Dubai triggers ‘overdue correction’ in stocks
November 30, 2009
Rising fears of a possible debt default at a Dubai state-owned conglomerate is the catalyst for an “overdue correction” in equities and risk assets, the chief executive of top bond fund manager Pimco said in an interview on Friday.
“Dubai is serving as a catalyst for an overdue correction in risk assets that have been supported by liquidity rather than fundamentals,” CEO Mohamed El-Erian told Reuters. “While many have acknowledged in the last few weeks the growing wedge between market valuations and economic and corporate realities, few have been willing to take their equity exposure down. Dubai is changing all of this.”
El-Erian oversees more than $940 billion in assets under management at Pimco.
Equity markets came under severe pressure on Thursday after news that Dubai World, the government investment company burdened by $59 billion in liabilities, sought to delay repayment of some debt.
U.S. stock markets, which were closed Thursday for the U.S. Thanksgiving Day holiday, fell on Friday. The Dow Jones industrial average dropped 154.48 points, or 1.48 percent, at 10,309.92, while the Standard & Poor’s 500 Index was down 19.14 points, or 1.72 percent, at 1,091.49.
“We had taken down risk exposures in the last few weeks through sales of credit and spread products and, correspondingly, increased our holdings of Treasuries and other high quality names,” El-Erian said.
Other investors were playing defense as well. The benchmark 10-year U.S. Treasury note was up 16/32, with the yield at 3.207 percent, while the two-year U.S. Treasury note was up 3/32, with the yield at 0.687 percent. At the longer end of the yield curve, the 30-year U.S. Treasury bond was up 12/32, with the yield at 4.2116 percent.
Overall, the underlying characteristics of the Dubai announcement are similar to those facing commercial real estate in other countries, including the United States and Britain, he said.
“There will be contagion to many markets, especially in the emerging world where we are witnessing broad-based sell-offs among names with very different financial characteristics.”
This is especially evident in the Middle East where risk spreads have widened for all names in the Gulf even though they share none of Dubai’s vulnerable debt characteristics, El-Erian explained. “With time, this will provide interesting opportunities for investors,” he added.
Crude oil prices tumble on Dubai news
November 29, 2009
Crude oil prices per barrel ended lower Friday, closing out the short week at $76.05, down $1.91, or 2.4 percent, on the New York Mercantile Exchange.
The drop was attributed in part to nervous traders reacting to news of a possible $60 billion default by a Dubai conglomerate, MarketWatch.com reported. The per-barrel price tumbled more than 7 percent in intraday trading, but rallied to finish at a 2.2 percent loss.
“Obviously, the markets are being roiled by the Dubai news,” said Mike Fitzpatrick, an analyst at MF Global. “It shakes confidence in financial markets and raises the specter of contagion, which could trigger a second wave in the credit crisis.”
Natural gas ended up 3 cents, or 0.6 percent, at $5.192 per million British thermal units.
Gasoline lost 3.6 percent to $1.9262 a gallon while December heating oil fell 1.4 percent to $1.9622 a gallon.
At the pump, the national average price of unleaded gasoline was $2.632 per gallon Friday, down from Thursday’s $2.633, AAA said.
Dubai Debt Crisis will not have Earth Shaking Impact, no need to Press Panic Button: Pranab
November 29, 2009
Asserting that there is no need to press the panic button, Finance Minister Pranab Mukherjee today said the Dubai debt crisis will not have “earth shaking” impact on the country’s economy.
“The full impact of the Dubai debt crisis is yet to be assessed, but there is no need to press the panic button,” Mukherjee told reporters.
To draw his point, he pointed out: “First of all, the amount is small and secondly, the exposure of our banking systems to the Dubai financial systems is limited.” He, however, added “some adverse effect” will be there on the stock markets initially, as was felt on Friday.
The finance minister has also said the crisis will not have much impact on the country’s exports to the region.
Mukherjee, however, added the debacle will impact the repatriation of foreign exchange from there and joblessness in the Gulf city-state.
On the issue of the large number of Indians working in that city, he said: “It will have to be seen how this will affect Indians working in Dubai,” though he sounded confident when saying it will not have much effect on the Indian workers in that country.
Indians constitute as high as 42.3 per cent of the population of Dubai.
The minister said the situation after the Dubai debt crisis is “manageable” and added that the government would keep a watch on the situation.
On the issue of climate change, he said: “There should be a common and differential approach towards climate change depending on each country.” Earlier delivering the Haksar Memorial Lecture on ‘Asian economy after the financial crisis’, he said it may be too early to speak about Asia after the crisis, though green-shoots of growth have certainly started to appear. “It is difficult to definitively say that the crisis is firmly and surely behind us.”
With the growth decelerating from 5.1 per cent in 2007 to 3.1 per cent in 2008, the world economic output got severely affected by the outbreak of the global financial crisis, he said.
Developing Asia’s growth, which had decelerated from 9.5 per cent in 2007 to 6.1 per cent in 2008, is expected to decline further to 3.4 per cent in 2009, he added.
CBI arrested Satyam Internal Auditor
November 24, 2009
The Central Bureau of Investigation (CBI) arrested the internal auditor of former Satyam Computer Services Limited V S Prabhakar Rao.Rao was under investigation for his role in assisting the Raju brothers in cooking up the balance sheets and forging bank statements. A CBI official said that though Rao’s role was suspected since the beginning, they could not establish a link till now. “We have arrested him today. We have adequate proof to link him with the entire scam,” the official said. Rao was also a key aide of Satyam founder B Ramalinga Raju and is learnt to be the brain behind suggesting how to fudge the account statements. Rao was produced before the Nampally court which remanded him to four days in CBI custody.
Meanwhile, the Institute of Chartered Accountants of India (ICAI) has announced its decision to issue separate notices to six auditors found “prime facie guilty of professional misconduct” in the Satyam Computer Services case.
These notices are being served on four auditors belonging to the statutory audit team of PriceWaterhouse, Bangalore — S Gopalakrishnan, Srinivas Talluri, Shiva Prasad and Ch Ravindranath. Besides that, notices are also being issued to V Srinivasu, chief finance officer of the company, and V S Prabhakar Gupta, head of the internal audit cell of the company.
Notices will also be issued to the New Delhi and Kolkata offices of PriceWaterhouse. These notices are being issued based on the report of Director (Discipline) of the ICAI into the role of external and internal auditors in the commission of the financial regularities in Satyam Computer Services Ltd.
Walmart Black Friday 2009 Flyer: Miley Cyrus Clothing specials
November 24, 2009
Walmart Black Friday 2009 flyer, Best Buy Black Friday 2009 sales and Toys R Us Black Friday 2009 ad. If retailers’ Black Friday schemes are not enough many leading tech giant and computer, laptop, mobile, camera and other gadgets’ manufacturers too have come out with their own Black Friday sales schemes.
The schemes are enticing for any lay person.
But I must warn you that please don’t go for EMI option as no one knows as to how long one may be able to pay the monthly installment that comes with the finance option.
If you have money please pay upfront.
It will keep you free from stress on the day when you may not be able to pay your monthly installment on the product.
Walmart and Best Buy, besides Sears and Target have come out some greatest bargains in recent times.
They are hoping against odds that their products are sold as soon as possible.
Now HP has come up with a great offer on its laptops and computers.
Apple has already announced its big time Black Friday ceremony.
HP has the HP dv6t Laptop w/ Quad Core i7-720QM Processor, 4GB RAM, 320GB hard-drive, 15.6″ Display and Blu-Ray reader for $924 Shipped when you use the $200 Off coupon: NBTY349821. You must follow all of the steps below (including adding the components that increase the cost of the laptop) for the coupon to work!
Be sure to take advantage of two free upgrades when customizing your system:
1. Click here to go to the dv6t landing page
2. Select Customize & Buy using the Base Configuration ($999.99)
3. Under Memory, select FREE Upgrade to 4GB DDR3 System Memory (2 Dimm) from 2GB DDR3 System Memory (2 Dimm)
4. Under Hard Drive, select FREE Upgrade to 320GB 7200RPM SATA Hard Drive with HP ProtectSmart Hard Drive Protection
5. Under Primary CD/DVD drive, select FREE Upgrade to Blu-Ray ROM with SuperMulti DVD+/-R/RW Double Layer
6. Under Personalization, select Webcam + Fingerprint Reader [+$25]
7. Under Networking, select Intel Wireless-N Mini-card with Bluetooth [+$50]
8. Under Battery, select 12 Cell Lithium Ion Battery [+$49]
9. Hit the red Review & Buy button (or continue to customize your laptop)
10. Hit Add to Cart
11. Enter in the coupon code NBTY349821 to take $200 off the price
Much like the earlier HP dv8t that was on sale earlier this month, the dv6t is absolutely beastly (both in performance and in size and weight). Weighing in at 6.34lbs stock (the 12-cell battery adds some weight), this laptop isn’t going to be known for its portability. What you do get is a laptop that not only can be used as a desktop replacement, but will also outperform most desktop configurations out there. With the upgrade to the 12-cell battery, battery life is expected to be around 5-6 hours, with some users claiming up to 8 hours!
* Intel(R) Core(TM) i7-720QM Processor (1.6GHz, 6MB L2 Cache, 1333MHz FSB)
* 4GB DDR3 System Memory (2 Dimm)
* 320GB 7200RPM SATA Hard Drive with HP ProtectSmart Hard Drive Protection
* 1GB Nvidia GeForce GT 230M
* 15.6″ diagonal High Definition HP Ultra BrightView Infinity Display (1366×768)
* Lightscribe Blu-Ray ROM with SuperMulti DVD+/-R/RW Double Layer
* Webcam + Fingerprint Reader
* Intel Wireless-N Mini-card with Bluetooth
* Genuine Windows 7 Home Premium 64-bit
* 12 Cell Lithium Ion Battery
This deal is not for everyone but for someone looking for a new computer with a $1000 budget, you should definitely not overlook this deal. This laptop is essentially the epitome of cutting-edge/future-proofing.
