By Grant Smith
August 5, Bloomberg
Crude oil fell to $118 a barrel on speculation Tropical Storm Edouard will leave U.S. oil rigs and refineries undamaged and as commodities prices tumble because of the slowing U.S. economy.
Oil dropped to its lowest level since May 5 as Edouard's wind speeds remained below hurricane strength. Gold, platinum and wheat dropped on speculation slower growth will curb demand and as a stronger dollar dulled the appeal of commodities as an inflation hedge.
``As the storm no longer appears an immediate threat, the dominant theme is still weaker demand,'' said Andrey Kryuchenkov, an analyst at London-based Sucden (U.K.) Ltd. ``Dropping below support levels around $120, where buying had first kicked in April, has probably triggered a lot of sell- orders.''
Crude oil for September delivery fell as much as $3.41, or 2.8 percent, to $118 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $119.34 at 1:32 p.m. London time.
Oil has lost almost $30 since touching a record of $147.27 a barrel in New York on July 11 as unprecedented fuel costs prompted U.S. consumers to limit spending on fuel. Yesterday, the UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials fell 3.25 percent, its biggest loss since March.
``Very little oil production seems to have been shut in by Edouard,'' said Christopher Bellew, a senior broker at Bache Commodities Ltd. in London. ``Gasoline stocks are high enough to limit any crisis from refinery shutdowns, so the market's returning its attention to the weak demand picture.''
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photo: Traders work in the crude oil options pit at the New York Mercantile Exchange, July 30, 2008. Photographer: Andrew Harrer/Bloomberg News
By Stanley White and Kim-Mai Cutler
June 16, Bloomberg
The yen fell to a seven-month low against the euro as gains in Asian stocks encouraged investors to add to holdings of higher-yielding assets funded in the Japanese currency.
The currency declined against the British pound and the New Zealand dollar, two favorites of so-called carry trades, as the MSCI Asia Pacific Index of regional shares rose for a second day. The dollar weakened against the euro and the pound after the Group of Eight stopped short of calling for a stronger U.S. currency in a statement after the weekend summit.
``The yen is grinding lower,'' said Osao Iizuka, head of foreign-exchange trading in Tokyo at Sumitomo Trust & Banking Co., Japan's seventh-largest lender. ``Stocks are stabilizing and that's a sign of improvement in risk appetite.''
The yen fell to 167.41 per euro at 7:10 a.m. in New York, from 166.35 late on June 13. The currency slid to 108.58 per dollar, the lowest since Feb. 14, before trading at 108.28, from 108.19. The dollar weakened to $1.5460 per euro, from $1.5380, after reaching as low as $1.5450 per euro. The yen may fall to 108.80 per dollar today, Iizuka forecast.
The yen slid 0.7 percent to 212.54 per British pound and 0.5 percent to 81.48 against New Zealand's currency as the MSCI Index of regional shares rose 1.5 percent. The pound gained to $1.9631, from $1.9476.
In the carry trade, investors get funds in a country with low borrowing costs and invest in another with higher interest rates, earning the difference between the two. The risk is currency moves erase those profits. Japan's benchmark rate of 0.5 percent compares with 4 percent in Europe, 2 percent in the U.S., 5 percent in the U.K. and 8.25 percent in New Zealand.
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photo: 1000-yen notes are arranged on top of U.S. one-dollar notes in New York, March 7, 2008. Photographer: Andrew Harrer/Bloomberg News
May 22, Reuters
TOKYO - Crude oil soared to a fresh record high above $135 per barrel on Thursday as a surprise drawdown in U.S. crude oil inventories and a weaker dollar prompted heavy fund inflows into the market.
Investment funds flocked into the market based on its strong performance, with key U.S. crude oil having surged more than 20 percent since the start of the month and geopolitical and supply concerns keeping traders reluctant to sell.
Recent bearishness towards the dollar added momentum to the oil market, as the dollar's weakness increases the purchasing power of buyers holding other currencies.
The front-month July NYMEX crude contract rose to a record high of $135.04 a barrel on the Globex electronic trading platform, up 1.4 percent from the New York settlement.
As of 0131 GMT, it was trading up $1.68 or 1.26 percent at $134.85, after settling up $4.19 or 3.3 percent at $133.17 in New York.
"The huge draw in crude inventories was surprising. All the focus is on bullish factors. You simply have to follow the trend and buy now," said Tatsuo Kageyama, an analyst at Kanetsu Asset Management in Tokyo.
"You really cannot forecast how much further the market will rally now. All I can say is the market will continue to rise," Kageyama said.
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photo: Traders work on the floor of the New York Mercantile Exchange May 21, 2008 (REUTERS/Shannon Stapleton)
By Peter S. Goodman
May 11, International Herald Tribune
If the United States were any other country, these would surely be days of panic and austerity in Washington. With debts spiraling higher, a trade deficit exceeding $700 billion a year, and its currency plunging for years, the government would be forced to cut spending and jack up interest rates in a frantic bid to attract investment.
But the United States is not any other country. For more than half a century, Americans have enjoyed a unique privilege in the global economy: The dollar has been the world's dominant currency, the money used in most transactions and the repository for the national savings of many countries, including China, Japan and Saudi Arabia.
Come what may — a financial crisis here, a military misadventure there — Americans could count on money sloshing up thick on their shores. Virtually limitless demand for American government bonds has supported the dollar's value, and kept domestic interest rates down. Americans have been emboldened to spend in blissful disregard of their debts, secure that foreigners would always supply finance. And that devil-may-care spending has in turn fueled economic growth around the world.
This dynamic may be so deeply embedded in the workings of the global economy that it could endure for many years to come: The costs of weaning the United States from its credit habit would ripple far and wide.
But what are the chances that a day of reckoning is coming, when the dollar would be so weak that America would have to play by the rules that apply to every other country? Recent signs do suggest some fraying in the American relationship with its many foreign creditors. The balance of trade has gotten so lopsided and the question marks hovering over the American economy so thick that some foreign governments are beginning to hedge their bets on the dollar.
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photo: A money changer in Manila counting U.S. dollars. Some economists say the dollar could lose more of its lead to the euro over the next decade or two, or, in the longer term, be overtaken by the Chinese yuan. (Cheryl Ravelo/Reuters)
By Terry Frieden
April 24, CNN
WASHINGTON -- Attorney General Michael Mukasey warned Wednesday that organized criminal networks have penetrated portions of the international energy market and tried to control energy resources.
In a speech at the Center for Strategic and International Studies in Washington, he said similar efforts have targeted the international financial system by injecting billions of illicit funds to try to corrupt financial service providers.
Mukasey then vowed to beef up U.S. efforts to fight international organized crime, which he called a growing threat to U.S. security and stability.
The attorney general and top law enforcement officials from the FBI, Immigration and Customs Enforcement and the Justice Department Criminal Division said a classified threat assessment prompted the creation of a strategy to combat the threat.
It calls for several U.S. agencies and their overseas counterparts to better prioritize their targets, to improve information sharing and to boost cooperation in law enforcement investigations and operations.
"The activities of transnational and national organized criminal enterprises are increasing in scope and magnitude as these groups continue to strengthen their networking with each other to expand their operations," said FBI Deputy Director John Pistole.
Officials declined to discuss specific cases because the information remains classified, and disclosure could jeopardize ongoing investigations.
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photo: Attorney General Michael Mukasey speaks Wednesday at the Center for Strategic and International Studies (AFP/Getty Images)
By Michael M. Grynbaum
March 12, International Herald Tribune
NEW YORK: The Federal Reserve on Tuesday announced coordinated action with other central banks to unfreeze panicky credit markets, unveiling a $200 billion program to let even the biggest banks borrow ultrasafe Treasury money by using some of their riskiest investments as collateral.
The action was the second by the Fed since Friday designed to stem a cash squeeze at seemingly solid financial institutions, which have become too frightened to finance even conservative debt offerings.
Stock markets soared after the announcement, with the Dow Jones industrials average closed up 416.66 points, or 3.6 percent, at 12,156.81. It was the biggest one-day point gain for the Dow since July 29, 2002. The dollar also strengthened from a record low against the euro, a sign that investors believed the program would help alleviate pressure in financial markets. (Page 17)
The so-called Term Securities Lending Facility will allow strapped financial institutions to hand potentially damaged securities to the government in exchange for either cash or Treasury securities, whose U.S.-government backing makes them one of the safest investments on the market.
The Fed normally lends Treasury securities to banks for just a few hours. Under the new program, money will be lent for 28 days and the central bank will accept nongovernment mortgage-backed securities - the source of the current crisis in the credit markets - as collateral.
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photo: Guarding the Federal Reserve building in Washington. The Fed and other central banks announced a $200 billion program to help credit markets. (Kevin Lamarque/Reuters )
By Yuji Okada and Sophie Tan
March 06, Bloomberg
Crude oil traded near a record $104.95 a barrel in New York after surging on OPEC's decision to leave production unchanged, lower U.S. fuel inventories and as Venezuela moved tanks toward its border with Colombia.
The Organization of Petroleum Exporting Countries agreed to maintain output targets at a meeting yesterday in Vienna. U.S. inventories fell for the first time in eight weeks, the Energy Department said. Venezuela activated the country's navy and air force in addition to mobilizing 10 tank battalions.
``Those factors encouraged buying here in Asia, extending what we saw in the U.S.,'' said Tetsu Emori, a fund manager at Astmax Ltd. in Tokyo. ``The drop in U.S. inventories, which generated panic-like buying, was a surprise. Crude oil, which has not seen the gains recorded by core commodities, suddenly emerged center stage. If crude rises above $105, the next target will be $150'' a barrel, he said.
Crude oil for April delivery was at $104.60 a barrel, up 8 cents, in after hours electronic trading on the New York Mercantile Exchange at 9:16 a.m. in Singapore.
Oil rose $5 to settle at $104.52 a barrel yesterday, a record close and the biggest one-day increase since Jan. 30, 2007. Futures earlier touched the highest since trading began in 1983.
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photo: Traders walk outside the crude oil options pit at the New York Mercantile Exchange prior moments before the start of trading in New York on March 5, 2008 (Photographer: Daniel Acker/Bloomberg News)
By Lewa Pardomuan
March 03, Reuters
SINGAPORE - Gold edged closer to the $1,000 an ounce mark on Monday, setting a record high for the fourth straight day after the dollar tumbled and crude oil held near an all-time high.
Silver jumped to $20 an ounce for the first time since November 1980 to track gold. Platinum and palladium held near their recent highs, while a firming yen ignited selling in yen-denominated Japanese precious metals futures.
Gold jumped as high as $984.60 an ounce, partly driven by purchases from Japanese speculators who took advantage of the dollar's drop to a three-year low against the yen. Gold was last quoted at $973.30/973.75 in New York on Friday.
Gold has gained around 18 percent in 2008 as investors shift some of their money into the precious metal on expectations of more interest rate cuts in the United States, volatile stock markets and fears of rising energy costs.
"Everybody talks about $1,000. There's Japanese buying. It's cheaper for them to buy," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, adding that investors may also book profits when gold eventually hit $1,000.
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photo: A woman holds a gold bar in Bangkok January 30, 2008. Gold edged closer to the $1,000 an ounce mark on Monday, setting a record high for the fourth straight day after the dollar tumbled and crude oil held near an all-time high (REUTERS/Sukree Sukplang)
By Christian Schmollinger
Feb 20, Bloomberg
Crude oil fell from a record $100.10 a barrel in New York on speculation that a U.S. Energy Department report will show stockpiles rose for a sixth week.
Supplies probably gained 2.28 million barrels in the week ended Feb. 15 from 301.1 million barrels, according to the median of responses in a Bloomberg survey. Inventories will rise as refiners are closed for repairs and upgrades as U.S. heating- fuel use slows and before warmer weather spurs an increase in gasoline demand.
Crude oil for March delivery dropped as much as 90 cents, or 0.9 percent, to $99.11 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $99.30 at 9:10 p.m. in Singapore.
Yesterday, futures soared $4.51, or 4.7 percent, to settle at $100.01 a barrel on the New York Mercantile Exchange. It was a record closing price and the first time Nymex futures have closed above $100 a barrel. Futures reached $100.10, the highest intraday price since trading began in 1983.
The Organization of Petroleum Exporting Countries, set to meet on March 5, may cut output as winter heating demand wanes, oil ministers from Algeria and Iran said in the past week. Oil also rose as a weakening dollar prompted some traders to invest in commodities as a hedge against inflation.
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photo by Lauren Nicole (Getty Images)
By Nicola Clark and Katrin Bennhold
Feb 10, International Herald Tribune
PARIS: After sifting through nearly 2,000 pages of instant message traffic, the police investigating the trading scandal at Société Générale were moving toward a theory Sunday in which Jérôme Kerviel, whom the bank blames for nearly €5 billion of losses, may not have acted alone, as he and the bank have claimed.
Instead, they believe he may have been trying to protect a friend who, it appears, helped him cover his tracks - until one final, fake e-mail message, purportedly from Deutsche Bank, brought the whole house of cards crashing down on Kerviel last month.
The transcript of instant messages between the two men on an internal Reuters system from October 2007 to January suggests that the friend, Moussa Bakir, had an intimate knowledge of Kerviel's surreptitious trading and that Kerviel was well aware of the gravity of his actions.
Two people with knowledge of the investigation said that they had also found other evidence suggesting that Kerviel and Bakir, a 32-year-old broker at Newedge, a subsidiary of Société Générale formerly known as Fimat, were in nearly constant contact. "Very many" of the telephone calls that appeared on Kerviel's personal mobile phone bill - which some months reached as high as €1,000, or $1,450 - were to Bakir, according to one of the people.
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photo: A screen shot from a Web page of a man identified on the site as Moussa Bakir. The French police questioned and released Bakir, a trader at Société Générale. (Adam Berry/Bloomberg News)
Jan 4, Bloomberg 
Feb. 4 -- Microsoft Corp. will probably sell bonds for the first time to finance its proposed $44.6 billion takeover of Yahoo! Inc., offering a top-rated investment in a newcomer to the debt markets.
The world's largest software maker will use cash and stock to pay part of the $31 a share it has bid for Yahoo in the biggest technology takeover ever. It will raise the rest in a debt sale, Chief Financial Officer Chris Liddell told analysts today in New York. He didn't say how much he's likely to borrow.
A Microsoft bond may attain the highest AAA rating, according to James Crandall, head of syndication at Calyon New York. He compared the maker of the Windows operating system with General Electric Capital Inc., last year's most prolific borrower, and Warren Buffett's Berkshire Hathaway Inc.
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photo: Bill Gates, chairman of Microsoft Corp., speaks during the Consumer Electronics Show (CES) in Las Vegas, Nevada, on Jan. 6, 2008. Photographer: Ronda Churchill/Bloomberg News
By Scott Lanman
Jan 30, Bloomberg 
The Federal Reserve may lower interest rates for the second time in nine days and indicate a readiness to go further if the economy deteriorates.
The Federal Open Market Committee, ending a two-day meeting today, will probably follow the Jan. 22 emergency reduction with a half-point cut in its benchmark rate, according to 48 of 85 economists surveyed by Bloomberg News. Such a move would bring the rate to 3 percent.
Officials may cite ``appreciable'' risks to growth, a word used for the first time last week, avoiding what analysts said were the mistakes of 2007's statements. Through December, the FOMC referred to ``inflation risks,'' confusing some investors about its intentions. To avoid the impression of a blank check, Chairman Ben S. Bernanke will also seek language that notes the cumulative cuts since September, Fed watchers said.
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photo: Ben S. Bernanke, chairman of the U.S. Federal Reserve, speaks at a House Budget Committee hearing in Washington, Jan. 17, 2008. Photographer: Dennis Brack/Bloomberg News
By CARL FREIRE, Associated Press Writer
Jan 21, Yahoo
TOKYO - Stock markets across most of Asia fell Monday following declines on Wall Street last week amid investor pessimism over the U.S. government's stimulus plan to prevent a recession.
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A contraction in the American economy would likely hurt profits at Asian exporters, although rising trade and investment within the region has made Asia less dependent on the U.S. economy than in the past.
Investors sold off shares, unimpressed by the economic stimulus plan President Bush announced Friday. The plan, which requires approval by Congress, calls for about $145 billion worth of tax relief to encourage consumer spending.
Japan's benchmark Nikkei 225 index slid 3.9 percent to close at 13,325.94 points, while Hong Kong's Hang Seng index was down 3.5 percent in afternoon trading at 24,323.44.
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photo: A man walks past the electronic board of a securities firm flashing the closing stock price of morning trading in Tokyo Monday, Jan. 21, 2007. Japanese stocks plunged Monday morning after Wall Street declined at the end of last week amid pessimism over the U.S. government's plans to forestall recession. The benchmark Nikkei 225 index lost 466.01 points, or 3.36 percent, to 13,395.28 points by the end of the morning session on the Tokyo Stock Exchange (AP Photo/Katsumi Kasahara)
By Feiwen Rong and Glenys Sim
Jan 9, Bloomberg
Gold rose to a record as a weak dollar increased demand for alternative investments and as energy and industrial metals gained.
Gold, copper and nickel are off to the best start since at least 1980 as funds rebalance their portfolios and pour more money into commodities, according to traders and analysts including Jonathan Barratt, managing director at Commodity Broking Services in Sydney.
``Gold continues to attract investor interest, reflecting the fragility of the dollar, expectation of lower U.S. interest rates, and worries about the outlook for inflation partly linked to the high level of oil,'' David Moore, commodity strategist at Commonwealth Bank of Australia, said in a report today.
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photo source: World Gold Council via Bloomberg News
By Stanley White and Ron Harui
Dec. 27 (Bloomberg) -- The dollar is poised to end a two- year slide against the euro in 2008 as government-backed funds in Asia and the Middle East purchase U.S. assets, currency strategists say.
The currency will gain 4.4 percent to $1.40 per euro by the end of the third quarter, according to the median forecast of 43 strategists surveyed by Bloomberg News. The dollar is down 9.8 percent this year to $1.4638 per euro, after weakening more than 10 percent in 2006.
Merrill Lynch & Co., Morgan Stanley, Citigroup Inc. and Bear Stearns Cos., based in New York, sold $20 billion in stakes to bolster capital eroded by credit-market losses. International purchases of U.S. financial assets totaled $114 billion in October, the Treasury Department said Dec. 17, the fastest pace in five months.
``Sovereign wealth funds are getting cheap deals by buying some of these bombed-out assets,'' said Gerry Celaya, chief strategist at Aberdeen, Scotland-based research company Redtower Ltd., whose $1.23 per euro forecast is the most bullish. ``The U.S. economy is resilient and good at clearing out all the dead wood and bouncing back, and the dollar will follow...''
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