Gold rises sharply, boosted by weaker dollar Gold futures rallied on Wednesday, breaking a two-session losing streak, as dollar weakness and rising crude-oil prices bolstered demand for the precious metal. Gold for December delivery rose $15.20, or 2%, to stand at $814.20 an ounce on the New York Mercantile Exchange. "The bulls were back in charge in the gold markets overnight, as an easing in the U.S. dollar, a bounce in oil and a recovery in equities prompted fresh buying," said Jon Nadler, an analyst at Kitco Bullion Dealers, in a research note. "I would use this and future moves like this for accumulation of positions ahead of what I see as another upcoming wave of buying," Oxman said.
HSBC warns of fresh sub-prime defaults HSBC, Europe's biggest bank, revealed this morning that it had suffered $3.4 billion (£1.6 billion) in bad debts linked to the sub-prime lending crisis in the third quarter. Charges related to bad debts rose by nearly 30 per cent in the third quarter and the bank warned that it may deteriorate further. But HSBC said its profit for the period was still ahead of expectations. HSBC said the US loan impairment charge was $1.4 billion more than the trend for the first half. That total included $700 million related to mortgages, with the remainder owing to branch unsecured loans and card portfolios. Stephen Green, the bank's chief executive, said nobody was sure how likely a deterioration was. He said: "I wouldn't want to put a percentage on it. It depends on the housing market and the overall US economy."
Goldman Sachs bets credit crisis will worsen Goldman Sachs, the feted investment bank and the only major Wall Street firm to have avoided giant losses from the credit crisis, is betting that the chaos in the American mortgage market will continue to get worse. As some of the finance industry's most powerful executives gathered for an industry conference in Manhattan, Lloyd Blankfein, the chief executive of Goldman Sachs, said his firm was still holding to its lucrative bets that the value of mortgage-backed securities will fall. And at the same conference, an executive from its smaller rival Bank of America announced that it would probably be writing down the value of its mortgage portfolio by a further $3bn (£1.45bn) at the end of the year.
What the 'Subprime' Mess Is Really About It’s about the international fiat monetary regime’s denouement, and of course the Ron Paul presidential campaign.Even the popular name of this "crisis" – implying that the whole problem is "subprime" borrowers with sketchy credit histories – is really just more disinformation. Shaky American borrowers defaulting on their home loans are indeed a great danger, but in the same way that a free press is a danger to despotic government. It is the danger of exposure. It is the end of plausible deniability. If the "markets" of the world perceive – finally – that the emperor has no clothes, the nearly century old game may be over. First, a little background. Forgive all the quotation marks, but it’s important to maintain a healthy skepticism when considering this subject.
Subprime Mortgages Lead to Subprime Currency Mr Bernanke told Congress he would support raising the limit on the size of the individual loans eligible for securitisation by the government-sponsored mortgage finance entities from $417,000 to $1m (€680,000, £475,000) on a temporary basis. He suggested that Fannie and Freddie could pay insurance premiums on these loans to the federal government, which would "act as guarantor" by taking on some of the credit risk.Charles Schumer, the Democratic chairman of the Joint Economic Committee, enthusiastically welcomed the idea and said he would try to insert it into legislation already before Congress. It came as Mr Bernanke told Congress that estimates that set the total losses from subprime mortgages at about $150bn were probably "in the ballpark".
Beauty deals a beastly blow to the US dollar The saga of the declining dollar has turned from a drama into a crisis. We’ve got used to having Chinese officials hinting darkly that they might diversify their foreign exchange reserves out of the US currency, as they did again last week. We can even take it when Bill Gross, the world’s most influential bond investor, tells the public, as he did, also last week, that their investment strategy should consist of not buying anything that has a dollar sign attached to it. But when Gisele Bündchen, the Brazilian supermodel, trashes your currency by insisting that she wants to be paid in euros, not dollars, it really hurts. Since the dollar began its long decline against the world’s currencies in early 2002, the mantra from financial pundits has been that as long as the decline was orderly, everything should be all right.
IS CHINA BLACKMAILING AMERICA? China, which is feeling the sharp bite of product recalls from US vendors, is striking back at the merchant princes of America in the manner they warned the US State and Treasury Departments they might in October. They are once again threatening to dump the dollar. As they signaled their intent to follow through on what they call their "nuclear option" a week ago, the dollar plummeted like a stone swan with an anchor around its neck. And gold rose like an eagle soaring on an upward draft. America attempts to force its costly manufacturing standards on China that the People's Republic of China would be forced to exercise what they called their "nuclear option"—dumping its $1.33 trillion in foreign reserves and collapsing the dollar.
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