On Sunday, French President Nicolas Sarkozy said, “`we need concreted measures, we need unity, which is what we achieved today. None of our countries acting alone could end this crisis”. The sweeping 14-point plan makes euro-zone governments responsible to stabilize long-term maturities, to buy stock in distressed companies, to issue guarantees and insurance, and to issue qualifying capital to financial institutions through preferred shares and other instruments.
Over the weekend, several European leaders pledged to protect the continent’s financial institutions from the cascading global economic maelstrom. At an emergency meeting in Paris, leaders from the United Kingdom, Germany, France and Italy agreed that European governments would provide support to prevent any bank from failing.
On Sunday morning, policymakers surfaced with an agreement to bail out the US financial markets with the commitment to creating the written document before the end of the day. The legislation should allow the Treasury to work with cash-strapped homeowners whose mortgages have been purchased by the federal government to refinance into a more affordable mortgage.
At the end of the year when many of the charts representing the historical valuation of the markets are printed, the graphs will indicate an insignificant marginal gain for the S & P 500 on a week over week basis. White washed in this obscurity will be the incredible volatility and turmoil which troubled the investment world and the activity which reflected the intra week behavior of investors.
A pair of drilling rigs were drifting in the Gulf, according to a press release issued by the Minerals Management Service. The MMS and the U.S. Coast Guard are monitoring the paths of the two rigs, and it has been stated that a pre-hurricane season risk analysis indicated minimal infrastructure in the areas surrounding the two rigs.
Ike is forecast to enter the Gulf of Mexico region by midweek, reaching the center by the end of the week before heading south of Louisiana possibly towards Texas. According to a press release on Sunday from the Minerals Management Service the personnel from 10 rigs have been evacuated.
Resources investors will be carefully monitoring news developments on at least two fronts this week, with a concentration of interest in the progress of Tropical Storm / Hurricane ‘Gustav’ in addition to the recent Russian foreign diplomatic relations with its neighbors and the West.
China holds “the cards”:
The “invisible hand” of Adam Smith has not been able to effectively remove the concentration of pricing power, as 65 per cent of the world’s supply of tungsten is sourced from China. The Chinese government has developed a reputation of stock piling resources and limiting global supplies in order to suit the country’s purposes. With the Olympic Games in the rear view mirror, investors will wait with keen anticipation to learn what the Chinese may now have in store in terms of regulating policy to control prices for the near future.
Crude oil observers will be carefully monitoring the progress of Tropical Storm Fay, which may strengthen to a hurricane before reaching Florida Keys on Monday night, according to a public advisory issued by the National Hurricane Center. The northern Gulf of Mexico accounts for more than 20% of US oil production. Tanker traffic and production in the North Atlantic region are often affected by storms in the area during hurricane season running June 1 through November 30.
With escalated geopolitical tensions and conflicts between Georgia and Russia over the weekend, some observers believe that fighting could disrupt energy exports from the Caspian region. Senior Bush administration officials stressed that the US is focused on diplomacy to facilitate an end to the hostilities, although officials have described the Russian offensive as a regional crisis that wouldn’t require outside intervention.
Tuesday, October 14, 2008
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