Thank goodness the US is closed!
Europe is down a whopping 3.5% (so far) this morning, opening in free fall after Asia opened down about 2% on the average (but finishing at the day’s lows). Gold flew up to $1,906 before calming down but oil is down to $84.82 at 6:45 am as the Dollar tests it’s highs of 75.15 on the Euro’s fall to $1.41 and the Pound testing $1.61. Any thoughts that the BOJ was done manipulating the Yen are now officially out the window as the Dollar/Yen is STILL 76.80 (around 128.50 on FXY), the same place it’s been since August 8th!
When the World’s 3rd largest economy is manipulating it’s currency on a daily basis, of course the Global markets are going to be thrown into chaos. Every day the BOJ tries to debase their currency they must buy other currencies or foreign stocks or gold or silver or oil – ANYTHING BUT YEN to make the Yen less valuable as compared to another relative basis.
Even so, it’s not working and Japan’s new finance minister said this morning that he will try to forge a consensus among the Group of Seven leading industrialized countries that “excessive yen rises” won’t benefit the world economy when finance officials meet in France later this week. “I am hoping to see us develop a common view that excessive yen rises, as shown by facts and processes in the past, do not necessarily have a positive impact on the global economy,” Mr. Azumi told reporters, referring to Friday’s planned meeting of G-7 finance ministers and central bank chiefs in Marseille, France. “At this exchange rate, it is becoming impossible for crucial parts of Japan’s export industry to make profits,” he said.
Asian shares were already following US financials downhill on oveblown fears of the FHFA lwasuit (see FHFA Friday). I say overblown because the first bank sued, ING, already settled for .20 on the Dollar so banks are reacting as if they already lost $30Bn when it’s much more likely this will all get washed away for $6Bn, or about 2 day’s worth of profits (4%). We’ve already seen the banking community write down over $1Tn in losses and survive to screw us over another day – do we really think this little wrist-slap will end them or is this just another example of retail suckers…
