Replies to post #212981 on $Stock*Shop*Charts*News*Option$

[networth]

BWNR has held its ground from day 1 of its r/s. This coming week looks healthy enough for it to possibly get into the next level of trading. I know that you have posted some chart on this, and thank you for doing so!

[Stock Lobster]

BL: Yen Declines on Speculation Higher Stocks to Boost Carry Trades

By Stanley White and David McIntyre

Nov. 26 (Bloomberg) -- The yen dropped from a two-year high against the dollar as global stocks climbed, encouraging investors to increase holdings of higher-yielding assets bought with money borrowed in Japan.

Japan's currency fell the most versus the Australian dollar, a favorite target of so-called carry trades. The yen slid against all of the 16 most-actively traded currencies after Asian stocks rose for a second day.

``It's likely to be a negative day for the yen,'' said Tony Morriss, a currency strategist in Sydney at Australia & New Zealand Banking Group Ltd., Australia's third-largest lender. ``There's a bit more risk appetite.''

The yen declined to 108.56 per dollar at 9:20 a.m. in Tokyo from 108.29 late in New York Nov. 23, when it reached 107.55, the strongest since June 2005. Japan's currency traded at 161.10 per euro from 160.54. The dollar was at $1.4838 per euro.

Against Australia's dollar, the yen fell to 95.71 from 95.05 late on Nov. 23, when it reached 93.57, the highest since Sept. 11. Japan's currency rose to 82.63 per New Zealand dollar from 82.18. The Morgan Stanley Capital International Asia Pacific Index of regional equities advanced 0.5 percent.

In carry trades, speculators get funds in a country with low borrowing costs and invest in one with higher returns, earning the spread between the two. The risk is currency fluctuations erase profits between the two rates.

Japan's 0.5 percent benchmark borrowing cost is the lowest among major economies and compares with 4.5 percent in the U.S., 6.75 percent in Australia and a record 8.25 percent target rate in New Zealand.

U.S. Housing

Gains in the dollar may be limited by speculation reports this week will show U.S. home sales declined, fueling expectations a housing recession will lead to lower interest rates.

The National Association of Realtors will say Nov. 28 existing home sales declined to 5 million in October, according to a Bloomberg News survey, the lowest since comparable records began in 1999. Data a day later will show new home sales fell to 750,000 in the same month, just above an 11-year low, according to a separate survey of economists.

``The dollar is likely to weaken,'' said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan's largest currency broker. ``There is a real risk that the housing market weighs on U.S. economic growth for months to come.''

The dollar may fall to 108 yen and $1.4850 per euro today, he forecast.

Interest rate futures show traders see 96 percent odds the Federal Reserve will lower its benchmark rate a quarter point to 4.25 percent at its next meeting on Dec. 11, up from 66 percent odds a month ago. The dollar has fallen against 15 of the 16 most-active currencies since the Fed cut rates from 5.25 percent on Sept. 18.

To contact the reporter on this story: Stanley White in Tokyo at [e-mail] David McIntyre in Sydney at [e-mail]

Last Updated: November 25, 2007 19:37 EST

[Stock Lobster]

BL: Yen Declines on Speculation Higher Stocks to Boost Carry Trades

By Stanley White and David McIntyre

Nov. 26 (Bloomberg) -- The yen dropped from a two-year high against the dollar as global stocks climbed, encouraging investors to increase holdings of higher-yielding assets bought with money borrowed in Japan.

Japan's currency fell the most versus the Australian dollar, a favorite target of so-called carry trades. The yen slid against all of the 16 most-actively traded currencies after Asian stocks rose for a second day.

``It's likely to be a negative day for the yen,'' said Tony Morriss, a currency strategist in Sydney at Australia & New Zealand Banking Group Ltd., Australia's third-largest lender. ``There's a bit more risk appetite.''

The yen declined to 108.56 per dollar at 9:20 a.m. in Tokyo from 108.29 late in New York Nov. 23, when it reached 107.55, the strongest since June 2005. Japan's currency traded at 161.10 per euro from 160.54. The dollar was at $1.4838 per euro.

Against Australia's dollar, the yen fell to 95.71 from 95.05 late on Nov. 23, when it reached 93.57, the highest since Sept. 11. Japan's currency rose to 82.63 per New Zealand dollar from 82.18. The Morgan Stanley Capital International Asia Pacific Index of regional equities advanced 0.5 percent.

In carry trades, speculators get funds in a country with low borrowing costs and invest in one with higher returns, earning the spread between the two. The risk is currency fluctuations erase profits between the two rates.

Japan's 0.5 percent benchmark borrowing cost is the lowest among major economies and compares with 4.5 percent in the U.S., 6.75 percent in Australia and a record 8.25 percent target rate in New Zealand.

U.S. Housing

Gains in the dollar may be limited by speculation reports this week will show U.S. home sales declined, fueling expectations a housing recession will lead to lower interest rates.

The National Association of Realtors will say Nov. 28 existing home sales declined to 5 million in October, according to a Bloomberg News survey, the lowest since comparable records began in 1999. Data a day later will show new home sales fell to 750,000 in the same month, just above an 11-year low, according to a separate survey of economists.

``The dollar is likely to weaken,'' said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan's largest currency broker. ``There is a real risk that the housing market weighs on U.S. economic growth for months to come.''

The dollar may fall to 108 yen and $1.4850 per euro today, he forecast.

Interest rate futures show traders see 96 percent odds the Federal Reserve will lower its benchmark rate a quarter point to 4.25 percent at its next meeting on Dec. 11, up from 66 percent odds a month ago. The dollar has fallen against 15 of the 16 most-active currencies since the Fed cut rates from 5.25 percent on Sept. 18.

To contact the reporter on this story: Stanley White in Tokyo at [e-mail] David McIntyre in Sydney at [e-mail]

Last Updated: November 25, 2007 19:37 EST

[Stock Lobster]

WSJ: European Insurers' Shares Face Further Gloom

Swiss Re's Subprime Losses
Add to Worries Over Exposure;
P/E Ratios on Par With Banks

By GORAN MIJUK
November 26, 2007

Fund managers in Europe are shunning insurance stocks amid growing concerns that the widening subprime-mortgage crisis could affect the sector, exerting more pressure on this year's already weak stock performance.

Worry reached a fever pitch last week when Swiss Reinsurance Co., the world's largest reinsurer by premiums, said it faced as much as a $1 billion loss in connection with complex engagements that are linked to subprime mortgages, which are home loans made to risky borrowers. The revelation caused Swiss Re's shares to fall more than 18% on the week, dragging down the entire industry.

The European insurance sector has lost more than 10% this year so far, pushing valuations to historic lows. The sector's estimated average price-to-earnings ratio for 2007 stands at 11.8, far below the food industry, which has a 20.1 P/E ratio. Valuations are virtually on par with the heavily subprime-stricken banking sector, where ratios hover around 11.8, according to data from Reuters.

P/E ratios -- calculated by dividing stock price by annual earnings per share -- reflect a stock's relative value and profit-growth potential. The higher the ratio, the more investors bet that profits will grow fast. A lower ratio can be a sign of greater value -- or of potential problems.

"Stocks look cheap. But that's the wrong angle," said Jaime Ramos, investment director at Standard Life Investments' European equities arm. "The subprime crisis is hanging like a cloud over the sector."

Swiss Re's subprime hit, which came only two weeks after it boasted a third-quarter net profit of $1.3 billion, was due to its exposure to so-called credit-default swaps, hedging instruments it sold to investors who were seeking insurance against losses on their bond portfolios. Swiss Re's P/E ratio for this year stands at 5.4, one of the lowest in the industry.

Despite the recent fall, stock prices could erode even further, should more subprime-related fallout emerge, he said. Although many insurers, which posted strong earnings this year, claim that their direct and indirect involvement in the subprime arena is limited, fund managers warn that the market's ability to estimate company profits will stay dim until full-year earnings are published in spring. Only conservatively led firms with strong balance sheets and little exposure to subprime bonds or insurance derivatives could offer investors stock-picking opportunities, fund managers say.

"It was a real shock for the market to learn that Swiss Re had such a big, even if indirect, exposure to subprime," said Robert Scholl, asset manager at Aargauische Pensionskasse in Aarau, Switzerland. "Trust is shattered, and the big question is who else has such instruments on its books."

With the deepening subprime shakeout, many mortgage- and asset-backed bonds lost value, and holders of credit-default swaps can seek claims from Swiss Re and other issuers. American International Group Inc. and Dexia SA also recently wrote down some of their swap investments because of crumbling bond valuations, adding to the sector's gloom.

German peers such as Hannover Re AG and Allianz SE and France's AXA SA were quick to assert that their direct and indirect exposure to subprime is limited. "The issue at Swiss Re will remain a single case and not become the tip of the iceberg" for the industry, said Elke König, chief financial officer of Hannover Re.



For its part, Swiss Re said it would improve its internal risk-assessing process. The company also moved to allay worry about more heavy losses this year, maintaining its forecast of a full-year net profit in 2007 and saying the year-end return on equity would be above the company's long-term target of 13%.

Industry observers are wary of such appeasing words. "The market doesn't believe them. Likewise, no one believes that Swiss Re's new risk process will avoid such losses in the future," Mr. Ramos said.

Deutsche Bank also warned in a sector study, published after Swiss Re's slide, that Netherlands-based Aegon NV and ING Groep NV are also likely to stay under pressure until the market has a full understanding of their exposure to the U.S. subprime market.

Though both companies recently said their exposure to the subprime market is contained, a deepening of the credit-market crisis and further downgrades of bond ratings could hit them hard, Deutsche Bank said.

ING, which has lost 25% this year so far, ended the week at €25.22 ($37.42), thanks to a 3.5% rise on Friday amid a Europe-wide market recovery. ING's P/E ratio stands at 6.2. Aegon, which has shed 18% this year, ended the week at €11.88. The company's P/E ratio stands at 8.6.

Still, there is room for outperformers. "For courageous investors, current valuations are certainly attractive," said Beat Stuber, partner at privately held asset manager Johnson & Stuber in Zurich. "But I only buy into stocks that offer a special situation or are led conservatively."

Among those stocks is Swiss Life Holding AG, which recently sold off several units and said it will embark on a $2.2 billion share buyback. The stock has outperformed the sector this year, but has failed to advance more than 1%. Another such defensive stock is Old Mutual PLC, which is in process of shedding noncore operations and has started a share buyback.

Write to Goran Mijuk at [e-mail]

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