I'm talking about all the companies combined as a whole I wasn't talking about any particular company. For instance investment banks such as goldman sachs currently trade as junk on the bond market as they are leveraged like mad. Obviously the chances of nestle going under are slim to none. :toast:
Everything's okay guys just stay the course, should be several more of these on the way down. Also for your rate cut question basehead. This guy just answered your question a rate cut will not be necessary barring a "calamity." So like i said in essence they will be saying game over things are really if they cut rates.
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Poole Says No Subprime Impact Yet on `Real Economy' (Update2)
By Anthony Massucci and Kathleen Hays
Aug. 15 (Bloomberg) -- Federal Reserve Bank of St. Louis President William Poole said there's no sign that the subprime- mortgage rout is harming the broader economy and an interest-rate cut isn't yet needed.
``It's premature to say that this upset in the market is changing the course of the economy in any fundamental way,'' he said in an interview in the bank's boardroom. ``Obviously, there could be an impact, but we have to rely on some real evidence.''
Barring a ``calamity,'' there is no need to consider an emergency rate cut, Poole said. His comments were the first by a Fed official since the U.S. central bank joined counterparts in Europe and Asia to inject emergency funds after a surge in money- market rates. The Fed has added $71 billion of reserves in the past five trading days.
Poole, 70, said businesses have maintained their hiring and investment plans and banks have sufficient capital to weather the credit-market turmoil. The St. Louis Fed chief stressed that the best course is for policy makers to assess the latest economic data when they next meet Sept. 18. The comments contrast with the certainty that traders put on a rate cut next month.
``If the data confirm the market's view that the economy is sagging, we'll have to decide whether to share that view,'' said Poole, who votes on the rate-setting Federal Open Market Committee this year. He cited the monthly jobs, retail sales and industrial production reports as key gauges he'll be watching.
Widest Since 2001
The yield on the September federal funds futures contract closed at 4.95 percent today, indicating at least a quarter-point reduction in the Fed's target. The benchmark two-year Treasury note yielded 4.29 percent, the furthest below the Fed's benchmark since 2001, when policy makers were lowering rates.
``There's no way the Fed is going to reduce interest rates before the meeting,'' said former Fed Governor Lyle Gramley, now senior economic adviser at Stanford Group Co. in Washington. ``Bill is just being realistic that we haven't seen anything going on in markets yet that would warrant that kind of action.''
Poole acknowledged that the credit-market turmoil will ``stretch out'' the ``adjustment'' in the housing industry. He said he couldn't predict how long the downturn will last.
The upheaval in credit markets was caused by deepening losses on securities backed by U.S. subprime mortgages. BNP Paribas SA, France's biggest bank, shocked investors Aug. 9 when it halted withdrawals from three funds just a week after its chief executive officer said the lender wasn't at risk.
Stocks Decline
While money market rates have retreated, stocks have continued falling this week on concern a drop in lending will hurt economic growth. The Standard & Poor's 500 Index has fallen 6.1 percent in the past week, closing at 1,406.70 today.
Poole rebutted comments from some Fed watchers that the central bank may be out of touch with market developments. The criticism followed comments the St. Louis Fed chief made to reporters on July 31 that the slump in stocks was ``a typical market upset.''
``No one has called up and said the sky is falling,'' Poole said today. ``As I talk to companies, their capital spending plans are intact.''
Poole joined in the unanimous decision by Fed policy makers to keep the benchmark rate at 5.25 percent for a ninth straight meeting on Aug. 7. Officials said in a statement while risks to growth had increased, citing ``volatile'' financial markets, inflation remained the predominant concern.
Fed Response
Three days later, officials rushed to contain a crisis of confidence in markets, issuing a statement and pledging to inject funds ``as necessary'' to steer the benchmark federal funds rate toward the 5.25 percent target. The Fed also highlighted that direct loans were available through the Fed's discount window.
The St. Louis Fed chief said today that ``we will supply more cash as necessary'' to meet short-term demand for funds. He noted that ``we're very much in touch with the markets.''
Poole said he didn't regret that the Aug. 7 statement retained a bias against inflation. He also said that while consumer price gains are ``moving in the right direction,'' the ``job is not done.''
Inflation has slowed for four straight months under the Fed's preferred gauge, which excludes food and energy costs. The core personal consumption expenditures price index rose 1.9 percent in June after a revised 2 percent gain in May, the Commerce Department said July 31.
Poole, who plans to retire next year, is a former economics professor at Brown University in Providence, Rhode Island. He joined the St. Louis Fed as its president in 1998. The St. Louis Fed includes Arkansas and portions of Missouri, Mississippi, Tennessee, Kentucky, Indiana and Illinois.
---------------------------------------------------------------------------
Poole Says No Subprime Impact Yet on `Real Economy' (Update2)
By Anthony Massucci and Kathleen Hays
Aug. 15 (Bloomberg) -- Federal Reserve Bank of St. Louis President William Poole said there's no sign that the subprime- mortgage rout is harming the broader economy and an interest-rate cut isn't yet needed.
``It's premature to say that this upset in the market is changing the course of the economy in any fundamental way,'' he said in an interview in the bank's boardroom. ``Obviously, there could be an impact, but we have to rely on some real evidence.''
Barring a ``calamity,'' there is no need to consider an emergency rate cut, Poole said. His comments were the first by a Fed official since the U.S. central bank joined counterparts in Europe and Asia to inject emergency funds after a surge in money- market rates. The Fed has added $71 billion of reserves in the past five trading days.
Poole, 70, said businesses have maintained their hiring and investment plans and banks have sufficient capital to weather the credit-market turmoil. The St. Louis Fed chief stressed that the best course is for policy makers to assess the latest economic data when they next meet Sept. 18. The comments contrast with the certainty that traders put on a rate cut next month.
``If the data confirm the market's view that the economy is sagging, we'll have to decide whether to share that view,'' said Poole, who votes on the rate-setting Federal Open Market Committee this year. He cited the monthly jobs, retail sales and industrial production reports as key gauges he'll be watching.
Widest Since 2001
The yield on the September federal funds futures contract closed at 4.95 percent today, indicating at least a quarter-point reduction in the Fed's target. The benchmark two-year Treasury note yielded 4.29 percent, the furthest below the Fed's benchmark since 2001, when policy makers were lowering rates.
``There's no way the Fed is going to reduce interest rates before the meeting,'' said former Fed Governor Lyle Gramley, now senior economic adviser at Stanford Group Co. in Washington. ``Bill is just being realistic that we haven't seen anything going on in markets yet that would warrant that kind of action.''
Poole acknowledged that the credit-market turmoil will ``stretch out'' the ``adjustment'' in the housing industry. He said he couldn't predict how long the downturn will last.
The upheaval in credit markets was caused by deepening losses on securities backed by U.S. subprime mortgages. BNP Paribas SA, France's biggest bank, shocked investors Aug. 9 when it halted withdrawals from three funds just a week after its chief executive officer said the lender wasn't at risk.
Stocks Decline
While money market rates have retreated, stocks have continued falling this week on concern a drop in lending will hurt economic growth. The Standard & Poor's 500 Index has fallen 6.1 percent in the past week, closing at 1,406.70 today.
Poole rebutted comments from some Fed watchers that the central bank may be out of touch with market developments. The criticism followed comments the St. Louis Fed chief made to reporters on July 31 that the slump in stocks was ``a typical market upset.''
``No one has called up and said the sky is falling,'' Poole said today. ``As I talk to companies, their capital spending plans are intact.''
Poole joined in the unanimous decision by Fed policy makers to keep the benchmark rate at 5.25 percent for a ninth straight meeting on Aug. 7. Officials said in a statement while risks to growth had increased, citing ``volatile'' financial markets, inflation remained the predominant concern.
Fed Response
Three days later, officials rushed to contain a crisis of confidence in markets, issuing a statement and pledging to inject funds ``as necessary'' to steer the benchmark federal funds rate toward the 5.25 percent target. The Fed also highlighted that direct loans were available through the Fed's discount window.
The St. Louis Fed chief said today that ``we will supply more cash as necessary'' to meet short-term demand for funds. He noted that ``we're very much in touch with the markets.''
Poole said he didn't regret that the Aug. 7 statement retained a bias against inflation. He also said that while consumer price gains are ``moving in the right direction,'' the ``job is not done.''
Inflation has slowed for four straight months under the Fed's preferred gauge, which excludes food and energy costs. The core personal consumption expenditures price index rose 1.9 percent in June after a revised 2 percent gain in May, the Commerce Department said July 31.
Poole, who plans to retire next year, is a former economics professor at Brown University in Providence, Rhode Island. He joined the St. Louis Fed as its president in 1998. The St. Louis Fed includes Arkansas and portions of Missouri, Mississippi, Tennessee, Kentucky, Indiana and Illinois.
:lol:
There ya go again Nancy, um I mean Basey. Being all patronizing and dismissive again.
Clue #1: How the hec you gonna pay the deficit down? All them tax revenues from giving the top 5% the biggest tax breaks? LOL
Clue #2: Huge gov't debt takes away from the private sector....real conservativism there, real wisdom.
Clue #3: What's the real gain from this quagmire in a desert shithole? Besides the defense contractor windfalls?
Clue #4: What's wrong with makin the rich pay for a war and the rest of us fighting it (as it's always been done)
Now you'all got us fighting it and having our children pay for it. Great!
Clue #5: What happens when all these gov't printin presses run outta ink?
:aktion033
btw, fuck Hillary unless she gets some conservative religion and vows to shrink spending (ain't gonna happen on either side bro) They're hooked and job security means more to all of em then simple fiscal restraint.
Thompson? LMAO, tell me how we pay for the world domination tour
Googliani? LMAO, tell me how we pay for the world domination tour
Romney? LMAO, tell me how we pay for all them fancy underpants those Mormons in the White House are gonna need?
Also in my spare time promoting ron paul in order to attempt to save what might be left of our country if things get as bad as i think they might.
His stock should rise quite a bit here if we continue to fall as unlike all the others he has been ranting about this happening for a while and gives sound reasoning as to why it happened.
That said he himself (Ron Paul) better watch out looked over his stock holdings and mainly holds a bunch of gold miners. They are going to get slaughtered (they have been since we started to fall) just as bad as the rest of the market if this truly is a collapse.
I disagree in that the problems we face go way beyond subprime but anyway....
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Aug. 16 (Bloomberg) -- The New Zealand dollar slumped, heading for its biggest weekly loss since the 1987 stock market crash, as investors slashed holdings of high-yield assets funded by loans in yen.
Australia's dollar, another favorite for investors who bought the nation's securities with money borrowed cheaply in Japan, tumbled as a drop in Asian stocks encouraged investors to unwind their carry trades. Both currencies fell to their lowest in more than four months against the dollar and yen on concerns losses related to subprime mortgages are deepening.
``The subprime issue is the center of the credit crisis universe and everything else is orbiting around it,'' said Alex Sinton, senior currency dealer at ANZ National Bank Ltd. in Auckland. ``The kiwi is one of fringe planets in that universe and it's going through a meteor belt at the moment.''
New Zealand's dollar slid 3 percent to 69.39 U.S. cents at 3:08 p.m. in Wellington. It fell as low as 69.37 cents, the weakest since March 16. It has tumbled 8.4 percent in the past 5 days and 14 percent since touching 81.10 cents on July 24, the strongest since being allowed to trade freely in 1985.
The currency also tumbled 3.2 percent against Japan's currency to 80.79 yen after having the biggest loss since December 2005 yesterday.
The Australian dollar declined 1.2 percent to 81.40 U.S. cents from late in Asia yesterday. It touched 81.38 cents, the least since April 5 and lost 4.9 percent over the past five days, the most since May 2004. The currency fell 1.5 percent against the yen to 94.72.
`Jumped On'
``The kiwi and Aussie will underperform,'' said Jonathan Cavanagh, a currency strategist at Westpac Banking Corp. in Sydney, referring to the currencies by their nicknames. ``Any bad news is jumped on in a big way.''
The Standard & Poor's 500 Index dropped for a third day, losing 1.4 percent, erasing the year's gains. Countrywide Financial Corp., the Calabasas, California-based Lender, tumbled 13 percent. Earlier in the day, Merrill Lynch & Co. said Countrywide could face ``effective insolvency'' should creditors force it to sell assets at depressed prices.
The Morgan Stanley Capital International Asia Pacific Index of shares fell 3.4 percent to the lowest since March.
Japan's 0.5 percent overnight lending rate is the lowest of any major economy. New Zealand's central bank raised borrowing costs four times this year to 8.25 percent and the Reserve Bank of Australia increased rates last week to 6.5 percent, making their currencies more appealing for carry trades.
Unjustifiably High
The New Zealand dollar may plunge to 67.50 by the end of December, close to its lowest so far this year, Sinton said. ``If the subprime issue continues and people don't look at yield it should revisit that level.''
New Zealand Finance Minister Michael Cullen said the nation's currency, which has slumped 11 percent the past three weeks, is still unjustifiably high.
``Despite the fall, the dollar is still well above a position justified by medium-term fundamentals,'' Cullen said in a speech in Christchurch. ``That can have an effect on how people see the long-run returns to exporting and there's a risk that people decide that exporting is simply not worth the effort.''
Australian and New Zealand government bonds rose for the third day as investors sought safer assets. The yield on the Australian 10-year note fell 2 basis points to 5.89 percent, according to data compiled by Bloomberg. The yield on New Zealand's 10-year security declined 5 basis points to 6.28 percent. Bond yields move inversely to prices and bond yields move inversely to prices.
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Aug. 16 (Bloomberg) -- The New Zealand dollar slumped, heading for its biggest weekly loss since the 1987 stock market crash, as investors slashed holdings of high-yield assets funded by loans in yen.
Australia's dollar, another favorite for investors who bought the nation's securities with money borrowed cheaply in Japan, tumbled as a drop in Asian stocks encouraged investors to unwind their carry trades. Both currencies fell to their lowest in more than four months against the dollar and yen on concerns losses related to subprime mortgages are deepening.
``The subprime issue is the center of the credit crisis universe and everything else is orbiting around it,'' said Alex Sinton, senior currency dealer at ANZ National Bank Ltd. in Auckland. ``The kiwi is one of fringe planets in that universe and it's going through a meteor belt at the moment.''
New Zealand's dollar slid 3 percent to 69.39 U.S. cents at 3:08 p.m. in Wellington. It fell as low as 69.37 cents, the weakest since March 16. It has tumbled 8.4 percent in the past 5 days and 14 percent since touching 81.10 cents on July 24, the strongest since being allowed to trade freely in 1985.
The currency also tumbled 3.2 percent against Japan's currency to 80.79 yen after having the biggest loss since December 2005 yesterday.
The Australian dollar declined 1.2 percent to 81.40 U.S. cents from late in Asia yesterday. It touched 81.38 cents, the least since April 5 and lost 4.9 percent over the past five days, the most since May 2004. The currency fell 1.5 percent against the yen to 94.72.
`Jumped On'
``The kiwi and Aussie will underperform,'' said Jonathan Cavanagh, a currency strategist at Westpac Banking Corp. in Sydney, referring to the currencies by their nicknames. ``Any bad news is jumped on in a big way.''
The Standard & Poor's 500 Index dropped for a third day, losing 1.4 percent, erasing the year's gains. Countrywide Financial Corp., the Calabasas, California-based Lender, tumbled 13 percent. Earlier in the day, Merrill Lynch & Co. said Countrywide could face ``effective insolvency'' should creditors force it to sell assets at depressed prices.
The Morgan Stanley Capital International Asia Pacific Index of shares fell 3.4 percent to the lowest since March.
Japan's 0.5 percent overnight lending rate is the lowest of any major economy. New Zealand's central bank raised borrowing costs four times this year to 8.25 percent and the Reserve Bank of Australia increased rates last week to 6.5 percent, making their currencies more appealing for carry trades.
Unjustifiably High
The New Zealand dollar may plunge to 67.50 by the end of December, close to its lowest so far this year, Sinton said. ``If the subprime issue continues and people don't look at yield it should revisit that level.''
New Zealand Finance Minister Michael Cullen said the nation's currency, which has slumped 11 percent the past three weeks, is still unjustifiably high.
``Despite the fall, the dollar is still well above a position justified by medium-term fundamentals,'' Cullen said in a speech in Christchurch. ``That can have an effect on how people see the long-run returns to exporting and there's a risk that people decide that exporting is simply not worth the effort.''
Australian and New Zealand government bonds rose for the third day as investors sought safer assets. The yield on the Australian 10-year note fell 2 basis points to 5.89 percent, according to data compiled by Bloomberg. The yield on New Zealand's 10-year security declined 5 basis points to 6.28 percent. Bond yields move inversely to prices and bond yields move inversely to prices.
My last post of the night looks like the fireworks are over for tonight and things are stabilizing should be an interesting day tomorrow.
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Asian Stocks Drop, Set for Biggest Drop in 3 Years; Banks Falls
By Patrick Rial and Chen Shiyin
(Bloomberg) -- Asian stocks tumbled, extending a global rout with its biggest drop in three years, after Australia's Rams Home Loans Group Ltd. said it was unable to refinance $5 billion of debt as a credit crunch deepens.
South Korea's Kospi index plunged 6.5 percent, heading for its largest loss since June 2002. Mizuho Financial Group Inc., Japan's second-biggest bank which has lost a quarter of its value in the past three weeks, led a slide in financial stocks.
Toyota Motor Corp. and Samsung Electronics Co. fell after reports showed U.S. home sales dropped to a four-year low and prices declined in a third of the nation's cities. BHP Billiton Ltd., the world's biggest mining company, slumped as concerns about slower global growth dragged commodities prices lower.
''Blood is hitting the streets, everyone seems to be panicking, and there's reason to panic,'' said Patrick Chang, who helps manage $4.5 billion at CIMB-Principal Asset Management Bhd. in Kuala Lumpur. ''There's been so much blow-up, we don't know when it's going to end. Liquidity is drying up.''
The Morgan Stanley Capital International Asia-Pacific Index lost 4 percent to 139.71 as of 12:56 p.m. in Tokyo, set for its biggest decline since May 2004 and wiping out gains for the year. About 20 stocks retreated for each that gained today as benchmarks slid across the region.
Japan's Nikkei 225 Stock Average dropped 3.5 percent to 15,900.49, poised for its lowest close since November. Sony Corp. led Japanese exporters lower after the yen strengthened to the highest against the dollar since March. South Korea's Kospi plunged the most in five years following a one-day holiday yesterday when the MSCI Asia index lost 2.5 percent.
Risk Averse
The Standard & Poor's 500 futures were 0.5 percent lower today. U.S. stocks fell yesterday on speculation Countrywide Financial Corp., the nation's biggest mortgage lender, may be forced into bankruptcy. The S&P 500 Index erased its gains for the year, dropping 1.4 percent.
Mizuho, Japan's second-biggest bank, slumped 5.9 percent to 637,000 yen. Woori Finance Holdings Co., South Korea's third- biggest financial services company by market value, dropped 4.6 percent to 21,000 won. National Australia Bank Ltd., the country's No. 1 lender, fell 2.8 percent to A$37.30.
Rams Home Loans Group said it was unable to refinance A$6.17 billion ($5 billion) of short-term U.S. loans because of a ''lack of market liquidity'' caused by a global credit rout. It plunged 42 percent to 79 Australian cents, 68 percent lower than the price at its initial share offering last month.
The MSCI Asia-Pacific Financial Index dropped 3.6 percent today, taking its one-month loss to 15 percent, the worst performance among the broader measure's 10 industry groups.
Overreaction?
Countrywide may go bankrupt if creditors force the company to sell assets at depressed prices or investors lose confidence in its ability to raise cash, Merrill Lynch & Co. said. KKR Financial Holdings LLC, a unit of Henry Kravis's buyout firm Kohlberg Kravis Roberts & Co., said it may lose up to $290 million from a drop in the value of mortgage-backed bonds it owns.
''Panic has been triggered by concern that the upward trend of the past three to four years has been broken,'' said Park Seh Ick, who helps manage $1.3 billion at Hanwha Investment Trust Management Co. in Seoul. ''People are overreacting.''
Stocks also dropped on signs investors are fleeing equities for less risky assets. Two-year Treasury yields held near the lowest in 22 months as a global stocks slide fed demand for the relative safety of government debt.
Fund managers are the most risk averse in a year, with 38 percent saying their willingness to take on investment risk is ''lower than normal'' because of the subprime crisis, a Merrill Lynch & Co. survey showed.
Toyota, James Hardie
Toyota, the world's No. 1 automaker by value, slumped 4.1 percent to 6,570 yen. James Hardie Industries NV, the biggest supplier of home siding in the U.S., lost 4.8 percent to A$7.30 in Australia. Samsung Electronics, which gets more than 80 percent of its revenue overseas, fell 4.7 percent to 583,000 won.
The National Association of Home Builders/Wells Fargo index of builder confidence slid to 22 from 24 in July, its sixth month of decline, the U.S. group said. A reading below 50 means most respondents view conditions as poor. A National Association of Realtors report said the median price for a single-family home fell in 50 of the 149 metropolitan areas it studied.
Yen, Metals
Sony, the maker of the Vaio computer and PlayStation game console, lost 3.6 percent to 5,320 yen. Honda Motor Co., Japan's second-biggest automaker, slid 4.9 percent to 3,730 yen.
The yen strengthened to as high as 116.25 to the dollar today, the highest since March 19. A stronger yen decreases the value of Japanese exporters' dollar-denominated sales when converted into local currency.
BHP declined 3.7 percent to A$31.97. Sumitomo Metal Mining Co., Japan's No. 1 nickel producer, lost 4.7percent to 2,250 yen. Zinifex Ltd., dropped 4.2 percent to A$14.48 in Australia.
A measure of six metals traded on the London Metal Exchange fell 1.5 percent yesterday to the lowest since March 9. Copper declined 1.4 percent, nickel fell 2.9 percent, and zinc lost 2 percent.
So-called cyclical stocks, whose profit growth is leveraged on an expanding global economy, were among the hardest hit. Hyundai Heavy Industries Co., the world's biggest shipbuilder, plunged 7.8 percent to 294,000. Nippon Steel Corp., the world's No. 2 steelmaker by output, slid 5.5 percent to 779.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net ; Chen Shiyin in Singapore at schen37@bloomberg.net
Last Updated: August 16, 2007 00:05 EDT
----------------------------------------------------------------------------------------------------------------------
Asian Stocks Drop, Set for Biggest Drop in 3 Years; Banks Falls
By Patrick Rial and Chen Shiyin
(Bloomberg) -- Asian stocks tumbled, extending a global rout with its biggest drop in three years, after Australia's Rams Home Loans Group Ltd. said it was unable to refinance $5 billion of debt as a credit crunch deepens.
South Korea's Kospi index plunged 6.5 percent, heading for its largest loss since June 2002. Mizuho Financial Group Inc., Japan's second-biggest bank which has lost a quarter of its value in the past three weeks, led a slide in financial stocks.
Toyota Motor Corp. and Samsung Electronics Co. fell after reports showed U.S. home sales dropped to a four-year low and prices declined in a third of the nation's cities. BHP Billiton Ltd., the world's biggest mining company, slumped as concerns about slower global growth dragged commodities prices lower.
''Blood is hitting the streets, everyone seems to be panicking, and there's reason to panic,'' said Patrick Chang, who helps manage $4.5 billion at CIMB-Principal Asset Management Bhd. in Kuala Lumpur. ''There's been so much blow-up, we don't know when it's going to end. Liquidity is drying up.''
The Morgan Stanley Capital International Asia-Pacific Index lost 4 percent to 139.71 as of 12:56 p.m. in Tokyo, set for its biggest decline since May 2004 and wiping out gains for the year. About 20 stocks retreated for each that gained today as benchmarks slid across the region.
Japan's Nikkei 225 Stock Average dropped 3.5 percent to 15,900.49, poised for its lowest close since November. Sony Corp. led Japanese exporters lower after the yen strengthened to the highest against the dollar since March. South Korea's Kospi plunged the most in five years following a one-day holiday yesterday when the MSCI Asia index lost 2.5 percent.
Risk Averse
The Standard & Poor's 500 futures were 0.5 percent lower today. U.S. stocks fell yesterday on speculation Countrywide Financial Corp., the nation's biggest mortgage lender, may be forced into bankruptcy. The S&P 500 Index erased its gains for the year, dropping 1.4 percent.
Mizuho, Japan's second-biggest bank, slumped 5.9 percent to 637,000 yen. Woori Finance Holdings Co., South Korea's third- biggest financial services company by market value, dropped 4.6 percent to 21,000 won. National Australia Bank Ltd., the country's No. 1 lender, fell 2.8 percent to A$37.30.
Rams Home Loans Group said it was unable to refinance A$6.17 billion ($5 billion) of short-term U.S. loans because of a ''lack of market liquidity'' caused by a global credit rout. It plunged 42 percent to 79 Australian cents, 68 percent lower than the price at its initial share offering last month.
The MSCI Asia-Pacific Financial Index dropped 3.6 percent today, taking its one-month loss to 15 percent, the worst performance among the broader measure's 10 industry groups.
Overreaction?
Countrywide may go bankrupt if creditors force the company to sell assets at depressed prices or investors lose confidence in its ability to raise cash, Merrill Lynch & Co. said. KKR Financial Holdings LLC, a unit of Henry Kravis's buyout firm Kohlberg Kravis Roberts & Co., said it may lose up to $290 million from a drop in the value of mortgage-backed bonds it owns.
''Panic has been triggered by concern that the upward trend of the past three to four years has been broken,'' said Park Seh Ick, who helps manage $1.3 billion at Hanwha Investment Trust Management Co. in Seoul. ''People are overreacting.''
Stocks also dropped on signs investors are fleeing equities for less risky assets. Two-year Treasury yields held near the lowest in 22 months as a global stocks slide fed demand for the relative safety of government debt.
Fund managers are the most risk averse in a year, with 38 percent saying their willingness to take on investment risk is ''lower than normal'' because of the subprime crisis, a Merrill Lynch & Co. survey showed.
Toyota, James Hardie
Toyota, the world's No. 1 automaker by value, slumped 4.1 percent to 6,570 yen. James Hardie Industries NV, the biggest supplier of home siding in the U.S., lost 4.8 percent to A$7.30 in Australia. Samsung Electronics, which gets more than 80 percent of its revenue overseas, fell 4.7 percent to 583,000 won.
The National Association of Home Builders/Wells Fargo index of builder confidence slid to 22 from 24 in July, its sixth month of decline, the U.S. group said. A reading below 50 means most respondents view conditions as poor. A National Association of Realtors report said the median price for a single-family home fell in 50 of the 149 metropolitan areas it studied.
Yen, Metals
Sony, the maker of the Vaio computer and PlayStation game console, lost 3.6 percent to 5,320 yen. Honda Motor Co., Japan's second-biggest automaker, slid 4.9 percent to 3,730 yen.
The yen strengthened to as high as 116.25 to the dollar today, the highest since March 19. A stronger yen decreases the value of Japanese exporters' dollar-denominated sales when converted into local currency.
BHP declined 3.7 percent to A$31.97. Sumitomo Metal Mining Co., Japan's No. 1 nickel producer, lost 4.7percent to 2,250 yen. Zinifex Ltd., dropped 4.2 percent to A$14.48 in Australia.
A measure of six metals traded on the London Metal Exchange fell 1.5 percent yesterday to the lowest since March 9. Copper declined 1.4 percent, nickel fell 2.9 percent, and zinc lost 2 percent.
So-called cyclical stocks, whose profit growth is leveraged on an expanding global economy, were among the hardest hit. Hyundai Heavy Industries Co., the world's biggest shipbuilder, plunged 7.8 percent to 294,000. Nippon Steel Corp., the world's No. 2 steelmaker by output, slid 5.5 percent to 779.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net ; Chen Shiyin in Singapore at schen37@bloomberg.net
Last Updated: August 16, 2007 00:05 EDT
