On Wednesday, the managing director of the Institute of International Finance (IIF), one of the leading international banking lobby firms, said that the health of the largest U.S. financial firms was on the mend, and the fallout from the subprime mortgage crisis was beginning to moderate. "The health of the largest 20 to 30 U.S. financial institutions is improving," said Charles Dallara at a news conference in Tokyo.
He did warn however that the turbulence in the global credit markets was likely to continue until the U.S. housing market bottoms out. A turnaround in the U.S. housing market and global credit markets has been viewed as a precursor to future global growth.
The IIF is based in the United States and represents more than 380 of the world's biggest financial institutions.
The conservatorship by the the U.S. Treasury of mortgage finance companies Fannie Mae (FNM) and Freddie Mac (FRE) has been lauded by financial firms and central banks around the world. The move was aimed at ensuring the stability of the financial system and shore up the housing market. The takeover over of the two institutions will provide a much needed "injection of stability" in the markets, Dallara said.
Saudi Arabia, OPEC, and Oil Supply
OPEC ministers on Wednesday agreed to change their production ceiling to 28.8 million barrels per day, a move that officials said should effectively cut production by 520,000 barrels a day, or about 1.8%, from July levels. Will they actually cut production?
The real question is, "What will Saudi Arabia do?" Saudi Arabia is definitely unhappy with OPEC, and they have said they will not go along with the cut in production. “Saudi Arabia will meet the market’s demand,” a senior OPEC delegate said. “We will see what the market requires and we will not leave a customer without oil."
After those comments comes a statement from OPEC, "Since the market is oversupplied, the conference agreed to abide by September 2007 production allocations adjusted to include new members Angola and Ecuador and excluding Indonesia and Iraq, totaling 28.8 million barrels per day, levels with which member countries committed to strictly comply." OPEC had been widely expected to maintain current production targets at its meeting in Vienna, although some ministers had advocated tighter compliance with formal limits by members who were overproducing their targets.
Oil prices have tumbled 30% since hitting a record high above $147 a barrel three months ago, a descent barely slowed by a pair of hurricanes whipping through the U.S. Gulf, home to a quarter of U.S. oil production.
Prices also fell on Wednesday after the International Energy Agency cut its world oil demand forecasts for this year and the next as high prices and mounting economic troubles drive consumers and businesses to conserve. There should be some more pressure on oil as Brazil announced another huge oil deposit in addition to the one Petrobras found offshore earlier this year. The deposits are said to be extremely large.
U.S. oil demand is already running about 3.8% below last year, according to government data.
Sources: Reuters, International Herald Tribune
He did warn however that the turbulence in the global credit markets was likely to continue until the U.S. housing market bottoms out. A turnaround in the U.S. housing market and global credit markets has been viewed as a precursor to future global growth.
The IIF is based in the United States and represents more than 380 of the world's biggest financial institutions.
The conservatorship by the the U.S. Treasury of mortgage finance companies Fannie Mae (FNM) and Freddie Mac (FRE) has been lauded by financial firms and central banks around the world. The move was aimed at ensuring the stability of the financial system and shore up the housing market. The takeover over of the two institutions will provide a much needed "injection of stability" in the markets, Dallara said.
Saudi Arabia, OPEC, and Oil Supply
OPEC ministers on Wednesday agreed to change their production ceiling to 28.8 million barrels per day, a move that officials said should effectively cut production by 520,000 barrels a day, or about 1.8%, from July levels. Will they actually cut production?
The real question is, "What will Saudi Arabia do?" Saudi Arabia is definitely unhappy with OPEC, and they have said they will not go along with the cut in production. “Saudi Arabia will meet the market’s demand,” a senior OPEC delegate said. “We will see what the market requires and we will not leave a customer without oil."
After those comments comes a statement from OPEC, "Since the market is oversupplied, the conference agreed to abide by September 2007 production allocations adjusted to include new members Angola and Ecuador and excluding Indonesia and Iraq, totaling 28.8 million barrels per day, levels with which member countries committed to strictly comply." OPEC had been widely expected to maintain current production targets at its meeting in Vienna, although some ministers had advocated tighter compliance with formal limits by members who were overproducing their targets.
Oil prices have tumbled 30% since hitting a record high above $147 a barrel three months ago, a descent barely slowed by a pair of hurricanes whipping through the U.S. Gulf, home to a quarter of U.S. oil production.
Prices also fell on Wednesday after the International Energy Agency cut its world oil demand forecasts for this year and the next as high prices and mounting economic troubles drive consumers and businesses to conserve. There should be some more pressure on oil as Brazil announced another huge oil deposit in addition to the one Petrobras found offshore earlier this year. The deposits are said to be extremely large.
U.S. oil demand is already running about 3.8% below last year, according to government data.
Sources: Reuters, International Herald Tribune
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