Business

Synchronized Rate Cut – Recovering Markets
by Milota Sidorova

There’s been a lot of happening past 24 hours in the world of finance. After Australian move of full percentage rate cut, FED, Bank of England and European Central Bank followed with synchronized strategy and cut off half percentage. Good news, though getting inspired by Henry Paulson, the actions weren’t sufficient.
British government is dealing the biggest bailout ever, literally the government's 500 billion pound ($865 billion) rescue plan. As it seems European markets recovered some of Wednesday’s losses due relatively steady performance in Asia overnight. Germany's DAX was 136.99 points, or 2.7 percent, higher at 5,150.61. French index CAC-40 increased up 110.85 points, or 3.2 percent, at 3,607.74. The FTSE 100 index of leading British shares was also 136.90, or 3.1 percent, higher at 4,503.59.

U.S. lawmakers continue the investigation in Lehman and AIG case. As for the market, Dow Jones has been declining and stopped loosing almost 2 percent on Wednesday. Weakening Bank of America Corp has agreed to buy back up to $4.7 billion in auction-rate securities. Its stocks has lost 26 percent on Tuesday performance and advanced 15 percent yesterday due the pesimistic 3Q report of 68 percent loss. The Securities and Exchange Commision announced perliminary setllement with 8 more investment banks, totalling the bill of $6 billion of the securities. Securities are one of the most demanded ‘cash alike’ assets.
Bank of America has also declared to use ‘its best efforts’ to provide as much as $5 billion in liquidity to other business and paid $50 million in civil penalty for misleading customers their auction – rate securities were safe.

Wall Street calmed down today and were rising very slowly however it’s been much too early to speak about restoring confidence. MSCI's main world stock index, for example, was up 0.7 percent. But it lost 3.9 percent on Wednesday, 3.0 percent on Tuesday and 6.1 percent on Monday. Against the stream, the group of recently preferred beneficiaries just like demand for government bond, gold and low-yielding currencies were declining.


related story: http://news.yahoo.com/s/ap/20081008/ap_on_bi_ge/bank_of_america_settlement;_ylt=AjiTGC1g75wtTQr39Zmcd9Cs0NUE

by Milota Sidorova for PocketNews (http://pocketnews.tv)

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posted by Blog TechSource @ 3:42 AM