chart of the week - price of gold versus the clock !!!
http://www.marketoracle.net/images/2008/gold9amGMT.gif
the explanation given is that the ECB, in concert with German, French, Swiss and other European national banks, is intervening to stem the ongoing fall of the US dollar - with collateral damage to the price of gold.
from
(snip)"Has Europe Declared War on the US Dollar?
When Jean-Claude Juncker, Luxembourg's premier and the chair of Europe's finance ministers, announced on April 23 that "financial markets and other actors [had not] correctly and entirely understood the message of the [recent] G7 meeting," his words went essentially unheeded. The Daily Telegraph's Ambrose Evans-Pritchard put that message in clear language. "[Juncker], he said, "has given the clearest warning to date that the world authorities may take action to halt the collapse of the dollar and undercut commodity speculation by hedge funds."
Prior to Juncker's comments French Finance Minister Christine Lagarde likened the recent G-7 stance to the 1985 Plaza Accord when the industrialized nations agreed to "coordinated intervention" to drive down the dollar. When asked whether the G7 statement might hint at a new coordinated intervention, Lagarde replied "the future will tell."
Behind the explicit message to the hedge funds and other "actors," stood an implicit message to the United States: The rapid decline of the dollar was about to be challenged. Europe would no longer tolerate its effect on European industry. Europe, in effect, was declaring war on the weak U.S. dollar.
With that by way of background, I invite you to take a look at the charts below:
As you can see, there is a discernible pattern in both charts. The last four sharp declines in the euro and gold have occurred at precisely 2AM Mountain time, or 9AM London time -- the first clue that these might not be random market events. The most recent (May 1) followed the announcement by the Fed it was lowering interest rates and that it stood ready to lower them further in the weeks to come. Adding to the intrigue, the first two instances appear to have been successful attempts to keep the euro from transcending the $1.60 mark.
These events, carried out in the London market in each instance at the open, go beyond giving the appearance of something unusual going on in the dollar/euro market. It seems that someone is intent on delivering a message, and that someone could very well be the European Union. "(snip)
Re: chart of the week - price of gold versus the clock !!!
When Clueless Idiots can't figure out the value of an asset, they blame the 'big guys' when price converge to value. Happens across all cultures, countries & race
Today was another big day in the idoits world.
They couldn't figure out 'Why Fannie May was up?
and couldn't figure out 'Why Yahoo was up'?
Guess what they concluded? Yes, George Bush sitting in his underwear is bidding up YHOO and FNM
Re: chart of the week - price of gold versus the clock !!!
^^^ arguably, Yahoo is 'up' based on speculation that, with Microsoft's takeover offer being refused, other higher takeover offers may now be tendered by would-be buyers other than Microsoft. 'Up' is of course a relative term since yesterday's $25.72 closing price is still some 25% below last october's valuation, and far below the average price for the past several years.
Also, arguably FNM stock was up based on an announcement that FNM will CUT DIVIDEND PAYOUTS to shareholders as well as an announcement by regulator OHFEO that FNM can once again loosen it's accounting standards for it's derivatives (all the better to hide potential losses) and can once again reduce its capital reserve requirements from 20% to 15% to 10%. And as above, yesterday's closing price was 'up' ... to a level that is only about 50% of last October's valuation.
Thus it is entirely arguable that both of your examples are also the result of actions by the 'big guys' rather than any real change in fundamentals. It's also entirely arguable that if you have been dollar cost averaging the purchases of YHOO vs FNM versus GOLD over the past several years, that only GOLD has resulted in a net gain !
research, research, research ...
(snip)"Fannie Mae loses $2.2B in 1Q, warns of severe weakness
By MARCY GORDON, AP Business Writer
2 hours, 27 minutes ago
WASHINGTON - Fannie Mae reported losses of $2.2 billion in the first quarter and the nation's largest buyer of home loans said Tuesday it would cut its dividend and raise $6 billion in new capital, with expectations that the housing slump will persist into next year.
Home prices fell faster in the first quarter than Fannie Mae had expected, the government-sponsored company said, and it will open a $4 billion share offering immediately, with the remainder being offered in the "very near future."
Fannie Mae's federal regulator, the Office of Federal Housing Enterprise Oversight, announced Tuesday that following the stock sale, it will cut the capital surplus cushion the company has to maintain by 5 percentage points to 15 percent. Another five-point cut will come in September, provided there is "no material adverse change" in the company's regulatory compliance.
The agency's director, James B. Lockhart, said capital requirements were eased because Fannie Mae has improved internal financial controls following a multibillion-dollar accounting scandal in 2004.
The government has come to rely increasingly on Fannie Mae and Freddie Mac as other lenders have shied away from the risk-heavy market for mortgage securities.
In addition to a reduced capital cushion, Fannie's estimated market share increased to about 50 percent of the new single-family mortage related securities issued, and investors seemed to welcome a broader role for the company.
Shares at one point rose nearly 5 percent, were trading up 3.7 percent, or $1.04 cents, at $29.33 by late morning.
The company's estimated fair value of net assets as of March 31 was $12.2 billion, down 66 percent from $35.8 billion at the end of December. The huge decline was attributed to falling home prices and changes made to reflect new accounting methods. The assets are not counted toward the overall loss.
Fannie Mae's first-quarter loss contrasts with a profit of $961 million in the January-March period last year. The company reported Tuesday that the early 2008 loss was equivalent to $2.57 a share. It earned 85 cents a share a year earlier.
Wall Street analysts polled by Thomson Financial had expected the company to lose 81 cents a share in the latest period.
Following Fannie's earnings release, Moody's Investors Service downgraded Fannie's financial strength rating because of the potential for credit losses over the next two years.
Reflecting the ravages of the housing crisis, Washington-based Fannie Mae was forced to set aside $3.2 billion to account for bad loans. The losses were greatest in the hardest-hit states: California, Florida, Michigan and Ohio.
And the company said it only expects credit losses to worsen next year.
"Going forward, we expect our financial results to continue to be affected by the difficult (housing) market," Fannie's chief financial officer, Stephen Swad, said in a statement.
Revenue rose 38 percent in the first quarter, to $3.8 billion, bolstered by increases in fees that Fannie Mae charges lenders to guarantee mortgages and in interest income.
Amid the deepening housing downturn and the financial turmoil it sparked, the government has increasingly looked to Fannie Mae and its smaller government-sponsored sibling, Freddie Mac, to step up their role and help restore stability to the market by buying up more mortgages and bundling and selling them as securities. Three-quarters of mortgage-backed securities are issued by the two companies.
In March the regulators reduced by a third the mandatory cash cushion that must be held by Fannie and Freddie, in order to free up an additional $200 billion to finance new mortgages and help existing homeowners battered by the roiling market to refinance into more affordable mortgages.
But analysts worry that the opening for Fannie and Freddie could put too much financial risk on the backs of the companies, which have taken multibillion-dollar hits from the foreclosure wave and have been hungry for capital. Critics have said that allowing the companies to take on more debt could threaten the global financial system.
On Tuesday, Fannie Mae said it would cut its dividend, starting in the third quarter, from 35 cents to 25 cents a share, freeing up around $390 million a year.
The company already had slashed the dividend 30 percent in December, when it also raised $7 billion in capital in a special stock sale. "(snip)
~
Re: chart of the week - price of gold versus the clock !!!
[quote=Melonie;1532693]http://www.marketoracle.net/images/2008/gold9amGMT.gif
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
"A picture is worth a thousand words". As you can see, I snipped those thousands of words, skipped reading them, and came to these "conclusions"
1) When anything has been pricey (eg, at historical, or relatively high level) for a period of time, 1 day people will wake up, and conclude that object isn't
worth paying that much for.(re- graph to left of clockmarks)
2) At the end of the day, things aren't so bad as they seemed at the beginning.8)