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Bernanke Says U.S. Inflation Should Slow Into 2009 (Update2)
By Craig Torres and Scott Lanman
Aug. 22 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said inflation should ease later this year and in 2009, while warning that policy makers will act if price increases don't slow over the ``medium term.''
A recovery in the dollar and declines in commodity prices ``should lead inflation to moderate,'' Bernanke said in a speech to the annual Fed conference in Jackson Hole, Wyoming today. The Fed ``is committed to achieving medium-term price stability and will act as necessary to obtain that objective,'' he said.
The Fed chief said the benchmark interest rate is ``relatively low'' given an increase in price pressures. Financial turmoil has ``not yet subsided,'' and is contributing to weaker economic growth and higher unemployment, he said.
Bernanke said as the central bank deals with the current turmoil, officials must also consider how to overhaul regulations to minimize the risk of future crises. He reiterated his endorsement of the Treasury getting power to resolve failing investment banks, and signaled a need for a new, comprehensive supervision of systemic risk.
Policy makers will ``continue to review'' the Fed's measures to ensure liquidity to determine ``if they are having their intended effects,'' Bernanke said. The central bank has introduced several tools since December to provide liquidity to commercial and investment banks.
Futures Trading
Traders added to bets that the Fed will increase borrowing costs by the end of the year, futures prices show. Odds of at least a quarter point boost in the main rate by the end of December rose to 26 percent from 18 percent yesterday. The highest probability is that the Federal Open Market Committee keeps the rate at 2 percent until next year, the contracts show.
Bernanke ``seems really comfortable with where policy is right now,'' said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina. ``The challenge is how patient is the Fed going to be.''
In his speech to the Kansas City Fed Bank's two-day conference on financial stability, Bernanke again defended the Fed's role in keeping Bear Stearns Cos. from collapse, and said ``the economy could hardly have remained immune from such severe financial disruptions.''
The Fed chairman has tried for the past year to curb a global credit crisis that has led to a higher U.S. jobless rate, slower economic growth and some $505 billion in credit losses at financial firms. Inflation has accelerated, with food and energy costs pushing up consumer prices in the 12 months to July by the most in 17 years.
Fed Powers
Bernanke asked Congress to give the Fed more authority over the U.S. payments system, and to consider devising a way to resolve failing investment banks. He also said regulators must shift their focus and consider how individual banks and brokers may together present large risks to the financial system.
``Making the systemic risk rationale for guidances and reviews'' of financial firms ``more explicit is certainly feasible and would be a useful step toward a more systemic orientation for financial regulation and supervision,'' Bernanke, 54, said to the conference of scholars and central bankers.
Bernanke also called for ``stress tests, not at the firm level as occurs now, but for a range of firms and markets simultaneously.'' Such exams might ``reveal important interactions that are missed by stress tests at the level of the individual firm.'' He said the technical and information requirements regulators need to conduct such tests ``could be daunting.''
Fed Lending
The Fed has opened up lending to nonbanks for the first time since the Great Depression, accepted mortgage debt as collateral for loans and cut the interest rate on its discount window lending. The measures have broadened the Fed's oversight and lender-of-last resort role.
Bernanke opened the discount window to investment banks in March after rescuing Bear Stearns Cos. from bankruptcy. The Fed facilitated the firm's merger with JPMorgan Chase & Co. by loaning against $29 billion of Bear securities. It opened the discount window in July to Fannie Mae and Freddie Mac, the largest U.S. mortgage finance companies.
``They are in a lot of new lines of business now in terms of lending to entities they didn't use to, in terms of taking credit risk that central banks don't usually have,'' Vincent Reinhart, a resident scholar at the American Enterprise Institute and former director of the Board's Division of Monetary Affairs said before the speech. ``The Federal Reserve is over-extended.''
Central bankers have also reduced the benchmark lending rate 3.25 percentage points since September to 2 percent. They have kept the rate at that level since April even as the consumer price index rose to 5.6 percent in July, the fastest increase on an annual basis in 17 years.
Mortgage Delinquencies
While the Fed has expanded its lending, markets instability has continued and credit has remained scarce. Investors are concerned mortgages delinquencies will increase, leading to greater losses at banks and other financial institutions.
Shares of Fannie Mae have fallen 58 percent this month, while shares of Freddie Mac have fallen 61 percent.
Nearly a quarter of all adjustable rate mortgages to borrowers with weak or limited credit history were delinquent in the first quarter, according to the Mortgage Bankers Association.
Meanwhile, some 463,000 Americans have lost jobs since January, and economists expect annualized rates of growth of just 1.2 percent in the third quarter and 0.45 percent in the fourth quarter, according to the median estimate in a Bloomberg Survey.
To contact the reporter on this story: Craig Torres in Washington at ctorres3@bloomberg.netScott Lanman in Washington at slanman@bloomberg.net Last Updated: August 22, 2008 10:47 EDT
By Craig Torres and Scott Lanman
Aug. 22 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said inflation should ease later this year and in 2009, while warning that policy makers will act if price increases don't slow over the ``medium term.''
A recovery in the dollar and declines in commodity prices ``should lead inflation to moderate,'' Bernanke said in a speech to the annual Fed conference in Jackson Hole, Wyoming today. The Fed ``is committed to achieving medium-term price stability and will act as necessary to obtain that objective,'' he said.
The Fed chief said the benchmark interest rate is ``relatively low'' given an increase in price pressures. Financial turmoil has ``not yet subsided,'' and is contributing to weaker economic growth and higher unemployment, he said.
Bernanke said as the central bank deals with the current turmoil, officials must also consider how to overhaul regulations to minimize the risk of future crises. He reiterated his endorsement of the Treasury getting power to resolve failing investment banks, and signaled a need for a new, comprehensive supervision of systemic risk.
Policy makers will ``continue to review'' the Fed's measures to ensure liquidity to determine ``if they are having their intended effects,'' Bernanke said. The central bank has introduced several tools since December to provide liquidity to commercial and investment banks.
Futures Trading
Traders added to bets that the Fed will increase borrowing costs by the end of the year, futures prices show. Odds of at least a quarter point boost in the main rate by the end of December rose to 26 percent from 18 percent yesterday. The highest probability is that the Federal Open Market Committee keeps the rate at 2 percent until next year, the contracts show.
Bernanke ``seems really comfortable with where policy is right now,'' said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina. ``The challenge is how patient is the Fed going to be.''
In his speech to the Kansas City Fed Bank's two-day conference on financial stability, Bernanke again defended the Fed's role in keeping Bear Stearns Cos. from collapse, and said ``the economy could hardly have remained immune from such severe financial disruptions.''
The Fed chairman has tried for the past year to curb a global credit crisis that has led to a higher U.S. jobless rate, slower economic growth and some $505 billion in credit losses at financial firms. Inflation has accelerated, with food and energy costs pushing up consumer prices in the 12 months to July by the most in 17 years.
Fed Powers
Bernanke asked Congress to give the Fed more authority over the U.S. payments system, and to consider devising a way to resolve failing investment banks. He also said regulators must shift their focus and consider how individual banks and brokers may together present large risks to the financial system.
``Making the systemic risk rationale for guidances and reviews'' of financial firms ``more explicit is certainly feasible and would be a useful step toward a more systemic orientation for financial regulation and supervision,'' Bernanke, 54, said to the conference of scholars and central bankers.
Bernanke also called for ``stress tests, not at the firm level as occurs now, but for a range of firms and markets simultaneously.'' Such exams might ``reveal important interactions that are missed by stress tests at the level of the individual firm.'' He said the technical and information requirements regulators need to conduct such tests ``could be daunting.''
Fed Lending
The Fed has opened up lending to nonbanks for the first time since the Great Depression, accepted mortgage debt as collateral for loans and cut the interest rate on its discount window lending. The measures have broadened the Fed's oversight and lender-of-last resort role.
Bernanke opened the discount window to investment banks in March after rescuing Bear Stearns Cos. from bankruptcy. The Fed facilitated the firm's merger with JPMorgan Chase & Co. by loaning against $29 billion of Bear securities. It opened the discount window in July to Fannie Mae and Freddie Mac, the largest U.S. mortgage finance companies.
``They are in a lot of new lines of business now in terms of lending to entities they didn't use to, in terms of taking credit risk that central banks don't usually have,'' Vincent Reinhart, a resident scholar at the American Enterprise Institute and former director of the Board's Division of Monetary Affairs said before the speech. ``The Federal Reserve is over-extended.''
Central bankers have also reduced the benchmark lending rate 3.25 percentage points since September to 2 percent. They have kept the rate at that level since April even as the consumer price index rose to 5.6 percent in July, the fastest increase on an annual basis in 17 years.
Mortgage Delinquencies
While the Fed has expanded its lending, markets instability has continued and credit has remained scarce. Investors are concerned mortgages delinquencies will increase, leading to greater losses at banks and other financial institutions.
Shares of Fannie Mae have fallen 58 percent this month, while shares of Freddie Mac have fallen 61 percent.
Nearly a quarter of all adjustable rate mortgages to borrowers with weak or limited credit history were delinquent in the first quarter, according to the Mortgage Bankers Association.
Meanwhile, some 463,000 Americans have lost jobs since January, and economists expect annualized rates of growth of just 1.2 percent in the third quarter and 0.45 percent in the fourth quarter, according to the median estimate in a Bloomberg Survey.
To contact the reporter on this story: Craig Torres in Washington at ctorres3@bloomberg.netScott Lanman in Washington at slanman@bloomberg.net Last Updated: August 22, 2008 10:47 EDT
hehe....lucky bid 10,000 at cheap......waiting to off after XD
jackjames ( Date: 22-Aug-2008 16:22) Posted:
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anyone, think about this, if this is the correction, you can imagine, how happily the fund managers are collecting from 0.54-0.65 prices right now compared to those fund manangers collecting between 0.98-1.10 ?
i am still bullish at this counter... target to offload some while it shot up to 75 cents.. wish me luck..
hu la la hu la la , hu la hu la lei, hu la hu la hu la, hu la hu la lei...
Crude Oil Rises as Tropical Storm Approaches Gulf of Mexico
By Gavin Evans
Aug. 18 (Bloomberg) -- Crude oil rose for the first time in three days in New York as a storm near Cuba prompted evacuations from rigs and production platforms in the Gulf of Mexico.
Tropical Storm Fay, with maximum sustained winds of about 50 miles (80 kilometers) an hour, was centered 200 miles southeast of Havana, Cuba at 8 p.m. New York time and may strengthen to a hurricane before striking Florida's northwestern coast Aug. 19, the National Hurricane Center said. Gains were limited on speculation slowing U.S. economic growth will trim fuel demand.
``We would have to see oil prices spike'' if Fay veers west toward Louisiana, Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut, said in an interview with Bloomberg Television. ``But I don't think they'll be able to hold on to any spike, particularly if damage is minimal.''
Crude oil for September delivery rose as much as 98 cents, or 0.9 percent, to $114.75 a barrel on the New York Mercantile Exchange and was trading at $114.73 at 8:35 a.m. in Singapore. The contract earlier fell as low as $113.25.
Brent crude for October settlement rose as much as 63 cents, or 0.6 percent, to $113.18 a barrel on London's ICE Futures Europe exchange at the same time.
The northern Gulf of Mexico accounts for more than a fifth of U.S. oil production.
Storms routinely disrupt tanker traffic and production in the region in the North Atlantic hurricane season running June through November. In 2005, Hurricane Katrina wrecked platforms and refineries around New Orleans, prompting an international release of fuel from reserve stockpiles.
Gulf Evacuations
Royal Dutch Shell Plc evacuated about 360 non-essential staff from the eastern Gulf the past two days. Production hasn't been affected. Transocean Inc., the world's largest offshore oil driller, said it evacuated 130 workers and suspended operations at several rigs in the Gulf as a precaution because of the storm.
New York oil futures fell 1.1 percent to settle at $113.77 on Aug. 15. Earlier in the session it touched $111.34, a 15-week- low, as the dollar rose for a fifth week against the euro and the Organization of Petroleum Exporting Countries warned of risks to world demand from the slowing global economy.
A report tomorrow will probably show home building in the U.S., the world's largest oil consumer, fell to the lowest pace in 17 years in July amid rising borrowing costs and record foreclosures.
Sentiment has turned bearish and oil's direction is being driven by the dollar, Beutel said. A weak housing report will reinforce investor expectations of slowing demand, while a strong number may bring forward the prospect of a rate-rise by the Federal Reserve, further supporting the dollar, Beutel said.
The dollar rose 2.2 percent against the euro last week. It was at $1.4717 in early Asian trading, from $1.4687 late in New York last week.
By Gavin Evans
Aug. 18 (Bloomberg) -- Crude oil rose for the first time in three days in New York as a storm near Cuba prompted evacuations from rigs and production platforms in the Gulf of Mexico.
Tropical Storm Fay, with maximum sustained winds of about 50 miles (80 kilometers) an hour, was centered 200 miles southeast of Havana, Cuba at 8 p.m. New York time and may strengthen to a hurricane before striking Florida's northwestern coast Aug. 19, the National Hurricane Center said. Gains were limited on speculation slowing U.S. economic growth will trim fuel demand.
``We would have to see oil prices spike'' if Fay veers west toward Louisiana, Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut, said in an interview with Bloomberg Television. ``But I don't think they'll be able to hold on to any spike, particularly if damage is minimal.''
Crude oil for September delivery rose as much as 98 cents, or 0.9 percent, to $114.75 a barrel on the New York Mercantile Exchange and was trading at $114.73 at 8:35 a.m. in Singapore. The contract earlier fell as low as $113.25.
Brent crude for October settlement rose as much as 63 cents, or 0.6 percent, to $113.18 a barrel on London's ICE Futures Europe exchange at the same time.
The northern Gulf of Mexico accounts for more than a fifth of U.S. oil production.
Storms routinely disrupt tanker traffic and production in the region in the North Atlantic hurricane season running June through November. In 2005, Hurricane Katrina wrecked platforms and refineries around New Orleans, prompting an international release of fuel from reserve stockpiles.
Gulf Evacuations
Royal Dutch Shell Plc evacuated about 360 non-essential staff from the eastern Gulf the past two days. Production hasn't been affected. Transocean Inc., the world's largest offshore oil driller, said it evacuated 130 workers and suspended operations at several rigs in the Gulf as a precaution because of the storm.
New York oil futures fell 1.1 percent to settle at $113.77 on Aug. 15. Earlier in the session it touched $111.34, a 15-week- low, as the dollar rose for a fifth week against the euro and the Organization of Petroleum Exporting Countries warned of risks to world demand from the slowing global economy.
A report tomorrow will probably show home building in the U.S., the world's largest oil consumer, fell to the lowest pace in 17 years in July amid rising borrowing costs and record foreclosures.
Sentiment has turned bearish and oil's direction is being driven by the dollar, Beutel said. A weak housing report will reinforce investor expectations of slowing demand, while a strong number may bring forward the prospect of a rate-rise by the Federal Reserve, further supporting the dollar, Beutel said.
The dollar rose 2.2 percent against the euro last week. It was at $1.4717 in early Asian trading, from $1.4687 late in New York last week.
dun tempt ppl lie to u in such a volatile market 
Quek4T ( Date: 14-Aug-2008 23:19) Posted:
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Who knows if it can go up to 0.9?
jackjames ( Date: 14-Aug-2008 23:10) Posted:
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Hi angel, at least this counter is making a comeback. Think many have bought other stocks which are worth less than 1/3 of the price now.
angelsiah ( Date: 14-Aug-2008 18:14) Posted:
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hee.. actually bought some at 0.58 also... after seeing their results... no la.. i didn't say i will sell 0.70... if it can cross 0.70, it will go back to 80 cents easily.
Hi jack, me still hold it, mine is 0.995 i think is much higher then u bought, u bought at 0.685 right so how wait till it $0.70 then sell ah, then i still lose.....:(
ha ha ha.. i don't think people think so logically when the market is crashing, they are reading based on the chart mah... if you can think so wise.. you would have bought last week at 0.54... ( but you never know tomorrow will have another correction), that's the exciting part to kill both contra and shortist.. that is why it is always to be a value investor... not need to worry the short term volatility.
anyway, fly , fly, fly to the sky now.........let's fly all the way to 0.70 , not need to swim so hard .. LOL..
one word:
commodity stocks will never die ones, at times it fade away. your brillant mind and homework liao.
unless there is only one elephant left in the world, after the earth's inferno, an animal in the fridge joke, world-wide, he he.
Cominng out of grossly oversold territory. 65.5 cents shouldn't be a problem if commodity futures remain positive and CPO and crude oil prices remain at current levels or higher. Net asset value at about 53 cents and just released excellent results should mitigate against any downside risks.
read brokers report with a pinch of salt
Is CIMB downgrade on plantation stocks esp those traded in Singapore still valid in the light of recent release of excellent results by GAR and FR. Anybody who has read the reports by CIMB care to comment? Good time to go in or bear trap? Please share your learned opinions. My opinion is that they were way oversold.
zhuge_liang ( Date: 22-Jul-2008 01:53) Posted:
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It has broken resistance
undervalued + technically good entry NOW NOW NOW!!..
No matter what, earn money can liao. ... Yippie !
This counter has been unfairly sold down in recent weeks. Considering the stock results, it should certainly worth more than what it is trading now. Crude oil prices has only drop 22% but some counters like Indo agri has drop more than 50% from itsr peak.
The prospect of palm oil remains good. It is cheap relative to soya, corn. It is versatile with research showing its health benefits in that it does not contain trans fat found in a lot of products made from unsaturated fat. Trans fat has in recent years been found to be worst than saturated fat from animals in causing arteries to clog up giving rise to heart attacks and stroke. Most products, nowadays if you notice, will make it a point to state that they do not contain trans fat. The consumption of non-transfat cooking oil, etc will only rise with increase health consciousness. Short of a world wide recession involving even China and India when everything will be affected anyway, the long term prospects should remain good for well run palm oil counters who are able to diversify into downstream palm oil products. The other biggest advantage of palm oil is that it is definitely a cheaper and economical source of biofuel. In addition, per hectare of land gives a much higher yield of biodiesel compared to say corn or soya.
Just some thoughts on why I think well run plantation counters is worthwhile investing at current prices.