While you're busy cutting and pasting article after article regarding the global economies you might take a second to read one of them. You'll find the common thread is that through each and every one of them the US is, either expressly or implicitly, forcasted to the better, if not the best, of all the ones referenced.
Even in this caption, you'll note "Dollar Hoarding ...... as the sun sets on the US Reich". Even for you, does this make any sense? On Oct 20, 8:43 am, "\"Lone Wolf\"" <[EMAIL PROTECTED]> wrote: > Dollar Hoarding Fuels Won, Rupee, Real Drop on Losses ............ as > the sunsets on the US Reich > By Kim Kyoungwha and Wes Goodman > > Oct. 20 (Bloomberg) -- Exporters in emerging markets are hoarding > dollars as losses on currency bets worsen the slump in the South > Korean won, Brazilian real, Mexican peso and India's rupee. > South Korean phone parts maker KJ Pretech Co. resisted converting > dollars to won after record swings in currency markets ruined its > trading strategies. In Brazil, Aracruz Celulose SA, a pulp producer, > Sadia SA, a poultry company and Grupo Votorantim, a cement maker, had > $2.3 billion in losses on hedges intended to protect earnings from > exchange-rate moves. India's biggest carmaker, Maruti Suzuki India > Ltd., plans to wait for a weaker rupee before bringing profits home > from outside the country. > Western Asset Management Co. and Union Investment, which manage more > than $800 billion combined, are selling emerging- market currencies as > the global economy slows and demand for dollars increases. Zurich- > based UBS AG predicts the rupee will weaken 2.1 percent to a record > low of 50 per dollar by March, adding to a 19 percent drop this year, > while the won will depreciate 6 percent to 1,400, extending a 29 > percent slump. > ``This is all caught up in the broader trend for the global grab for > dollars,'' said Edwin Gutierrez, a money manager who oversees $5.5 > billion in debt in London at Aberdeen Asset Management, the Scottish > fund company focused on emerging markets. ``Expect more weakness.'' > Currency Slump > The won slumped 9.7 percent on Oct. 16, the most since the > International Monetary Fund bailed the nation out in 1997. It has > gained 4 percent in the past two days to 1,315 as the government > mapped out a plan to support banks. India's rupee, which has slumped > for 10 weeks, fell 0.2 percent today to 48.96 after the central bank > cut its benchmark rate for the first time since 2004 today to support > its economy. > The Brazilian real closed at 2.1190 on Oct. 17, bringing its 2008 drop > to 16 percent. Mexico's peso ended the week at 12.88 per dollar, for a > year-to-date decline of 15 percent. > Emerging markets tumbled after Lehman Brothers Holdings Inc. filed for > bankruptcy, deepening a freeze in credit markets. Investors turned to > the safest, dollar-denominated securities even though the U.S. economy > is growing more slowly than those of developing nations and the > Federal Reserve's 0.5 percent benchmark interest rate compares with 5 > percent in South Korea, 8 percent in India and 13.75 percent in > Brazil. > Three-month Treasury bill rates fell to 0.02 percent on Sept. 17, from > 1.91 percent in August. The ICE futures exchange's Dollar Index, which > tracks the greenback against the currencies of six U.S. trading > partners, climbed 14 percent since June to 82.41, after falling 5.5 > percent in the first half. > Rising Volatility > Rapid moves in exchange rates are perilous for exporters because they > can't adjust their hedging strategies fast enough. The JPMorgan > Emerging Market Volatility Index soared to a record 32.01 percent on > Oct. 10 before ending the week at 25.63. The index never exceeded > 15.66 until Lehman's bankruptcy, according to data compiled by > Bloomberg. > ``It doesn't matter what your fundamentals are,'' said Sergey > Dergachev, an emerging-market money manager at Union Investment in > Frankfurt, which has $233 billion in assets. ``Investors are trying to > get rid of anything that is associated with market risk.'' > Central banks and governments around the world are pumping > unprecedented amounts of cash into the financial system to combat the > credit crisis. The moves are starting to bring down money market > interest rates, which may revive demand for higher- yielding assets > such as emerging-market currencies. > The three-month London interbank offered rate for dollars fell every > day last week, to 4.42 percent from 4.82 percent. The Dow Jones > Industrial Average climbed 4.8 percent for its best weekly performance > since 2003. > Debt Guarantees > South Korea's government yesterday announced it will grant a three- > year guarantee for as much as $100 billion in debts used by the > nation's lenders until June 30. > ``The Korean won may rise a bit as it helps local banks secure dollars > more easily,'' said Seo Chul Soo, a debt strategist in Seoul at Daewoo > Securities Co., South Korea's third-biggest brokerage. ``Still, it > can't solve the fundamental problem until the global financial market > stabilizes.'' > Brazilian losses on currency derivatives may reach 60 billion reais > ($27 billion), said Paulo Vieira da Cunha, a former central bank > director who is now a partner at New York- based hedge fund Tandem > Global Partners. Korean companies may lose as much as 3 trillion won > ($2.2 billion) on contracts that are only profitable when the currency > stays in a range, said Kwon Jae Min, a credit analyst at Standard & > Poor's in Hong Kong. > `At a Loss' > Taesan LCD Co., the Korean supplier of flat-screen parts to Samsung > Electronics Co., failed on Sept. 16 because of losses on derivatives, > financial instruments derived from stocks, bonds, loans, currencies > and commodities, or linked to specific events like changes in the > weather or interest rates. KJ Pretech is losing $383,000 a month on > similar trades. > ``We are making up for currency losses with dollars from overseas > sales,'' Lee Jeong Dae, head of the Hwaseong-based KJ Pretech's > finance team, said in an Oct. 14 telephone interview. ``For now, it's > manageable but we're at a loss how to get it through should export > orders fall.'' > Mumbai-based Sundaram Multi Pap Ltd., which makes school note books, > is one of 12 companies that filed lawsuits against banks accusing them > of hiding risks on the currency products they marketed. Citic Pacific > Ltd., the Hong Kong arm of China's biggest state-owned investment > company, said today it may lose as much as $2 billion from > unauthorized currency bets. Mexico City-based Controladora Comercial > Mexicana SAB, the country's third-largest supermarket chain, filed for > bankruptcy last week because of losses linked to the peso's drop. > `Bad Trades' > ``The unwinding of these bad trades is causing all types of > problems,'' Tony Volpon, chief economist at Sao Paulo-based brokerage > CM Capital Markets, wrote in a note to investors last week. The banks > that sold the trades also ``hedged themselves,'' exposing them to > similar funding calls, he wrote. > The won was Asia's best-performing currency in the four years to Oct. > 31, 2007, soaring 31 percent to a decade high of 899.60 per dollar. > That encouraged companies to buy contracts that lock in an exchange > rate or profit from a drop in dollars. > South Korea's banks were the main sellers of the contracts. They > borrowed dollars and converted them to won because they also wanted to > fix a price for the U.S. currency to limit their exposure. That > contributed to an almost tripling of the nation's external debt due in > a year to $176 billion between the end of 2005 and June 30 this year. > There's a more than 50 percent chance Korean banks won't be able to > find foreign funding, threatening their ability to repay short-term > debt, S&P said in an Oct. 15 report. > Slowing Economies > Emerging market countries must still contend with a slowing global > economy. The IMF's World Economic Outlook forecast this month that > global growth will weaken to 3 percent in 2009, from 3.9 percent this > year and 5 percent in 2007. That would mean a world recession under > the fund's definition. > ``India is still not going to get capital flows when the global > liquidity conditions begin to ease,'' said Ajay Seth, chief general > manager of finance at New Delhi-based Maruti Suzuki, which sells its > Alto small car in Europe. The rupee will fall to 49 per dollar again > ``very soon,'' he said. > Slowing exports and rising import costs prompted South Korea's central > bank to forecast a $9 billion deficit in its current-account this > year. Brazil is forecasting a $28.8 billion deficit in the broadest > measure of trade. > ``There's a funding problem in dollars worldwide,'' said Rajeev De > Mello, head of Asian bonds in Singapore for Western Asset, which > manages about $600 billion. > To contact the reporters on this story: Kim Kyoungwha in Beijing at > [EMAIL PROTECTED]; Wes Goodman in Singapore at > [EMAIL PROTECTED] > Last Updated: October 20, 2008 06:47 EDT --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. 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