Trading Now

Trading Now

Tuesday, September 22, 2009


*gee I wonder why
Investors appear unenthusiastic about RBS stock offer
Investors did not show much enthusiasm for a planned stock offering of $4.8 billion to $8.1 billion announced by Royal Bank of Scotland. Coming 15 months after RBS' last rights issue, worth $19.4 billion, the move is too soon, analysts said. The bank proposed the offering to avoid making an additional payment in equity to the U.K. government's troubled-asset guarantee scheme, a payment that would raise the government's stake in the bank to about 85%. The Scotsman (Edinburgh) (21 Sep.)

Anticipated oil-price plunge drives option prices to record high
Oil traders buying options to protect themselves against a collapse in the price of oil are paying record prices, as the Organization of Petroleum Exporting Countries delivers 600,000 barrels a day in excess of global demand. The spread between what traders pay to bet on a price drop and a price increase expanded to 10 percentage points, according to Banc of America Securities-Merrill Lynch. "If ever there was going to be a retreat below $60 a barrel, it is now," said Stephen Schork, president of Schork Group. Bloomberg (21 Sep.)

Census data show how recession has changed Americans' lives
U.S. census data confirm that the ferocity of the economic downturn has profoundly changed the way Americans live. The disruption cost many their jobs, nudged those still employed to carpool, and persuaded couples to put off getting married or buying their first home. It reduced the number of foreign-born residents, as workers from other countries gave up on finding employment in the U.S. "The recession has affected everybody in one way or another as families use lots of different strategies to cope with the economic reality," said Mark Mather, associate vice president of Population Reference Bureau. The New York Times/The Associated Press (22 Sep.)

U.S. to see flat holiday-shopping season, Deloitte says
Limited credit, high unemployment and increased savings by Americans might delay a rebound for U.S. retailers until 2010. "Americans continue to save at historically high rates while also paying down debt, and these factors combined suggest another chilly holiday season for retailers," said Carl Steidtmann, chief economist at Deloitte Research. BusinessWeek/Investing Insights blog (21 Sep.)

"Disconcerting" money-supply drop clears path for Fed stimulus
A sharp contraction for U.S. money measure M3 eliminates arguments that the Federal Reserve is in danger of unleashing high inflation by sticking with a stimulative monetary policy, said Paul Ashworth, senior U.S. economist at Capital Economics. He called the August drop at an annual rate of 2.2% "disconcerting." BusinessWeek (21 Sep.)

MasterCard survey: Chinese household spending to increase
A survey by MasterCard shows that China's household spending will increase, thanks to the government's $586 billion economic stimulus. A survey of 6,300 families shows that 41% of urban households and 59% of rural households intend to spend more during the next year than they did in the previous 12 months. "The short- to medium-term income and employment stimulus may well develop into longer-term structural improvement that supports a higher level of household spending," said Yuwa Hedrick Wong, an economic adviser at MasterCard Worldwide. The China Post/Bloomberg (22 Sep.)

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