9-1-15 Economic Times

01
Sep
01 Sep 2015 In GLOBAL ECONOMIES Comments Off on 9-1-15 Economic Times
GLOBAL
Global markets’ quest for stability after Black Monday
USA
Latest: Dow futures down 300 points; Nikkei loses 4%
Our live blog has all the news and analysis from global stock markets, which are seeing more heavy selling on Tuesday. Data overnight showed activity in China’s manufacturing sector slowed markedly in August, another signal that the world’s second-largest economy is losing momentum. Dow futures tanked more than 300 pointson Tuesday and European bourses were trading sharply lower. We’ll keep …
Only the Fed can crash Wall Street
Here is why: Through its direct and indirect control of American interest rates, the Fed exercises a decisive influence on dollar-denominated asset valuation models. With that in mind, how can anyone think that peripheral foreign exchange moves and flagging East Asian growth dynamics could throw the Big Board into an irretrievable decline? The Fed also controls a currency that remains an …
CHINA
Shanghai opens week with more volatility
AUSTRLIA
RBA Holds Rates as Aussie Cushions China-Led Commodity Drop
Australia left interest rates unchanged Tuesday as a declining currency cushions the impact of lower commodity prices and a weaker outlook for key trading partner China.
Reserve Bank of Australia Governor Glenn Stevens and his board kept the cash rate at a record-low 2 percent, as predicted by markets and economists following reductions in May and February. The currency has dropped more than 2 U.S. cents since the last meeting.
RBA holds rates steady at 2% ahead of Q2 GDP
Australia’s central bank kept interest rates at a record low on Tuesday in a widely expected decision ahead of GDP data that is likely to show economic growth shifted a gear lower in the second quarter. The Reserve Bank of Australia (RBA) left the cash rate at 2.0 percent, where it has been since May. It cemented its wait-and-see stance by repeating that it would assess upcoming economic data …
EUROPE
Europe Equity Futures Drop After Stocks’ Worst Month in 4 Years
The plunge that led Europe’s equities to their biggest monthly losses since 2011 is showing no signs of easing.
The Stoxx Europe 600 Index lost 3 percent at 9:59 a.m. in London, following Asian stocks lower after a report showed China’s official factory gauge dropped to a three-year low, while manufacturing in the euro area shrank more than initially forecast. Miners again were the most hurt among European industry groups, sliding 4.5 percent as commodities resumed their declines.
Germany’s GM crop ban could raise food prices
Plans by Scotland, and possibly Germany, to ban genetically modified (GM) crops could prove a boon for farmers of conventional crops in these countries, but could also put further research at risk, analysts say. As a result of the ban, producers of non-GM crops in Scotland may see prices rise if demand remains strong and other countries switch to producing GM crops, according to Hamish Smith, …
 
 
HUH  ???
The melancholy billionaire: Minecraft creator unhappy with his sudden wealth
But according to a series of tweets over the weekend, Markus “Notch” Persson is pretty unhappy with his life and his huge wealth.
Persson sold his wildly popular game a year ago. Since then he bought a 23,000-square-foot mansion in Beverly Hills for $70 million, reportedly outbidding Beyonce and Jay Z. But even those ultra-luxury digs aren’t enough to make him happy.
“The problem with getting everything is you run out of reasons to keep trying, and human interaction becomes impossible due to imbalance,” he wrote at the start of series of tweets.
His depression apparently struck a cord with the twitterverse. Nearly 1,400 people retweeted that first tweet, and 2,200 favorited it.
But Persson wasn’t done there. He followed with tweets about never feeling more isolated.
Part of the isolation apparently comes from having nothing to do, just sitting around waiting for friends and family.
Persson feels unappreciated by the workers at his former company, who he said he made sure were taken care of in the sale to Microsoft (MSFT, Tech30).
And apparently part of his loneliness comes from not being able to date the woman he would like to, because of his wealth. She apparently wanted to date a “normal person.”
Some people suggested he follow the example of Elon Musk, who took the fortune he made from selling his stake in PayPal (PYPL, Tech30) to

eBay (EBAY) and used it to start businesses he was passionate about. Musk, of course, launched Tesla Motors (TSLA), which is trying to combat global warming by developing an affordable electric car, and SpaceX, which is trying to create an affordable rocket to take people to Mars. But Persson rejected the idea of such visionary efforts.

The tweets brought encouragement from some others who had enjoyed sudden success, although maybe not actual billions. It also brought offers from people who said they’d be willing to hang out with Persson and be his friend. He said he appreciated all the offers and reassurances.
And when one person tweeted him about his regretting the sale to Microsoft, he responded early Monday that “selling out was the best thing I ever did.”
He seemed to be taking a more positive view of things in his tweets Monday morning, saying he was having a nice day. And he mocked news reports about the tone of his melancholy tweets over the weekend.
OIL
Oil skyrockets up to almost $50 a barrel
Oil ends 8.8% higher, capping huge 3-day gain
Oil prices surged nearly 9 percent Monday, capping a three-day rally in which the commodity rose a total of more than 27 percent, after U.S. oil production data showed output falling and OPEC said it would talk with other producers about low prices. Crude futures rebounded after retreating early Monday. U.S. oil, which rallied 12 percent last week, erased August’s steep losses, closing up …
USA
There’s Only One Chart That Really Matters for Currency Traders
During a week when central banking is the prime focus of the currency market, traders who were whipsawed in August are looking to their colleagues on interest-rate desks for clues about whether they should buy or sell the dollar.
The U.S. currency is increasingly moving in tandem with the difference between dollar- and euro-based interest rates. The 120-day correl
Interest-rate differences were signaling a stronger dollar until about three weeks ago when China unexpectedly devalued the yuan, sending shock waves around the world and raising speculation the rout may delay Federal Reserve plans to raise interest rates.
When European Central Bank policy makers meet on Sept. 3, they’ll deliberate whether a bigger quantitative-easing program is needed as risks to economic growth threaten their inflation goal. A day later, the Labor Department’s August payroll report will provide Fed officials with the most important data available to them before the Sept. 16-17meeting.
A more stimulative-minded ECB may lower yields in the region and damp the appeal of the euro.
“They’re both symptoms of the same issue,” said Omer Esiner, chief market analyst at currency brokerage Commonwealth Foreign Exchange Inc. in Washington. “If we get continued intense global market volatility, then investors will unwind that the Fed will raise rates in September or even December. You will see that change reflected in the yield spread and the dollar.” ation between euro-dollar and the gap between two-year swap rates reached the most since January.
 
ASIA
Asian stocks open lower after weak US finish
Asian stocks nursed a lower open, following a negative lead from Wall Street and as investors brace themselves for more economic data out of China. Overnight, U.S. equity markets ended in the red to chalk up their worst month since 2012. The Nasdaq Composite (NASDAQ: .IXIC) closed down 1.07 percent, while the Dow Jones Industrial Average (Dow Jones Global Indexes: .DJI) and S&P 500 (CME:Index …
MIDDLE EAST
Islamic State group announces own currency free from ‘satanic’ banks
CHINA
China August official PMI falls to 49.7, in line with expectations
China’s official manufacturing purchasing managers’ index (PMI) edged down to 49.7 in August from 50 in July, just below the 50-mark that separates expansion from contraction. Economists in a Reuters poll had expected a figure of 49.7. The final Caixin/Markit PMI print at is due out at 0945 local time. A preliminary reading of the index, released earlier this month, fell to a near …

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