January 3 - Bloomberg (Brian Louis): "Tousa Inc, the Florida homebuilder that
lost 99% of its market value in the past year, missed interest payments on $485
million in debt. Debt holders may accelerate payment of the notes outstanding
if the company doesn’t pay the interest in 30 days ... Tousa ... has $1.7
billion in debt ..."
Currency Watch January 3 - Financial Times (Javier Blas and Michael Mackenzie):
"Crude oil prices briefly hit the $100-a-barrel level and gold prices
jumped to an all-time high as investors yesterday poured
money into commodities following deepening fears about the weakness of the US
dollar ... The dollar's fragility, which makes dollar-denominated commodities
cheaper to non-US investors, comes after the US manufacturing sector slumped to
its lowest level in five years during December ... 'People seem scared from a
number of factors - an inflation spike, further US dollar weakness or systemic
financial risk,' [UBS strategist John] Mr Reade said."
December 31 - Financial Times (Ralph Atkins): "The euro has fast gained ground
against the dollar in international official foreign exchange reserves in
recent months, according to official statistics highlighting the nine-year-old
currency's growing global importance. Reflecting its increasing strength on
foreign exchange markets, the euro's share of known foreign exchange holdings
rose to 26.4% in the third quarter of this year ... That was up from 25.5% in
the previous three months and from 24.4% in the third quarter of 2006. The
dollar’s share of known official foreign reserves ... fell to 63.8% in the
third quarter, down from 66.5% in the same three months of 2006."
The dollar declined 0.6% over the past week to 75.79. For the week, the
Japanese yen increased 2.9%, the Swiss franc 2.3%, the Norwegian krone 1.7%,
the Swedish krona 1.7%, the Brazilian real 1.3%, the Danish krone 1.2%, and the
Euro 1.0%. On the downside, the South Korean won declined 0.6%, the British
pound 0.6%, the Canadian dollar 0.5%, and the Australian dollar 0.3%.
Commodities Watch January 3 - Bloomberg (Millie Munshi and Mark Shenk): "Commodities
surged to a record for a second straight day as crude oil and gold climbed to
the highest ever and the dollar slumped, increasing the allure of raw materials
as a hedge against inflation. The UBS Bloomberg Constant Maturity Commodity
Index rose as much as 1.7% to a record 1,327.21. Oil reached $100.09 a barrel
as US inventories tumbled more than forecast. Spot gold climbed as high as
$868.89 an ounce. Industrial metals, sugar and wheat also gained. The dollar
approached a one-month low versus the euro on speculation US borrowing costs
will drop."
January 3 - Bloomberg (Feiwen Rong): "China's three commodity futures exchanges
traded record volumes last year as demand for raw materials from soybeans to
copper increased and new contracts were introduced in the fastest-growing major
economy. A total of 728 million contracts changed hands in 2007 on the Shanghai
Futures Exchange, the Dalian Commodity Exchange and the Zhengzhou Commodity
Exchange, up 62% from a year ago ..."
December 31 - Bloomberg (Glenys Sim and Feiwen Rong): "The Shanghai Futures
exchange, China's biggest commodity bourse by value, will introduce gold
futures on Jan. 9, underscoring the increased sophistication of the nation's
financial markets and rising investor interest in the metal."
Commodities began the year as they ended 2007. Over the holiday-shortened week,
Gold surged 2.3% to $859.6 and Silver 3.8% to $15.46. March Copper rose 2.8%.
February Crude gained $1.82 to $97.91. February Gasoline added 1.3%, and
January Natural Gas jumped 6.2%. March Wheat rallied 5.3%. For the week, the
CRB index jumped 2.2%, increasing one-year gains to 25.8%. The Goldman Sachs
Commodities Index (GSCI) rose 2.4%, increasing its 52-week surge to 53%.
China Watch January 1 - AFP (Robert J. Saiget): "Chinese President Hu Jintao has
vowed 'forceful measures' to curb rising food prices and address a booming real
estate market that has seen property prices sky-rocket ... 'The central
government attaches great importance to commodity prices and has made it an
important task to stabilise them,' Hu said ... 'A series of forceful measures
have been taken and will continue to be taken to ensure the normal life of the
masses,' Hu was quoted ... He also vowed to curb rising housing prices to help
low-income families and to provide them with better health care benefits, two
other top concerns of ordinary Chinese. 'The [Communist] Party and government
are very much concerned about the housing problem of the low-income masses,' Hu
said."
January 4 - Kyodo: "A report published by a Chinese government think tank has
suggested that rising inflation could threaten social stability if action is
not taken to control food prices ... The study by the Chinese Academy of Social
Sciences says about half of poor families' income goes for food so rising
prices are hitting them particularly hard, the China Daily reported. Li
Peiyuan, director of the academy's sociological research department, said:
'Controlling food prices and maintaining their stability are extremely
important foundations for our social stability'."
January 3 - Wall Street Journal (Michelle Ng): "China's tax revenue jumped 31%
last year to 4.94 trillion yuan (US$676.33 billion) as the country's economic
boom raised corporate profits."
December 31 - Market News International: "The steam has finally come off the
Chinese residential market as would-be buyers weigh up the impact of the
government's ongoing campaign to bring to heel one of the major drivers of
economic activity. Real estate agents working in China's largest property
markets said transaction volumes have fallen through the floor in recent months
..."
December 31 - Bloomberg (Chia-Peck Wong): "Hong Kong lending rose 19% in
November to the highest level since January 1999 ... The city's biggest banks
cut interest rates three times in the first 11 months, spurring borrowing. By
comparison, loan growth in China was 17 percent in November."
January 3 - Bloomberg (Wendy Leung): "Hong Kong retail sales grew at the
fastest pace in more than three years as falling unemployment, higher wages and
a property market boom stoked consumer spending. Sales by value climbed 19.5%
to HK$20.3 billion ($2.6 billion) in November from a year earlier ..."
Japan Watch January 4 - Bloomberg (Joi Preciphs): "Japan and India agreed to a
currency swap valued at $6 billion to offset a potential financial crisis,
Nikkei English News reported ... The agreement, Japan's first for a currency
swap with a nation outside East Asia, is aimed at stabilizing Asian financial
markets, the news service said."
India Watch January 4 - Bloomberg (Anoop Agrawal): "India's foreign-exchange
reserves rose $2.84 billion to $275.6 billion in the week ended Dec. 28 ..."
January 4 - Bloomberg (Anil Varma): "Money supply growth in India quickened in
the two weeks ended Dec. 21 ... The M3 measure ... increased 22.8% from a year
earlier ..."
Asian bubble Watch January 3 - Financial Times: "The dominoes are starting to fall.
Singapore, one of Asia's most open economies, yesterday revealed a sharp
slowdown in growth, which fell to 6% year-on-year in the fourth quarter from 9%
in the third quarter. Singapore is first out of the traps, but its neighbours
are set to exhibit a similar trend of decelerating growth in the fourth
quarter. South Korean export growth is softening. Malaysia, coming off a
relatively strong third quarter, is now seeing a slowdown in exports and
industrial production ... JPMorgan reckons that fourth quarter growth in
emerging Asia will decelerate to 5.2% year-on-year, compared with an average of
9.3% in the first three quarters of the year. Stripping out China and India,
the fourth quarter number falls to just 3.3%."
December 31 - Bloomberg (Seyoon Kim): "South Korea's inflation accelerated in
December as crude oil prices climbed. The consumer price index jumped 3.6% from
a year earlier ... The increase was the biggest since October 2004 ..."
January 3 - Singapore Straits Times (Fiona Chan): "Home hunters can ring in the
new year with some cheer - the roaring property market is finally showing signs
of slowing. Prices of all categories of homes grew at a lower rate at the end
of last year, after months of climbing at a breakneck pace. Growth braked the
most at the highest end of the market ... Even with the slowdown, private home
prices still beat most forecasts by shooting up 31% for the whole year ..."
December 31 - Bloomberg (Beth Thomas): "Vietnam's economy expanded this year at
the fastest pace since 1996 ... Gross domestic product increased 8.5% in 2007
..."
Unbalanced Global Economy Watch January 4 - Bloomberg (Fergal O'Brien): "European inflation stayed at
the highest in more than six years in December as food and energy costs soared,
heightening concern among central-bank policy makers that rising prices will
fuel bigger wage increases. The inflation rate in the euro area was 3.1%...
January 3 - Bloomberg (Gabi Thesing): "Money-supply growth in the euro region
held at the fastest pace in 28 years in November, adding to the European
Central Bank's inflation concerns. M3 money supply, which the ECB uses as a
gauge of future inflation, grew 12.3 percent from a year earlier, unchanged
from October, the Frankfurt-based central bank said today. That's the highest
rate since July 1979 ...'The credit crunch has not crimped credit growth in the
euro area,' said Thorsten Polleit, chief Germany
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