since no one else has questioned it .. i will, page-19

Wall St produces a stunning turnaround on Treasury news
09:46, Saturday, 22 November 2008

Sydney - Saturday - November 22: (RWE Aust Business News) - Wall
Street investors confidence returned after news that a central banker who
has already overseen bailouts and rescues is likely to become Treasury
Secretary in the new Obama Government.
It was not just this factor that helped the market turnaround but
also a reaction to recent heavy losses.
Despite the latest 6.5 per cent rise on the session, the Dow finished
the week 8.4 per cent behind.
Bargain hunters also contributed when the market appeared to be
going south early in the day.
Wall Street encountered an erratic session with a last minute
buying spree to reduce initial losses of more than 120 points at one
stage.
Financial markets decided the possible appointment of New York
Federal Reserve President Timothy Geithner as President elect Barack
Obama's Treasury secretary was a tonic for confidence.
The news lifted some uncertainty that has been hanging over the
market.
The significance of this is that Geithner has been one of the
the chief architects of all the bailout plans and rescue packages.
It pushed the Citigroup worries into the background.
Until the Geithner news broke, share prices moved in and out of
positive territory as investors continued to show nervousness about
severe weakness in the economy and uncertainty about corporate balance
sheets.

At the bell, Wall Streets Dow had piled up 494.13 points or 6.54
per cent after being flat for most of the session.
The S&P 500 gained 47.59 points while the Nasdaq Composite
advanced 66 points and the 100 gained 46 points.

Treasuries reversed direction and fell sharply, shown by the 10
year cash paper yield rising 14 points to 3.15 per cent.
Renewed fears over the future of Citigroup knocked global
confidence with the Europeans taking another caning.
There is growing concern that a power vacuum in Washington was
contributing to the global financial crisis, reflected by the failure by
Congress to make a decision on whether to rescue the key auto industries.
Congressional efforts to rescue auto makers collapsed, with
lawmakers saying the industry lacked plans to return to profitability.

In addition, America's second largest bank, Citigroup fell
sharply and the price is now only half of what it was a week ago.
Citigroup was off another 15 percent a day after plummeting 26
percent as Chief Executive Vikram Pandit tried to downplay speculation
the bank might sell major businesses or look for a merger to restore its
health and investor confidence.
"It's fear that businesses and consumers will stop doing business
with Citigroup.
It's fear that they won't be a survivor and fear of possibly
unknown off-balance sheet items or exposures," said Tim Ghriskey, chief
investment officer at Solaris Asset Management.
Some analysts are worried that Citigroup might face the same
Government involvement that brought Washington Mutual undone and anything
to do with mortgages and securitisation is bad news.
Citigroup Inc shares plunged anew on Friday, breaking through the
key level of $4 a share and reversing early gains on the news that the
bank was mulling a variety of options to restore the bank's health.
Citi, down as much as 21 percent, was the biggest decliner among
big banks, but other big banks were also under pressure.
JPMorgan Chase & Co was as much as 12 percent lower.
In addition, the cost to protect Citigroup debt against default
rose suggesting that fixed-income investors see increased risk.

In Europe, data showed euro zone demand plunged, and world
central bankers considered the prospect of deflation as the Bank of Japan
left its benchmark interest rate at just 0.3 percent, saying the road to
recovery would be long.
Meanwhile, Goldman Sachs forecasts more pain, estimating real US GDP
would fall 5 percent on an annual basis in the current quarter, with
unemployment reaching 9.0 percent in the fourth quarter of 2009.
A 5 percent contraction would be the largest since the first
quarter of 1982, when the economy shrank 6.4 percent on an annualized
basis.
The United States, Britain and Europe are expected to ease
interest rates further next month as the worst financial crisis in 80
years spreads recession across much of the globe.
Bank of Japan Governor Masaaki Shirakawa said he was on watch for
the risk of deflation as Japan lapses into recession, although he did not
forecast its return.
St Louis Federal Reserve President James Bullard said with
interest rates already low, the US central bank may have to rely on
"quantitative easing" to ward off deflation, recalling large BoJ
liquidity injections during the 1990s to jump-start the economy by
flooding it with cash once rates reached zero.
However, Richmond Fed Bank President Jeffrey Lacker differed,
saying the US economy was likely to emerge from its downward slide next
year and the Fed should keep its it eye on the risk that inflation may
accelerate along with growth.
The Fed is expected to cut rates to 0.5 percent next month.
Philadelphia Federal Reserve President Charles Plosser
said the troubled U.S. housing market should find a bottom in the middle
of 2009, but acknowledged the outlook remains highly uncertain.
Speaking to reporters after a media workshop at the regional
central bank, Plosser said the economy had slowed dramatically, making
inflation less of a concern.
"Housing markets should begin to firm up next year.
"The economy is going to be very weak in the fourth quarter,"
Plosser added.
In other news, oil majors Exxon Mobil Corp, ConocoPhillips and
other energy companies top the list of US companies with severely
underfunded pensions -- a situation that may drain precious cash in a
time of capital market volatility, especially at smaller firms.
A sell-off in crude oil and natural gas prices has already prompted
many energy companies to rein in spending and conserve cash, but the
sector may also see earnings pinched by contributions needed to make up
for shortfalls in defined pension plans.
In the market, Wal-Mart Stores named its international chief,
Mike Duke, to succeed Lee Scott as president and CEO effective February
1.
More GM production cuts for UAW, but aid is likely to come with
strongs.
In commodities, gas prices spiral down to near $2.
The sudden reversal in oil and gasoline prices is bringing relief
to some and complicating business for others.
Meanwhile, Fannie and Freddie have suspend foreclosure sales and
evictions on certain properties until January as it prepares for its
loan-modification program.
The Office of the Comptroller of the Currency is paying closer
attention to roughly 100 community banks with large exposure to weak
commercial real-estate loans, one in a series of moves by federal
regulators to try to head off the next phase in the credit crisis.
Despite the $700 billion rescue plan that Treasury is using to
pump capital into hundreds of banks and thrifts, regulators continue to
mobilize initiatives to stabilize the banking sector.
Federal officials have faced criticism in recent months about not
doing enough to head off the financial crisis.
Steps regulators are taking come against the backdrop of an
expected overhaul of financial-market supervision next year, which could
consolidate power and realign responsibility.

Key New York indices end higher
-------------------------------

WALL STREET... Dow Jones Industrial Average settled 494.13
points higher at 8046.42
Range on the Dow for the session was a high of 8071.43 and low
7449.38.
Dow components were 28 rises and 2 falls.

Standard and Poor's 500 index gained 47.59 to 800.03. The Nasdaq
Composite index gained 68.23 to 1384.35 and the Nasdaq 100 index ended
49.06 to 1085.57.
Business volume was 10.5 billion trades on the NYSE and the
NASDAQ posting sales of 3.1 billion.

Dow rises included included Alcoa 1.59 or 23.21pc to 8.44, Walt
Disney 2.39 or 12.76pc to 21.12,Exxon Mobil 7.30 or 10.66pc to 75.81,
bellwether Caterpillar 1.83 or 5.57 per cent to 34.67, Microsoft 2.15 or
12.26pc to 19.68, United Technologiesd 3.45 or 7.98 to 46.67.
The two Dow falls were Citigroup 94c or 19.96pc to 3.77 and
J.P.Morgan Chase 66c or 2.82pc to 22.72.

National-Oilwell Varco Inc. and Chesapeake Energy jumped more
than 20 percent as oil rose for the first time in six days.
The rally came after this week's rout dragged the S&P 500’s
price-to-earnings valuation to the cheapest since 1995

Exxon Mobil Corp., the largest U.S. oil company, climbed 7.30, or
10.66pc to 75.81. Crude oil rose as OPEC members cut production and
governments stepped up efforts to revive economic growth..

Citigroup pared declines, falling 94 cents to $3.77 after
sinking as low as 3.05, and the S&P 500 Financials Index erased a 7.5
percent tumble to climb 3.4 percent on word of Obama's pick for Treasury
secretary.