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Stock Market Update - 1:30pm
Posted: February 8, 2008 at 2:38 pm by Chuck
The market continues to weaken on economic signs that recession is here. University of Michigan Director of Economics Studies (the people who issue the consumer confidence reports) stated in a Reuters article today that in their view a recession is already here. He stated “This is no ordinary recession… The aftereffects will last much longer than the typical downturn”
Another news item, this one very concerning and has the potential of doing serious damage to the economy is today OPEC said that they may abandon the US dollar peg to the price of oil. Instead oil will be based on the price of the Euro. This news has sent the value of the US dollar sharply lower over the past hour. If OPEC is considering moving oil pricing to another currency this says that the confidence in the US dollar is continuing to weaken. And they feel they need to move oil prices to a more stable currency.
And credit losses are being discussed again as being much larger than already stated. And we also received some ratings downgrades on CDO’s at MBIA as well.
Preservation of capital remains priority 1
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I noticed your suggestion that there might be something special coming in the news after trading hours.
Do you think that the decreased production in North Sea and Nigeria along with the possibliity that OPEC wants to keep the price per barrel between $80 - $85
Hello Guy…
I did not mean that something would happen today. What I meant was that IF any of the ratings agencies are going to issue a significant downgrade of the bond inserers, Ambac or MBIA they would most likely do it on a Friday after markets close. That way the impact will have time to be ansorbed before trading begins on the following Monday. It is just my thoughts on how it would play out if they were to do it.
Regarding the Oil prices I’ll have to look into that one. But one thing I can say is that Russia wants to keep crude prices up. Russia has a lot at stake should the crude prices fall to much..