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How comfortable is wealth held in securities right now?

*Associated Press, by Toby Anderson, March 13, 2008

Global [Securities] Markets Tumble

“LONDON (AP) – European and Asian markets tumbled and Wall Street headed for a sharply lower opening Thursday as Carlyle Capital appeared close to collapse, the dollar plunged against foreign currencies and oil hovered near record highs.

In Europe, the U.K’s benchmark FTSE 100 index dropped 1.9 percent to 5,667.5, while Germany’s DAX slipped 2.4 percent to 6,443.59. In France the CAC declined 2.5 percent to 4,579.56.

‘U.S. dollar lows as well as record high oil prices are … adding to woes as the market begins to head south following strong gains at the start the week,’ said Nick Mitchell, a dealer at CMC Markets in London. ‘Sentiment has also been hit today by the dollar falling below 100 yen for the first time since 1995.’

Dow futures were down 164 points, or 1.4 percent, to 11,959, while the Standard & Poor’s 500 index futures were down 19.8 points, or 1.5 percent, to 1,289.6.

In Asia the dollar’s drop to a 12-year low against the yen hammered stocks of Japanese exporters such as Toyota and Sony. The Nikkei 225 index tumbled 3.3 percent to 12,433.4, its lowest in 2 1/2 years.

In late Tokyo trading, the dollar fell below 100 yen for the first time since 1995, sinking as low as 99.75 yen.

Asian markets, which had rallied Wednesday on news of the U.S. Federal Reserve’s $200 billion relief plan for tight credit markets, resumed their slide with growing sentiment that a U.S. recession is imminent.

‘This is just an extremely nervous market given the uncertainties overhanging the outlook for the world,’ said David Cohen, a regional economist with Action Economics in Singapore. ‘The clouds are the combination of the oil prices, the nervousness about the U.S. slipping into recession and dragging down the global economy and … the turmoil in the credit markets that doesn’t want to go away.’

Carlyle Capital Corp., managed by the Washington, D.C.-based Carlyle Group, said late Wednesday it expects creditors to seize all the fund’s remaining assets after unsuccessful negotiations to prevent its liquidation. The Amsterdam-listed fund shook financial markets last week after missing margin calls from banks on its $21.7 billion portfolio of residential-mortgage-backed bonds. Carlyle’s troubles have amplified fears that billions of dollars of depressed mortgage-backed securities will flood the market, reducing their value even further.

Caryle shares plunged 70.3 percent to 83 cents in Amersterdam trading Thursday.”


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