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Monday, August 27, 2007

(EXTRACT) REUTER [Will There Be Calm]

No calm ahead for Wall Street
Another rocky week is expected for stocks as investors look for indications that the Fed will lower interest rates.

August 26 2007: 12:41 PM EDT


NEW YORK (Reuters) -- Wall Street is heading for another volatile week, but the bulls could get a further reprieve if calm brought on by the Federal Reserve's liquidity injections and a surprise cut in its discount rate lasts.

The coming week has a slew of economic indicators, including July existing home sales and preliminary figures on second-quarter gross domestic product, which should shed more light on the economy's health.

But paramount to Wall Street will be what the data says about the prospects for a cut in the fed funds rate as the housing slump fuels worries that the sector's slowdown could tip the world's largest economy into a recession.

"Wall Street is banking on a mid-cycle slowdown that was expected but could get worse, suggesting that the Fed may want to lower the fed funds rate," said Rob Goodman, director of investments for Fairport Asset Management, in Cleveland. "A cut," he said, "is not out of the realm of possibilities ... and I don't expect Wall Street to be too negative going forward."

Fed rate cut? Don't bank on it
But even with the burgeoning calm, money managers and analysts say a sense that there could yet be more upheaval due to weakness in the housing industry still pervades the market and could make for cautious trading ahead of the Labor Day holiday on Monday, Sept. 3. Volume is likely to be lighter than normal with many of Wall Street's denizens on vacation or cutting the week short for the last long weekend of summer.

Lots of economic numbers and exceptionally light volume often is a recipe for volatility. The Chicago Board Options Exchange Volatility Index, also known as Wall Street's fear gauge, ended Friday at 20.72, down 8.4 percent. The VIX is down almost 45 percent from Aug. 16, when it climbed to 37.50, a five-year high.

Dow up 7 percent for the year
More worrisome, analysts and money managers said would be any news that pointed to further turmoil in the subprime mortgage sector. Last week, several mortgage providers, including Accredited Home Lenders Holding Co, said they were cutting hundreds of jobs as the lending squeeze and lingering jitters in the credit markets take their toll.

Still, the clamor for a cut in the fed funds rate is providing a cushion for stocks as shown by Friday's stock market advance. Surprisingly strong data on July new home sales and durable goods orders contributed to the market's calmer tone.

Friday's gains sent the Dow Jones industrial average up 2.3 percent for the week, its best weekly advance since April 22. Both the Nasdaq Composite Index and the S&P 500 notched their biggest weekly gains in five months, with the Nasdaq rising 2.9 percent and the S&P gaining 2.3 percent.

For the year, the Dow is up 7.35 percent, while the S&P 500 is up 4.31 percent and the Nasdaq is up 6.68 percent. Before the latest turmoil, data showing the economy's pace of growth was stronger than expected would have rattled investors, quashing the oft-repeated view of a "Goldilocks" scenario - an economy that's neither too hot nor too cold.

Fed bends rules for two big banks
But with investors still uncertain about the extent of the impact of the faltering housing market and losses from subprime mortgages, Wall Street is set to latch on to any news showing that the economy is weathering the real estate downturn, albeit with bumps along the way.

"If the consumer can come out of subprime OK, then the market will come out of subprime OK," said Jim Fehrenbach, head of Nasdaq trading at Piper Jaffray, in Minneapolis.

He said the jobs report, due before the Fed's policy-setters meet on Sept. 18 to decide on interest rates, is among the pieces of data that may seal the market's fate in the days ahead, along with reports on housing. "If those numbers turn south, that's going to really increase recession fears," Fehrenbach said.

But the August jobs report is still a ways off. The nonfarm payrolls report for August will be released on Sept. 7.

Housing, Fed Minutes and GDP
Looking at this week, however, the economic calendar promises plenty of numbers to crunch and there could be some surprises. Among the week's highlights will be data on existing home sales on Monday; the S&P/Case-Shiller Home Price Index Tuesday, along with the Conference Board's August consumer confidence index and weekly store sales.

The minutes from the Fed's most recent policy meeting on Aug. 7, at which the Fed left its benchmark fed funds rate unchanged at 5.25 percent, are also due Tuesday. The Federal Open Market Committee's August minutes could be particularly illuminating on the central bank's thinking before its surprise cut in the discount rate on Aug. 17 and its statement afterward saying "tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward."

Weekly data on mortgage applications will be released on Wednesday, while the government's preliminary report on second-quarter GDP is due out on Thursday, along with weekly data on initial jobless claims. This will be the second look at gross domestic product, which measures the output of all goods and services within U.S. borders, for the second quarter. The advance estimates of GDP were released on July 27.

Hedge-fund redemption shock
Friday's data features a reading on July personal income and spending, a report that includes one of the Fed's favored consumer price inflation gauges, the core PCE price index. (PCE refers to "personal consumption expenditures." The core PCE price index excludes volatile food and energy prices.)

Also on tap for Friday is the release of the August reading of business activity in the U.S. Midwest from the National Association of Purchasing Management-Chicago and data on U.S. factory orders for July.

The corporate earnings agenda is thin, with tax preparer H&R Block (Charts, Fortune 500) and computer maker Dell (Charts, Fortune 500) set to release quarterly results on Thursday.

Sunday, August 26, 2007

(EXTRACT) CNA [ODEX Had "No right of civil action"]

SINGAPORE : Anime distributor Odex had "no right of civil action" against illegal downloaders.

This is because it was just a sub-licensee and not the copyright owner or exclusive licensee for most of the anime titles sold here.

This is the rationale behind the court's surprise dismissal of Odex's bid to get Pacific Internet (PacNet) to disclose its customers' identities.

The judge's 13-page grounds of decision was released on August 24.

District Judge Earnest Lau also noted that Odex was also in no position to initiate criminal prosecution.

On August 23, the judge ordered the company to pay legal costs of more than $7,000.

The judge also expressed unease over the hasty manner in which Odex tried to go after some 1,000 PacNet subscribers.

In particular, he was not convinced of the investigation method it used to uncover the IP addresses and pinpoint the alleged wrongdoers.

Industry observers had expected the court to rule in Odex's favour.

This is especially after it had successfully forced two other Internet service providers, StarHub and SingNet, to hand over the data of those suspected of illegal downloading.

In its letters of demand, Odex is asking for $3,000 to $5,000 compensation and also hinted of criminal prosecution should the subscriber refuse to pay up.

But the judge said under the Copyright Act, "only the copyright owner and the statutory exclusive licensee � have the right to take action against copyright infringers".

He added that Odex appeared to be the exclusive licensee for just one title, Mobile Suit Gundam Seed.

Odex said it would be appealing against the judgement. - CNA /ls

Tuesday, August 14, 2007

How Many Actually Survived Last Week's Onslaught?

Straits Time3380.61+21.43(+0.64%)
SENSEX 15017.21+148.96(+1.00%)
UOB Sesdaq 228.30-1.90(-0.83%)
KLSE Comp 1296.48+8.78(+0.68%)
Nikkei 225 16800.05+35.96(+0.21%)
Hang Seng 21891.10+98.39(+0.45%)
Dow Jones 13311.89+72.35(+0.55%)
KOSPI 1849.26+20.77(+1.14%)
SSEC 4820.06+70.69(+1.49%)

Well, market is getting really volatile now with Sub prime woes and credit crunch unsolved. "Longist" that has been making a pile from the market for the past few months had their profit cut or even wipe out.

I would like to share with you the psychological behaviour of an amature investor. They are people whom underestimate the power of TA or technical analysis. Uptrend and downtrend detection. Although some are able to hold but ultimately it will be a scenario of unnecessary baby sitting. Consequently, as of current high-cap is going to be a roller coaster situation now. It thrills you by rebounding, but the rebound will be lower then of their falls. So after charting them, you will ultimately see a declination triangular formations. Pennies are different they are boundless in their interest and speculation making them attractive and profitable for the next few months or so, in my personal opinion.

Jade, LC Dev, Baker Tech, PSC Corp, Stratech, Lottvis, Lantrovis and Global Test will be in focus for the next few weeks at least.

Being very busy for the past weeks therefore had no time to calculate the portfolio. Will do it during my next posting. However, in a nutshell, fund holding with over weighted Asia equities exposure of mine sees a 15% decline to the current ROI of 15%. Outperform for Thailand, India, China and Korea. Especially China as they gear up for Olympics 2008.

Any opinion herein is made on a general basis and is not an inducement to trade.

Friday, August 10, 2007

(EXTRACT) Oil Price Fall

LONDON (Reuters) -- Oil fell more than $1, below $71 a barrel Thursday as further trouble in the U.S. subprime mortgage sector sent world stock markets tumbling and spilled over into oil and other commodities.

U.S. crude fell $1.38 to $70.77, more than 11 percent off its all-time high of $78.77 hit Aug. 1.

Other commodities also took a dive. Metals futures, often considered among the riskier securities, were down, with lead losing 5 percent and copper hitting its lowest since late June.

News BNP Paribas had become the latest bank to be hit by mortgage credit problems sent shivers through markets nervous that troubles in U.S. mortgages would spread globally.

A shortage of cash in money markets prompted the European Central Bank to add emergency liquidity.

"The fear is that all of this is going to have an impact on demand," said Chip Hodge, energy portfolio manager with John Hancock Financial Services.

Analysts noted flight from risk and strong demand for cash had forced short-term eurozone interest rates sharply higher. This, they said, was another sign of how much "stress" there was in the market and how much liquidation of risky assets.

"It seems that investors who need to finance their holdings of securities are not being able to draw on credit facilities and instead having to finance in the cash market," said Nick Parsons, head of market strategy at nabCapital.

Events on world markets overshadowed a bullish supply-demand picture for oil laid out in the latest fuel inventory data from top consumer the United States.

Figures released Wednesday showed U.S. crude and gasoline stocks fell sharply last week as crude imports slumped and refineries throttled back.

Gasoline inventories declined 1.7 million barrels, below the lower end of the average range, while crude stocks dropped for the fifth consecutive week.

"The inventory data was bullish but investors' interests were obviously muted," said David Moore of the Commonwealth Bank of Australia.

Unease over the health of the U.S. economy has knocked U.S. oil from an all-time high of $78.77 struck last Wednesday.

Analysts say further declines may be triggered by speculative funds moving out of energy and commodities to cover losses in equities and other markets.