US to Guarantee Over $300 Billion in Citigroup Assets

The U.S. government has agreed to guarantee over $300 billion of Citigroup's troubled assets -- loans and securities backed by residential and commercial real estate and other such assets -- with conditions attached. These conditions are being hammered out.

In a late-night announcement after a weekend of talks about what to do to help Citi, the Treasury also said it and the FDIC will provide protection against losses in a pool of about $306-billion worth of loans and securities on Citigroup's balance sheet. The Treasury said the U.S. Federal Reserve stood ready to backstop any additional risk in the asset pool through an offer of a non-recourse loan.

"With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy",  the Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation said in a joint statement.

No Plans For Federal Takeover Of Citi

The government officials decided against taking over Citigroup in the way it took control of AIG by lending the firm massive amounts of money and in return assuming a huge equity position.

Government officials fear taking over Citigroup would create a precedent: Unlike AIG, Citigroup's balance sheet is relatively healthy, with relatively strong levels of capital particularly compared to most of its competitors.

Still, officials from the Treasury and Citigroup are unsure what it would take to restore confidence in the company, including a possible smaller capital injection or some sort of statement that Citigroup is financially sound.

For that reason, Citigroup officials are continuing to explore possible merger possibilities and a spin off of some of Citigroup's businesses, even as CEO Vikram Pandit publicly stated the sale of the firm's massive and coveted broker business, Smith Barney is off the table, these people say.

Both officials at Citigroup and in the government concede the situation facing Citigroup is daunting. Because of Citigroup's size and scope—it operates in just about every country and competes in just about every financial business, the company's survival is a national concern.

Citigroup has spent the past week telling investors that its capital position is strong, but investors have lost confidence in the current management led by CEO Vikram Pandit who has been in the job less than a year, and the firm's board, which appeared to ignore widespread calls by analysts to integrate the firms operations and slash its massive workforce until recently.

Meanwhile, various merger possibilities seem slim. A deal with investment banks Morgan Stanley or Goldman Sachs would create massive overlap and would lead to huge layoffs. There aren't many banks with a strong deposit base that Citigroup can buy with its depressed stock price.

(Watch the full Charlie Gasparino Citigroup report on the left)

Pandit, for his part, has cut the workforce to 350,000 from 375,000 and just announced another 50,000-job cut by early 2009. But for investors, those moves were too little too late. Just a year ago, Citigroup's share traded at around $50.

Citigroup's shares fell 60 percent last week to $3.77 amid concerns about the bank's loan exposure amid a recession hurting many economies globally. Citi shares failed to rebound on Friday, even as the Dow Jones Industrial Average of large company stocks spiked nearly 500 points on the news that President-elect Barack Obama will name NY Fed President Tim Geithner as his new Treasury Secretary.

Because Citigroup is a bank it has access the the Federal Reserves discount window, and because of its size, there is virtually no possibility of the bank failing and filing for bankruptcy as investment bank Lehman Brothers did. "Citigroup is too big to fail; the government wont allow that because the firm is involves in so many business both institutional and consumer around the world," said one bond trader with detailed knowledge of Citigroup's operations.

Sumber : www.cnbc.com

BEI: Saham Publik di Bank Century Tidak Hangus

Jakarta - Otoritas Bursa Efek Indonesia (BEI) menjamin saham milik publik di PT Bank Century Tbk (BCIC) tidak akan hangus terkait pengambilalihan bank itu oleh Lembaga Penjamin Simpanan. Saham publik akan diproteksi.

"Nggak hangus, mana bisa hangus. Nanti kita tunggu laporan dari LPS, kan tidak mungkin LPS ambil alih 100%. Saham publik kan tidak bisa dihilangkan," kata Direktur Perdagangan dan Litbang BEI MS Sembiring di gedung BEI, Jakarta, Senin (24/11/2008).

Sembiring menilai adanya kecemasan saham publik di Bank Century akan hangus karena munculnya informasi yang tidak benar. "Saya kira ini cuma persepsi saja yang menyebabkan munculnya informasi saham publik akan hilang," tukasnya.

Jika pemegang saham lama akan ikut menambah modal, menurut Sembiring, maka itu dilakukan oleh pemegang saham utama melalui penyertaan modal sementara maksimal 25% dari dana modal untuk penyelamatan.

"Pemegang saham lama bisa ikut melakukan normalisasi Bank Century, tidak mungkin pemegang saham publik yang dikorbankan. Saham publik pasti akan diproteksi," jelas Sembiring.

Saat ini investor publik tidak bisa melakukan transaksi saham Bank Century karena sahamnya disuspensi sejak Jumat 21 November 2008. Harga terakhir saham Bank Century ada di level Rp 50 per saham.

Pemegang saham Bank Century per 30 September 2008 adalah:

Clearstream Banking S.A Luxembourg 11,5%
First Gulf Asia Holdings Limited (d/h Chinkara Capital Limited) 9,55%
PT Century Mega Investindo 9%
PT Antaboga Delta Sekuritas 7,44%
PT Century Super Investindo 5,64%
Lain-lain kurang dari 5% sebesar 57,21%.

Tiga Mobil Uang Pasok Dana Kas ke Bank Century

Jakarta - Tiga mobil uang pasok kebutuhan tunai di Bank Century Pusat, Senayan, Jakarta. Di tengah kekuatiran para nasabah tentang kemampuan Bank Century, pasokan uang tunai dipastikan aman.

Seorang pegawai bank tersebut mengatakan pasokan uang tersebut merupakan standar pengiriman uang ke bank yang mendapat bantuan likuiditas dari pemerintah. Karena pada Jumat pekan lalu (21/11/2008) operasional bank tutup maka baru hari ini pasokan uang kembali diantar sebanyak itu.

"Itu untuk antisipasi kalau ada kebutuhan tunai dari nasabah, tapi jumlah itu kayaknya terlalu banyak, 12 peti, pasti tidak habis kok, dari tadi yang narik uang sedikit," tuturnya Senin (24/11/2008).

Pegawai tersebut mengatakan saat ini nasabah tenang dan tidak perlu panik karena Bank Century sudah diambilalih pemerintah. "Coba lihat tuh, banyaknya pasokan likuiditas tunai dari BI dan pemerintah," ujarnya.

"Kemungkinan dengan adanya pasokan uang ini, bisa jadi batasan penarikan tunai Rp 50 juta sudah tidak ada lagi, tapi kita lihat nanti, soalnya belum ada perintah dari atasan," katanya.

Selain itu, terlihat pasokan uang tunai rupiah juga berdatangan ke kantor tersebut melalui 3 mobil pengantar uang. Ini tampaknya dilakukan untuk mengantisipasi adanya penarikan tunai yang cukup besar dari para nasabah.

 

Sumber : www.detik.com

Citigroup Dapat Bailout US$ 20 Miliar

Washington - Pemerintah AS setuju untuk memberikan bailout hingga US$ 20 miliar kepada Citigroup. Bank terbesar kedua AS itu kini sedang berjuang melawan ganasnya krisis yang menyebabkan harga sahamnya terus merosot.

Persetujuan bailout itu disampaikan Departemen Keuangan AS setelah serangkaian pembicaraan, dan merupakan bagian dari paket bailout US$ 700 miliar Troubled Asset Relief Program (TARP) yang telah disepakati sebelumnya. Pengumuman dilakukan setelah Departemen Keuangan, Bank Sentral AS dan Federal Deposit Insurance Corporation (FDIC) sepakat untuk menyelamatkan Citigroup.

Dalam pernyataan bersamanya, ketiga lembaga pemerintah AS itu akan memberikan perlindungan bagi Citigroup untuk melawan kemungkinan kerugian besar yang tidak biasa pada kumpulan aset utang yang bernilai sekitar US$ 306 miliar, serta surat berharga yang berbasis hunian dan real estate komersial serta aset lain. Aset-aset itu masih akan masuk dalam neraca Citigroup.

Di bawah kesepakatan itu, Citigroup sepakat untuk mengaplikasikan pembatasan gaji para eksekutifnya dan program modifikasi FDIC untuk mortgage.

"Dengan transaksi ini, pemerintah AS akan mengambil seluruh langkah yang diperlukan untuk memperkuat sistem finansial dan melindungi para pembayar pajak serta perekonomian AS," demikian pernyataan bersama ketiga lembaga itu seperti dikutip dari AFP, Senin (24/11/2008).

"Kami akan terus menggunakan seluruh sumber kami untuk memperkuat institusi perbankan kami dan meningkatkan proses perbaikan dan pemulihan serta untuk mengelola risiko," imbuh pernyataan tersebut.

Citigroup kini memang sedang dalam krisis setelah sahamnya terus merosot. Citigroup sejak pekan lalu sudah dikabarkan sedang meminta pertolongan pemerintah AS. Pada perdagangan Jumat (21/11/2008) lalu, saham Citigroup merosot hingga 20% menjadi hanya 3,77 dolar. Sepanjang pekan lalu, saham Citigroup merosot hingga 60% dan mencapai titik terendahnya sejak Desember 1992.

Seperti dikutip dari Reuters, nilai pasar Citigroup pada penutupan perdagangan Jumat lalu hanya US$ 20,5 miliar. Nilai pasar Citigroup mencapai titik tertingginya hingga US$ 270 miliar pada akhir 2006.

Kabar Pangeran Alwaleed bin Talal yang akan meningkatkan kepemilikan sahamnya di Citigroup menjadi 5% tak mampu mengangkat saham bank yang menggurita itu.

 

Sumber: www.detik.com

DPR Minta BI dan Pemerintah Lebih Berani Atasi Pelemahan Rupiah

Jakarta - DPR meminta pemerintah dan Bank Indonesia (BI) mengambil langkah-langkah yang berani guna membendung melemahnya nilai tukar rupiah lebih lanjut.

Permintaan tersebut disampaikan Ketua DPR Agung Laksono dalam rapat paripurna pembukaan masa sidang II tahun 2008-2009 di Gedung DPR/MPR, Senayan, Jakarta, Senin (24/11/2008).

Salah satu langkah berani adalah dengan menerapkan penjaminan secara penuh dana nasabah bank alias blanket guarantee.

"Langkah ini akan mendatangkan rasa aman dan tenang sehingga masyarakat tidak perlu menyimpan uangnya di luar negeri," jelas Agung.

Sejumlah negara tetangga sudah terlebih dahulu menerapkan kebijakan ini seperti Singapura dan Malaysia. DPR berharap kebijakan blanket guarantee ini bisa mengembalikan dana-dana yang kini diparkir di luar negeri.

"Dewan juga berpendapat, kiranya arsitektur perekonomian dunia saat ini mengalami perubahan. Devisa bebas perlu diubah menjadi devisa terkendali sehinga lalu linta valas bisa diawasi," katanya.

Agung menambahkan, sebagai akibat dari krisis sejumlah sektor tertekan seperti sektor komoditi, properti dan finansial. Sektor industri pada karya yang berlokasi di beberapa wilayah sudah mulai kolaps karena hasil produksinya tidak dapat dipasarkan.

"Sektor properti mengalami kesulitan karena tingginya bunga bank. Masyarakat menengah ke bawah sulit menerima kredit perumahan, sektor riil yang seharusnya jadi andalan mengalami perlambatan pertumbuhan," katanya.

 

Sumber: www.detik.com

Analisa Tehnikal By AN 24 November 2008

Jpy Buy : 95.20
Sell :
Stop : 94.90
Intraday : 96.00 – 96 .85
Daily : 97.00 – 97.50

GBP Buy : 1.4835
Sell :
Stop : 1.4765
Intraday : 1.4915 – 1.4965
Daily : 1.5020 – 1.5095

XAU Buy : 794.00
Sell :
Stop : 788.00
Intraday : 802.35 – 810.80
Daily : 816.50 – 822.20

CHF Buy :
Sell : 1.2260
Stop : 1.2320
Intraday : 1.2175 – 1.2090
Daily :1.2030 – 1.1997

AUD Buy : 0.6285
Sell :
Stop : 0.6225
Intraday : 0.6350 – 0.6430
Daily : 0.6485 – 0.6530

EUR JPY Buy :120.20
Sell :
Stop : 119.50
Intraday : 121.45 – 122.20
Daily : 123.15 – 123.95

EUR Buy : 1.2540
Sell :
Stop : 1.2480
Intraday : 1.2635 – 1.2675
Daily : 1.2720 – 1.2750

Bank Century Beroperasi Lagi, Nasabah Tetap Tenang

Jakarta - Operasional PT Bank Century Tbk (BCIC) kembali dibuka sejak pukul 08.00 WIB Senin 24 November 2008 setelah pada Jumat pekan lalu (21/11/2008) ditutup sementara karena adanya pengambilalihan oleh Lembaga Penjaminin Simpanan (LPS).

Dari pantauan detikFinance, Senin (24/11/2008) situasi kantor pusat Bank Century di Plasa Senayan, Jakarta terlihat normal dan tidak ada kepanikan di bank tersebut.

Sebanyak 4 teler dari 7 teler yang ada telah siap melayani nasabah. Namun tidak ada jumlah nasabah yang datang secara mencolok. Nasabah yang datang justru terlihat tenang. Himbauan pemerintah agar nasabah tidak panik cukup manjur karena semua dana nasabah justru lebih aman ditangan LPS.

Manajemen baru Bank Century yang dikomandoi Maryono, sebelumnya menjabat Group Head Jakarta Network Group Bank Mandiri, juga mulai efektif bekerja pada hari ini.

LPS mencatat  capital adequacy ratio (CAR) Bank Century kini hanya sebesar 2,35%. Padahal laporan keuangan Bank Century per 30 September 2008 menunjukkan CAR yang masih bagus di atas 8%. CAR dengan Risiko Kredit 14,88% dan CAR setelah memperhitungkan Risiko Kredit & Risiko Pasar 14,76%.

Sumber : www.detikfinance.com

Obama may delay tax rise

WASHINGTON/LIMA (Reuters) - President-elect Barack Obama may consider delaying a campaign promise to roll back tax cuts on high-income Americans as he works on a huge stimulus plan to counter the worst economic crisis the world has faced in decades.

The policy moves by the Obama team came as Citigroup (C.N: Quote, Profile, Research, Stock Buzz), the second-largest U.S. bank by assets and one of the best-known American financial institutions, was struggling on Sunday night to restore confidence after its share price dropped 60 percent last week.

The Wall Street Journal reported that Citigroup was nearing agreement with U.S. government officials on the creation of a separate "bad bank" that would house some of its potentially toxic assets.

Meanwhile, the 21 members of the Asia-Pacific Economic Cooperation forum, which includes the U.S., Japan and China, pledged at the end of a two-day summit in Lima that they would take quick and decisive action as they seek to reduce the impact of the recessionary conditions sweeping many economies.

And diplomats also said there was a high probability the World Trade Organization would hold a ministerial meeting next month to seek a breakthrough in the stalled Doha round of global trade talks.

But the politicians are up against a steady drumbeat of grim economic and corporate news. On Friday, figures from the euro zone and Japan are expected to show increases in jobless rates, and on the same day the traditional start to the U.S. holiday shopping season promises to be one of the most wrenching for retailers in recent memory.

The National Institute of Social and Economic Research forecast early on Monday that the British economy will shrink by 1.5 percent next year, and for a total six quarters in a row, with a recovery not starting until early 2010.

And Canadian Finance Minister Jim Flaherty said Canada's economy may be in a "technical" recession in the last quarter of this year and the first quarter of next year, the first time the Conservative government has conceded that possibility.

Such news will be vying with any positive investor sentiment created by Obama's moves as global financial markets open on Monday.

Early indications were slightly encouraging for U.S. stock market investors at least, with U.S. stock index futures opening a bit higher. The benchmark S&P500 index futures were up 4.50 points at 796.50 in early Asian trading, though Australian stocks were lower in early trading.

TOP ECONOMIC TEAM

Perhaps most importantly among the policy developments, two Obama aides indicated that the tax cuts brought in under the current administration of President George W. Bush may be allowed to run their course until the end of 2010, rather than being rescinded by legislation before then.

When asked if the tax cuts for the wealthy would be allowed to expire on schedule after 2010 rather than be rolled back earlier, senior Obama adviser David Axelrod told Fox news channel: "Those considerations will be made."

Another adviser, Bill Daley, said on NBC's "Meet the Press" that the 2010 scenario "looks more likely than not."

Business leaders and economists had expressed concern that raising taxes on the higher paid now would only exacerbate the economy's woes.

Obama, who will take over from Bush on January 20, is ready to announce his top economic team on Monday, holding a news conference at 11 a.m. in Chicago (1700 GMT).

He plans to nominate Timothy Geithner, president of the New York Federal Reserve Bank, as Treasury secretary, a transition official said. Lawrence Summers, 53, who was Treasury secretary in the Clinton administration, will help shape policy as director of the White House National Economic Council, the official said.

The potential size of the latest U.S. stimulus plan appears to be growing from the $100 billion to $300 billion previously suggested by congressional leaders.

One influential Democrat, Sen. Charles Schumer of New York, said on Sunday that a package of up to $700 billion was needed to support the American economy. Schumer also said he expects Congress to get the package onto Obama's desk for signature by Inauguration Day.

"The main thing right now is to get this economic recovery package on the road, to get money in the pockets of the middle class, to get these projects going, to get America working again, and that's where we're going to be focused in January," said Axelrod.

On Saturday, Obama laid out plans for a two-year economic stimulus involving the creation of 2.5 million jobs.

The comments on the tax increases, the stimulus plan and the economic appointments should bring some cheer to the furrowed brows of investors in world markets, but it may only be temporary.

U.S. stock prices, pummeled for most of last week, rallied more than 6 percent on Friday after word first leaked out that Geithner might take the helm at Treasury.

"I think it will help the market on Monday but I think it will be very short-term help," said Michael Pento, senior market strategist at Delta Global Advisors.

"You can stimulate the economy in the short run by a temporary adrenaline stimulus and a steroid shot of deficits, but in the long run it's extremely deadly."

At the meeting of APEC, Bush, Chinese President Hu Jintao, Japanese Prime Minister Taro Aso and other members of the group, said they would refrain from raising trade barriers over the next 12 months.

They committed to try to reach a breakthrough in the stalled Doha round of trade talks before the end of this year.

Trade officials at the WTO said that although the WTO's 153 member states remain at odds in several parts of the Doha talks, there was growing consensus over the need for ministers to meet and seek a deal in the key areas of agriculture and industry.

"I think there is a very high probability," U.S. ambassador to the WTO Peter Allgeier told journalists when asked about the likelihood of a ministerial meeting being called. "We have to wait and see a few more days."

The officials said the meeting would almost definitely occur in mid-December, after WTO talks mediators have the chance to revise negotiating texts that would form the basis of a deal on cuts to trade-hampering tariffs and subsidies.

"The window we have is not that big," one official said.

"SEEN THIS MOVIE BEFORE"

Financial markets are waiting for some sort of Citigroup announcement this weekend, and if nothing happens, the bank's stock is likely to plunge further on Monday, analysts said.

Citigroup's stock dropped to a low of $3.05 on Friday, a level not seen for about 16 years, spurring the bank's management to talk to the U.S. Treasury and the Federal Reserve about its options.

The bank is not in danger of near-term collapse, people close to Citigroup said on Friday. Depositors are sticking with the bank, as are trading counterparties. The capital ratio that regulators look at most carefully, namely the tier-one capital ratio, is well above minimum required levels.

But a rapid decline in share price can make customers skittish and cut into a bank's business, wrote analysts at independent research boutique CreditSights on Saturday.

"Unfortunately, we feel like we have seen this movie before," they added. Lehman Brothers Holdings Inc and Washington Mutual Inc both experienced major declines in their shares, followed by an exodus of customers. Lehman filed for bankruptcy, while regulators took over Washington Mutual.

According to the Wall Street Journal report, a newly created "bad bank" structure might take on some of Citigroup's more than $1.23 trillion of off-balance sheet assets. Citigroup might bear the initial losses on the assets, and the government might cover losses beyond a particular threshold, the newspaper reported, citing people familiar with the matter.

In other developments, Britain prepared plans to inject billions of pounds into its economy to stop a recession from turning into a slump amid plunging house prices, rising unemployment and shrinking manufacturing output.

The package, to be announced on Monday, is expected to total up to 20 billion pounds ($30 billion), and will include extra public spending designed to grease the wheels of the economy.

Brown's finance minister, Alistair Darling, is also expected to announce plans to plug the hole in state finances by raising taxes in the future, including a political shift in the form of a sharp rise in income tax for high earners, media reports say.

"Doing nothing is not an option," Prime Minister Gordon Brown said in a speech he will give to business leaders on Monday. "We need timely action now to prevent permanent damage."

(Reporting by Reuters bureaux; Writing by Martin Howell; Editing by Maureen Bavdek, Bernard Orr)

Sumber: http://www.reuters.com

Market Outlook 24 Nov 2008

The euro depreciated vis-à-vis the U.S. dollar last week as the single currency tested bids around the $1.2425 level and was capped around the $1.2810 level. The pair lost about 45 pips last week.  NABE sees the U.S. economy shrinking 2.6% in Q4 and 1.3% in Q1.  G20 officials called for closer coordination and will have a "college of supervisors" monitor the world's largest financial institutions.  Fed funds futures see a 100% chance of a 50bps easing on 16 December.  U.S. automakers failed to secure a congressional bailout.  The Fed reduced its 2008 GDP forecast to 0.0% - 0.3% and its 2009 forecast at -1.0%.  FOMC #2 Kohn said deflation calls for aggressive easing.  Sr. Louis Fed's Bullard said the Fed may need to resort to quantitative easing.  Citigroup shares moved to all-time lows.

 

Bundesbank warned the economy could weaken further in Q4.  ECB's Bini Smaghi, Weber, Mersch, and Nowotny see more rate cuts.

 

Data released in the U.S. last week saw October PPI off a record 2.8% with core PPI up 0.4% m/m and 4.4% y/y; September TICS net inflows were US$ 143.4 billion; October industrial production was up 1.3% with October capacity utilization at 76.4%; October core CPI was off 0.1% m/m and up 2.2% y/y; October housing starts were off 4.5% with building permits off 12%; weekly initial jobless claims were up 27,000 to 542,000 with continuing claims at 4.012 million; and October consumer confidence fell 0.8%.

 

Data released in the eurozone last week saw German October CPI at -0.2% m/m and +2.4% y/y; October PPI was unchanged m/m and up 7.8% y/y; and French consumer spending declined 0.4%.

 

Last week's high (1) was below the 23.6% retracement of the 1.1638-1.2328 range and last week's low (2) was just above a multi-month low.  The 1.2927/ 1.3204/ 1.3359/ 1.597 levels represent upside resistance targets while the 1.2326/ 1.2081/ 1.1685 levels represent downside support targets.

 

 

The yen appreciated vis-à-vis the U.S. dollar last week as the greenback tested bids around the ¥93.65 level and was capped around the ¥97.55 level.  The pair lost about 135 pips last week. The Nikkei 225 stock index gained 2.70% on Friday to close at ¥7,910.79.  Finance chief Nakagawa verbally intervened against the yen's strength.  PM Aso expressed "firm" support for a U.S. dollar-centered global FX system.  Opposition Democrats are trying to force an early election.  Yosano said FY 2009 could see negative economic growth.  BoJ kept rates unchanged and Shirakawa said the "severe adjustment" will take time.  The government reduced its economic assessment and sees worsening exports. 

 

Data released in Japan last week saw September industrial orders up 1.1% m/m; October wholesale prices were up 4.8% y/y; Q3 GDP was off 0.1% q/q; the September tertiary index was off 0.6% m/m; September wages were upwardly revised to +0.2% y/y; the September all-industries index fell 0.1% m/m; and exports declined 7.7% y/y with a trade deficit of ¥63.9 billion.

 

The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8311 in the over-the-counter market.  Hu railed against protectionist policies.  Economists are eyeing possible deflation in China next year. 

 

Data released in China saw October fixed asset investment up 27.2% y/y and October urban unemployment printed at 4.0%.

 

Last week's high (1) was below the 38.2% retracement of the 110.64-90.88 range and last week's low (2) was below the 23.6% retracement of the same range. Upside resistance targets remain the 98.43/ 100.76/ 102.42/ 103.14 levels while downside support targets remain the 95.71/ 91.87/ 90.88 levels.

 

 

The British pound appreciated vis-à-vis the U.S. dollar last week as cable tested offers around the US$ 1.5250 level and was supported around the $1.4640 level.  The pair gained about 115 pips last week.  BoE boss King said the MPC is "certainly prepared" to cut rates again if necessary.  Darling said increased fiscal spending is proper given the economic crisis and will give a pre-Budget report on 24 November.  Short sterling futures see up to 100bps of easing next month.  November MPC meeting minutes revealed talk of cutting more than 200bps this month, instead of the 150bps that were enacted.  MPC's Dale sees lower rates.

 

Data released in the U.K. saw October CPI growth decelerate to 4.5% y/y with core CPI at 1.9% y/y; CBI November manufacturing output fell to -42; October retail sales were off 0.1% m/m and up 1.9% y/y; October public sector net borrowing reached ₤1.382 billion; October CML gross mortgage lending rose to ₤18.7 billion; and Q3 home repossessions printed at 11,300.

 

Last week's high (1) was below the 23.6% retracement of the 1.8668-1.4558 range and last week's low (2) was just above a multi-month low.  Upside resistance targets include the 1.5446/ 1.5879/ 1.6128 levels while downside support targets include the 1.4558/ 1.4442/ 1.3682 levels.

 

The Swiss franc depreciated vis-à-vis the U.S. dollar last week as the greenback tested offers around the CHF 1.2300 figure and was supported around the CHF 1.1890 level. The pair gained about 275 pips last week.  SNB shocked the markets with a 100bps cut to 0.50% to 1.50%. 

 

Data released in Switzerland last week saw the November ZEW expectations index improved marginally to -88.5; October PPI rose 2.9% y/y and was off 0.6% m/m; October retail sales climbed 6.4% with October unemployment at 2.5%;  and October exports declined 8.1% with the trade surplus higher at CHF 1.84 billion.

 

Last week's high (1) was a multi-month high and last week's low (2) was above the 76.4% retracement of the 1.2476-0.9647 range.  Upside resistance targets include the 1.2593/ 1.3233/ 1.4269 levels while downside support targets include the 1.2076/ 1.1808/ 1.1758/ 1.1594 levels.

 

 

AUD

 

The Australian dollar depreciated vis-à-vis the U.S. dollar last week as the Aussie tested bids around the US$ 0.6075 level and was capped around the US$ 0.6595 level.  The pair lost about 180 pips last week.  The RBA is likely to cut at least 75bps in December and futures eye another 100bps in cuts beyond that by March.  GDP growth is seen at or below 1% in 2009.  RBA continued to heavily intervene to support the A$. and is likely to lower rates further.

Data released in Australia last week saw Q3 retail sales up 0.1%.

Last week's high (1) was right around the 23.6% retracement of the 0.9849-0.6007 range and last week's low (2) was just above a multi-month low.  Upside resistance targets include the 0.6600/ 0.6914/ 0.7262 levels while downside support targets include 0.6007/ 0.5536/ 0.5226 levels.

Sumber: GCI Foreign Exchange Research

 

Citi, Government Working Feverishly on Rescue Plan

The U.S. government and Citigroup are working feverishly to hammer out a rescue plan for the beleaguered bank. If all goes according to plan, there will likely be an announcement of some type of plan in a couple of hours.

The exact nature of plan remains unclear, but the government is leaning towards some sort of cash infusion into Citigroup . The plan will probably be a multi-layered one, which means the government could backstop losses on Citigroup's troubled assets as well. In exchange, Citi may issue preferred stock to the government

Sources with knowledge of the negotiations say "everything is on the table", meaning that even the government plan of buying the troubled assets could be revived.

The problem with buying the assets from Citi is political: People close to the deal know that other firms will line up and ask the government to purchase their troubled assets as well. Brokerage stocks got crushed when Treasury Secretary Hank Paulson reversed his plan on the TARP to direct capital infusions to the banks and away from buying troubled assets.

The Bottom line: This is very fluid and the situation may change again. But as of now, the government is getting cold feet on plan to buy troubled assets, which leaves direct capital infusion on the table.

Negotiating A Deal

The government is mulling the purchase of a substantial amount of assets from Citi, similar to a good bank, bad bank structure. The government would absorb much of the losses for Citi if there are losses and Citi would issue preferred stock to the government.

While the Fed could buy more than $100 billion or more in the bad assets if the plan goes through, that doesn't mean it will pay Citi $100 billion, depending on the final valuation of those assets. According to people with knowledge of the discussions, the plan for Citi resembles the original TARP proposal, in which the government would buy bad assets for financial firms at some price higher than what's being offered in the market.

Still, officials from the Treasury and Citigroup are unsure what it would take to restore confidence in the company, including a possible smaller capital injection or some sort of statement that Citigroup is financially sound.

For that reason, Citigroup officials are continuing to explore possible merger possibilities and a spin off of some of Citigroup's businesses, even as SEP Vikram Pundit publicly stated the sale of the firm's massive and coveted broker business, Smith Barney is off the table, these people say.

"CNBC Reports: Saving Citi" Tonight, Sunday Nov. 23rd, 8pm - 9pm EST

Both officials at Citigroup and in the government concede the situation facing Citigoup is daunting. Because of Citigroup's size and scope—it operates in just about every country and competes in just about every financial business, the company's survival is a national concern.

Citigroup has spent the past week telling investors that its capital position is strong, but investors have lost confidence in the current management led by CEO Vikram Pandit who has been in the job less than a year, and the firm's board, which appeared to ignore widespread calls by analysts to integrate the firms operations and slash its massive workforce until recently.

Meanwhile, various merger possibilities seem slim. A deal with investment banks Morgan Stanley or Goldman Sachs would create massive overlap and would lead to huge layoffs. There aren't many banks with a strong deposit base that Citigroup can buy with its depressed stock price.

Pandit, for his part, has cut the workforce to 350,000 from 375,000 and just announced another 50,000-job cut by early 2009. But for investors, those moves were too little too late. Just a year ago, Citigroup's share traded at around $50.

On Friday Citi traded at $3.77 and failed to rebound even as the Dow Jones Industrial Average of large company stocks spiked nearly 500 points on the news that President-elect Barack Obama will name NY Fed President Tim Geithner as his new Treasury Secretary.

Sumber: http://www.cnbc.com/id/27878049

Saudi Arabia Forced To Slash Interest Cuts By Crisis

Saudi Arabia slashed interest rates for an unprecedented third time since October and the United Arab Emirates intervened in a property merger on Sunday in moves to contain the impact of the credit crunch.

The developments show how the global financial crisis has torn through the Arab Peninsula, until recently thought immune due to massive sovereign savings and earnings from energy exports, with almost the same violence as in Europe and North America.

Saudi Arabia, the world's biggest oil exporter, reduced its key repurchase rate by 100 basis points to 3 percent to keep credit markets moving and boost domestic liquidity. The kingdom's central bank also lowered reserve requirements to 7 percent from 10 percent, prompting one economist to say the two actions may mean the central bank has detected "serious slowdown signs especially in the private sector." For other Gulf Arab policy moves, click on. "(The central bank) is trying to stimulate the economy.

There could be a slowdown coming from the credit area," said Muhammed Younas Malick, senior economist at the state-controlled National Commercial Bank in Jeddah.

A credit slowdown has already afflicted the UAE's property sector, which had enjoyed a five-year boom. Lenders and developers in the UAE have been battered by the credit crisis as market financing evaporated, property values plunged and buyers fled a market where land values have soared.

On Sunday, the finance ministry announced that two of the UAE's largest mortgage lenders, already on track to merge, will be brought under a state-owned bank, in the first sign of federal intervention in Dubai's troubled real estate sector.

o Economic Team Obama: Will It Help Settle Markets?

Trading in Amlak and Tamweel, which have been struggling due to the credit crunch, was suspended after the ministry said it would supervise their merger under the state's Real Estate Bank to ensure a fair valuation and protect shareholders.

A government body approved a merger that would combine Real Estate Bank with Emirates Industrial Bank, the official WAM news agency reported later on Sunday without giving details.

"For Amlak and Tamweel, it was always clear that some level of government support was necessary," said Raj Madha, a banking analyst at EFG-Hermes in Dubai. "There were three problems that Amlak and Tamweel were facing: funding, liquidity and solvency.

A merger between the two would have made no difference to those problems but an integration with Real Estate Bank effectively addresses all three of those issues," he told Reuters.

The combined market value of the firms is 2.5 billion dirhams ($681 million) -- roughly one third of their worth on Oct. 4 when the two Dubai-based firms first announced merger plans.

'ABU DHABI LENDING CREDIBILITY TO DUBAI'

Little-known Real Estate Bank is a government-owned entity aimed at supporting the real estate sector and provide housing for UAE nationals, according to its website.

Earlier this month, Tamweel told Reuters it was in talks with the central bank and finance ministry about their "short-term requirements facility," and long-term funding options once its merger with Amlak had gone through.

A finance ministry official said on Sunday that more details would be announced in coming weeks while an Amlak official declined to comment. Tamweel was not immediately available. Speculation has grown, as the financial crisis squeezes credit and hits stocks and real estate markets, that the federal government may step in to help shore up confidence in Dubai.

"Abu Dhabi, as the main backer of the UAE government, is lending its credibility to the Dubai real estate sector in a nutshell," said Eckart Woertz at Dubai-based think tank Gulf Research Center.

The UAE, the world's fifth-largest oil-exporter, is a seven-member federation that includes the Gulf trade and tourism hub of Dubai and is led by the emirate of Abu Dhabi, which is home to most of the country's oil.

Rasmala Investments Partner Eric Swats said the federal government's move seems aimed at securing access to central bank financing by changing the firms' status from mortgage lenders. "This is not dissimilar to what the U.S. government did when it granted Goldman Sachs and Morgan Stanley bank holding company status," he said.

UAE lenders have responded to the credit crisis by shutting off consumer credit to some clients and tightening conditions for mortgages in a move that threatens to choke off a five-year economic boom.

Becoming a licensed bank would enable the two mortgage lenders to take deposits and access emergency federal funds. Amlak, the biggest Islamic mortgage lender in the UAE, cut off new loans this month. Amlak, an affiliate of major Dubai developer Emaar Properties, earlier this year renewed its application to convert into a bank, which would allow it to take deposits.

Tax Rollbacks Could Be Delayed In Obama Stimulus Plan

Tax Refund Check
AP
U.S. President-elect Barack Obama may consider delaying a campaign promise to roll back tax cuts on high-income Americans as he works on a huge stimulus plan to counter the worst economic crisis the world has faced in decades.

In other moves to stave off the worst economic mess since the Great Depression, the 21 members of the Asia-Pacific Economic Cooperation forum declared at the end of a two-day summit in Lima that they would take all necessary economic and financial measures.

And diplomats also said there was a high probability the World Trade Organization would hold a ministerial meeting next month to seek a breakthrough in the Doha round of trade talks. But it may be the moves by Obama that resonate most in global financial markets on Monday.

Two Obama aides indicated when asked on Sunday TV talk shows that the tax cuts brought in under the current administration of Present George W. Bush may be allowed to run their course until the end of 2010, rather than being rescinded by legislation before then.

Business leaders and economists had expressed concern that raising taxes now would only exacerbate the economy's woes. Obama, who will take over from Bush on January 20, is ready to announce his top economic team on Monday.

He plans to nominate Timothy Geithner, president of the New York Federal Reserve Bank, as Treasury secretary, a transition official said. Lawrence Summers, 53, who was Treasury secretary in the Clinton administration, will help shape policy as director of the White House National Economic Council, the official said.

On Saturday, Obama laid out plans for a two-year economic stimulus involving the creation of 2.5 million jobs. The size of the stimulus plan appears to be growing from the $100 billion to $300 billion previously suggested by congressional leaders.

One influential Democrat, Sen. Charles Schumer of New York, said on Sunday that a package of up to $700 billion was needed to support the American economy. Schumer also said he expects Congress to get the package onto Obama's desk for signature by Inauguration Day.

"The main thing right now is to get this economic recovery package on the road, to get money in the pockets of the middle class, to get these projects going, to get America working again, and that's where we're going to be focused in January," senior Obama adviser David Axelrod told Fox news channel. When asked if the tax cuts for the wealthy would be allowed to expire on schedule after 2010 rather than be rolled back earlier, Axelrod said: "Those considerations will be made."

Another adviser, Bill Daley, said on NBC's "Meet the Press" that the 2010 scenario "looks more likely than not." The comments on the tax increases, the stimulus plan and the economic appointments should bring some cheer to the furrowed brows of investors in world markets, but it may only be temporary.

U.S. stock prices, pummeled for most of last week, rallied more than 6 percent on Friday after word first leaked out that Geithner might take the helm at Treasury.

"I think it will help the market on Monday but I think it will be very short-term help," said Michael Pento, senior market strategist at Delta Global Advisors. "You can stimulate the economy in the short run by a temporary adrenaline stimulus and a steroid shot of deficits, but in the long run it's extremely deadly."

o Economic Team Obama: Will It Help Settle Markets?

At the meeting of APEC, which includes the United States, Peru pledged to push for a so-far elusive global free trade deal that they said would help keep the world from sliding into a deep recession. Bush, Chinese President Hu Jintao, Japanese Prime Minister Taro Aso and other members of APEC, said they would refrain from raising trade barriers over the next 12 months.

They also supported overhauls of the International Monetary Fund (IMF) and the World Bank at a time when more countries need emergency bailouts to avert economic devastation. "The current situation highlights the importance of ongoing financial sector reforms in our economies," the leaders said in a statement.

They committed to try to reach a breakthrough in the stalled Doha round of trade talks before the end of this year. China's Hu said leaders must pay attention to the impact of the crisis on the developing world and provide it with support.

Japan was expected to reiterate an offer to give $100 billion to the IMF to prod other countries to chip in funds.

BLAME IT ON THE U.S.

Canadian Prime Minister Stephen Harper and Mexican President Felipe Calderon blamed the United States for starting the crisis and called for better banking regulations.

In other developments, Britain prepared plans to inject billions of pounds into the economy to stave off recession amid slumping house prices, rising unemployment and shrinking manufacturing output.

Finance Minister Alistair Darling will unveil the package of tax cuts and extra public spending expected to total up to 20 billion pounds ($30 billion) on Monday, newspapers said.

A cut in the so-called value added tax, or VAT, is aimed at giving a pre-Christmas boost to consumers' spending power.

"Doing nothing is not an option," Prime Minister Gordon Brown said in a speech he will give to business leaders on Monday. "We need timely action now to prevent permanent damage."

ASIA LEARNS TO FLINCH

China also planned more ways to support its economy, now showing signs of being infected by the crisis after years of extraordinary growth. =State television said projects planned by provincial governments will add an additional 10 trillion yuan ($1.5 trillion) to the value of a 4 trillion yuan economic stimulus package announced earlier this month.

The investments include rail, roads, ports and housing, CCTV said. The spending plans will emphasize rural infrastructure. South Korean officials said they had further policy options to combat the global downturn, putting pressure on the central bank to cut interest rates in Asia's fourth-largest economy. "We need financial support for small companies and exporters," Prime Minister Han Seung-soo said.

In the Gulf, also feeling the crisis despite its oil riches, Saudi Arabia's central bank slashed its benchmark lending rate from 4 percent to 3 percent, the second reduction in a month to keep credit markets moving and boost liquidity.

Citigroup's Pandit: We Will Not Sell Smith Barney

As Citigroup officials continue to weigh their options, Chief Executive Vikrum Pandit said he would like to keep the company together and does not wish to spin off its Smith Barney brokerage unit.

* Who are the biggest owners of Citigroup?

Pandit's comments came during a morning conference call with his staff. During the call, Pandit said "rumor mongering is at the heart of our problems," and he reiterated that Citigroup's capital position is very strong.

Citibank

With Citigroup [C Loading... () ] shares plunging below $5 a share on Thursday for the first time in 13 years, pressure is mounting, and could ultimately result in Pandit stepping down because of the lack of confidence in his ability to lead the firm through these troubled times.

By falling below $5, many mutual funds and institutional investors -- in particular pension funds -- must unload shares of Citigroup to comply with investment guidelines.

Senior officials at Citigroup have told CNBC that they will have to make a strategic change in the firm's direction, including finding a possible merger partner or raising cash in the coming days to arrest the sharp slide in the firm's stock price.

A Citigroup spokesman had no comment, but investment banking sources say possible partners could include Morgan Stanley [MS 10.05 0.85 (+9.24%) ], Goldman Sachs [GS 53.31 1.31 (+2.52%) ] or State Street Bank [STT 31.78 3.09 (+10.77%) ]. Both Goldman and Morgan have recently switched over to banking holding companies so they could collect deposits. But finding a possible partner would be difficult in an environment where every major firm is reeling from the credit crunch and has its own set of problems.

Citigroup's has been reeling on concerns that mounting losses from credit cards, mortgages and toxic debt could overwhelm its efforts to slash costs and add deposits.

Citigroup says its capital position is strong but acknowledges that the market appears to want to bank to raise more cash. Officials inside the bank denied speculation that Citigroup might approach the U.S. Treasury for more money from the $700 billion Wall Street bailout fund.

On Thursday, Citigroup officials began pushing SEC officials to reinstate the so called uptick rule, which made it more difficult for professional investors known as short seller—who make money betting that shares will decline—to short Citigroup stock.

(Citigroup's board meets today to discuss the bank's options. Watch the accompanying video for more...)

Citigroup's shares may be tumbling, but Ladenburg Thalmann's banking analyst Dick Bove said he does not see any reason for Citigroup to follow the path of Lehman and fail. Bove maintained his "buy" rating on the stock on Thursday.

The current decline in the stock price is reflecting a series of fears related to loans and security values that cannot be actualized without a severe setback in the economy and a very rapid increase in interest rates, Bove said.

Citigroup has access to U.S. Federal Reserve funds, is working at insuring some of its debt and is reducing its balance sheet faster than any other company in the banking industry, said Bove, who believes these steps backstops the bank's liabilities.

"It would take a Depression every bit as large and long as the 1930s debacle to shake this company's viability," Bove said.

Citi Presses to Bring Back Short-Selling Ban

As part of its efforts to curb the rumor-mongering it alleges is hurting its stock, Citi has told members of Congress to address short-selling, people familiar with the matter told Reuters.

The Financial Services Roundtable, an industry group, is also pressing for regulators to temporarily bring back the emergency ban that ended on Oct. 8.

The group, which represents most of the largest banks, brokerages, asset managers, and insurance companies in the United States, has been talking to securities regulators and others about reinstating the ban since it was lifted, said Scott Talbott, senior vice president in government affairs in Washington, DC.

Those efforts have increased in recent days as financial stocks have plummeted, Talbott said. "When conditions warrant, you want to prevent a downward spiral for shares. Investors are acting on panic now," he said.

* Slideshow: Big Budget Events

If financial stocks were reaching irrationally high levels, the group would seek measures to rein them in, Talbott said. "We want markets to operate efficiently," he added.

Short-sellers borrow stock they expect will fall in price in the hope of repaying the loans for less and pocketing the difference. They have been blamed by some corporate executives for driving down the price of their companies' stock.

John Nester, a spokesman for the SEC, declined to comment. The agency separately announced on Thursday that it will hold a teleconference of international securities regulators next week to discuss short selling, among other topics.

Hati-hati Pelemahan Rupiah Berlanjut

Jakarta - Rupiah masih akan mengalami tekanan tinggi terutama dari faktor eksternal. Fluktuasi mata uang lokal ini terus berlanjut karena ketatnya likuiditas dolar di dunia yang semakin membahayakan nilai tukar rupiah.

Pada perdagangan valas pukul 08.00 WIB, Senin (24/11/2008) rupiah ada di posisi 12.650 per dolar AS dan diperdagangkan di kisaran 12.500-12.800 per dolar AS. Posisi rupiah pagi ini melemah jika dibandingkan penutupan Jumat pekan lalu (21/11/2008) di level 12.000/US$.

Farial Anwar ketika dihubungi detikFinance, Minggu (23/11/2008) mengatakan tekanan terhadap rupiah belum hilang apalagi jika pemerintah AS jadi menerbitkan surat utang, penguatan dolar akan terus terjadi dan membahayakan semua mata uang dunia, termasuk rupiah.

Sepanjang awal tahun hingga 21 November 2008, rupiah bersama mata uang regional lainnya telah mengalami pelemahan yang signifikan. Rupiah melemah 22,4%, rupee India melemah 21,3%, won Korea melemah 38%, peso Filipina melemah17,2% dan baht Thailand melemah 16%.

Farial mengatakan rencana AS menerbitkan surat utang senilai US$ 500 miliar disebabkan pemerintah AS tidak memiliki dana untuk merealisasikan bailout US$ 720-750 miliar. "AS akan defisit besar jika tidak menerbitkan surat utang. Nilai surat utang yang akan diterbitkan belum pasti, tapi yang jelas akan berpengaruh besar pada seluruh mata uang dunia," jelas Farial.

Penerbitan surat utang miliaran dolar diperkirakan bakal menyerap dolar dari seluruh dunia ke AS. Menurut Farial, dalam kondisi seperti sekarang ini, penyerapan dolar akan menyebabkan dolar semakin langka di pasaran.

"Ini akan mendorong penguatan drastis mata uang dolar terhadap seluruh mata uang dunia, terutama negara-negara yang ikut membeli surat utang AS. Rupiah bakal anjlok tajam. Saya belum bisa perkirakan angkanya, yang jelas anjlok cukup tajam," jelas Farial.

sumber : http://www.detikfinance.com/read/2008/11/24/081036/1041662/6/hati-hati-pelemahan-rupiah-berlanjut