Central banks in delicate situation by Daniela Simkova

Christmas means a closed market for the banks. During this time banks can clean the "year-end balance sheet." The Leading central banks were not successful in tiding the blockades. There is a wide difference between the borrowings for banks and that for governments, which means that investors are careful in lending to the banks. The longer it will last, the more danger rises up to the prominence. A fear that banks could tighten the economy is getting higher and higher. Confidence is the most important factor in the bank system and this year it becomes strongly emphasized. Leading central banks are in a delicate situation. No one would like to see any of the big banks bagging for a cash on New Year. Therefore five central banks set up a plan which ensures transfer some $100 billion to the banking system kept in dollars. Markets hope that the money will have at least those who are in a financial crisis and is also afraid of the revelation of the banks situation. As a result, the Federal Reserve decided to lower interest rates by a quarter of a percentage, which was demonstrated as a rough implement in solving this crisis. Borrowing of money market needs remedy as fast as possible. Central banks don't want to rely just on the overnight borrowing, they need something different, funding over longer time, more precisely three months.

by Daniela Simkova for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.

Good news about mortgage by Ludmila Martinicka

Majority of teenage people would like to live on their own as soon as possible. To move away from the touching hand of their parents, far far away from their advices, commands and restrictions. Moving from the parents house brings different thoughts to young head. Do I really want to move? Does it worth to leave the comfort they are providing me? Should I live alone or invite a friend to live with me? Will my parent cover all the expenses joined with the flat and my own in additional? Usually, the answer is no. Why should parents pay for another flat, if whole family can live happily under one roof? Well, sometimes it really worths. Similar problem with living have also young couples. To live as a subtenant could be fine in the beginning but not when you want to set up a family. People at the young age use to be on the lower stave of the position ladder at work, what mean also a lower income into the family budget. Luckily, for those who took their life into their hands, there is a possibility of mortgage. And what is even more positive, rates are decreasing and home prices are falling. Also people with smaller salary can afford it. A lot of this has to do with the Federal Reserve's balancing act between encouraging economic growth and keeping inflation under control. Thanks to this step you can find your new home and bring an early Christmas present for the whole family. Don't hesitate too long, because rates can move quickly!

related story: http://www.fool.com/personal-finance/home/2007/12/12/early-christmas-for-mortgage-borrowers.aspx

by Ludmila Martinicka for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.

Disappointed investors by Claudia Sonea

On Tuesday Fed finally cut interest rates by a quarter point, disappointing investors who hoped the central bank would lower up to a half-point. Their disappointment led to stock's fall on Wall Street and there are new concerns on where the economy is heading, if indeed will overcome the credit and mortgage crisis. Counting on the fact that the Fed would do all it could to prevent the economy from slipping into recession, investors made good deals on the market and the stocks were up in the last two weeks. However, their views and those of the central bank did not match, although the Fed said on Tuesday that the new rate cut is supposed to propel the economic growth over time. The statement was categorised by Bill Knapp, economist and chief investment strategist for MainStay Investments, a division of New York Life Investment Management as being a clear and firm affirmation of the fact that the Fed think the rate has been cut enough. The rate cut was accompanied by a lowering of the discount rate (the interest it charges banks for loans) by a quarter-point to 4.75 percent, making it easier for banks to obtain the cash they need for year-end obligations. Moreover, the assurances that further cuts are possible if a severe downturn in housing and a crisis in mortgage lending worsen should have ease investors preoccupation, but it didn't. As it is, the Dow fell 294.26, or 2.14 percent; The Standard & Poor's 500 index fell 38.31, while the Nasdaq composite index fell 66.60, or 2.45 percent. The 10-year Treasury note's yield, which moves opposite the price, fell to 3.97 percent from 4.16 and the dollar was way behind other currencies. Only bond prices rose a little bit and the bad thing is that oil price raised too, but not that much as it was last month and settled on the New York Mercantile Exchange at $90.02 per barrel. Bruce McCain, head of the investment strategy team at Key Private Bank, explained that Fed's decision has much to do with the fact that the former cuts still have to work their way into the economy. No matter the tactics applied by Fed, the banking suffered the consequences and Washington Mutual Inc. became the latest lender to resort to a massive stock sale to shore up its finances after Citi Bank and Switzerland-based UBS AG. Still until further notice there is nothing left to do than wait and see what is happening, so don't go away, more to come!

related story: http://news.yahoo.com/s/ap/20071211/ap_on_bi_st_ma_re/wall_street;_ylt=AkFaH6gaxZ3N.STUw2rrYWis0NUE

by Claudia Sonea for PocketNews (http://pocketnews.tv)

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Western banks final quarter by Claudia Sonea

Subrpime lending market raises serious issues to all Western banks that are forced to write down losses, not only in the fourth quarter, but on the whole year's profit. UBS AG is one of them and on Monday it announced that will write off a further $10 billion in losses in order to raise billions in capital through share sales to Singapore and an unidentified investor in the Middle East. A similar situation happened a month ago with Citigroup Inc., the largest U.S. bank, who sold 4.9 percent of its shares to Abu Dhabi Investment Authority, the sovereign investment fund of the Gulf Arab state, for $7.5 billions. Despite the fact that at the middle of November UBS had predicted a profit for the fourth quarter it will post now another loss at the end of fourth quarter, adding the $10 billion written off to other 4.2 billion from the third quarter. In addition, the bank downgraded the value of some assets by more than 4 billion francs ($3.4 billion) because of exposure to bad U.S. mortgages at the beginning of October. UBS Chairman Marcel Ospel stated that although the bank had so many losses due to subprime US lending market, the 30 billion francs ($26.6 billion) in new money brought in from clients in October and November should have balanced the financial situation. The main investor was The Government of Singapore Investment Corp., a sovereign-wealth fund that paid for 9 percent of the shares 11 billion Swiss francs ($9.75 billion). It is called GIC and its deputy chairman is Tony Tan who made a public statement that Singapore is not seeking control of the Swiss bank; therefore the investment is not conditioned of having a representation on UBS's board. About the move of UBS analysts speak as a being a very bad one- Matthew Clark and Vasco Moreono of Keefe, Bruyette & Woods Ltd said it represents the total opposite of the advice given three weeks ago by Chief Financial Officer Marco Suter. Meantime, UBS shares rose $1.18, or 2.3 percent, to close at $51.66 in New York trading and everyone is waiting to see the where everything is heading. Moreover, the plan introduced by Bush of granting a few months to recover and extend the mortgages in such a way, that the borrowers can cope with the normal course, has still to prove if it's benefic or not. Andreas Venditti, an analyst at Zuercher Kantonalbank, inclines to say it is not because it depends of the bank referred to. Don't go away more to come!

related story: http://news.yahoo.com/s/ap/20071210/ap_on_bi_ge/switzerland_ubs;_ylt=ArShHYqTsy_a6ya6Sha2iFGs0NUE

by Claudia Sonea for PocketNews (http://pocketnews.tv)

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New days for Wall Street Journal by Ivana Bruderova

In these days, something which had never happened before become a reality. One of the most famous and the most influential newspapers The Wall Street Journal, for more than century controlled by Dov Jones & Co and the Bancroft family, change their owner. Rupert Murdoch,76, well known in publishing industry, owner of for instance London's The Times, Fox News Channel, which took over the CNN in rating war among the cable networks, bought also deal of MySpace, one of the hottest trends on Internet . Murdoch's News corporation offered more than 5 billion dollars to Dov Jones & Co. for the Journal. Everything can it's price. Finally R. Murdoch became a new boss of Dov Jones & Co. Last week News Co. designated new management and everyone is waiting impatiently what will happen, at the first place how the sale will affect the paper. Murdoch is stale for risking a lot, but lately he usually profit from it."The culture at News Corp. is one of partnering and taking prudent business risks, and they have a balance sheet to fund investment," said Richard Zannino Dov Jones CEO. When News Corp. bought The Times it went through substantial change apparent at the first sight. A Format changed from broadsheet to the smaller „compact" format, to the size of tabloids. Many journalist were affraid it will lost it's respectability, but The Times in the smaller version outsold all compete newspapers over the past three years. It brought them also commercial success. The Wall Street Journal has gone through many changes, but those the greatest are expected in following months. Murdoch do not reveal details of his plan, but he want to expand overseas to Asian and European countries to compete Pearson PLC's Fnancial Times and with newspapers Washington go up agressively against The New York Times.

related story: http://online.wsj.com/public/us

by Ivana Bruderova for PocketNews (http://pocketnews.tv)

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Lowering of interest rates as a result of struggling US economy by Petra Calovkova

US economy is struggling and therefore there will be another lowering of interest rates. Federal Reserve Board Chairman, Ben Bernanke, made this decision third time during this year. This way they want to support businesses and also consumers in increasing their economic activity. But lower interest rates might also cause inflation, cheaper export but lower import. Changing of interest rates few years ago, when they were too low for quite a long time, brought along housing boom, while nowadays there is a problem with selling the houses in US. It would change a lot if people would be able to forecast the growth or lowering of interest rates. It is hard to predict though, because they actually reflect human activity. One of the factors influencing these changes is for example borrowing money when there is a demand of those who want to borrow the money and then those who have the money to lend. If the demand is high, the interest rates are higher than they could be. Another factor can be governments printing more money than is needed. If more money is available, then interest rates lower. And for instance also inflation is an important factor. If it changes, also interest rates are about to be higher or lower. But back to the US case, Martin Cantor, director of the Long Island Economic and Social Policy Institute at Dowling College, said that contrary to the common belief, the federal funds rate has a "very minor effect" on consumer rates, or buyers' behavior. However, who knows. Ben Bernanke also has his reasons to think that it might matter. Let's see what the result would be.

by Petra Calovkova for PocketNews (http://pocketnews.tv)

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Dollar falling, China's economic growing, and what about the oil? by Ludmila Martinicka

Since 2003 the oil prices are growing. The reason could be increasing demand from China and India. After falling price of oil to $88 it rose up back to $90 for a barrel on Thursday. Dollar is falling, China's economic growing. Seems that oil prices fell down too quickly and now they are coming backwards. Last week the price was $99 a barrel, this Wednesday the price fell on $88 a barrel. As everybody was prepared on increase of the price to $100 a barrel, and the price $80 a barrel seems to be really cheap, what is quite weird but understandable, $90 a barrel could be quite acceptable. James Cordier, president of Liberty Trading Group in Tampa, Fla. Evaluate this situation like some kind of hunt for bargains. But the decrease of the oil prices seems to be just a little backspace before it runs up and cross the $100 a barrel border. Condoleeza Rice challenged Europe and Russia to ratchet up pressure on Iran to halt uranium enrichment and come clean about its nuclear programs. Energy traders worry that any dispute between the Iran and West could cut into oil supplies from the Middle East. Officials should be really careful about their words and decisions. The Dollar fell against Euro. This might also influence the decrease of the oil price. The growth of China's economics about 1 percent is estimated due to oil prices, stated Organization for Economic Cooperation and Development's revision.

related story: http://news.yahoo.com/s/ap/20071206/ap_on_bi_ge/oil_prices;_ylt=AukrdVxxbFM9.vZFgc7nTWus0NUE

by Ludmila Martinicka for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.

Mortgage crisis. by Zuzana Valkova

People are used to live in a good, comfortable conditions. They live in their beautiful houses or apartments and enjoy their privacy - their homes. But there are always people, who can not afford nice living. They don't have enough money to buy house or even small apartment. What do these people do then? They have to take loan. What else should they do? Only blessing is, that there are special loans for housing, called mortgages. But I'm not really sure about their convenience. Because of mortgage crisis in the US, are many people living in fear about their homes. Last year, it was a big hit in The US to take subprime mortgage. I had no idea what was that, but after some research, I found that I exactly know what's that. Subprime lending is kind of loan for people who don't qualify for market interest rates, or they can not, or don't want to prove if they have enough income to pay the money back, or have bad credit history. This kind of loan is dangerous for both sides. For lenders because there is no warranty, that they get their money back. And for borrowers there is a danger of taking their fortune- their house. So why do they take this kind of loan, when there is another kind? It's called A-paper loan, and its a regular loan from bank, which has lower interest rates and it's safe. But difference is that bank needs to know people's real credit history and they do investigation about their incomes. Many people can not afford this kind of mortgage, so their only hope is subprime loan.

related story: http://news.yahoo.com/s/ap/20071206/ap_on_go_ca_st_pe/mortgage_crisis;_ylt=Are866lYJZs.3WC1fF9Gj6Ks0NUE

by Zuzana Valkova for PocketNews (http://pocketnews.tv)

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People drowning in debts? by Ludmila Martinicka

ABA is an acronym for free-trade and professional association. Full name is American Bankers Association. Association promotes and advocates issues important to the banking industry in United States and in addition also performs educational components for consumers through its Educational affiliate. The headquarter of ABA is in Washington, D.C. Some of American people say, they suffer from high fees of debt/credit cards, that banks "eat" too much of their money. Did people (not only American) became victims of their own financial system, system that they invented? It is nice, to have a possibility to get some money from the bank. But people use to forget easily the loan conditions. So, what about the credit risk, indeed? Whose fault is it that many people are "drowning" in debts? Government of United States thinks about legislative changes. The American Bankers Association warned Congress, that new legislation could have ineligible impact on their financial health. Representatives of ABA also expressed their conviction, that Americans are not drowning in credit card debts. Three American financial companies & Bank of America, Discover Financial Services and Capital One & tried to explain their practices to the Congress. A candidate for presidency 2008, Senator Barack Obama expressed his will to fight against predatory credit card companies. Till today, nobody proved if this companies behave predatory or not. However, we are those, who take money from banks and then pay for it. I would need a training to understand to deep how this financial system work. I just hope, the responsible ones know how to work things right.

related story: http://uk.news.yahoo.com/afp/20071205/tpl-us-banking-finance-politics-10170b4_1.html

by Ludmila Martinicka for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.

Stocks moving up and down by Natalia Holvova

In the world of finance there were ups and downs this year. Sometimes it is not easy to find a balance and some years are more events rich than the others so even predictions can vary in different ways. Mortgage crisis brought some troubles on Wall Street and it certainly wasn't easy to find a way how to get out of unpleasant situation. It seems that everything is getting more stabilized although this is not the end. Important men are talking about the stock rising and better oil prices and eventually appear optimistic but this is a situation that is happening "in highs". Common people do not know and do not care what is going in the macroeconomic sphere. The only thing that matters is our small personal life we have to live everyday. We are interested in food and gas prices, we do care about how much we need to pay for our rent and how we pay all the other bills we have. There is no one else who is going to pay our stuff for us and these are the worries no one from the important well-paid men has. Of course it is important to have these "big" people on the Wall Street but we need them to make our lives easier and the quality of our living higher more than listen to the global financial factors we do not really understand. I do care if my future kids will have enough food to eat, if I am going to be able to give them as good education and life opportunities as possible, not about how much is an oil barrel. I just need someone who is more human being than finance stockbroker and someone who is able to speak my language so I do know what is needed in my small world according to big financial "highs".

related story: http://news.yahoo.com/s/ap/20071205/ap_on_bi_st_ma_re/wall_street;_ylt=AtPzoftkg8im3rfIvUMlubqs0NUE

by Natalia Holvova for PocketNews (http://pocketnews.tv)

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Trouble at Wall Street by Eva Matova

After last week's problems on the Wall Street there is a serious reason for worries about the subprime mortgage crises and its impact on banks and brokerages. The decline of the market may badly affect the mortgage industry which means that the home foreclosures will worsen. The White House has already promised to help the house-owners to avoid defaults as a plan to hold the interest rates steady for a while is being created. San Francisco Fed President Janet Yellen warned the public that housing problems could "spill over" into consumer spending. That is one of the reasons why the investors are now expecting the November employment record, which may help to indicate the direction of consumer spending, the crucial factor to maintaining economic growth. The economists find it difficult to predict what is going to happen after last week's gains. Lincoln Anderson, chief investment officer and chief economist at LPL Financial Services in Boston, was heard to say that "a market is trying to sort out whether we're seeing a big shift in the economic and investment fundamentals here or whether we're just going to continue to slog along"

by Eva Matova for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.