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How figures can tell a different story:

Holden yesterday cut around 600 jobs from its Adelaide car manufacturing business as sales of the new fuel-thirsty six cylinder Commodore continued to underperform the company’s expectations.

The cuts came as figures were released showing that car sales have jumped 9 per cent in the first two months of the year: but sales of locally-made Holdens are sluggish.

Hence the pressure on employment.

The company said the cuts would be made through voluntary redundancies and follow the ending of the dual manufacturing of the new and old Commodores models and the more efficient plant after half a billion dollars was spent upgrading it.

Yes, but the latest figures on car sales show the new Commodore isn’t doing well, so there’s a big hint the company is matching labour force to car production levels.

With Ford selling fewer Falcons (Ford’s performance is worse than Holden’s so far in 2007), there will now be questions over the Melbourne operations of that struggling US giant.

The Adelaide job losses follow a slide in sales of the locally built Commodore range in 2006 and the carmaker’ $144 million after tax loss for 2005.

Holden cut 1,400 jobs in August 2005 when it decided to axe its third shift at Elizabeth due to falling local and global demand for large cars: that situation hasn’t improved here or in many foreign markets.

Likewise Mitsubishi has seen some stability in the sales of locally made versions of the 380 model, but at a low level. Sales have risen slightly in the first two months of this year but nothing like the 14 per cent rise in locally made Toyotas (for the Camry and the Aurion).

So it could be more bad news for Adelaide later in the year with continuing speculation about the future of the Mitsubishi car making operations there. There was considerable speculation late last year that they could be closed in 2007.

The Reserve Bank board meets later today and no change in the current interest rate level of 6.25 per cent is expected, although there’s a worry or two in some figures released in the last day or so.

It’s going to be a nervy day on local markets today after Wall Street fell sharply on Friday and the prices of major commodities also slumped.

After our market shed 4.1 per cent on the ASX 200 last week (and which closed lower on Friday at 5786, with the All Ords also down at 5775) the last thing investors would have wanted was a bone rattler on Wall Street and other markets on Friday night.

But that’s what they got.

The Dow lost 120 points or about 1 per cent, while the broader S&P 500 index fell 1.1 per cent. NASDAQ composite fell 1.5 per cent on Friday: all big falls but amplified by the nervousness ignited by Tuesday’s big fall, the biggest since September 11, 2001.

For the week, the Dow lost 4.2 per cent and saw its worst decline on a percentage basis since late March 2003; The S&P 500 lost 4.4 per cent for the week, in its worst weekly performance since late January 2003 and NASDAQ fell 5.8 per cent this week, the worst drop in just over two and a half years.

US Government 10 year bonds finished at 4.5 per cent, equal to the level set in the aftermath of Shanghai Tuesday last week and a sign that more and more investors are retreating from the sidelines.

Here the SFE Share Price Index was showing a 47 point fall Saturday morning for the ASX 200 when trading resumes today. But everyone will be watching how China and especially Tokyo open later on.

US investment banks such as Goldman Sachs, Merrill Lynch, Bear Stearns, Citigroup and big banks in Europe such as HSBC, UBS and Credit Suisse all saw their share prices under pressure last week because investors perceive them to be engaging in risky activity: whether it is emerging markets, private equity, hedge funds, aggressive proprietary trading or servicing the troubled US housing market, including the imploding subprime sector.

Anything to do with risk is now being avoided by investors so it will be interesting to watch the prices today of Macquarie Bank (up in Friday’s down market after a profit upgrade), Babcock and Brown, Allco and Allco Equity Partners and similar sorts of listed investors.

Qantas firmed to over $5.20 on Friday in the wake of the ACCC’s approval of the buyout on Thursday.

In London on Friday the Financial Times was reporting that commodities, though down over the week, had shown some resilience.

A few hours in New York it was clear that apart from oil (which eased a touch only) commodities were much weaker than thought.

For example LME copper prices eased $US87 a tonne to $US6013 a tonne, a fall of 1.4 per cent. Several hours later in New York the price closed down 2.56 per cent at $US2.63 a lb, a loss of 7USc a lb.

Gold closed down sharply around $US648 an ounce in London, and was off more in New York at $US644 an ounce, a loss of 3.1 per cent.

Traders said that what was notable was the way the instability in stocks fed into other markets (with US bonds the only one benefiting as prices on bonds rose and yields fell sharply).

Much of the shuffling in equities and commodity markets was done by financial investors (AKA speculators, hedge funds and the like) who liquidated positions to generate cash and de-risk their books.

Copper prices in New York fell 5.2 per cent last week ending the February rally.

Gold fell 6.2 per cent last week, silver 12 per cent. Analysts said $US1.3 trillion in value was wiped from equity markets around the world and hundreds of billions more disappeared in commodity and other markets.

Bonds, not precious metals were the only safe haven for nervous investors.

Copper is being hurt by the withdrawal of speculative positions built up in the rally last month: as US copper consumption fell, dragging prices down in January Chinese buyers started picking up the cheaper priced metal, leading to a rush of money punting on a rise in Chinese consumption.

What many forget was that China withdrew from world copper markets in the last half of 2006 because prices were too expensive and ran down internal stocks.

In the words of an adviser to President Clinton back in the race for the 1992 presidential election, a sign was placed in the campaign office which read “It’s The Economy, Stupid”.

You could say it wasn’t the best timing to produce what could be our biggest IPO this year.

Just as our market had a big day Friday, rising conclusively over the 6000 point mark and finishing there, oil, copper and gold all hit 2007 highs on Friday night, our time, prompting suggestions of a gathering re-run of last year’s commodities boom.

The gathering crisis in the subprime mortgage market in the United States is starting to send ripples through the broader economy.