Carlyle Group's mortgage-bond fund was suspended in Amsterdam trading after creditors forced the sale of some holdings, jeopardizing shareholders' capital. Thornburg Mortgage Inc., the home lender that's lost 95 percent of its market value in the past year, may go out of business because the provider of “jumbo” loans can't meet $610 million of margin calls. As long as such news continue to pour in stock markets will continue to fall globally. US equity markets fell even on news that Fed will pump in $200 billion to increase liquidity squeezes and prevent equity markets from a fall. The Fed thinks that cutting interest rates and increasing endless money supply can prevent stock markets from falling. If the fundamentals are shaky the monetary stimulus package will be useless.
This is an instant world and central banks and investors expect instant results. If the root of the problem is not corrected, instant medicines will have a temporary effect but will occur off and on and can also become an un-curable disease in the long term.This is what the Fed is doing by increasing money supply and remaining unconcerned over the US dollar’s sharp decline. Short term gains will be long term pain not just for the Fed but for the global economy. Gold and only gold will benefit out of such actions of the Fed.
This is an election year in the US. The measures taken by the Fed will give temporarily relief to the US economy over the coming months. The monetary measures taken by the Fed may have a political motive as the positive result of the current spate of interest rate cuts and huge liquidity injections will be evident after August this year.Base metals will continue to remain volatile this week while precious metals will be a technical trade.
COPPER -- MAY FUTURE -- INTRA DAY PIVOT: $404.0
Failure of copper to break $302-$304 this week will result in a fall to $372 and $360.
NYMEX CRUDE OIL --FUTURE -- INTRA DAY PIVOT: $106.0
Crude oil has to hold $106 else a fall to $100 and $98. Resistance at $106.70 and $109.20
HAPPY PROFITABLE TRADING
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-- Posted Monday, 10 March 2008 | Digg This Article | Source: GoldSeek.com
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