Europe's Battle In The Credit Crisis
a) As European authorities renegotiated two bailouts this weekend, Europe is opening notably weaker today as most bourses are down about 4 percent; the UK and France hit a four-year low, France a two-year low.
b) BNP Paribas SA said it would take a 75 percent stake in the remaining operations of Fortis (the Belgium and Luxembourg operations).
While Fortis had big problems with its credit derivatives portfolio, remember that last year Fortis attempted to buy the banking arm of ABN Amro. That deal ($33 billion) became a problem when shareholders feared Fortis would not be able to procure the loans to pay for it.
- Euro Shares Nosedive 5%
- Poll: Should Countries Guarantee Deposits?
Separately, the German government unveiled a $68 billion rescue package for Hypo Real Estate.
c) The Russian market was halted twice, and is also at a three-year low.
d) Iceland suspended trading in its banks.
a) Oil broke below $90 for the first time since February as the dollar rally (and perceived demand reduction) continues.
b) Gold is also rallying, as are gold stocks, which are up about 4 percent pre-open on modest volume.
c) The Baltic Exchange Dry Index hit a two-year low.
d) Commodity stocks like Massey, Potashand Anadarko Petroleumare down about 7 percent pre-open.
1) Hartford Financialup 9 percent pre-open; they will receive a $2.5 billion capital investment from German insurer Allianz. They also warned of a large third-quarter loss ($8.50 to $8.80 a share),with core earnings at a loss of $1.50 to $1.60 a share (estimate was for gain of $0.71) ; the vast majority of the losses are write-downs on its investment portfolio. They also announced a 40% cut to their quarterly dividend.
2) Bank of America down 5 percent after making a roughly $8.6 b deal with U.S. attorneys-general to settle risky loans originated by Countrywide.
3) EBay will cut global work force by about 10%.
- Japan Off 4%, China Falls 5%
- Dow to Open 200 Points Down
- World Markets Data
- Oil Falls to 8-Month Low Below $90 a Barrel
- Battered Euro Sinks, Yen Soars as Crisis Bites
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