per cent of its investments outside the US, is forcing
the Washington-based firm to confront a host of regulatory and
political issues in numerous jurisdictions.
...
Carlyle Group Sells Stake to Abu Dhabi
The deal comes on the same day Dubai and Qatar announce they hope
to acquire controlling interest in Nasdaq and London Stock Exchange
http://blog.washingtonpost.com/washbizblog/2007/09/
carlyle_group_sells_stake_to_a.html
The Carlyle Group, the District's private-equity giant, announced
that it is selling a 7.5 percent share of its general partnership
to an investment group owned by the government of Abu Dhabi -- one
of a flurry of deals today involving Arab governments and U.S. and
British financial assets. See story.
The $1.35 billion sale to the Mubadala Development Company marks
the second time Carlyle has brought an outside owner into its
highly profitable fold. The purchase price values Carlyle, a high
profile equity player with longstanding ties to the Middle East, at
roughly $20 billion, less a 10 percent discount for the new
partners. That is more than six times what Carlyle was valued when
the California public pension system purchased about 5 percent of
the company in 2000.
Mubadala is wholly owned by the government of Abu Dhabi, the
capital of the oil-rich United Arab Emirates. As part of the deal,
Abu Dhabi will make a separate $500 million investment into Carlyle
funds.
Reminiscent of the Chinese government's recent $3 billion
investment into Blackstone Group, a New York-based private equity
firm, the money from Abu Dhabi "will add to Carlyle's capital base,
strategically expand our business and be used for additional
investments," Carlyle executives said in a statement.
The company, which has $76 billion under management, has had some
bumps this summer. It pulled one of its properties, Insight
Communications, off the market after bidders that included Time
Warner Cable had difficulty getting enough bank financing. And in
another recent blow, Carlyle made available $200 million in loans
to shore up Carlyle Capital, a European affiliate that has been
squeezed by the credit-market turmoil.
The Carlyle deal comes on the same day that the governments of two
other Arab nations, Dubai and Qatar, announced they were buying
large shares of the Nasdaq and London Stock Exchanges -- recycling
the cash from recent high oil prices into strategic global
investments.
-- Thomas Heath and Howard Schneider
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