Asian shares dip and dollar hits record low vs yen

TOKYO, Oct 31 (Reuters) - Asian shares fell on Monday, taking a breather from a nearly 10 percent rally last week after Europe laid out a basic framework to tackle its debt crisis, but the euro held steady while the dollar dropped to a record low against the yen.

Investors were shifting their focus for now from Europe to key events such as the Federal Reserve's monetary policy meeting and U.S. economic data, including jobs, due later this week to gauge the state of the world's largest economy.

Despite easing equity markets, investors' appetite for some riskier assets remained, with Asian credit markets stabilising and easing demand for protection in the options market against losses.

The CBOE Volatility index VIX -- a 30-day risk forecast of volatility in the S&P 500 -- fell on Friday to its lowest in nearly two months.

MSCI's broadest index of Asia Pacific shares outside Japan fell 0.2 percent on Monday, after posting its best week in nearly three years as a long-awaited plan to resolve the European debt crisis sparked a huge relief rally.

The Nikkei opened down 0.4 percent, weighed by the yen's persistent strength and worries about Japanese companies' earnings.

"The Nikkei ended at a two-month closing high on Friday, so it's difficult for the market to push it up too far, but it's unlikely that there will be a sell-off, either," said Yumi Nishimura, senior technical analyst at Daiwa Securities.

MSCI's all-country world stock index was up 0.5 percent late on Friday, after hitting its highest level in nearly three months and posting its best week since July 2009.

U.S. stocks ended mixed on Friday, closing out a fourth week of gains. October also was on track to be the best month for stocks since 1974, supported by strong earnings. Merck & Co Inc and Chevron Corp both topped expectations with financial results on Friday.

But a weak sale of Italian bonds on Friday underscored fragility of the euro zone's debt progress. The 10-year yield gap between Italian and German bonds widened after the auction to 378 basis points, about 10 bps wider on the day.

Italy paid record high cost of more than 6 percent to borrow on the debt market, in the first euro zone bond auction after policymakers struck an agreement on Thursday to slash Greece's debt burden and strengthen the European Financial Stability Facility, the region's rescue fund.

Details to implement the agreement remain unresolved, with one of the key issues being raising funds for the bailout vehicle.

The head of the EFSF played down hopes of a quick deal with China to throw its support behind efforts to resolve the crisis.

But a rise in riskier assets helped ease strains and stabilise Asian credit markets, with the spreads on the iTraxx Asia ex-Japan investment grade index , a gauge for whether investor risk appetite is returning, little changed early on Monday.

The euro held on to most of last week's gains against the dollar, but uncertainty about a possible interest rate cut on Thursday by the European Central Bank could limit its upside for now.

The single currency reached a seven-week high around $1.4247 last Thursday, and looked set to end the month up nearly 6 percent for its best monthly performance in just over a year.

Reuters

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Portugal wants U.S. help in euro crisis

(Reuters) - Portugal asked Mexico on Saturday to tell fellow G20 members next week that the United States should offer "financial help" to resolve the euro zone sovereign debt crisis, describing it as a "systemic and global" problem, a Portuguese government source said.

Portuguese Prime Minister Pedro Passos Coelho asked Mexican President Felipe Calderon to convey the message during the G20 meeting in Cannes next week, the source told reporters after the two leaders met at the Ibero-American summit in Paraguay.

"The crisis isn't in the euro zone. It is a systemic and global crisis and we hope that other big G20 countries intervene," the source told reporters in the capital Asuncion, speaking on condition of anonymity.

The source added that Washington should help resolve the crisis "by boosting trade and also with financial help."

No one from Calderon's delegation in Asuncion could immediately be reached for comment.

Financial markets rallied strongly this week after European leaders hammered out a deal to recapitalize their banks, boost the firepower of a euro zone rescue fund, and impose hefty losses on holders of Greek debt.

However, economic analysts quickly warned that details of the rescue could still take weeks or even months to work out.

Portugal is suffering a deepening recession as it implements painful austerity measures under a 78-billion-euro ($110.3-billion) EU/IMF bailout.

Survivalists fear currency crash

To survive a feared currency crash, some people are going for gold.

"People are frightened, pensions are at risk because of this devaluation and printing that's going on and the debt thing is a monster," said John Budden, a veteran market analyst based in Ottawa. "Have some gold - physical gold. By that I mean bullion or coins, tucked away. Maybe bury it in the garden."

Budden says Canada is generally a safe place to stash money for an emergency, but the value for precious metals as currency is still lost on many.

"Canadians, North Americans, just don't have a clue - they have never had to get their families across a border in the middle of the night using gold as a bribe, when no one will take any paper currency," said Budden.

Demand for gold and silver has jumped since the 2008 recession. Many fear the fiat currency, one not backed by gold deposits, will eventually collapse, leading to a worthless paper dollar in the United States, akin to the Weimar Republic in Germany after the First World War.

Republican leadership candidate Ron Paul advocates a return to the gold standard, and wants to allow independent mints to produce their own coins, altering legal tender laws.

The state of Utah changed its law this year and now allows shoppers to use gold and silver to do business, with several states thinking of following suit.

Survivalists are stocking up on so-called "junk silver," for trading after a crash and some businesses are asking to be paid in it already.

Canadian dimes and quarters minted prior to 1966 contain 80% silver and 20% copper. American coinage is similar. With the date stamped on them, survivalists say this junk silver has clear precious metal value and could be used as hard currency in a crisis.

"It protects your money. They see the future coming," said Frank Rossi, part owner of Universal Coins in Ottawa. "Everybody remembers in Germany when you could buy whole buildings for an ounce of gold, and if they don't remember, they should.

"A quarter in 1966 would buy you a Coke and chips. That same quarter today buys you a Coke and chips, but a 2011 minted quarter buys you nothing."

Toronto Sun

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Occupy Oakland makes plans for citywide general strike

OAKLAND -- Occupy Oakland protesters debated Thursday evening the practical difficulties of organizing a citywide general strike with the aim of shutting down the city of Oakland on Nov. 2. Speakers urged teachers, students, union members and workers of all stripes to participate in whatever way they could, and said the entire world was watching Oakland. "Oakland is the vanguard and epicenter of the Occupy movement," said Clarence Thomas, a member of the powerful International Longshoreman and Warehouse Union who urged the hundreds of assembled people to support the strike.

Protesters said the aim of the strike was to involve Oakland more aggressively in the global Occupy movement, and to help mobilize millions of Americans to protest against what they see as the excesses of Wall Street, unfair banking regulations and disparities in the nation's health care system.

The call for a strike originated Wednesday evening during a General Assembly which drew at least a thousand people from all walks of life to Oakland's Frank Ogawa Plaza, which protesters had turned into a de-facto camp site before police kicked them out last week. Many people said they felt mobilized to participate after seeing videos and pictures from Tuesday night's violence, when at least 200 riot police from around the Bay Area clashed with protesters, lobbing tear gas, flash-bang grenades and so-called "nonlethal" projectiles to attempt to corral and contain them.


San Jose Mercury News