Central banks cutting holdings of U.S. dollar

Reuters
Monday, February 26, 2007

LONDON: Central banks around the world are continuing to diversify their reserves by cutting their dollar holdings, according to a survey sponsored by Royal Bank of Scotland Group.

Italy, Russia, Sweden and Switzerland have made "major adjustments" in foreign-exchange holdings favoring the euro and the pound, according to the poll, which was conducted by Central Banking Publications between September and December 2006.

China also plans to manage its reserves more actively, the report said.

"Central banks are open to saying they've been diversifying to improve returns and reduce exposure to any single currency," said Sean Callow, senior currency strategist at Westpac Banking in Singapore. "There's no doubt that when they say 'diversification' they mean selling dollars."

more

there's just too much that's hollow, shallow, or false in our economy. we don't make anything, our policies are spending what's left of our treasure and credit and blood on the sands of iraq, corruption is rampant, and our leadership seems not to care about any of our pressing long term problems.

i seriously question, and have for some time now, if we'll ever pay all the debt we owe the chinese and others. "get out now" seems like a good idea to me, if you hold a lot of us debt and financial vehicles.

bonddad's blog to get his take. Personally, I think your background makes your hunches worth more than pocket-change, SP. I have a baaaad feeling about this as maybe the first real bump before the axle comes off this car.

I wanna see bonddad's take on this as well.....he seems to spend all day looking at stuff like this (for me, a semester of accounting still spawns headaches remembering that 20-years-gone class, and the numbers...oh, God, the numbers!!). Lessee what he has to say....

-5.75,-4.05 "I am in earnest; I will not equivocate; I will not excuse; I will not retreat a single inch; and I will be heard."
William Lloyd Garrison
US abolitionist & editor (1805 - 1879)

update: bonddad isn't optimistic either. If I understand, it looks like there would need to be something major to turn things around tomorrow (he thinks there may be more selling=off tomorrow). I think I've said enough: I'm way outta my depth looking at these figures, but what I'm seeing makes me worry.....

February 27, 2007
Tuesday’s Mini-Report
Posted 5:30 pm | Printer Friendly | Spotlight
The Carpetbagger

Today’s edition of quick hits.

* A couple of years ago, Labor Secretary Elaine Chao said the strength of the stock market “final arbiter” is the of the success of the president’s economic policies. Something to keep in mind when we consider today’s Wall Street free fall.

snip

* Dick Cheney’s ongoing overseas trip has been marred by electrical problems, unexpected stops, skeptical allies, and unfriendly locals. Then the Taliban apparently tried to kill him. Quite a trip, isn’t it?

I was reading earlier somewhere that maybe Cheney is avoiding coming back til after the Scooter verdict comes in :D

NYSE imposes trading curbs as stocks slide

NEW YORK (Reuters) - The New York Stock Exchange said on Tuesday it instituted downside trading curbs at 1:03 p.m. (1803 GMT) as U.S. stocks fell sharply in heavy trading.

The U.S. market's fall followed a sharp drop in Chinese equities overnight, which reignited concerns about a slowdown in global growth and raised worries that stock valuations may be too high. The New York Stock Exchange Composite Index (.NYA: Quote, Profile, Research),, which is used to determine when to begin trading curbs, was down 171.49 points, or 1.8 percent, at 9,249.95.

The trading curbs require that all program buying of S&P 500 stocks must be on an up-tick.

_{"A bad treaty is better than a good missile" ~ Andrei Kislyakov}

Technical glitches plague Wall Street

Dow Jones says problem with DJIA reporting caused dramatic decline; NYSE says trading was interrupted due to intermittent technical problems.
February 27 2007: 5:41 PM EST

NEW YORK (CNNMoney.com) -- As the Dow Jones industrial average suffered its biggest one-day point loss in 5-1/2 years Tuesday afternoon, traders were blind to the severity of the fall due to technical problems.

Dow Jones said that for about an hour it experienced difficulty with its system for reporting the industrial average's activity.

"Around 2:00pm today the market's extraordinarily heavy trading volume caused a delay in the Dow Jones data systems and as a result, the calculation of the Dow Jones Industrial Average temporarily lagged behind the market decline and as we identified the problem we decided to switch over to a back-up system and the result was a rapid catch-up in the published value of the Dow Jones Industrial Average," explained a Dow Jones spokeswoman.

When the back up system was activated around 3:00pm, the delay was eliminated and the numbers on the big board caught up immediately with the market activities.

"The drop lag that occurred in a minute should should have happened over a period of 20, 30 or 40 minutes," a spokeswoman said.

However, "investment products like futures contracts, exchange rate funds or mutual funds that use the index as an underline were not affected," the spokeswoman noted.

Separately, the New York Stock Exchange said intermittent systems problems disrupted some trading Tuesday afternoon.

"Trading towards the end of the day was interrupted due to an intermittent technical problem and that problem is being assessed as we speak," an NYSE spokesman said.

It is unclear whether the problems are related, the spokesman said.

American companies long salivating to get into China aided by our government will now kick our ass economically. It's all due to slave labor wages and if they don't work they most likely take them out back and shoot them. Hey, we don't have any more industry outside of the military.
After the crash it will make it easier to "sell" the North American Union, which will be the end our all of our "rights".

Looks like our national banker is getting tight on money. Hope they won't want it all at once.

International Institute of Management (IIM) released a new report warning about the U.S. economic risks.
The report:
1. Uncovers the forces behind Feb 27th stock market meltdown and the Chinese reaction to the outlook of U.S. Economy.
2. Forecasts the future behavior of U.S. and global markets.

Med Yones, the author of the white paper, warns against costly policy mistakes and provides a detailed analysis of the economic, social and geopolitical risks facing the United States

The complete text of the report is available at:

http://www.iim-edu.org/u.s.economyrisks/

Mar 01, 2007
David Olive

Bay Street and other major world stock markets have a bad case of the jitters these days, and the big question is how long the uncertainty will last.

There are almost more reasons than you can count for this week's market volatility, which has planted seeds of doubt over how long the current four-year bull market in equities can last.

That means we're in for a few more nasty surprises in the months to come, even if markets in Toronto, New York, Japan and China appear to have stabilized in yesterday's trading after a massive sell-off Tuesday that abruptly erased about $632 billion (U.S.) in stock value in New York alone.

more

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Trade War, Gold
Friday, February 23, 2007

Davos, Switzerland, Economic Summit

Max Weber said the following: "If you misprice risk, don't come looking to us for liquidity assistance. The longer this goes on and the more risky positions are built up over time, the more luck you need... It is time for financial market to move back to more adequate risk pricing and maybe forego a deal even if it looks tempting... Global liquidity will dry up and when that point comes some of this underpricing of risk will normalize. If there is much less liquidity around, people will not go into such high risk engagements and will unwind them."

full article

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The drop Wednesday signalled market volatility and will replace stability--uncertainty will become the new norm.

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I'll paraphrase what Weber said, "Don't come crying the blues to responsible central bankers, because you have been warned several times."