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Maybe I will quit forex and start trading stocks again lol!
Posted by: SloJon
In reply to: None Date:1/18/2007 3:02:27 PM
Post #of 13522
VA Introduces Bill Requiring FTDs to be Reported
1/17/2007 12:20 PM
UPDATE: Senator Potts, who sponsored the VA bill, pulled it within 3 hours of this blog being written. His staff said it was due to "requests of constituents." So, what "constituents" are against transparency in the markets, and disclosure of who is taking investor money and failing to deliver the shares purchased? I wonder. Who would lose from that bill going to the floor? Hmmmm. At least we are all now seeing exactly how the system works - the best politicians money can buy.
I am sickened, as usual. This is so blatant it stinks.
-----------------
VA introduced a bill that will require brokers to report any FTDs to the state, or pay a grand a day fine for failing to do so.
This is now the third state to introduce anti-NSS legislations - Utah was first, Arizona recently also did, and now VA.
I wonder when Congress is going to figure this out? Will it take a couple more, making it 10% of the states, wanting to put a stop to this? 20%? 30%?
Wall Street has been scamming US citizens with bogus chits rather than genuine stock, and the states are figuring it out, and doing what the SEC refuses to do - demanding disclosure and transparency, and setting the brokers up to be sued out the ying yang for duping investors.
You can probably hear the screaming from the industry already.
A source confirms that there will be quite a few more of these bills hitting over the next few months, so I think it is safe to say that this cat is out of the bag.
http://www.thesanitycheck.com/BobsSanityCheckBlog/tabid/56/EntryID/559/Default.aspx
Reason Rules!
Slowly but steady boys and girls. I did not realise the effect that the value of a currency can have on inflation. Makes sense. If the PPI is lower than the CPI is lower and they dod not need to raise rates. Capitalist, you have the value of the currency factored into your calculations right?
Now I know that if the EUR goes to da moon then they will raise rates more slowly. GBP is a different animal. But for the swissie and the euro it would apply quite nicely it seems.
Euro – The Euro remains very strong in the face of healthy US data. The ECB monthly report released this morning remained essentially unchanged from the prior month. The report indicated that there were still upside risks to inflation and improving prospects for growth. The comments from EU’s Alumnia today are a great reflection on how the ECB probably felt at their last monetary decision. Alumnia said that the Euro’s appreciation has been moderate and the recent strength of the currency has helped to push down inflation. Between November 21st and December 2nd, the EUR/USD appreciated from 1.2860 to 1.3367. This rapid acceleration pushed down inflation at a time when oil prices tumbled, giving the ECB plenty of room to delay an interest rate hike. As much as foreign exchange traders like to see higher yield, central banks do not, especially for a region that is still struggling to grow. Each rate hike tightens the economy and crimps growth. The latest drop in Euro will still validate another rate hike in March, which may explain why ECB members still feel that rates remain accommodative. Meanwhile Switzerland reported improvements in both retail sales and the ZEW survey of analyst sentiment. Consumer spending increased by 3.3 percent in the month of November while the ZEW survey rose from -23.7 to -10.8. This gives the Swiss National Bank reason to lift interest rates again despite muted inflationary pressures.
Because they want to divert the masses' (sheep) attention to other crap topics and not talk about the economy. The bulk of any country's population is spoonfed garbage and they eat it merrily because they do not know any better.
But it you lower their paychecks, pay more for gas etc ... and the poor are gonna frackin rebel. That is why they keep the happenings of the economy hush hush cause ANYBODY AND EVERYBODY understands MONEY.
Criminals! All of them!
May they all rot in hell!
Ultimatepick
One interesting aspect of tonight’s market reaction has been the particularly poor performance of the Swiss franc, as the unit came within 3 points of the 1.6200 level on the EUR/CHF cross. In a classic case of throwing baby out with the bath water, the market has decided to sell all the low yielders and as the currency with second smallest yield in the industrialized world, the Swissie has suffered from its association wit the yen. Yet there are considerable differences between the two economies, not the least of which is the fact that the Swiss consumer is far healthier than his Japanese counterpart. Today’s Swiss Retail Sales printed at 3% versus 1.8% forecast while the ZEW survey of economic expectations improved to -10.8 from -23.7.
The rally in the EURCHF pair has been driven by the disparity in the pace of rate hikes between the SNB and the ECB last year. However, with ECB choosing to hold off on rate hikes until March and with SNB strongly signaling that it will continue the rate normalization process, at the very least the two central banks should match each other as the year progresses. Furthermore, with the Swissie so markedly weaker against the euro, the SNB may be fearful of importing inflation and may opt for a 50bp hike at its next meeting. In either case the Swissie appears to be grossly oversold against the euro and if the Swiss economic data continues to impress such imbalances are not likely to last for long.
The latest USD/CHF (dollar)rally is all stop loss driven. I see it time and time again but still haven't trained myself to take advantage of it. The market is your enemy and will do things to you when you least expect it.
Ataglance .... thanks for reminding me about all this. I am currently rereading The art of war.
Is it possible that the reports that come out are fudged? Who is in control of all the economic reports? Can the data be falsified? FRacking penny stocks all over again if it is true!
Heads UP! The EUR/CHF is showing classic signs of topping out. 1-2-3 divergence on the Weekly Stochs and the dailies are pointing down. Also the is a hammer fest up there.
Sell the rallies and you shall be rewarded.
A nice 200 pip profit is in the making me thinks.
And it will take the miserable USD/CHF down with it too! DIE DIE DIE!
Sorry about that ... had to vent!
Ultimatepick
Bernanke's bear saved by fairytale
It is still too early for a full celebration of what some are starting to call the return of the Goldilocks economy writes Gerard Baker
--------------------------------------------------------------------------------
January 17, 2007
AT the end of the month Ben Bernanke will celebrate his first year as chairman of the US Federal Reserve.
A very quiet celebration is being planned, from what I understand. There will be enough liquidity to keep the level of interest sufficiently high, though Bernanke may take away the punch bowl just as the party gets going.
The main dish on the menu, however, should be bear. With evidence accumulating that the US has again avoided the terrible fate predicted by the doomsayers, the central bank chairman and his colleagues could be forgiven for feasting freely on the entrails of all those bearish prognosticators who have been predicting collapse for the past year.
They won't, of course, being of a cautious, even pessimistic, disposition. But as 2007 gets under way, that soft landing for the US economy everyone said couldn't happen is clearly in sight.
There were two main sets of worriers a year ago. One said recession was imminent. The other said it was merely deferred.
The first group cited the bursting of the housing bubble and a US dollar collapse as the reasons US growth would turn negative.
The second said inflation was spiralling out of control and the Fed would be forced to raise interest rates much more sharply than it had already, and then the economy would drop into recession.
So far, the housing collapse has not materialised. Residential construction spending has fallen sharply in the past year, and Fed officials acknowledge that activity in the housing sector will be a drag on GDP growth for the whole of 2007.
But what has not happened is the consumer spending crunch caused by a fall in house prices.
Since house price increases are assumed to have been a key factor behind strong consumer spending growth over the past five years, a decline in prices was expected to lead to a retrenchment.
But - again, so far - house prices have declined only a little nationwide. More importantly, new research suggests that, when prices were rising, consumers did not spend anything like as much of their housing wealth as was previously believed. As a result, they are unlikely to cut back sharply.
The US dollar's fall has also continued - intermittently - but has not produced the much feared loss of confidence by international investors in US assets. So, except for housing and a sunsetting car industry, the rest of the US economy has done just fine.
On the inflation side, the signs are also encouraging that the worst fears of 2006 will not be realised in 2007. Inflation - however you measure it - eased in the second half of last year, thanks partly to the decline in oil prices.
The big worry for the inflation pessimists was what they believed to be a sharp slowdown in the US economy's potential growth rate.
Between 1995 and 2000 the US enjoyed a productivity-fuelled surge in its trend rate of growth - the rate at which the economy can grow without igniting inflation - to somewhere above 3.5 per cent per year. Between 2000 and 2005 that trend rate accelerated even more. But last year new data suggested that productivity gains had ebbed and the trend could be back down to its more boring rate of about 2.5 per cent or even lower.
That is worrying for inflation, because it means that even at a relatively sluggish actual growth rate of about 2.6 per cent, which the economy is expected to post in 2007, inflation could accelerate.
But there is reason to doubt the new pessimism on productivity and trend growth. It is quite possible that the recent slowing in productivity could just be the undershooting counterpart of an overshoot between 2000 and 2005, and that the correct trend rate is still around 3 per cent.
What is more, as David Hale, of Hale Economic Advisers, points out in a new paper, Are Profits Driving the US Business Cycle?, the fabulous rate of US corporate profitability growth in the past few years, even as real wages are increasing, may suggest that the official productivity numbers are being understated.
It is still too early for a full celebration of what some are starting to call the return of the Goldilocks economy. But if they do have that anniversary party at the Fed this month, they should surely serve porridge not too hot, not too cold; just the right temperature.
The Times
Inverse head and shoulders on USD/CAD. Geez man ... why did I not see that sooner!!
Which video?
What you see as a trip to da moon ... others see as a buying opportunity. But according to these seasonal charts .... it might actually go TO DA MOON.
http://www.spectrumcommodities.com/education/commodity/charts/cl.html
http://www.spectrumcommodities.com/education/commodity/charts/dx.html
Candlestick Patterns - Bearish Reversals
http://www.stockcharts.com/education/ChartAnalysis/candlestickbearreversal1.html
Lets see if the swissie exhibits any one of these patterns.
Down boy ... down!!
Central Bank Interest Rate Outlook
http://www.dailyfx.com/page/central_bank_interest_rate.html
Take the 1 HR chart but go back a couple of days and the MACD. It has been divergent for 400 pips ... unbeleivable! It was all the pro US news last week that made this situation happen. MACD has become my favorite indicator. I used to hate it because I did not know how to use it properly.
The line in the sand is EUR/USD 1.2900 AND USD/CHF 1.2500.
Who will be the victor?
The fundies will surely create the spark!
I concur. I have been shorting the USD/CHF for a while now because it was showing divergent signals. I hate that pair so much. But yet it beckons me. Anyways ... you have a copilot up until 1.3120.
Euro goin up or what? What a battle this is .....
LOL!!!! Those eyes of yours are mesmorizing. Makes me wanna go to sleep.
I am only interested in dogs. Cats need not apply.
I am not interested in your CAT moving average.
Simple and exponential are the only valid ones.
Ya I was up ... love the London session.
EUR/USD is sitting under the 55 day SMA. If we breach and close above that level today we could see this pair rally nicely as some model type accounts use this average as a pivot.
Can someone tell me what a model type account is?
This got me thinking. What moving averages and other indicators do the big dogs use? They must have stringent rules about buying and selling based on specific moving averages and other indicators.
I am on another quest to find out what the big hedge funds use as trading signals. Help is welcome.
Thanks dudes!
Ultimatepick
Seasonal Pattern Chart List
Information is until 1999 but I am sure one of us could get until 2006. I am in constant search for seasonal patterns. Nothing is written in stone. FOREX is a game of probabilities.
The way I see it ... I have a better chance here than going to the casino.
http://www.spectrumcommodities.com/education/commodity/charts/index.html
US Dollar Index (NYBOT): (High: Jun/Low: Nov-Dec) Currency has tended toward strength in first half of year before declining into year end. Note how this pattern is nearly reverse that of the 30-year Treasury bond.
Swiss Franc (IMM): (High: Oct or Dec//Low: Feb-Mar or May-Jun) Franc has regularly declined from beginning of new calendar year into Feb through early Aug. Powerful rise into October has often carried into year end.
Eurodollars (IMM): (High: Dec//Low: Jun) Apparent "sharp declines" in Mar, Jun, Sep more likely the effect of discounts at rollover. Seasonal weakness built into prices in June.
Regarding USD/CAD
There might be a nasty reversal in USD/CAD if the Liberals succeed in reversing the decision or extending the deadline for the income trusts. Follow this story closely if you are trading USD/CAD.
Canada's Liberals Seek Hearings on Income Trusts (Update1)
By Theophilos Argitis
Jan. 15 (Bloomberg) -- Canada's main opposition Liberal Party wants parliamentary hearings on Finance Minister Jim Flaherty's plan to tax income trusts to help the party develop a position on the issue ahead of a possible election this year.
The House of Commons finance committee is scheduled to vote on whether to hold debate on Jan. 17, following a request by the Liberals. The Bloc Quebecois support the plan, giving the Liberals enough committee support to initiate the hearings.
The Liberals want to hear evidence on the merits of extending the four-year tax moratorium for existing trusts or exempting energy trusts, John McCallum, the lawmaker responsible for financial affairs, said in a telephone interview today. An election may take place this year because the Conservatives hold a minority of seats in the House of Commons and need opposition support to stay in power.
``We would require a position on this issue in an election and I don't think we can come to a good public policy conclusion without answers to these key questions,'' McCallum said. ``We haven't made up our minds.''
The Conservatives received backing from the Bloc Quebecois and New Democratic Party to pass a motion in November allowing the government to implement the tax. That means the measure can't be reversed even if the government fails to pass legislation enacting the tax. Only a change in government policy could prompt a reversal, McCallum said.
The New Democratic Party, which holds the balance of power, will continue to support the measure, Judy Wasylycia-Leis, the sole NDP lawmaker on the finance committee, said in a telephone interview.
`Grandstand'
She said a reversal now would only hurt investors who have sold their income trusts, and called the Liberal move ``a chance to grandstand.'' Flaherty has insisted he won't back down, forcing trusts to pay tax for the first time, starting in 2011.
The industry has lost about C$24 billion ($20.5 billion) in market value since the government announced Oct. 31 that it will begin taxing existing trusts to limit the erosion of tax revenue. The decision broke an election campaign promise made by Prime Minister Stephen Harper. Trusts have been lobbying for an exemption to the tax or an extension of the four-year moratorium, and investors have tried to keep the pressure on the government.
``We would like to see them examine the facts, tell us what numbers they used, because they haven't,'' Leslie Lundquist, who runs the C$900 million ($770 million) Bissett Income Fund in Calgary, said in a telephone interview.
New Lobby Group
A new group calling itself the Canadian Association of Income Trust Investors was formed today and is seeking to sign up as many as 300,000 people in a bid to reverse the plan. The Canadian Association of Income Funds also has said it will continue lobbying.
The government has said it will seek to introduce legislation after public consultations that are scheduled to end Jan. 31. A Nov. 8 poll by Ipsos Reid found about 4 million Canadians believe they may have been negatively affected by the decision.
Income trusts have avoided most corporate taxes by paying out their cash flow to investors in monthly dividends. The market value of trusts had soared 20-fold in six years to C$200 billion as corporations converted to the investment structure to benefit from the tax breaks.
The Liberals have four members on the finance committee, the Bloc Quebecois have two, and the New Democratic Party have one. The governing Conservatives have the other five.
Because the committee chairman, a Conservative, only votes to break ties, the Liberals only need to win the backing of the Bloc Quebecois to initiative hearings. Pierre Paquette, the Bloc vice-chair of the finance committee, said in a telephone interview his party will support the hearings.
To contact the reporter on this story: Theophilos Argitis in Vancouver at targitis@bloomberg.net
UK annual CPI inflation jumps to 3.0 pct in Dec, highest in a decade
Tuesday, January 16, 2007 4:33:33 AM
LONDON (AFX) - The Bank of England's target rate of inflation jumped to 3.0 pct in December, taking it dangerously close to 3.1 pct which would force the Governor to write a letter of explanation to the Chancellor of Exchequer, figures from the Office for National Statistics showed.
The reading is just above the 2.9 pct median forecast of analysts polled by AFX News and is the highest level since the series began in January 1997.
The jump in the CPI rate will have been a major factor in the Bank of England's surprise decision to raise interest rates to a five-and-a-half-year high of 5.25 pct last week.
The Bank of England is charged with targeting annual CPI inflation at 2.0 pct on a two-year horizon. If the rate were to deviate by more than 1 pct above or below this level, the governor Mervyn King would have to write a letter to the Chancellor of the Exchequer Gordon Brown, something that has never happened since the Bank was granted independence in 1997.
ONS officials confirmed that the BoE's Monetary Policy Committee had access to the figures during their rate-setting deliberations.
The sharp increase in inflation may well increase market expectations that the Bank of England will raise interest rates again over the coming months, possibly with a back-to-back hike next month ahead of the release of its quarterly inflation report.
The statistics office said the biggest upward effect on prices came from rises in transport costs, driven by fuel prices following the Chancellor's decision to raise fuel tax duty after the Pre-Budget Report. The average price of petrol also increased by 2.0 pence per litre between November and December, compared with a fall of 3.0 pence a year ago.
Other signficant upward effects came from furniture and household goods, with prices of furniture showing their largest month-on-month increase since the start of the official series in January 1997. Prices for recreation and culture were also up significantly, mainly due to changes in the price of computer games, non-fiction books and DVDs.
Small downward effects came from vegetable prices and from clothing and footwear, with women's outwear seeing 'widespread special offers', the ONS said.
The rise in the CPI rate is well above what the BoE forecast at its last quarterly inflation report in November, when it said it expected inflation to 'rise further above the target in the near-term, but then fall back as energy and import price inflation abate'.
On a month-on-month basis, CPI rose by 0.6 pct from November, against the previous month's 0.3 pct increase and above analysts' expectations for a rise of 0.5 pct.
Of further concern to the Bank of England's Monetary Policy Committee moreover was a sharp increase in the RPI rate, the measure which is used in pension payments and often in pay deals. The MPC has been concerned recently that rising inflation expectations would lead to higher wage deals during the key January pay round.
RPI rose by an annual rate of 4.4 pct in December, its highest level since December 1991 and following a 3.9 pct rise in November. The rate is above analysts' forecasts of 4.3 pct, with the increase due mainly to rises in mortgage interest payments -- a component excluded from the CPI rate -- following the Bank of England's quarter point rate rise in November.
On a monthly basis, RPI inflation was up 0.8 pct after a 0.3 pct rise in October, again above forecasts for a smaller gain of 0.6 pct.
Meanwhile, the RPI-X measure, which excludes mortgage payments, was up by 3.8 pct year-on-year after a 3.4 pct year-on-year rise in November. This is the highest reading since October 1992 and is above expectations for a 3.7 pct increase.
The annual RPI-X measure remains well above the 2.5 pct annual rate that the Bank of England was previously charged with targeting and is now in the territory which would have forced a letter from the governor to the Chancellor. It has been above 2.5 pct since May.
On a monthly basis, RPI-X rose by 0.6 pct, against forecasts for a 0.4 pct rise and following a 0.4 pct gain the previous month.
Elsewhere, the annual core rate of CPI inflation which excludes energy, food, alcoholic beverages and tobacco, jumped to 1.8 pct from 1.6 in November, above forecasts for a reading of 1.7 pct and the highest rate since August 2005.
On a monthly basis, core CPI rose by 0.6 pct, up from 0.2 pct in November.
Well now the rumour is in anything below 3% would cause cable to fall. We need 3.1% or more to make cable strengthen.
http://news.bbc.co.uk/1/hi/business/6265765.stm
Finally this frackin diverging USD/CHF seems to be going down.
GBP CPI had to be high. That is why they preempted to raise interest rates. Do they have CPI numbers in advance to make this decision?
EUR is goin to da moon tonight. I can feel it.
The Canadian economy is like a tugboat and the American economy is a supertanker. When shit his the fan Canada goes off the deep end MUCH FASTER than the supertanker US. When Canada recovers the US recovers after .. but in a supertanker sorta way :)
Canada is the nimble one.
Point is ... study the NORTH AMERICAN economy as a whole and USD/CAD really is a sweet pair to hold. Trading it is another story ... it goes up and down with no particular rhyme or rhythm .. sometimes it trends and other times it is like a kindergarden kid drew the chart.
USD/CAD long for the next couple of months is a pretty good bet. But you gotta hold it.
Good luck!
Here is another article that touches on what I mean. Canada cannot do well without the mighty American consumer. There will be corrections but Canada is fighting a losing battle. USD/CAD at 1.25 in 4-5 months is my call.
Dodge May Delay Rate Cut as Lower Dollar Aids Exports (Update1)
By Greg Quinn
Jan. 15 (Bloomberg) -- Bank of Canada Governor David Dodge may have less need to trim interest rates because the Canadian dollar's slide is helping the exports that make up more than a third of the country's economy.
Dodge and his colleagues on the bank's Governing Council, who are forecast to keep rates unchanged tomorrow, are likely to delay a reduction hinted at only last month, futures trading suggests. Economists now predict any cut, which would be the first since April 2004, won't happen before the third quarter.
The Canadian dollar's descent to a 13-month low and the accompanying export spurt may help manufacturers recover after their production declined for most of 2006 and threatened to stunt economic growth into this year. The dollar is the worst- performing major currency against its U.S. counterpart in the past three months, losing 3 percent.
``There is a less pressing need to cut rates,'' said Carolyn Kwan, an economist at Scotia Capital Inc. in Toronto and a former Bank of Canada researcher. ``The export sector will certainly benefit from a Canadian dollar that has been depreciating.''
The currency, which reached a 28-year high in May, has retreated as the price of crude oil and natural gas tumbled. Canada, which sits on the biggest pool of oil reserves outside the Middle East, is the world's third-largest producer of natural gas.
Policy makers, who have kept the benchmark lending rate at 4.25 percent since May, will do so again tomorrow, according to the median forecast of 26 economists in a Bloomberg News survey.
End of Tightening
Prior to May, the central bank pushed rates higher at seven consecutive meetings. Dodge said the tightening was necessary to control inflation amid record shipments of energy and metals. The bank's announcement tomorrow is at 9 a.m. in Ottawa.
Dodge signaled during a Dec. 11 press conference in Toronto that he was considering a reduction, saying a slowdown in Canada and the U.S. -- Canadian exporters' biggest market -- was lasting longer than he anticipated.
The world's eighth-largest economy shrank in September and failed to grow in October, as factory output declined for the ninth month of 2006, Statistics Canada said. Canadian manufacturers export half their production, mainly to the U.S. Retail sales, a strong point for most of last year, declined in both months.
``A couple of weeks ago we thought the Bank might be cutting rates say in the second quarter,'' said Dale Orr, Toronto-based managing director of Canadian research for Global Insight Inc., an economic forecasting firm. ``We have now withdrawn that.''
Futures
Trading in futures contracts tied to the Bank of Canada's main rate shows speculation about a reduction is ebbing. The yield on the December bankers' acceptance contract on the Montreal Exchange has risen to 4.19 percent, approaching the central bank's current rate, up from 3.74 percent on Dec. 1.
Still, most economists say exports can't rebound fast enough to stave off an eventual cut. Policy makers will ease in the third quarter, according to the median of 12 estimates in a Bloomberg survey taken Jan. 2-8.
There are already signs of a turnaround. The trade surplus widened more than expected in November, soaring 24 percent from the prior month, and exports to the U.S. jumped 3.6 percent. Factories hired 10,100 workers in December out of 61,600 new jobs; the jobless rate matched a 31-year low of 6.1 percent.
`Bottom Line'
``Every one cent U.S. change in the U.S. dollar is about C$19 million on our bottom line,'' said Rodger Hutchinson, corporate controller at Vancouver-based West Fraser Timber Co., North America's third-largest lumber producer, in an interview.
The Canadian dollar rose to 85.63 U.S. cents at 9:30 a.m. in Toronto today, from 85.43 cents on Jan. 12. The currency touched 84.75 U.S. cents on Jan. 11, the weakest since Nov. 22, 2005.
Car manufacturers, whose exports fell for several months last year, increased sales in the U.S. and elsewhere overseas by 5.4 percent in November.
Dodge, 63, hasn't speculated on how the lower dollar may be affecting factories or other sectors of the economy.
``We've had some weakening of resource prices, so it's not totally surprising that there will be some weakening of the Canadian dollar,'' he said Jan. 7 in Switzerland.
Jeremy Harrison, a spokesman for the central bank, declined to comment. Dodge's next opportunity after tomorrow will be Jan. 18, when he releases an economic forecast.
Obstacles
Some economists warn Canada's economy still faces obstacles that will force a rate cut this year.
Warren Lovely, an economist at CIBC World Markets Inc. in Toronto, noted that ``very little real economic growth'' has accompanied Canada's job growth. He predicts the economy will expand at a 2.4 percent annual rate this quarter, slower than the 3.6 percent pace a year earlier. There's still a need to ease, ``and not just a token amount,'' he said.
Most economists predict a cut won't come soon though, especially if the dollar weakens further.
``If the currency continues to drop, the argument for a rate cut weakens,'' said Doug Porter, an economist at BMO Capital Markets Corp. in Toronto. The dollar ``is rapidly getting back into an area that I would call comfortable for a lot of manufacturing.''
The Decline in the U.S. Current-Account Balance Since 1991
http://www.cbo.gov/showdoc.cfm?index=5722&sequence=0
Extremely cool publication explaining it all. In fact the CBO site is filled with gold nuggets for all you fundamental traders out there.
Budget and Economic Information
Monthly Budget Review
Current Budget Projections
Current Economic Projections
http://www.cbo.gov/
Harvard's Feldstein Says Dollar `Too High to Be Sustained'
By Scott Lanman
Jan. 6 (Bloomberg) -- Harvard University economist Martin Feldstein said the dollar is vulnerable because of U.S. reliance on foreign government purchases of American securities, leaving the currency ``too high to be sustained.''
``The current high level of the dollar reflects some errors in understanding by the financial-market participants,'' Feldstein said during a panel discussion at the American Economic Association's annual meeting in Chicago today.
Some investors don't appreciate that much investment in the U.S. is coming from foreign governments, not private entities investing in the economy, Feldstein said. The central banks of nations including China and Russia have accumulated holdings of Treasuries through managing the value of their currencies. China's reserves amount to about $1 trillion.
The U.S. currency posted its fourth annual decline in five years in 2006, dropping 3.9 percent against the currencies of U.S. trading partners, according to the Fed's trade-weighted broad dollar index. The index, at 107.29 on Jan. 4, is still about 43 percent above its average since 1973.
Treasury Secretary Henry Paulson has repeatedly said that a ``strong'' dollar set freely in the foreign-exchange market is in the U.S. national interest.
Feldstein said the so-called ``strong dollar'' policy, followed by Treasury secretaries since Robert Rubin served under former President Bill Clinton from 1995 to 1999, doesn't mean the U.S. will act to protect investors in the currency.
Dollar Policy
The 67-year-old Harvard economist, who heads the National Bureau of Economic Research, the group that officially dates U.S. recessions and expansions, said his interpretation of U.S. policy is that American officials may be comfortable with a weaker exchange rate, as long as it doesn't push up U.S. inflation.
``We like to have a low inflation rate that protects the purchasing power of the dollar for American consumers,'' Feldstein said. ``A strong dollar at home, but a competitive dollar abroad.''
Feldstein suggested that U.S. policy is inconsistent because while advocating a strong dollar, officials are pressing China to allow the yuan to appreciate at a faster pace. The yuan is also known as the renminbi.
``The statement `a strong dollar is good for the United States' is a nice slogan, but that's all it is, a nice slogan,'' Feldstein said. ``It's clear that the U.S. government would like to see the dollar decline relative to the Chinese renminbi, and if so, why not against other currencies which we have large trade imbalances.''
Current Account
Feldstein spoke in a panel discussion addressing the dollar and the U.S. current-account deficit. The session also featured Harvard economist Kenneth Rogoff and Peterson Institute for International Economics economist Michael Mussa, both former chief economists at the International Monetary Fund; Nobel laureate Robert Mundell of Columbia University; and Stanford University's Ronald McKinnon.
In the third quarter, the U.S. current-account deficit widened to a record $225.6 billion as the trade gap widened and the country paid more interest to overseas investors. The current account is the broadest measure of trade because it includes transfer payments and investment income.
Foreign investors hold about half of the $4.3 trillion of marketable Treasuries outstanding, according to monthly figures from the U.S. Treasury. Official holdings totalled $1.3 trillion in October, the Treasury said on Dec. 15.
Feldstein said that media don't pay enough attention to data on foreign official holdings of U.S. securities.
Rogoff said that while the dollar will probably weaken as the U.S. current-account gap narrows, ``I don't think it's going to be a catastrophe.''
In 2005, Feldstein was considered by some investors to be a candidate to replace Federal Reserve Chairman Alan Greenspan. President George W. Bush chose Ben S. Bernanke, then a White House economic adviser and a former Fed governor and Princeton University economist. Bernanke took office in February 2006.
Sure ... among other things.
I live in Canada and read the news everyday. Jobs are being created as we can see from the payroll numbers but NOBODY can explain why. The economists here are baffled. The Canadian economy is running on fumes.
As I said in a prior post ... there was a rather newly elected minority government in power (The conservatives) and they aim to please. You cannot rule out a manipulation of numbers. They have a an agenda no doubt about it.
Like I said the economists cannot explain what is happening right now to the North American economies.
As you can see from this link Canada is almost exclusively dependant on exports to the US:
http://www40.statcan.ca/l01/cst01/gblec02a.htm
We all know there is going to be an economic slowdown and the US will imports less goods into Canada.
Forget that bullshit about the price of oil yada yad yada. the correlation between the price of oil and the CAD is slowly dwindling.
Look at the weekly futures chart ... goin down!
http://www.tfc-charts.com/chart/CD/W
The housing market like in the US is NOT doing well. I can see it all around me. The only place that is doing well is Calgary with the oil sands. The rest of Canada is suffering .. and suffering badly.
Numbers alone do not drive markets. You gotta get a feel of the situation and alot of things are out of place.
Or maybe I am delusional .. time will tell.
Ultimatepick
The Canadian economy has nothing going for it right now. The CAD is goin to 80 cents (1.2500) in about 4 months. For now the USD/CAD might correct but fundamentaly the Canadian economy is screwed.
Another scenario to consider: the market has pulled back hard three times in a row after hitting a downtrend line, and is now setting up to do it for a fourth time, really slowly, allowing everybody plenty of time to get short. Should you believe that you are staring at a guaranteed move lower? Certainly not! These are the moments to be most skeptical. This is when our mischievous opponent is sure to break the heretofore reliable pattern and trap a whole bunch of inexperienced traders who thought they had a sure thing.
My favorite paragraph. Thanks man.
The US just went through a major election. Conspiracy theorist that I am (Glance too probably) there may have been number manipulations here and there and also there will be in the future. Always remember that there are people in charge of economic reports. People often have agendas.
Remember that the US has just deployed additional troops to Iraq. The government wants the economy to APPEAR to be doing well to soften the blow of what is about to happen to Iran.
Lets not be fooled. In a couple of months the US will do something MAJOR in the middle east.
I have been studying the weekly charts of the EUR/USD and see it going down at least another 500 pips in the near future.
The AUD has topped out also and it correlates with the EUR.
Look at the divergence on the weekly chart of EUR/USD.
The EUR will not drop like a stone but will whipsaw it's way down to 1.2430.
That is how the US wants it and that is how it will get it.
Ultimatepick
Greenback tipped to rise as US economy slows
Monday December 11, 2006
NEW YORK - The greenback will rise in 2007, even as the United States economy slows sharply, as Asian central banks continue buying the American currency to keep their own currencies down and their exports competitive, says a British research firm.
London-based Lombard Street says a housing slump in the US will finally cause Americans to cut back on spending, while rising labour costs will prevent the Federal Reserve from cutting interest rates until the second half of the year.
But director Diana Choyleva says Asian states with large surpluses and export-driven economies will still need to recycle savings into US assets and keep their currencies from rising too rapidly against the greenback.
And with Americans saving more, "the supply of dollars will shrink at a time when demand for the dollar will be going up" and that will put upward pressure on it.
The outlook runs counter to a widespread FX market view the US dollar will weaken in 2007 amid slower growth and an expected decline in interest rates.
Choyleva said markets are pricing in a rate cut too soon.
"There's a big chance growth will be high enough in the near term to exacerbate the inflation outlook than low enough to help with inflation," she said. "The Fed will need to engineer a hard landing to get inflation back on target."
US consumer spending will fall, though, as home prices continue to slide. The National Association of Realtors reports existing home prices fell 3.5 per cent in October for the third straight month.
Rapid gains in home prices had been the main driver in recent years of US consumption, which comprises some two-thirds of gross domestic product.
Choyleva says the result over the next 12 months to 24 months will be a gradual unravelling of global financial imbalances caused by excessive American spending and excessive saving in Asia.
Even if the US spending spree ends, Asian states have assets to spare.
http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10414720
The Japs are gonna try real hard to keep their yen down especially if the US economy slows.
FXCM have been bad bad boys. They were fined 110 000 bucks!
What a bunch of morons!
Regulatory Actions
FOREX CAPITAL MARKETS LLC NFA ID: 0308179
http://www.nfa.futures.org/basicnet/CaseInfo.aspx?entityid=0308179&type=reg
Oanda is clean
http://www.nfa.futures.org/basicnet/Details.aspx?entityid=0325821&rn=Y
GAIN (forex.com) has a complaint against them.
http://www.nfa.futures.org/basicnet/CaseInfo.aspx?entityid=0339826&type=reg
Pretty interesting stuff!
Ultimatepick
Welcome. Your question is too general to answer.
Rob Grespi blasting a broker ... frackin hilarious. You gotta listen to this.
He calls the dude 10 days before the conversation on the bottom inquiring about http://www.profinum.com and they end up screwing someone from his user group. Rob is a bit of a dick (That is why he is cool in my book) but he knows this business cold and makes alot of money.
http://www.kingforexsignals.com/Robvideos/010307_Profinium1_Rob/010307_Profinium1_Rob.html
http://www.kingforexsignals.com/Robvideos/010307_Profinium2_Rob/010307_Profinium2_Rob.html
The call is near the end of this video :
http://www.kingforexsignals.com/Robvideos/011107_SpecialEd_Rob/011107_SpecialEd_Rob.html
Alot of people do not like Felix but he is building something and making alot of people happy.
http://forexdiamonds.com/performance.htm
Cheers!
Ultimatepick
The Europeans are idiots. I can't beleive they did not raise interest rates. GBP is kicking their ass. The DAX is gonna fracking crash like there is no tomorrow with all this freemoney circulating. The frackin repo rate is higher than the ECB interest rate! GAWD! They need to bring their money supply under control or else they are screwed.
The Brits are doing it right! Long live the queen. Now I see why they did not want to join the EU. The europeans SUCK when it comes to monetary policy.
DID you see that candle on the GBP today? WOW! My USD/CHF short is looking pretty good know huh Glance? muhahaha!