August 2008 Archives
By Pham-Duy Nguyen
Aug. 29 (Bloomberg) -- Gold rose, heading for a second straight weekly gain, as energy costs gained, reviving demand for the metal as a hedge against inflation. Silver also gained.
Crude-oil prices are higher this week, after advancing last week, amid concern hurricanes will disrupt U.S. petroleum production in the Gulf of Mexico. Gold reached a record in March as oil rose toward all-time highs in July.
``If the hurricane does head into the Gulf and cause damage, that would definitely support gold,'' said Tom Hartmann, a commodity analyst at Altavista Worldwide Trading Inc. in Mission Viejo, California. . .
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By Claudia Carpenter Aug. 28 (Bloomberg) -- Rand Refinery Ltd., the world's
largest gold refinery, ran out of South African Krugerrands
after an ``unusually large'' order from a buyer in Switzerland.
The order was for 5,000 ounces and it will take until Sept. 3 for inventories to be replenished, said Johan Botha, a spokesman for Rand Refinery in Germiston, east of Johannesburg. He declined to identify the buyer.
Coins and bars of precious metals are attracting investors as a haven against a sliding dollar and conflict between Russia and its neighbor Georgia. The U.S. Mint suspended sales of one- ounce ``American Eagle'' gold coins, Johnson Matthey Plc stopped taking orders for 100-ounce silver bars at its Salt Lake City refinery and Heraeus Holding GmbH has a delivery waiting list of as long as two weeks for orders of gold bars in Europe.
``A lot of people are worried about the dollar, they're worried about inflation and now we have geopolitical risk with what's happening in Russia,'' said Mark O'Byrne, managing director of brokerage Gold and Silver Investments Ltd. in Dublin. O'Byrne said his company's sales are up fourfold this year, heading for a record since its founding in 2003.
Gold rose to a record in March and is 25 percent higher than this time last year, while the dollar dropped 7.4 percent against the euro. Silver is up 15 percent in the period.
Salt Lake
French Foreign Minister Bernard Kouchner said European Union leaders meeting in Brussels Sept. 1 will discuss sanctions against Russia after it recognized the independence of two regions of Georgia. U.K. Foreign Secretary David Miliband said yesterday Russia was trying to ``redraw the map'' of Europe.
Johnson Matthey's Salt Lake City refinery doesn't have the capacity to meet investor demand for 100-ounce silver bars, said spokesman Ian Godwin in London. He wouldn't comment on whether the company may expand capacity or end production.
The refinery usually gets orders for 1,000 ounce bars from banks and silver grains from jewelers, Godwin said.
Rand Refinery has manufactured, marketed and delivered more than 46 million ounces of Krugerrands since the gold coin was introduced in 1967, according to the company's website. Krugerrands are minted at the South African Mint from gold coin blanks supplied by Rand Refinery.
Gold for immediate delivery rose $2.29 to $829.19 an ounce by 5:24 p.m. in London. Silver gained 10.5 cents to $13.60.
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08.27.08,
4:07 PM ETBy Frank Tang and Jan Harvey
NEW YORK/LONDON (Reuters) - Gold ended higher Wednesday as oil prices rose, boosting the precious metal's appeal as an inflation hedge, and as the dollar retreated from a six-month high against the euro.
Oil firmed more than $2 a barrel after data showed U.S. crude inventory fell and as fears grew that tropical storm Gustav could hit oil installations in the Gulf of Mexico.
Gold was at $826.05/827.45 by New York's last quote at 2:15 p.m. EDT (1815 GMT), up from $822.90/824.30 an ounce late in New York Tuesday.
"Gold is mainly supported by a firm crude price," said Philip Carlsson, Saxo Bank's global products manager for futures and options.
"I don't see the market as all bullish though, and should the tropical storm create fewer problems than expected, the sell-off could be immediate," he added.
Jon Nadler, senior analyst at Kitco Bullion Dealers in Montreal, said that gold buying remained sluggish, and short-term trades could dominate the market until after the U.S. Labor Day holiday next week.
U.S. gold contract for December delivery settled up $5.90 at $834.00 an ounce on the COMEX division of the New York Mercantile Exchange.
The dollar slipped as investors bet the U.S. currency's recent jump to 2008 highs against a basket of currencies was too far, too fast given hawkish rhetoric from a European Central Bank policy-maker.
A weaker dollar typically benefits gold, which is often bought as a hedge against weakness in the U.S. currency.
In the longer term, global economic deterioration is expected to support the dollar, as the Federal Reserve is likely to hold rates while other key central banks are expected to cut.
This should keep a lid on gains in gold, analysts said.
Resurgent physical demand for gold coins and bars, which was a key factor supporting gold prices above $800 an ounce, is still supportive, traders say.
Jewellery demand is also expected to pick up going into September, especially in India, the world's biggest jewellery market.
"Reports state that physical demand out of India is picking up ahead of the approaching festival season that peaks in October for Diwali," noted Marc Elliott, an analyst at Fairfax.
PLATINUM CLIMBS
Spot platinum, meanwhile, climbed 1.5 percent as traders took advantage of a recent drop in prices to buy into the white metal. Palladium also ticked up 2 percent.
Both metals have suffered from fears weaker economic growth will cut car consumption, denting demand for the platinum group metals as components in catalytic converters.
But after a sharp drop in prices throughout early August, both metals are now bouncing back.
Spot platinum ended higher at $1,434.50/1,454.50 an ounce, up from $1,409.50/1,429.50 late in New York. Spot palladium firmed to $288.50/296.50 an ounce, higher than its previous U.S. finish of $282.00/290.00.
"We believe that palladium is chronically cheap relative to platinum," said JP Morgan analyst Michael Jansen in a note.
"We actually believe that palladium should be bought on an outright basis in the $250-$275/oz area," he added.
Silver finished lower at $13.47/13.53 an ounce, ignoring gold's strength as traders locked in profits, compared with $13.56/13.64 an ounce late in New York late on Monday.
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Cash-Strapped FDICPosted Wednesday, Aug. 27, 2008, at 7:06 AM ET
You can add the Federal Deposit Insurance Corp. to the list of entities that may be in line for a Treasury Department bailout, the Wall Street Journal
reports, following an interview with the agency's chairwoman.
The FDIC is a bit cash-strapped these days as it props up failing banks across the country. It announced on Tuesday that 117 ailing banks are now under its care and that the FDIC holds an astounding $78 billion in distressed bank assets, the Guardian points out. And, the New York Times says, the FDIC sees the banking crisis going from bad to worse.
All this turmoil and further pain explains why the FDIC may need a loaner from the Treasury "to cover short-term cash-flow pressures caused by reimbursing depositors immediately after the failure of a bank," the WSJ says, after scoring an interview with the FDIC's Sheila Bair. The agency has gone cap in hand to the Treasury before—in the early 1990s, after the savings-and-loan debacle forced thousands of banks out of business. The FDIC's Bair reassures the WSJ that a loan would cover short-term operating costs—not losses, she asserts—"for liquidity purposes."
With inflation running too high for its liking, the Federal Reserve is hinting it will raise the benchmark interest rate, the NYT reports. The paper has decoded the minutes from the most recent Fed meeting in August and concluded: "Expect Fed policy makers to eventually raise their benchmark interest rate in an effort to slow inflation, but they have not agreed to a timetable for the move." Fed watchers on Wall Street believe "the central bank is carefully watching the trend of rising prices, and is more likely to raise rates than lower them by the beginning of next year," according to the paper.
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Regulator, insurer boosts its staff and provisions as it faces its biggest challenge in decades
Cox News ServiceSunday, August 24, 2008
ATLANTA — The Federal Deposit Insurance Corp. is one of those agencies with a low profile but essential role similar to plumbing or electricity — you don't notice it until the power's out or the basement's flooding.
These days, the FDIC's folks are busier with the financial equivalent of fixing burst water mains and dead power lines.
Seventy-five years after it was launched during the Great Depression, the bank regulator and insurer is facing its biggest challenge in decades. Many banks in Georgia and across the nation have been battered by the slumping economy and troubled loans to home builders, developers and homeowners.
Hundreds could fail, some industry experts predict. That could force the agency to make good on its promise to insure most customers' checking and savings deposits up to $100,000 and some retirement accounts up to $250,000, putting pressure on its insurance fund.
Is the agency, whose combined insurance funds were technically pushed into insolvency during the savings and loan debacle two decades ago, ready for another banking crisis? And how bad could it get?
Despite the frequent gloom on both Wall Street and Main Street, industry players seem confident in the overall resiliency of the banking industry and the FDIC's ability to shelter customers from bank failures.
The FDIC, which had shrunk to 4,600 employees from 23,000 at the height of the savings and loan meltdown, has been gearing up for another wave of bank failures.
It's hiring 70 new employees and bringing back 70 retirees to beef up its teams that swoop in, usually over a weekend, to take over and reopen banks under new management.
The FDIC's Atlanta regional office, which covers seven states from West Virginia to Florida, also recently boosted its bank examiner and professional staff by about 10 percent, to about 300. The agency is also expected to soon raise the insurance premiums it charges banks and thrifts to begin rebuilding its reserves.
The FDIC won't discuss its projections, but it has been increasing its loss provisions for expected bank failures and adding institutions to its growing "problem" bank list. The list totaled 90 institutions with $26.3 billion in assets at the end of March. The confidential list is expected to be longer when the FDIC issues an update Tuesday.
"We don't predict numbers of bank failures," FDIC spokesman David Barr said. "We do realize that there will be more failures, but it's something that we can manage."
Georgia a special concern
Even though most of the headline-grabbing bank and real estate problems center on Florida and California, Georgia is likely to emerge as a hot spot, as well.
The state's banks, which included 109 community banks that were launched since 2000, built up the nation's heaviest concentration of loans to home builders and real estate developers. Many of those businesses have since gone belly-up, saddling banks with growing piles of bad debt and foreclosed properties.
Nine of the state's banks recently landed on a top-25 list compiled by SNL Financial based on the so-called "Texas ratio," which attempts to gauge how likely the institutions will run into financial trouble.
FDIC officials said they expect the Deposit Insurance Fund, which had $52.8 billion at the end of March, to remain sound.
"The losses would have to be pretty catastrophic" to create a deficit, said Arthur Murton, the FDIC's director of insurance and research. That's because, Murton said, under a federal reform law passed after the S&L crisis, the agency was given more flexibility to raise the deposit insurance rates it charges banks whenever needed.
"We have a pretty significant fund, and we have the ability to replenish it," he said.
How bad will it be?
Certainly the FDIC's and the banking industry's challenges so far haven't come close to the challenges of the 1930s and 1980s. Some 9,000 banks failed in the four years before Congress created the FDIC in 1933. Thousands of institutions also failed during the S&L crisis. Year to date, eight institutions have failed.
Georgia has so far gotten off rather lightly, with no bank failures this year and relatively few during those earlier crises. Eight Georgia banks failed in the late 1930s, and 21 collapsed from 1988 to 1992. The largest so far was last year's shutdown of NetBank in Alpharetta, with $1.5 billion in deposits.
But both the state and national tallies will grow, industry analysts predict.
They expect possibly hundreds of bank failures nationally over the next few years as more borrowers ranging from homeowners to businesses default on loans. How many will depend on whether the economy enters a recession.
"For a lot of banks, the die has already been cast," said Jeff K. Davis with FTN Midwest Securities. At the low end, he estimates that roughly 100 banks will fail over the next 18 months if falling crude oil prices and recent gains on Wall Street point to a possible turnaround in the economy. That number could swell to 600 failures if the economy falls into a serious recession, although most will be small community banks, he added.
The FDIC will have to absorb "some expensive failures," but nothing like past waves of bank failures because banks are generally much larger and better diversified, said Bert Ely, a longtime bank industry consultant who has his own firm in Alexandria, Va. "The banking industry goes into this mess much stronger than it was" in those earlier eras, he said.
Some industry watchers say bank failures could wipe out much of the FDIC's insurance fund, forcing the agency to collect significantly higher premiums from financial institutions in the future. The eight failures this year are expected to cost $5 billion to $9 billion, potentially wiping out up to a sixth of the FDIC's insurance fund.
Because of the likely drain on the fund, the FDIC is expected to increase deposit insurance rates as early as next month. Otherwise, the losses will push the fund below a statutory minimum of 1.15 percent of insured deposits. The fund equaled 1.19 percent of insured deposits at the end of March.
"As the FDIC incurs losses, those losses will be passed back to the banking industry," Ely said. "The real party at risk here is the banks."
But ultimately, the FDIC can turn to Uncle Sam for help. That's what happened during the S&L crisis, when billions in losses wiped out an insurance fund that covered savings and loan deposits. Congress stepped in and turned responsibility over to the FDIC in 1989, giving the agency extra time to rebuild its insurance reserves. Still, that fund dropped to a deficit of $7 billion in 1991 before it began to recover.
Sticker shock
The FDIC doesn't expect a replay of those events, despite the heavy losses the agency expects from this year's bank failures. The FDIC's Murton said the initial batch of shutdowns was probably not a good indicator of future trends. The expected losses were skewed unusually high by last month's failure of IndyMac Bancorp, he said. California-based IndyMac, with $32 billion in assets, was the nation's third-largest U.S. bank failure. It is expected to cost the fund $4 billion to
$8 billion.
"We had one of the largest and certainly what we think will be one of the most expensive failures at the beginning of the cycle," Murton said. "We don't expect to see repeats of that."
In the event that he's wrong, he said the FDIC can draw on a $30 billion line of credit with the federal Treasury to continue covering future bank failures. Beyond that, said Barr, the FDIC spokesman, the agency is backed by the "full faith and credit" of the United States. "It's on the sticker" displayed by federally insured banks, he said.
Gerard Cassidy, a veteran banking analyst with RBC Capital Markets, expects the FDIC to remain sound, even though he projects up to 300 banks will have to close within three years. He expects the FDIC to boost its rates up to 30 percent next month to shore up its insurance fund.
"Although it's going to be challenging, it's not going to be all that bad," said Cassidy, who is credited with devising the so-called "Texas ratio" in the early 1990s to predict which banks or thrifts might fail. "If anyone has a deposit of less than $100,000, they can sleep as soundly as always," he said.
Second-guessing
Still, the FDIC's and other bank regulators' performance is getting mixed reviews. Critics say the agencies were too slow and did too little to steer banks away from risky mortgage loans and heavy concentrations in construction and home-builder loans, which account for much of the industry's expected losses.
The FDIC also was criticized for its handling of last month's shutdown of IndyMac. Many people waited hours in long lines to withdraw money or check on accounts.
On the other hand, the agency caused barely a ripple when it shut down several smaller institutions such as Bradenton, Fla.-based First Priority Bank, whose deposits were taken over earlier this month by Atlanta's SunTrust Banks.
"I was shocked that the FDIC did not have IndyMac on its watch list until a month before" its collapse, Cassidy said. "You may have an inexperienced team. ... Remember, for the last 13 or 14 years, the banking industry has been pretty benign."
Barr, the FDIC spokesman, countered that the FDIC has "a good mix of experienced staff." He said he's at a loss to explain the unusual level of anxiety among IndyMac's customers. "They knew their funds were insured. ... They still lined up and took their money out," he said. "We've had three failures since IndyMac and they all went smoothly."
He said the FDIC and other regulators were also aware of the growing risk level in banks' loan portfolios, and took action. The agencies issued guidance to banks in 2006 to discourage them from making too many loans to home builders and real estate developers, but they had "a very difficult line to walk" at the time, when banks were still prospering from such lending, he said.
"I feel that we did recognize it and did what we could," Barr said, but "you don't want to cause a credit crunch."
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WASHINGTON — Sheila C. Bair anticipated the mortgage crisis long before most other regulators. But she never dreamed it would wreak so much havoc on so many banks.
Sheila C. Bair of the Federal Deposit Insurance Corporation.
More than a year after the credit crisis first flared, Ms. Bair, the chairwoman of the Federal Deposit Insurance Corporation, warned on Tuesday that the outlook for the ailing banking industry was bad — and getting worse.
The swelling tide of toxic home loans is proving to be even more worrisome than initially feared, Ms. Bair said. She is struggling to clean up the mess and forestall home foreclosures with a plan to ease loan terms for hard-pressed homeowners.
“It is going to be slog to work though this, but there is no easy way to do it,” Ms. Bair said about her plan during an interview in her office here. “We haven’t seen the trough of the credit cycle yet.”
Her downbeat outlook was underscored on Tuesday by the F.D.I.C’s latest quarterly assessment of the industry. The agency said the number of bad loans at banks ballooned to its highest level in 15 years during the second quarter.
Industrywide, bank earnings plunged 86 percent from April to June, to $4.96 billion, from $36.8 billion a year earlier, the agency said.
The F.D.I.C., which guarantees savings and checking deposits, also raised the number of banks on its list of problem lenders to 117, the most since mid-2003.
That is up from 90 at the end of the first quarter. The agency does not disclose which banks are on the list, but it said the troubled lenders had combined assets of about $78 billion.
For all the bad news, American banks are in far better shape than they were in the late 1980s and early ’90s, when the savings and loan crisis claimed hundreds of lenders across the nation.
But some worry that the agency has fewer people — and less money — than it needs to cope with the industry’s latest travails, particularly if several large institutions were to collapse. Nine lenders, most of them small, have failed so far this year. Analysts expect dozens more to run into trouble.
Ms. Bair’s agency is stretched. Dozens of staff members who had been through the banking crises of the early 1990s retired in recent years. Despite her efforts to bring some seasoned examiners back, her small army of examiners is largely untested.
Meanwhile, there are growing questions about the adequacy of F.D.I.C.’s insurance fund, which guarantees repayment on deposit accounts of up to $100,000 when banks collapse. The fund dwindled to $45.2 billion during the second quarter, from $53 billion in the first quarter.
To replenish its fund, the agency will probably have to raise the fees it charges banks by at least 14 cents for every $100 of deposits, according to estimates by analysts. Ms. Bair declined to comment on the likely size of any increase but said the agency was proposing to revamp its fees so that institutions engaging in high-risk practices would pay higher rates.
“It only seems fair,” Ms. Bair, 54, said. Such a move is expected to draw criticism from banks.
How Ms. Bair navigates the financial and political landmines ahead will help determine the course of the banking industry and, by extension, the broader economy. It will also determine her legacy.
“If the agency gets through the credit mess, having handled the bank failures that are to come, she is going to be widely seen as the person who prepared the agency for this,” said Jaret Seiberg, a financial policy analyst for the Stanford Group in Washington. “If the cycle is worse than expected — and if the agency insurance fund isn’t big enough or they didn’t have enough examiners — she will become the fall guy.”
The centerpiece of Ms. Bair’s plan is to modify loans so that people can stay in their houses. “It is something we should put a priority on,” said Ms. Bair, who speaks at a rapid clip.
From her perch at the F.D.I.C., Ms. Bair has become one of the industry’s most influential policy makers and outspoken critics. She issued some of the earliest warnings on the housing market and prodded the Treasury Department to back a comprehensive approach toward freezing low teaser rates on certain adjustable mortgages, a stance that many investors have opposed. She has also walked a fine line between pressuring banks to raise capital and urging depositors to remain calm.
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"Banks too important to be left on their own," Bernanke says.
WASHINGTON (MarketWatch) -- Central bankers and regulators are rethinking their faith in the ability of market forces alone to police the increasingly complex global financial system.
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Regulators Step Up Bank Actions
As U.S. Races to Head Off More Failures
August 26, 2008; Page C1
WASHINGTON -- Federal regulators have increased the number of struggling banks they have effectively put on probation, forcing them to fix their problems and try to avoid potentially costly failures.
![[chart]](http://s.wsj.net/public/resources/images/MI-AS065_TROUBL_20080825183215.gif)
The Federal Reserve and the Office of the Comptroller of the Currency, two of the nation's primary bank regulators, have issued more of these so-called memorandums of understanding so far this year than they did for all of 2007, according to data obtained from regulatory agencies under Freedom of Information Act requests.
These secret agreements can force banks to take steps including raising capital, cutting back on risky loans and suspending dividend payments.
The depth of problems in the banking sector will become clearer Tuesday, when the Federal Deposit Insurance Corp. updates its list of "problem" institutions. The FDIC had 90 banks on its list March 31. There have been five bank failures since July 11, and many other banks are considered at risk by regulators.
Government officials have been brokering the memorandums with institutions large and small, from National City Corp., a Cleveland bank with $154 billion in assets, to $660 million-asset First Private Bank & Trust of Encino, Calif., a unit of Boston Private Financial Holdings Inc.
Banks are struggling with their worst crisis in a generation amid the deterioration of real-estate and credit markets nationwide.
"The increase in [memorandums] is not surprising given the more challenging market conditions faced by many banking organizations," said Roger Cole, the Fed's director of banking supervision and regulation. They "are useful in specifying weaknesses in risk management and other areas that need to be addressed by bank management."
Because banks don't have to disclose the memorandums, bank customers and investors generally remain in the dark. In some recent cases, federal regulators haven't disclosed more-serious enforcement actions against banks until after those banks have failed. Regulators are often wary of igniting a run on the bank, with panicked customers yanking deposits.
Coral Gables, Fla.-based BankUnited Financial Corp. said Monday that its $14 billion banking unit recently entered into an agreement with the Treasury Department's Office of Thrift Supervision over concerns about capital levels, among other things. BankUnited didn't specify whether the agreement was a memorandum or some other type of directive, but the regulator is requiring the company to end its option adjustable-mortgage and alternative mortgage businesses.
The inconsistency of public disclosures "is very frustrating as an investor in bank stocks," said Gerard Cassidy, an analyst with RBC Capital Markets, noting that an enforcement action represents a red flag about a bank's health and is likely to put the brakes on that company's growth. "It would be very helpful in an investor's analysis if they knew that an agreement was already signed."
For regulators, the memorandums are an early-warning system about troubled banks but aren't meant to imply that a bank is at risk of failing. They are often a precursor to more-severe, publicly disclosed enforcement actions if conditions don't improve.
"Enforcement actions, bank failures and so on are sort of trailing economic indicators," said Oliver Ireland, a former Fed attorney who is now a partner at Morrison & Foerster LLP. "We're probably not done with all this yet. Not by a long shot."
Speculation about these pacts is enough to drive a bank's stock price down. Washington Mutual Inc. took the rare step in June of issuing a statement to knock down rumors that the bank had entered into a deal with its supervisor, the Office of Thrift Supervision.
While regulators wouldn't disclose the names of banks with which they've entered into memorandums, three agencies provided tallies of how many agreements they've arranged, offering a snapshot of the problems engulfing the banking industry.
As of June 17, the Fed had entered into 32 memorandums with state-chartered banks and bank holding companies. For all of last year, the Fed entered into 31 such agreements.
The Office of the Comptroller of the Currency, a division of the Treasury Department that supervises national banks, entered into nine memorandums with banks through Aug. 15, compared with six in all of 2007.
The FDIC, which insures deposits at the nation's banks and thrifts and also is the primary regulator of many smaller lenders, had entered into 118 memorandums as of Aug. 15, compared with 175 for of 2007.
The Office of Thrift Supervision, which supervises federal savings and loans, refused to disclose its data. Senior Deputy Director Scott Polakoff said in an interview that the number had jumped. "We have seen a significant spike," he said.
"The pendulum has swung" toward tougher regulation, said George Haligowski, chairman and chief executive of Imperial Capital Bancorp Inc. of La Jolla, Calif., one of a handful of firms to publicly disclose in securities filings having agreed to a memorandum.
In certain years during the past decade, regulators issued more memorandums, indicating that regulators are still grappling to figure out how best to deal with troubled companies.
For example, the Office of the Comptroller of the Currency brokered 32 in 1999 and 31 in 2000. The FDIC entered into 198 of these agreements in 2005. Typically, regulators choose to broker a private agreement if they feel management is being cooperative and the bank's problems can be addressed quickly. The cause of those spikes isn't clear.
National City, the big Cleveland lender, confirmed it had entered one with the OCC and the Federal Reserve Bank of Cleveland several days after the fact had been reported in The Wall Street Journal.
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Monday, August 25, 2008
NEW YORK (Reuters) - The U.S. Mint said it must allocate the American Eagle bullion coins among dealers to cope with overwhelming demand as it resumed taking orders for the popular coins on Monday.
"The unprecedented demand for American Eagle gold one-ounce bullion coins necessitates our allocating these coins among the authorized purchasers on a weekly basis until we are able to meet demand," the U.S. Mint told its authorized American Eagle dealers in a memo dated August 22.
Last week, soaring demand forced the U.S. Mint to suspend temporarily sales of the American Eagles, creating a shortage in the one-ounce version of the coins, which are also available in other weights and denominations.
American Eagle gold coins have been popular novelties among collectors and investors since their introduction in 1986. The coins offer people an easy, tangible way to invest in the gold market, as opposed to buying an exchange-traded fund or other financial instrument.
Coin dealers from the United States and Canada reported a surge in buying of bullion coins and other gold products since prices plummeted from highs last month, contributing to supply fears.
The buying spree and the subsequent shortage of the Eagles have improved momentum in gold as market participants interpret it as a sign of increasing retail investor interest in gold and other precious metals.
The Mint said that it will equally divide its Eagles inventory available for sale each week into two equal pools, with the first allocated equally among all authorized dealers, and the second pool distributed according to the dealers' past sales performance.
Allocation will continue for the American Eagle silver bullion coins, another popular item, the U.S. Mint said.
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.
By Marcy Gordon
WASHINGTON (Aug. 22) - Federal regulators on Friday shut down Kansas bank Columbian Bank and Trust Company.
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Dollar, oil, Russia eyed as traders weigh physical, investment gold demand
SAN FRANCISCO (MarketWatch) -- Gold futures fell Monday, with traders taking profit from last week's 5% rally and finding little indication for direction from the U.S. dollar and oil.Capital Gold Group, gold group, gold, gold prices, gold news, gold coins, gold bullion, gold IRA, IRA gold
By Josh P. Hamilton
Aug. 22 (Bloomberg) -- Fannie Mae and Freddie Mac, the two largest mortgage finance companies, ``don't have any net worth,'' billionaire investor Warren Buffett said.
``The game is over'' as independent companies said Buffett, the 77-year-old chairman of Berkshire Hathaway Inc., in an interview on CNBC today. ``They were able to borrow without any of the normal restraints. They had a blank check from the federal government.''
Freddie Mac and Fannie Mae touched 20-year lows yesterday on the New York Stock Exchange on speculation a government bailout will leave the stocks worthless. U.S. Treasury Secretary Henry Paulson won approval from Congress last month to pump emergency capital into the companies, which account for more than half of the $12 trillion U.S. mortgage market.
Fannie and Freddie mispriced their products and ``kept existing because they had the federal government behind them,'' Buffett said. Omaha, Nebraska-based Berkshire had been among the largest holders of Freddie until about 2001, when it became apparent the company wasn't being run well, he said.
The two mortgage companies recorded almost $15 billion in combined net losses in the past four quarters as delinquencies rose to record levels, shrinking their capital. The swoon sparked concern they may not be able to weather the worst housing slump since the Great Depression and prompted Paulson to step in with a rescue plan.
Fannie, down 95 percent in the past year before today, advanced 34 cents to $5.19 at 9:32 a.m. in New York Stock Exchange composite trading. The stock was trading at almost $70 a year ago. Freddie, down 91 percent this year, added 24 cents to $3.40.
Market Value
Fannie's market value has shrunk to $5.2 billion from almost $40 billion at the beginning of the year. Freddie has declined to $2 billion from $22 billion, making it increasingly difficult for the companies to raise new funds.
Fannie Mae was created as part of Franklin D. Roosevelt's
New Deal in the 1930s, a time when the U.S. economy was
struggling to emerge from the stock market crash, industrial
production had tumbled 50 percent and the unemployment rate rose
as high as 30 percent. Freddie started in 1970, when the economy
was strained by the Vietnam War.
Both have the implicit guarantee of the U.S. government, so they can borrow at lower rates than banks and make money by purchasing higher-yielding mortgages from home lenders, providing new capital for loans.
Discomfort
Buffett had an 8.5 percent stake in Freddie until he became ``uncomfortable'' with the risks Freddie was taking on. In 2005, he said ``it would not be the end of the world'' if Fannie and Freddie stopped buying new mortgages.
Former Federal Reserve Chairman Alan Greenspan and Richmond Federal Reserve Bank President Jeffrey Lacker have called for the companies to be nationalized. William Poole, former head of the St. Louis Fed, said last month Freddie is technically insolvent and Fannie's fair value may be negative next quarter.
Buffett said he may have increased his stake in Wells Fargo & Co. or American Express Co., without being more specific.
More bank failures are possible this year, Buffett said, and he suggested penalties should be meted out to people who spread rumors about the solvency of investment banks. Speculation about cash shortages contributed to a run on Bear Stearns Cos. and its forced sale to JPMorgan Chase & Co. earlier this year.
``If your virtue is questioned, you've got a problem,'' he said. In the normal course of business, ``there is no investment bank that can pay all its liabilities tomorrow.''
Richest Man
Buffett, ranked the world's richest man by Forbes magazine, said he made a $500 million bid on a Chinese stock ``not so long ago'' that wasn't accepted. He declined to name the company involved, adding that he'd ``be surprised if we don't do something in the next few years'' in China.
He also said he traveled with Bill Gates, founder of Microsoft Corp., to a Canadian site for extracting oil from tar sands, though an investment isn't imminent. Buffett said oil has ``changing dynamics because there's not a buffer for supply like there was'' a few years ago.
Buffett has been seeking acquisitions to put some of Berkshire's idle cash to work and toured Europe earlier this year to find candidates. He said today that he's been getting more ``distress'' calls than real opportunities, and that he's been referring callers to sovereign wealth funds. While he wouldn't call the funds, often controlled by national governments, ``dumb money,'' he characterized them as ``innocent money.''
Slower Growth
The U.S. economy is likely to continue slowing the rest of this year, Buffett said. Berkshire Hathaway's retail businesses slowed more during June and July, and they're trying to raise prices as margins get squeezed by higher costs, he said.
Buffett said he's concerned that inflation will start being built into expectations as it was during the 1980s.
``If that happens again, we're in big trouble,'' he said.
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BERLIN, Aug 22 (Reuters) - Germany's Bundesbank on Friday rejected calls that it should sell some of its gold reserves to help boost the slowing German economy, telling Reuters financial and political uncertainty make the reserves even more important than before.
"Gold sales are not a suitable way to sustainably consolidate the public accounts," the Bundesbank said after a query about trade union proposals that it sell gold to fund some of a 25 billion euro ($37 billion) economic stimulus package.
"National gold reserves have a confidence and stability-building function for the single currency in a monetary union. This function has become even more important given the geopolitical situation and the risks present in financial market developments."
The Bundesbank is the world's second-largest holder of gold after the
U.S. Federal Reserve, and has sold just 20 tonnes out of total reserves
of over 3,000 tonnes in the past five years. [photo below is 1 tonne of gold]
These sales were to allow the German finance ministry to mint gold coins, unlike the much more active sales programmes of other central banks which wanted to shift their portfolios from gold to a more diverse array of assets.
To reduce volatility in the price of gold <XAU=>, 15 European central banks agreed in 2004 to limit gold sales to 500 tonnes a year over the next five years.
The Bundesbank is expected to make a formal statement about any gold sale plans around September, when the final year of the Central Bank Gold Agreement starts.
"The Bundesbank reaches decisions about the nature and size of reserves
autonomously. The board of the Bundesbank decides every year afresh
about changes in the level of its gold holdings," the central bank said.
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American Eagle Gold Coins Sold Out After Spree
By Frank Tang
August 21, 2008
NEW YORK (Reuters) - A buying spree in the popular American Eagle bullion coins appears to have depleted inventory of major North American coin dealers, contributing to supply fears and sharply higher gold prices on Thursday.
Coin dealers in the United States and Canada said buying of gold coins and other bullion products has soared since last week as gold prices tumbled to near a nine-month bottom.
Blanchard and Co., one of the largest U.S. retail dealers of rare coins and precious metals, said the American Eagle and American Buffalo one-ounce gold coins -- novel items among collectors and investors -- are currently sold out.
"Nobody has the Eagles or the Buffalos right now. We bought 2,000 ounces late last week, and those were the last 2,000 ounces that we can find in the marketplace," said David Beahm, vice president of New Orleans-based Blancard.
"If we don't have them, nobody has them," Beahm said.
According to a Thursday report by the Wall Street Journal, the U.S. Mint told dealers it was temporarily suspending all sales of the American Eagle coins due to depleted inventory and unprecedented demand.
Michael White, a spokesman of the U.S. Mint, did not return calls for comment.
Meanwhile, Canada-based dealer Kitco also said demand for gold bullion coins has increased significantly in recent days.
Kitco's Senior Analyst Jon Nadler said American Eagles are still in stock even though delays in supply and shipping of all bullion products could be possible due to high demand.
On Thursday, spot gold was up more than 3 percent to $837 an ounce, while U.S. gold futures for December delivery scaled a one-week high at $845 an ounce.
George Gero, vice president of RBC Capital Markets Global Futures in New York, cited the gold coin shortage for Thursday's gold rally.
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Gold at 10-day high as markets change tack
* Gold hits one-week high as investors return
* Soft dollar, higher oil prices boost gold
* Strong physical demand expected to boost prices further
Thu Aug 21, 2008 11:06am EDT
By Pratima Desai and Anna Stablum
LONDON, Aug 21 (Reuters) - Gold prices hit a 10-day high on Thursday, fortified by investor buying as oil prices rose, the dollar slipped, equities fell and on expectations of strong physical demand over coming months.
Gold <XAU=> rose to $839.00 an ounce, the highest since August 11, and was up at $837.90/839.90 an ounce at 1453 GMT from $810.35/811.75 an ounce late in New York on Wednesday.
A softer dollar and geo-political concerns were the key drivers behind the short-term correction within what is an overall bear market, said Dresdner Kleinwort consultant Peter Fertig.
"In the medium term, the dollar is going to strengthen again against the euro and that is going to weigh, not only on crude oil, but also on gold," he said.
Oil CLc1 rose to over $121 a barrel after Russia responded angrily to a U.S. missile shield agreement with Poland, raising the threat of a supply disruption from the huge energy producer.
[ID:nSP297682]
"Oil prices at current levels could attract further investment fund flows into precious metals," Standard Bank said in a note, adding that technical signals indicated precious metals were due for a correction.
The firmer dollar in recent months has pulled gold down by around 20 percent from its all-time high of $1,030.80 an ounce hit in March, and a lower price has attracted buying.
Demand for gold in top consumer India fell sharply after prices hit a record but as the country heads into the festival and wedding season, demand will rise.
"There are signs that physical demand is rising sharply in response to low prices," said Eugen Weinberg, commodities analyst at Commerzbank.
"Indian jewellers, for example, are paying far bigger premiums to gold importers in order to meet the rise in demand.
"Indian demand should rise rapidly over the next few months, especially with the country's main religious holidays approaching, which should provide an additional boost."
A weaker U.S. currency makes commodities priced in dollars cheaper for holders of other currencies. Investors often use gold as a hedge against financial turmoil and inflation, often triggered by high oil prices.
European equities fell to three-week lows as oil prices revived inflation concern, financial stocks slid and worries about U.S. mortgage lenders Freddie Mac and Fannie Mae mounted. [.EU]
The number of U.S. workers filing new claims for jobless benefits fell last week for a second week in a row, the government said, though they continued at levels that showed a weakening labor market. [ID:nN20401484]
"Focus is more on the 4-week average and on the continued claims and not on the initial. Stock markets eased after the data -- another supportive factor for gold," Fertig said.
In platinum, palladium and silver, the thinking is also that the recent sell-off has been overdone and that a bounce is due.
But over the longer term, analysts expect platinum's fortunes to be tied to the health of the global car industry, which in recent months has experienced sharply declining sales.
Spot platinum <XPT=> was firmer at $1,444.00/1,464.00 an ounce from $1,368.50/1,388.50 an ounce late on Wednesday.
Earlier, it rose to an intra-day high of $1,450 -- the highest since August 15.
Palladium <XPD=> was higher at $291.50/299.50 from $281/289 and silver <XAG=> rose to $13.79/13.84, up 5 percent, from $13.15/13.21. Silver hit an intra-day high of $13.85 -- the highest since August 15.
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By Shobhana Chandra and Timothy R. Homan
Aug. 19 (Bloomberg) -- U.S. builders broke ground on the fewest new homes in 17 years and producer prices climbed the most since 1981, providing no sign of an economic recovery or easing inflation.
Housing starts fell 11 percent in July to an annual rate of 965,000, the Commerce Department said today in Washington. The Labor Department reported the producer price index jumped 9.8 percent from a year before.
``There's no doubt we're in a period of stagflation now,'' said Peter Kretzmer, a senior economist at Bank of America Corp. in New York who formerly worked at both the Federal Reserve Bank of New York and the Fed Board in Washington.
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By Shamim Adam
Aug. 19 (Bloomberg) -- Credit market turmoil has driven the U.S. into a recession and may topple some of the nation's biggest banks, said Kenneth Rogoff, former chief economist at the International Monetary Fund.
``The worst is yet to come in the U.S.,'' Rogoff, a Harvard University professor of economics, said in an interview in Singapore today. ``The financial sector needs to shrink; I don't think simply having a couple of medium-sized banks and a couple of small banks going under is going to do the job.''
The U.S. housing slump has triggered about $500 billion in credit market losses for banks globally and led to the collapse and sale of Bear Stearns Cos., the fifth-largest U.S. securities firm. Bonds of regional banks such as National City Corp. and Keycorp are under pressure on expectations of more fallout. Rogoff, 55, said the government should nationalize Fannie Mae and Freddie Mac, the nation's biggest mortgage-finance firms.
Freddie Mac and Fannie Mae ``should have been closed down 10 years ago,'' he said. ``They need to be nationalized, the equity holders should lose all their money. Probably we need to guarantee the bonds, simply because the U.S. has led everyone into believing they would guarantee the bonds.''
Last month, President George W. Bush signed into law a housing bill that provides Treasury Secretary Henry Paulson the power to make equity purchases in Fannie Mae and Freddie Mac. Paulson asked for the authority July 13 after the shares of the firms, which own or guarantee almost half of the $12 trillion of U.S. mortgages, slid to the lowest level in more than 17 years.
Shares Slump
The mortgage lenders have been battered by record delinquencies and rising losses. Fannie Mae fell 30 cents to $5.85 at 12:55 p.m. in New York Stock Exchange composite trading, its lowest level since May 1989 amid concern the government-chartered companies will fail to raise the capital they need to offset losses. Freddie Mac declined 8 percent to the lowest since January 1991.
Banks repossessed almost three times as many U.S. homes in July as a year earlier and the number of properties at risk of foreclosure jumped 55 percent, according to RealtyTrac Inc., an Irvine, California-based seller of foreclosure data. U.S. builders broke ground on the fewest houses in 17 years last month, according to a Bloomberg News survey.
Rogoff told a conference in Singapore today that the credit crisis is likely to worsen and a large bank may fail, Reuters reported earlier. He was the IMF's chief economist from August 2001 to September 2003.
``Like any shrinking industries, we are going to see the exit of some major players,'' Rogoff told Bloomberg, declining to name the banks he expects to fail. ``We're really going to see a consolidation even among the major investment banks.''
IndyMac Bancorp
IndyMac Bancorp Inc., once the second-largest U.S. independent mortgage lender, filed for bankruptcy protection Aug. 1, three weeks after it was taken over by the Federal Deposit Insurance Corp. amid a run by depositors that left it strapped for cash. Bear Stearns collapsed in March and sold itself to JPMorgan Chase & Co. for $10 a share.
``The only way to put discipline into the system is to allow some companies to go bust,'' Rogoff said. ``You can't just have an industry where they make giant profits or they get bailed out.''
Federal Reserve Chairman Ben S. Bernanke, seeking to allay renewed concerns over the health of the nation's financial system, said on July 8 that the central bank may extend its emergency-loan program for investment banks into next year.
Regulatory Gap
His comments followed calls by Paulson for regulatory changes that would allow financial firms to fail without threatening market stability.
Paulson has identified a legal gap that leaves unspecified how to deal with failures of companies that don't take deposits, such as investment banks. He proposed tightening supervisors' oversight of lenders and dealers while at the same time discourage companies from depending on a government rescue if their bets go wrong.
``We need to create a resolution process that ensures the financial system can withstand the failure of a large complex financial firm,'' Paulson said in a speech in London on July 2.
In the case of commercial banks, the use of taxpayer funds in an emergency requires the approval of two-thirds majorities of the FDIC and Federal Reserve boards, and of the Treasury secretary in consultation with the president.
U.S. Recession
The world's largest economy is already in a recession, and the housing market will continue to deteriorate, Rogoff said. The U.S. slowdown will last into the second half of next year, he said, predicting a faster recovery in Europe and Asia.
The Federal Reserve, which has left its key interest rate at 2 percent after the most aggressive series of rate reductions in two decades, risks raising inflationary pressures, he said.
``Rates are too low,'' Rogoff said. ``They must realize we're going to get inflation if things stay where they are. They need to raise rates but I don't think they are going to because they're way too nervous.''
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(2008-08-18 12:48:43) - The
year-old financial crisis is not only far from over but could actually
get much worse, bringing more big shocks to the U.S. economy and stock
market, a host of experts said Monday.Kotok thinks Merrill Lynch , Wachovia and other financial companies are at risk of failure as the cost of raising capital soars at a time when the banks need to pay settlements over auction rate securities.
"Not very big ones necessarily," he said. "But a thousand banks is going to be a lot."
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The Labor Department reports that its Producer Price Index increased by 1.2% in July and by 9.8% in the past year.
NEW YORK (CNNMoney.com) -- In another indication of growing inflation, wholesale prices increased in July to the highest annual rate in 27 years, according to a government report released Tuesday.
The annual Producer Price Index for finished goods rose 9.8% in the 12 months that ended in July.
The jump in wholesale prices is the fastest rate of increase since a 10.4% bump-up in June 1981, according to Joseph Kowal, economist at the Bureau of Labor Statistics.
The Labor Department also reported that PPI rose 1.2% in July, after increasing 1.8% in June. Analysts polled by Briefing.com had expected an increase of only 0.6%.
The surge in producer prices is in large part due to higher energy prices, said Doug Roberts, chief investment strategist for ChannelCapitalResearch.com.
Crude oil prices doubled in the 12 months through July, but have since fallen nearly 24% from their peak hit last month.
The latest PPI report doesn't reflect the recent drop in crude prices, but Roberts expects future readings to ease.
"The topline is a bit behind the curve - that will fall in the future," he said. "Right now, it has not really taken into account the recent decrease in energy prices."
Core inflation: The so so-called core PPI number, which excludes food and energy prices, rose by 0.7% - more than the 0.2% increase analysts had expected.
The core inflation index is "the more long term rate" because it indicates how much inflation "is seeping into the economy" beyond the volatile energy prices, said Roberts.
The index for finished goods other than foods and energy has advanced by 3.5% in the past year, according to the report.
Food and energy: The indexes that measure producers' food and energy prices increased in July, but at a more moderate pace than in the previous two months.
Energy prices rose by 3.1%, after a 6.0% jump in energy prices in June and a 4.9% jump in May. In the 12 months through July, prices for finished energy goods have surged 28%.
Food prices rose by only 0.3% in July, after increasing by 1.5% in June and 0.8% in May. In a year-over-year comparison, prices for finished consumer foods have increased by 8.7%, according to the report.
The much more moderate increase in food prices in July compared with June is the one bright spot in the otherwise glum inflation report, according to Roberts.
Even though energy prices in July were still on the rise last month, "if you are seeing the other big component of inflation go down a bit, that could indicate a positive for the future," he said.
The government reported last week that the
the Consumer Price Index jumped by 0.8% in July, which was twice the
increase that economists had expected. 
Gold price fall seen set to revive Indian imports
Tue Aug 19, 2008 4:01pm IST
By Biman Mukherji and Arpan Mukherjee
NEW DELHI/MUMBAI, Aug 19 (Reuters) - Indian jewellers are paying gold importers more than double last month's premiums as they scramble to meet a resurgence in demand stoked by a steep fall in global prices and the approach of the Diwali festive season.
The rise in premiums suggests a jump in imports by the world's top buyer, where stocks had fallen earlier this year after dealers, bankers and jewellers slashed purchases on signs that record-high prices had crimped demand.
Premiums paid to importers have more than doubled to about $1.80 per kilogram from 80-85 cents last month, dealers said.
India imported about 30 tonnes in July, a drop of nearly 56 percent from a year earlier, and imported 24 tonnes in June, data from the Bombay Bullion Association showed. The World Gold Council said India's total gold demand fell 47 percent on the year in Jan-June to 263.5 tonnes.
"Gold imports this month will be close to 50 tonnes," said Harish Galipelli, head of research at brokerage Karvy Comtrade.
But Daman Prakash, a Chennai-based bullion dealer and member of the Tamil Nadu Bullion Forum, was more bullish. He reckons imports could surpass last August's 79 tonnes, the highest for 2007.
International gold prices <XAU=> tumbled by more than a fifth last week to below $800 an ounce, after hitting a four-month high of $987.75 in mid-July and a record $1,030 in March.
Local demand for the precious metal picked up after domestic prices fell below 13,000 rupees ($300) per 10 grams from a record above 13,800 rupees in mid-July. Spot gold INBULL03 was trading at 11,228 rupees per 10 grams on Tuesday, according to Punjab National Bank.
Analysts said wholesale dealers were unlikely to drop their prices significantly as the festival season got under way, but the high premiums were not deterring buyers.
Ranjeet Kumar Chaubey, deputy manager and dealer at state-run Punjab National Bank said the bank had three to four clients with no stock waiting for gold at different locations.
"My clients are ready to pay any premium," Chaubey said.
The premium in the southern city of Chennai has almost quadrupled to 40 rupees per gram from 10 to 12 rupees normally.
"Some jewellers are even willing to pay a premium of up to $2 a kilogram," said a bullion dealer at a leading Indian bank who did not want to be identified. "But we don't have the stocks."
The delivery time for gold jewellery has gone up to a week in many regional markets from just one day last month, and analysts and dealers expect supply to remain tight this week at least and beyond if world prices fall further.
Prakash in Chennai said due to falling demand earlier in the year, refiners had geared down production and were not able to ramp it up rapidly.
"Banks are not in a position to source materials from refiners immediately, which entails a delay of five to six days," he said.
Krishna Kumar Nathani, managing director of consultancy
Indiabullion.com, agreed: "There is no ready delivery of gold
available, for love or money."
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August 18, 2008
(RTTNews) - After falling sharply last week, the price of gold regained some ground over the course of the trading session on Monday. The price increase came as traders did some bargain hunting amid a decrease in the value of the U.S. dollar.
While ending the session off its best level of the day, gold for December delivery closed up $13.60 at $805.70 an ounce after falling more than $70 an ounce last week to a multi-month closing low of $792.10 an ounce.
Bargain hunting contributed to the increase by the price of gold, with some traders moving their money out of the U.S. dollar and into the precious metal. The dollar is giving back some ground after moving sharply higher in recent sessions.
Despite the price increase, the price of gold remains well off its recent highs set in mid-July and is down more than $200 from its record high of $1,033.90 an ounce set on March 17.
The U.S. dollar index has risen more than 7 percent since mid-July, making gold more expensive for foreign investors.
However, it is worth noting that the dollar's recent strength is due more to indications of weak economic conditions in other countries rather than a notable improvement in the economic situation in the U.S.
Some economists have also pointed out that the recent strength in the value of the U.S. dollar could lead to a reduction in demand for U.S. exports, which has been a key driver of economic growth in the past two quarters.
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13 August 2008 @ 02:13 am EST
Citigroup's Australian metal analysts Tuesday urged investors and mining companies to look through the current "haze of negativity" and expect to "see a strong rebound" in metals prices and mining stock in the fourth-quarter 2008 and 2009.
"A friendless mining sector is in need of a lifeline having pulled back 25% from the May peak, Citigroup analysts Clarke Wilkins and Matthew Hope admitted, adding that global growth is "undeniably slowing."
Noting that the gold price is only down 7% in Australian dollar terms, the analysts declared, "We remain bullish on gold with a 2009 price forecast of US$950/oz driven by a return of fabrication demand after the price correction, wealth effects in developing nations and negative real interest rates."
Meanwhile, the analysts advised that "the underlying driver of commodity intensive infrastructure investment in developing countries remains unchanged. Short-term risks remain, but the opportunities are there for investors/corporates that can look through the haze of negativity."
In their research, Wilkins and Hope noted that "the Super Cycle bull market for commodity stocks that has been underway since early this decade has not been a one way street, with a number of meaningful corrections that have tested the resolve of the market. "
"Trading these spikes and troughs in the mining stocks is not without risks, but is undeniably a highly rewarding strategy for those that are nimble enough and have the courage to look through the current negative haze surrounding the sector."
The analysts suggested that "the only reason for not stepping up and buying the sector after this [recent] correction is a belief that the cycle is not well and truly over and commodity prices will fall further." Citigroup believes growth in China is still the nation's number one priority. "This point is critical as China is after all the key driver of the commodity Super Cycle."
Citigroup suggests that the Olympic Games now ongoing in Beijing are confusing China's economic picture due to curtailments of manufacturing, transport congestion, steps to ensure no interruption of power and clear skies, which in turn, distort short-term economic data. "Economic policy post the Olympics will be key. It seems likely that the government will continue to selectively stimulate," the analysts advised.
"With a number of commodities entering price levels where China has traditionally restocked, particularly copper, we expect to see a strong rebound in prices and stocks in 4Q08 and 2009."
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The Washington Post reports that the number of bank failures has been surprisingly low. But the crunch count is likely to grow as the problem bank list triples from 90 to