IMF, Moodys, FT : "Global Financial Stability Report", "US wireless industry outlook goes negative", ...
"Global Financial Stability Report", 6/02:
imf.org
"Global Business Cycle Indicators"
globalindicators.org
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"US wireless industry outlook goes negative", 6/21/02:
moodys.com
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"The US Current Account Deficit: Crisis in Waiting or Normal Adjustment?"
moodys.com
"Dollar May Halt Decline in 2nd Half: Currency Focus"
quote.bloomberg.com
Charts:
...http://www.whitehouse.gov/fsbr/international.html
...http://stockcharts.com/gallery?$USD
...http://quotes.ino.com/exchanges/?c=currencies
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"Corporate greed...":
news.ft.com
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Selected highlights, rearranged.
>>> Corporate greed fails to dent America's belief in business
By Caroline Daniel
Published: June 29 2002 5:00 | Last Updated: June 29 2002 5:00
Lynn Turner, former chief economist at the Securities and Exchange Commission, said: "People are angry at corporate America and the greed. Gordon Gekko became a reality. They can't understand why someone has to go back to the company and take out loans and why boards just sat and watched this happen."
One measurable effect on popular attitudes comes in data from the Pew Research Center in Washington.
... More people think businesses put executives interests ahead of stockholders' compared with 1994.
... About half believe government regulation is needed, up from 41 per cent in 1995.
It seems that for now, faith in US capitalism is intact. But it may not be long before this changes. "People in Congress are starting to get a sense of how mad Americans are about this and it is starting to impact how they will vote in November," said Ms. Turner. "This is a grassroots populist issue that is starting to burn."<<<
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>>> THE US CURRENT ACCOUNT DEFICIT: Crisis in Waiting or Normal Adjustment?
Summary Opinion
The US current account this year is expected to record its third consecutive annual deficit in excess of 4% of GDP.
...This level is a record high for the United States and approaching a level that studies of other countries indicate could lead to a correction.
... However, certain factors make the US position different from other countries, notably the role of the dollar in global trade and financial markets and the absolute size of US financial markets compared to alternatives.
While a "currency crisis," in which the dollar fell sharply and the current account adjusted relatively rapidly, cannot be ruled out, it does not seem the most likely scenario in the near term.
... Instead, a more normal adjustment over a period of a few years could occur.
... However, the more time that goes by without an adjustment, the sharper the adjustment will be when it does occur.
Moody’s Aaa ratings of the United States are partly based on the dollar ’s significant international role and the consequent lack of foreign currency debt of either the public or private sectors.
A current account adjustment, even with a sharp fall in the dollar,
... would probably not lead to pressure on the ratings,
... although it could have implications for some corporate ratings and for countries that depend heavily on trade with the US. <<<
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>>>06/29 04:09
Dollar May Halt Decline in 2nd Half: Currency Focus (Update1)
By Chris Gothard
London, June 29 (Bloomberg) -- The dollar had its biggest quarterly decline since 1987 in the past three months. Some people in the currency market see it halting that slide if the U.S. economy shows more signs of recovery.
The dollar will trade at 99 cents per euro and 123.24 yen at the end of the year, according to the average forecast of 51 analysts, traders and investors surveyed by Bloomberg News. It was recently at 99.15 cents per euro and 119.59 yen. Against a trade- weighted index of six currencies, compiled by the New York Board of Trade, it dropped 10 percent in the past quarter.
``Investor confidence in U.S. assets has been badly shaken, but it's difficult to see that the dollar's decline will persist,'' said Adrian Cunningham, who helps oversee $150 million at Abbey National Plc's Talorcan hedge fund in Glasgow, Scotland. ``The U.S. economy is recovering.''
The world's biggest economy is expected to grow faster than those of Europe and Japan this year, which may lure investors back to dollar-denominated assets. A slower-than-forecast recovery in U.S. corporate profits and concern that companies are using accounting practices to falsely inflate earnings had led some investors to lose confidence in U.S. investments.
The world's biggest economy will grow 2.3 percent in 2002, according to the International Monetary Fund. That compares with expansion of 1.4 percent in the 12 countries that share the euro and a contraction of 1 percent in Japan. The U.S. grew an annual 6.1 percent in the first quarter, its fastest pace for two years, while the euro-region economy expanded 0.2 percent.
`Main Problem'
The dollar slumped 9 percent or more against the euro, the yen and the Swiss franc in the first half as some investors dumped dollar holdings. The Standard & Poor's 500 stock index has tumbled 13 percent this year, its biggest first-half loss since the 1970s, while the Dow Jones Industrial Average fell 7.5 percent.
``A lack of confidence in U.S. assets is the main problem for the dollar,'' said Scott Barlass, director of currencies at Abbey National Asset Managers in Glasgow, where he helps oversee 14 billion pounds ($20 billion). He sold dollars this year for currencies such as the euro, the yen and the Swiss franc.
Barlass expects the dollar to weaken to $1.05 per euro by the year's end. The euro hasn't been worth $1 since February 2000.
Government figures this month showed the U.S. current-account deficit, the gap between money entering and leaving the country, grew to a record $112.5 billion in the first quarter, from $95.1 billion in the previous three months.
``The U.S. needs investors to keep buying U.S. assets'' or the deficit will widen, said Steven Saywell, a currency strategist at Citigroup Inc., the world's biggest foreign-exchange bank, according to a May poll by Euromoney magazine. He expects the dollar to slip to $1.02 per euro by the end of the third quarter.
`Drying Up'
Much of the strength in the dollar before its recent decline came from foreign buying of U.S. stocks and corporate bonds, Abbey National's Barlass said. ``Those flows are drying up.''
Foreign investors bought $17.6 billion more U.S. stocks than they sold in the first quarter, according to Treasury Department figures. That's down from $46.7 billion a year earlier. Net purchases by foreigners of U.S. corporate debt dropped to $48.6 billion, from $68.5 billion a year earlier.
In the Bloomberg survey, Rabobank was the most bullish on the dollar against the euro, seeing the U.S. currency strengthening to 90 cents by the end of the year. Lehman Brothers Inc. was the most bearish, predicting it would weaken to $1.15 per euro and 110 yen.
Twenty-three of 53 respondents said the euro will trade at $1 or above by the end of the third quarter. That figure rose to 27 for the year's end.
The British pound will probably trade at $1.52 at the end of September and at the end of the year, according to the survey. The U.K. currency closed yesterday at $1.5335. <<< |
