Designer`s house to be sold in asset battle

Designer`s house to be sold in asset battle	23.09.2008

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Tom of Melbourne has obviously got the blinkers on. People will surely loose their jobs and their homes. America is in recession and Australia will follow in late 2008 or early 2009. Prices are ridiculous compared to real value and thus prices have to fall or go nowhere, like they did for most of the 1990s. There has been a herd mentality with property in the last couple of years. People were still spending into the New Year, but most have now got the message ... STOP SPENDING or you'll get into trouble. Interest rates, oil prices, food, education and health costs, etc are all going up. Salary and wages have gone virtually no where. Sometimes the best thing to do is to do nothing. Cash is sometimes, King. This credit crunch is bigger than most people realise and has still got a way to go and is a global issue, not just a US issue. Hold onto your cash sit back and enjoy the ride. It's a ride that a lot of people haven't experienced before.Leave the politics out of it Tom and tell it how it is. This is how it would have been if the Howard government got back in. Rudd and his team have inherited this and there isn't a lot they can do about it. That's how it is.The ABC Four Corners program ran a story on the 17th September 2007 called Mortgage Meltdown and there is an extended interview with Robert Shiller, Professor of Economics at Yale University USA regarding, Home Prices and is worth viewing. http://www.abc.net.au/4corners/special_eds/20070917/subprime/default.htm
Posted by: Rob W of Brisbane 10:02am today

The sun only has 4.5 billion years fuel left (its already mid way through its life!) The universe it expanding and it may die of heat loss, then again there may also be a big crunch and you are all worried about the share market!!???The UNIVERSE will renew itself destroying everything and you are all worried about the stock market??????
Posted by: the oracle 10:02am today

"Global markets in panic as sub-prime crisis spreads" - See this has nothing at all, nothing, zip, nada to do with any Australian Government post or present.And for God's sake don't say "recession", interest rates are going up because...? (hint: it's not from a recession)So don't post Liberal/Labor trash here - try Women's Weekly
Posted by: James of Brisbane 10:02am today

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European, Asian markets nosedive, US trade volatile
One strategist sees "complete state of panic"
Sub-prime credit crisis `beyond the Fed`

OVERSEAS traders have dumped shares and the US dollar in the hours after Australian stocks lost $31 billion as global markets plunge into "a complete state of panic".

In the US, trading was highly volatile overnight, and while stocks rebounded from sharp losses at the open, few were forecasting an end to the turbulence, with confidence plummeting and widespread expectations of a US recession.

The Dow Jones industrials gained 0.13 per cent to 11,966.66 at the closing bell, but the tech-heavy Nasdaq composite slumped 1.56 per cent to 2177.90, and the broad-market Standard & Poor`s 500 index was down 0.88 per cent to a preliminary close of 1276.77.

The tone was set by former US Federal Reserve chairman Alan Greenspan who wrote in The Financial Times that "the current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the Second World War``.

The volatility spilled into commodities, with oil soaring to a fresh high near $US112 a barrel before falling back dramatically to $US105.68 and gold jumping to new heights beyond $US1032 per ounce.

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In London, where the Bank of England said today it had pumped £5 billion ($10.8 billion) into short-term money markets to combat the ongoing global squeeze on credit, the FTSE 100 index of leading shares shed 3.86 per cent.

In Paris the CAC 40 fell 3.51 per cent and in Frankfurt the Dax lost 4.18 per cent.

The DJ Euro Stoxx 50 index of leading eurozone shares was down 3.55 per cent at the close, its lowest level since the middle of 2005.

The picture was similar in Asia, where Tokyo stocks plunged by 3.7 per cent down, ending below the key 12,000 points level for the first time since August 2005.

Mumbai nosedived by 6.03 per cent, Hong Kong shed 5.2 per cent, Shanghai declined 3.6 per cent and Seoul gave up 1.6 per cent.

Panic

"The markets are in a complete state of panic and in such situations there is no such thing as valuation or value in any asset," said Michael Klawitter, FX strategist at Dresdner Kleinwort in Frankfurt.

The sell-off has been sparked by new fears over the scale of bank exposures to the US sub-prime crisis and credit squeeze, highlighted by the Bear Stearns rescue.

In Australia yesterday, shares slumped to an 18-month low, with banking stocks leading the rout as the S&P/ ASX 200 fell to 5087.

Traders warned of more declines ahead as the big US banks begin profit reporting tonight.

"Once they`ve reported, it may signal the bottom of the financials, but there is potential here for large, large write-downs that the market may be unaware of," said Patersons Securities private client adviser Tony Tascone.

"I think the market wants to see the index below 5000 and it probably needs to go there to get past the psychological level. It wants to see some value where it is well and truly oversold."

Fear breeds fear

CommSec chief equities economist Craig James said: "Right across the Asian region, everyone is looking over their shoulders and fear tends to breed on fear.

"That such an established institution like Bear Stearns, whose share price was trading at $US170 a share at the start of last year, $US30 on Sunday before now falling to $US2 - that fall from grace has been remarkable."

The news that Bear Stearns would be sold to JPMorgan for the equivalent of $US2 a share, just hours after announcing it had to be bailed out by the US Fed via its new owner, weighed heavily on overall sentiment and pounded Australian banking stocks yesterday.

Commonwealth Bank and Macquarie Group were both down more than 6 per cent by the close, while Babcock & Brown suffered a slump of more than 10 per cent. ANZ also lost 4.9 per cent and the National Australia Bank shed 2.9 per cent.

Bank collapse?

"Now we`re starting to get the real concerns from clients who are asking: `are we going to have a financial collapse in the top four banks? Should I have my money in the banks?`," Mr Tascone said. "And there is so much fear inside of that selling - they`re selling banks like they`re going broke."

The S&P/ASX 200 Index tried to rally early in the session after the US central bank announced it was cutting the discount bank lending rate by 25 basis points to 3.25 per cent along with setting up a new lending facility for primary dealers.

But the Bear Stearns announcements and a slump in the US futures market added to concerns about the health of other financials and further losses on Wall Street, analysts said.

With AFP and The Australian

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Today`s Top Picks

Heather Mills pockets payout

PAUL McCartney has been ordered to pay his estranged wife $52.3m as part of their acrimoniousdivorce.
Gallery Pictures from the bitter battle »