Monday, September 17, 2007

Morning Market Buzz 9/17/07

Stocks will stumble out of bed this morning, as the problems at Britain's Northern Rock keep investors uneasy and queasy on both sides of the Atlantic. The bigger picture issue is that a run on a large bank in the UK could spur other European depositers to pull money out of their banks, or seek greater liquidity by selling stocks. A couple billion pounds withdrawn from Northern Rock isn't much in the grand scheme of things, but a run of this nature, or "panic" presents a great danger to the stability of any financial system. What starts out small in this realm can rapidly snowball since financial systems around the globe are interlinked.

A special message that falls on deaf ears: Northern Rock Homepage CEO Message
Northern Rock's stock is being pummeled: UPDATE 3-Northern Rock shares plunge, customers flee.

Meantime, in the European bourses, banking stocks have been slammed in general: Banking shares tumble on Northern Rock fallout. The Financial Times 100 has traded lower by more than 1.5% today.

As Alan Greenspan does the interview circuit for his new book, he had this warning for UK home owners, which might as well be for US homeowners as well: UK housing market set for a painful correction, Greenspan warns.

Greenspan sure has been speaking his mind (see more stories below) in cathartic like fashion and has thrown some big punches. As I mentioned over the weekend, it will be interesting to see who punches back.

Weakness is stocks is translating to a modest flight to gold: Gold up as investors seek refuge from market.

Meantime, on this side of the "pond", we await the Tuesday Fed decision. Perhaps it takes some outside perspective. The Telegraph of the UK speculates: Bernanke will prove sterner than Wall Street thinks. The bottom line, is that it seems he is damned if does and damned if he doesn't. There's no easy cure when borrowers and lenders aren't interested in dealing with each other.

The dollar continues to wobble and Greenspan had this to say about the buck: Report: Greenspan says euro could replace US dollar as reserve ....

He also has a message for the bond market: UPDATE 1-Greenspan warns of higher inflation-paper.

Greenspan has thus far spilled the beans on the Iraq war, a war for oil says he. Greeny is also telling the truth about coming inflation, deeper housing bust and that the dollar's best days are far behind. What will he do for an encore? (BIDU) jumped 2% premarket. RBC lifted its price target on BIDU to $333 to $302.

Speaking of high flyers... Iran and Google: Iran blocks access to Google.

Microsoft loses landmark EU antitrust case and will be digging into petty cash.

The world o' crops is being shaken by the weather: Soybeans Rise to 3-Year High as US Crop Faces Frost Damage, or this story: Wheat prices continue amazing market climb.

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