do the sums china having a laugh

So our Reserve Bank pumped 5 billion odd into the system with the overall effect being a loss of value of 53 billion on the XAO/XJO

All this in the 'free' world. The Chimese are laughing so loud the rumour is that even the Ming porcelain is cracking up!!

I don't know what the clowns are trying to do puting a finger in the dyke when the hole is the sixe of a bucket. Perhaps Bush rang up Howard & told hime to pull finger.

This will end in tears - Rip Torn RIP.

Got gold yet?

US sparks worldwide panic
Vanessa Burrow
August 11, 2007


THE market's biggest one-day fall in almost six years knocked almost $53 billion off the value of Australia's top 200 companies.

The 3.7 per cent lambasting followed last Wednesday's 3.3 per cent fall. They were the two largest one-day falls since the September 11 terrorist attacks.

"I've got my helmet on here, it's ugly mate," said Greg Bundy, former head of Merrill Lynch Australia, as he watched on.

Worldwide, investors started to panic after yet another financial institution announced it had lost money because of the low-end "subprime" US mortgage market and its widespread effect on the US credit market.

This time the alarm was sounded by France's largest bank, BNP Paribas, which froze three funds with subprime connections. BNP said the funds could not be properly valued because of the "complete evaporation" of liquidity in some parts of the market.

Its announcement came only days after BNP's chief executive officer said the bank's exposure to the subprime market was "absolutely negligible".

The resulting flight out of stocks hit European markets hard, set off the biggest falls on Wall Street since February, and virtually erased this week's substantial gains on the Australian sharemarket.

The round of falls continued last night, with Wall Street's Dow Jones index of the top 30 stocks down 163 points, or 1.2 per cent, soon after the market opened. European markets were down as much as 2.4 per cent.

"Ugliness" and "carnage" were two of the words used to describe the falls, which followed three days of relative calm that had been helped by upbeat commentary from the Reserve Bank and the US Federal Reserve.

The head of hedge fund sales at UBS, John Garrett, said the absence of liquidity in the credit markets overnight had triggered the falls.

This was confirmed by the Bank of Japan, the Reserve Bank of Australia, the European Central Bank and the US Federal Reserve, which lent funds to the market to ease a general cash shortage.

The RBA lent $4.95 billion — the most since 2003 — while the Bank of Japan added ¥1 trillion ($A10 billion), the European Central Bank lent €94.8 billion ($A153.3 billion) and the Federal Reserve contributed $US24 billion ($A28.4 billion).

"People were trying to borrow money to run their businesses and there was no liquidity," Mr Garrett said.

Tolhurst senior investment adviser Mark Gouloupoulos said the central banks' intervention was designed to comfort investors, but could have the opposite effect: confirmation that the central banks believed there was a problem could make investors twitchy.