Der USA Bären-Thread

 Geithner: China backs efforts to fight downturn

Zeichen und Blitze. Ob dafür Gras reicht? Auch verspricht er das Defizit zu bekämpfen. Aber erst wann die Krise vorbei ist. Wann ist sie vorbei? Und geht sie dann nicht übergangslos in die nächste Krise über? Aber den chinesischen Bonzen tut sowas gut. Da sie auch nicht wissen wie man sich aus den Ungleichgewichten befreien kann und trotzdem alles beim alten bleibt, glauben sie gerne den Schmarren.

www.thestreet.com/story/10508113/1/...g-move-will-be-down.html

www.safehaven.com/showarticle.cfm?id=13493&pv=1

www.safehaven.com/showarticle.cfm?id=13495&pv=1

aber ich finde man muss schon anerkennen, dass die Amis mit ihrem manchmal elendig-brutalen Pragmatismus die Sache einigermassen zielführend angehen. Natürlich nicht so, wie wir Germanen das elegant-fundamentalistisch als einzig wahre Lösung sehen wollen würden (würden wir überhaupt eine Lösung sehen wollen ausser dem "Big Unwind", hinter dem dann das Heulen und Zähneklappern droht, aber Hauptsache, wir wissen in den nächsten Jahrzehnten wenigstens, wer daran schuld war? :-), und deshalb dürfen wir - insbesondere wir hier im Bärenthread - natürlich auch die Nase rümpfen ;-)

Aber ich gewinne immer mehr das Gefühl, dass die Welt halt doch nicht aufhören wird zu funktionieren, nur weil wir dafür nicht die Genehmigung erteilt haben, oder - noch viel schlimmer - wir nicht mal gefragt worden sind ;-)

[Falls jetzt jemand fragt, welches Gras ich denn geraucht habe: keines! Und ob ich noch ein Börsenbär bin: bin ich! :-]

Mal etwas leichter formuliert würde ich sagen, die Amis hängen erkennbar dem Konzept an: wir müssen nur den Weltuntergang mit allen Tricks und aller Brutalität noch 5..10 Jahre nach hinten zu schieben versuchen. Und wenn diese 5..10 Jahre vorbei sind, dann fangen wir einfach genau so wieder von vorne an.

Für den echten Germanen ist das natürlich nix ;-)

Aber wenn man es ca. 10 Mal so iteriert kriegt, dann hat man doch immerhin schon ein ganzes Leben lang erfolg- und genussreich herumgesaut! Oder? ;-)

auf dier Schiene ist schon einmal 2005 einer gefahren
www.finanznavigator.de/stock-board/....php3?t=31858&page=3

Der Chart von daiphong in # 44046 hat mich mal zu einer EW-Zählung angeregt. Sollte diese korrekt sein, d.h. dass Welle 3 in einem i-v-Muster läuft, würde die Perspektive grässlich aussehen. Die Elliott-Wellentheorie enthält auch eine sog. Alternierungsregel, die Folgendes besagt: Die Unterwellen großer A-B-C-Korrekturwellen verlaufen nach sehr unterschiedlichen Mustern. Vergleicht die Hauptantriebswelle A mit der Hauptantriebswelle C, inbesondere die Unterwellen 3 von A und C!

ging primär gegen die naiven Chinesen. Zuerst plustern sie sich auf und dann spielen sie wieder Schoßhund.

Ich bin auch nicht dafür, alles Krachen zu lassen, nur weil man dann ideologisch sauber gehandelt hat.  Mir ist auch klar, wie tief die  Amis sich reingeritten haben. Da kommt man nicht einfach raus. Sowas braucht Jahrzehnte.  Momentan geht es nur darum Zeit zu gewinnen und das nächste Jahr zu erreichen. Allerdings wird dieses Fuschen nicht sehr lange mehr funktionieren. Man muss in nicht allzu langer Zukunft tiefer ran. Nach Geithner, wenn man aus dem Gröbsten raus ist. Und was wird man dann tun? Nun man wird die Handelsungleichgewichte ernsthaft angehen. Bis dahin sind die Chinesen dann noch stärker exportabhängig und werden unter Garantie dann den Bach runter gehen. Eventuell ziehen sie dann auch, wie vormals Japan, in den Krieg.

... meckern, sondern nur mal zum Ausdruck bringen wollen, wie atemberaubend unvorhersehbar die ganze Chose ist.

Es ist wie beim Catchen (oder wie ich es mir beim Catchen vorstelle :-). Man weiss wirklich nicht, wer gerade unten liegt, weil das vorher gegen ein paar dezente Scheinchen so ausbaldowert worden ist, oder oben liegt, weil er der stärkere ist, zumindest für ein paar Sekunden... Und wie es in der nächsten Runde weitergeht, weiss man garantiert nicht. Dafür sorgen schon die Veranstalter, die das zahlende Publikum ja wohl nur gegen ein absolutes Maximum an Entertainment bei der Stange halten können.

Will allegorisch sagen: ich bin und bleibe für den Augenblick ein ziemlich fundamentaler Bär, aber ich traue dem Schicksal prinzipiell die allerwüstesten Volten zu.

Und da die Amis ja wohl die Erfinder der grossen Entertainment-Industrien sind, dürfte das Schicksal die Jungs auch als die bestgeeigneten Subkontraktoren verpflichtet haben, um uns zahlendem Publikum 'was zu bieten und es so bei der Stange zu halten.

Und zahlendes Publikum sind wir ja wohl wirklich, oder? ;-)

Eine Millisekunde zurück zur sogenannten "Sachlage": ich halte es genau so prinzipiell für möglich, dass man in den nächsten 3..5 Jahren total erfolgreich Bubble3.0 aufbläst, wie dass es zwei Jahrzehnte lang "Japan 1990 ff." gibt (es gäbe übrigens eindeutig auch schrecklichere Schicksale!), wie das es eine gemilderte Neuauflage von 1929 etc.pp. gibt. Letzteres halte ich relativ aber für das deutlich Unwahrscheinlichste. Insofern: "Big Unwind" hört sich gut an, wird es vermutlich aber nicht geben.

IMHO ;-)

"Bis dahin sind die Chinesen dann noch stärker exportabhängig und werden unter Garantie dann den Bach runter gehen. Eventuell ziehen sie dann auch, wie vormals Japan, in den Krieg"

Da ist bestimmt ein reichlich wahres Fünkchen hinter: während wir hier oben auf unserem superkomfortablen Wohlstandsniveau locker mal eben ein paar dicke % negatives BSP wegstecken können, sieht das bei den Chinesen schon anders aus.

Der Straubhaar vom Hamburger HWWI (?), ein wirtschaftlich/politisch kluger Mann, denn immerhin kommt er aus der Schweiz ;-), hatte mal gesagt, dass er für die nächsten Jahrzehnte mit einem Auseinanderbrechen von China rechnet. Das mag - falls es überhaupt passiert - so friedlich wie bei der Tchechoslowakei zugehen, muss es aber wahrlich nicht.

Insofern gibt es auch aus einer solchen ernsthafteren Betrachtung (als meiner letzten) eine Reihe von Volten, durch die das Schicksal unsere mentalen Parametrierungen ziemiich ändern könnte.

Aber spannend bleibt es immer ;-)

http://www.ariva.de/Das_bullishste_aller_Szenarien_c2928268

in die Pfanne weil ich nicht mehr kanne.

Krisenbedingte Defizite sollen nicht eingerechnet werden, aber aber gibt es überhaupt Defizite ohne Krisen?

"Doch als Ergebnis der milliardenschweren Steuerausfälle und Konjunkturprogramme explodieren die Fehlbeträge. Die EU-Kommission geht davon aus, dass 13 der 16 Euro-Staaten Länder 2009 und 2010 die Defizitgrenzen reißen. In Deutschland rechnet Brüssel kommendes Jahr mit 5,7 Prozent, in Frankreich mit 7,0 Prozent, in Spanien mit 9,8 Prozent und in Irland gar mit 15,6 Prozent.


Die Ministerin aus der Regierung von Präsident Nicolas Sarkozy weigerte sich, ein Zieldatum zu nennen, bis zu dem Frankreich sein Defizit unter die Paktgrenze senkt. „Meine Hauptsorge ist heute nicht die 3,0-Prozent-Grenze“, sagte Lagarde. „Ich sorge mich darum, wann wir kein Negativwachstum mehr haben werden.“ Sicher sei nur, dass das zu einem früheren Zeitpunkt vereinbarte Zieldatum 2012 inzwischen völlig unrealistisch sei."

Wir Deutsche sollten jetzt für die Stabilität des Euro sorgen durch Anhebung der MWST auf 25%. Hicks.


www.mmnews.de/index.php/200906023045/...stabilisiert-Euro.html

... jemand da ist. Zumindest ist's hier in der Bärenhöhle heute anders als sonst doch sehr verdächtig ruhig ;-)

Vielleicht basteln einige ja auch in aller Stille an einem Tarn-Bullenfell, damit sie morgen bei Tageslicht nicht als Bären erkannt und gekillt werden ;-)

Nach den üblichen Theorien müsste ja eigentlich erst noch der allerletzte Bär verschwinden, bevor es so richtig runter gehen kann. Ein ganz sicheres Short-Auftocksignal wäre insofern wohl, wenn AL schreibt, dass er in einen 8-wöchigen Südsee-Urlaub geht und dort leider keinen Internet-Anschluss hat...

Ich selbst bin auch erstmal für 2 Tage weg. Also dass Ihr mir hier nicht etwa heimlich einen Dax-, Gold-, oder Öl-Crash veranstaltet, bevor ich wieder zurück bin! ;-)

Schau dir nur mal die verzweifelten Oszillationen im Chart des $BPFINA seit 2007 an - die stärksten Bull-zu-Bear-Wandlungen (und umgekehrt) innerhalb kurzer Zeiträume, die ich bei diesem Index je gesehen habe. Und dabei zeigt MA 600 unbeeindruckt die langfristige Tendenz auf!

ich mach seit wochen die psychologische zerknirschungsübung, mich innerlich von einem immer grösseren haufen knete zu verabschieden. du hingegen scheinst dich nicht im geringsten von deiner überzeugung abbringen zu lassen. respekt. hoffen wir, dass du recht hast.

Comments

Clearly, there are a number of interested parties in Timothy Geithner’s professed desire for a stronger USD. However, Mr Geithner’s objective lies beyond a number of hurdles that are possibly insurmountable in the short-to-medium term. 

The means by which Mr Geithner has proffered assurances over the USD to his Chinese hosts these past two days has centred upon the Treasury’s will to “do anything [it needs] to do to make sure that [it] brings down [the  US’] fiscal deficits and improve the strength of the US economic fundamentals.” However, the market’s implicit scepticism over the credibility of any commitment in this regard is entirely understandable. Retrenchment in fiscal stimuli would be a risk-laden and premature proposition in the face of a financial and economic crisis whose ultimate scale and legacy has yet to be appreciated. 

No doubt Mr Geithner’s assurances would therefore centre on the longer-term; but even then, there are inherent risks in airing plans for belt-tightening in the current environment. The hazy concept of Ricardian Equivalence suggests that consumers discount their future tax liabilities thereby offsetting the interim spending or tax incentive. Whether or not this is deemed realistic, the risks of derailing recovery on this front are not to be taken lightly. After all, readers may well recall the Hashimoto government’s decision to hike the Japanese sales tax in 1996 which had catastrophic consequences for the country’s embryonic recovery.

As a means to shore-up the USD, monetary policy appears to be no better prospect than fiscal policy. After all, with a policy of quantitative easing currently in train, it would be illogical to expect the FOMC to entertain tighter monetary policy any time soon. Note Dallas Fed President Richard Fisher comments on Friday for example: Mr Fisher said that the US economy will not recovery in a “meaningful” way before the end of this year and that deflation remains a risk in this climate – hardly the basis for any tightening in policy. Yet, even in the event that the levers of US economic power were freed-up any time soon, it is by no means certain that this would necessarily rekindle the interests of international investors.

After all, to focus squarely on the negative forces being brought to bear upon the USD would be to ignore positive developments in a number of markets around the world that are underpinning the greenback’s counterparts. Indeed, the Bank of New York Mellon’s custodial flow data are enlightening in this regard. Certainly, the data show that the USD’s downtrend – which resumed in earnest in mid-to-late April - coincided with the onset of a modest outflow from US fixed income assets that continues to this day. However, the data show that this point also marked the beginning of a steady rise in foreign interest in a number of emerging equity markets (one of which happens to be South Korea, which places today’s reserve data in an interesting light – see Headlines). 

Hence, mid-April saw, not so much a flight from the USD it seems, but an expressed preference for assets which greater yield-enhancement potential. Coupled with the constraints on the domestic policy front in the US, this simple observation sheds further light on the degree of difficulty Mr Geithner faces in securing a stronger USD if the US Treasury is not to resort to other, more direct means of proffering support. 

 

Ich meine damit den $DJUSFV, der die Basis des ETF XLF bildet. Dessen Chart lässt sehr schön erkennen, dass die Aufwärtsdynamik der Rally seit März raus ist. Der Ausbruch aus dem Trendkanal nach unten wurde über sehr schwache Kerzen gegen dessen untere Begrenzung getestet.

allzuviel, wie ich zu meiner Schande gestehen muss. Aber irgendwie hört's sich doch bearish an ;-)

www.nytimes.com/2009/06/02/opinion/02tue1.html?_r=1
A continuing steep drop in home prices combined with rising unemployment is powering a new wave of foreclosures. Unfortunately, there’s little evidence, so far, that the Obama administration’s anti-foreclosure plan will be able to stop it.

The plan offers up to $75 billion in incentives to lenders to reduce loan payments for troubled borrowers. Since it went into effect in March, some 100,000 homeowners have been offered a modification, according to the Treasury Department, though a tally is not yet available on how many offers have been accepted.

That’s a slow start given the administration’s goal of preventing up to four million foreclosures. It is even more worrisome when one considers the size of the problem and the speed at which it is spreading. The Mortgage Bankers Association reported last week that in the first three months of the year, about 5.4 million mortgages were delinquent or in some stage of foreclosure.

Not all of those families will lose their homes. Some will find the money to catch up on their payments. Others will qualify for loan modifications that allow them to hang on. But as borrowers become more hard pressed, lenders — whose participation in the Obama plan is largely voluntary — may not be able or willing to keep up with the spiraling demand for relief.
One of the biggest problems is that the plan focuses almost entirely on lowering monthly payments. But overly onerous payments are only part of the problem. For 15.4 million “underwater” borrowers — those who owe more on their mortgages than their homes are worth — a lack of home equity puts them at risk of default, even if their monthly payments have been reduced. They have no cushion to fall back on in the event of a setback, like job loss or illness....

With joblessness rising, lower monthly payments could quickly become unaffordable for many Americans. In a recent report, researchers at the Federal Reserve Bank of Boston argued that unemployment is driving foreclosures and to make a difference, anti-foreclosure policy should focus on helping unemployed homeowners.The report suggests a temporary program of loans or grants to help them pay their mortgages while they look for another job. .............

na das ist doch mal ne tolle Idee,warum kommt Merkel nicht auf sowas,Finanzhilfe für arbeitslose Hausbesitzer...

investierter Knete kann, muss aber nicht immer eine positive Korrelation bestehen ;-)

Das macht solche Foren wie die hier manchmal etwas anstrengend.

Aber gerade der Bärenthread scheint mir hier in Ariva dank AL's Teilnehmer-Sieben eine einigermassen wohltuende Ausnahme zu sein.

So, genug, jetzt müsst ihr mal 2 Tage ohne mich auskommen. Geniesst es, bevor es wieder vorbei ist ;-)

für den US-Housing- und Kredit-Markt (siehe Artikel von Farrell, unten).

 

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Mortgage Rates Balloon

By Tony Crescenzi
Street.com Contributor
6/2/2009 10:28 AM EDT


Treasury yields have been rising for months (Chart unten - A.L.), but their rise did not cause any dislodging of the private credit markets as yields on corporate bonds and mortgage securities fell.

Part of the reason is the Federal Reserve's promise to purchase up to $1.25 trillion of mortgage securities and $200 billion of agency securities. Thus far the Fed has purchased about $425 billion of mortgage securities and $80 billion of agency securities.

    Until last week, the Fed's purchases were enough to keep investors in the game so to speak, but the rise in Treasury yields became so great that the dam broke and mortgage rates began to climb. The increase, which will be tabulated by Freddie Mac (FRE) in its weekly rate survey, could well be about three-eighths to a half percentage point.

We know this by tracking the actively traded mortgage-backed securities. For example, the Fannie Mae (FNM) 4.0% mortgage-backed securities hovered around 4% for months before its yield climbed to about 4.5% -- all in a week's time.

The Fannie 4.5% coupon has moved from about 4.1% to about 4.6%. Consumer rates track MBS rates very closely and the 4.0% coupon is the one that was mirroring consumer rates most.

 

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Market Commentary
Rise in Rates Could Quash Recovery
By Vincent Farrell Jr., Street.com
6/2/2009 5:12 AM EDT

...Corporate profits in the U.S. for the first quarter were up $42.6 billion to $1.307 trillion. While that is off 18% from a year ago and off about 25% from the record $1.713 trillion recorded in the third quarter of 2006, $1.3 trillion is a lot of money. The gain, however, was due to the snapback of financial profits (up 94%), and non-financial earnings were off (think the auto companies). It looks more likely to me that earnings for this year will be above the $50 level that I think is the median estimate. If the S&P 500 were to earn, say, $55 for this year, the market at its current level of 945-ish would be at 17.2 times, which strikes me as fully valued.

I know that at the beginning of recoveries commodities have rallied -- the Reuters/Jefferies CRB commodities index is up more than 18% this year -- and that bond yields have always risen. But I am worried that the rise in Treasury yields could torpedo a recovery. At interest rates of 4.5%, every 30-year mortgage could theoretically be refinanced (from an interest-rate perspective the mortgage could be underwater). At 4.75% rates, Credit Suisse says 87% are refinanceable, but at 5.25%, the number drops to 43%. With the 10-year Treasury back to 3.7%, mortgage rates will be north of 5.5% and the hoped-for consumer reliquification will be stunted. Also, gasoline is back above $2.50, up 55% on the year, and the auto shutdowns are almost sure to cause a rise in unemployment claims.

And where is the volume to support the wonderful move we have had in the market? I have been wrong (again!) to have turned cautious, but low-volume breakouts have often been sucker's bets in the past. A nice overbought rally does set the bar higher, though, and while I expect a consolidation, it will come from a higher level than I thought and the likely retest level will be higher as well (Farrell hatte in früheren Posting die Zone von 780 bis 820 im SPX als Korrekturziel genannt.)

 

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Aktuell liegt der Zinsrendite der 30-jährigen US-Staatsanleihen, die die Vorgaben für Hypokredite liefern, bei 4,5 %. Laut Farrell (oben) gibt es ab 5,25 % Rendite Probleme für den US-Housingmarkt. Wenn die US-Longbonds-Rendite ($UST30Y) im bisherigen Tempo weitersteigt, ist die Marke von 5,25 % in etwa fünf Wochen erreicht.

 

(von wegen big Unwind und nie wieder..)
Gretchen Morgenson und Don Van Natta in der New York Times
www.nytimes.com/2009/06/01/business/01lobby.html?em

As the financial crisis entered one of its darkest phases in October, a handful of the nation’s largest banks began holding daily telephone sessions. Murmurs were already emanating from Washington about the need for a wide-ranging regulatory overhaul, and Wall Street executives girded for a fight.
Atop the agenda during their calls: how to counter an expected attempt to rein in credit-default swaps and other derivatives — the sophisticated and profitable financial instruments that were intended to limit risk but instead had helped take the economy to the brink of disaster.

The nine biggest participants in the derivatives market — including JPMorgan Chase, Goldman Sachs, Citigroup and Bank of America — created a lobbying organization, the CDS Dealers Consortium, on Nov. 13, a month after five of its members accepted federal bailout money.
To oversee the consortium’s push, lobbying records show, the banks hired a longtime Washington power broker who previously helped fend off derivatives regulation: Edward J. Rosen, a partner at the law firm Cleary Gottlieb Steen & Hamilton. A confidential memo Mr. Rosen drafted and shared with the Treasury Department and leaders on Capitol Hill has, politicians and market participants say, played a pivotal role in shaping the debate over derivatives regulation.

Today, just as the bankers anticipated, a battle over derivatives has been joined, in what promises to be a replay of a confrontation in Washington that Wall Street won a decade ago. Since then, derivatives trading has become one of the most profitable businesses for the nation’s big banks.

The looming fight over regulation is the beginning of a broader debate over the future of the financial industry. At the center of the argument: What is the right amount of regulation?

Those who favor more regulation say it would offer early warning signals when companies take on too much risk and would help avert catastrophic surprises like the huge derivatives losses at the giant insurer the American International Group, which has so far received more than $170 billion in taxpayer commitments. The banks say too much regulation will stifle financial innovation and economic growth.

The debate about where derivatives will trade speaks to core concerns about the products: transparency and disclosure.

There are two distinct camps in this argument. One camp, which includes legislative leaders, is pushing for trading on an open exchange — much like stocks — where value and structure are visible and easily determined. Another camp, led by the banks, prefers that some of the products be traded in privately managed clearinghouses, with less disclosure.

The Obama administration agrees that more regulation is needed.A proposal unveiled recently by Treasury Secretary Timothy F. Geithner won plaudits for trying to make derivatives trading less freewheeling and more accountable — a plan that hinges in part on using clearinghouses for the trades.

Critics in both the financial world and Congress say relying on clearinghouses would be problematic. They also say Mr. Geithner’s plan contains a major loophole, because little disclosure would be required for more complicated derivatives, like the type of customized, credit-default swaps that helped bring down A.I.G. A.I.G. sold insurance related to mortgage securities, essentially making a big bet that those mortgages would not default.

Mr. Rosen and other bank lobbyists have pushed on Capitol Hill to keep so-called customized swaps from being traded more openly. These are contracts written for the specific needs of a customer, whose one-of-a-kind nature makes them very hard to value or trade. Mr. Rosen has also argued that dealers should be able to trade through venues closely affiliated with banks rather than through more independent platforms like exchanges.

Mr. Rosen’s confidential memo, dated Feb. 10 and obtained by The New York Times, recommended that the biggest participants in the derivatives market should continue to be overseen by the Federal Reserve Board. Critics say the Fed has been an overly friendly regulator, which is why big banks favor it.
Mr. Rosen’s proposal for change was similar to the Treasury Department’s recently announced plan to increase oversight. Treasury officials say that their proposal was arrived at independently and that they sought input from dozens of sources.

Even so, market participants, analysts and members of Congress who have proposed stricter reforms worry that the Treasury proposal does not go far enough to close several important regulatory gaps that allowed derivatives to play such a destructive role in the current financial crisis.

But increased transparency of derivatives trades would cut into banks’ profits — hence the banks’ opposition. Customers who trade derivatives would pay less if they knew what the prevailing market prices were.
“The banks want to go back to business as usual — and then some. And they have a lot of audacity now that everyone has bailed them out,” saidYra Harris, an independent commodities trader.....

....What makes this fight different, say Wall Street critics and legislative leaders, is that financiers are aggressively seeking to fend off regulation of the very products and practices that directly contributed to the worst economic crisis since the Great Depression. In contrast, after the savings-and-loan debacle of the 1980s, the clout of the financial lobby diminished significantly.

The current battle mirrors a tug-of-war a decade ago. Arguing that regulation would hamper financial innovation and send American jobs overseas, Congress passed legislation in December 2000 exempting derivatives from most oversight. It was signed by President Bill Clinton.

The law passed despite the strenuous objections of Brooksley Born,....In a recent speech, Ms. Born said big banks are again trying to water down oversight efforts. .....

The market now represents transactions with a face value of $600 trillion, up from $88 trillion a decade ago. JPMorgan, the largest dealer of over-the-counter derivatives, earned $5 billion trading them in 2008, according to Reuters, making them one of its most profitable businesses.

Among the companies that expanded rapidly was A.I.G. Straying from its main business of providing property and life insurance, A.I.G. wrote a type of contract known as credit-default swaps that protected holders of mortgage securities against defaults. When millions of subprime borrowers stopped paying their mortgages, A.I.G. had to provide cash collateral that it did not have to clients that had bought its insurance.

Before the crisis, few market participants knew the size of A.I.G.’s exposure.....

und zwei weitere Seiten zu dem Thema....

 Anders als die Chinesen sind die Ruskies wohl doch etwas "behind the curve". Vielleicht liegt's ja daran, dass da auf allen Ebenen der Wodka immer in Strömen fliesst...

Auf jeden Fall: wenn das der Grund hinter dem letzten USD-Verfall war, dann gewinne ich erhebliche Konfidenz, dass EUR/USD auf keinen Fall mehr an die 1.50 herankommt ;-)

The EUR/USD and GBP/USD soared over two big figures higher today following remarks from Russian President Medvedev that a new supranational reserve currency could reduce the global economy's vulnerability to USD instability. The EUR/USD rose as high as 1.4331 from 1.4125 following Medvedev's remarks, while the cable surged as high as 1.6596 from lows of the session at 1.6326. USD weakness was broad-based, with the greenback losing ground against fellow carry-trade funding currency the JPY. USD/JPY fell as low as 95.33 from 96.60 in early New York trading. As the greenback fell, USD-denominated commodities turned in a mixed performance. Gold ended the session 2.5% higher, while crude oil was -0.3% lower. Risk tolerance remained high throughout the session, bolster by a US pending home sales report that came in stronger than expected. Global equity markets were mixed, largely trading sidewise, with the Dow up +0.2%, the FTSE down -0.7% and both the German DAX and French CAC flat.

Russia: President Dmitry Medvedev said that a there was a need for more reserve currencies, the RUB could eventually become a reserve currency [;-] and a new supranational currency could lay the foundation for a more stable global monetary system. "We need some kind of universal means of payment, which could create the basis of a future international financial system," Medvedev said. He added that "naturally, because of the crisis in the American economy, the attitude towards the USD has also changed" and "it's our idea, and our Chinese colleagues support it." A "precursor" to a supranational currency already exists in the form of the IMF's special drawing rights (SDRs), Medvedev said. The G20 did not discuss the proposal at its last meeting, because it was a matter "for the future."