Monday, August 30, 2010

Rumors have circulated in China that People’s Bank of China (PBC) Gov. Zhou Xiaochuan may have left the country.

Rumors have circulated in China that People's Bank of China (PBC) Gov. Zhou Xiaochuan may have left the country. The rumors appear to have started following reports on Aug. 28 which cited Ming Pao, a Hong Kong-based news agency, saying that because of an approximately $430 billion loss on U.S. Treasury bonds, the Chinese government may punish some individuals within PBC, including Zhou.

Although Ming Pao on Aug. 30 published a report on its website indicating that the prior report was fabricated by a mainland news site that had attributed the false information to Ming Pao, rumors of Zhou's defection have spread around China intensively, and Zhou's name has been blocked from Internet search engines in China.

STRATFOR has received no confirmation of the rumor, and reports by state-run Chinese media appeared to send strong indications that Zhou is in no trouble at the moment. However, the release of this rumor and its dispersion throughout the public is significant, particularly as the Communist Party of China (CPC) is preparing for a leadership transition in 2012.

Chinese state-run media and official government websites have run several high-profile reports about Zhou, which should be seen as a move to refute the rumors. The PBC website published two articles on its homepage reporting on Zhou's meeting with visiting

Japanese Financial Services Minister Shozaburo Jimi during the third China-Japan high-level economic dialogue as well as a meeting with an Italian delegation. Xinhua news agency reported that Zhou told the PBC Party Committee Enlargement Meeting on Aug. 30 it should "continue to implement justice, and strengthen legislative work in financial system." Prior to this news, Zhou appeared at the 2nd annual conference of the heads of the Chinese, Japanese and Korean central banks held on Aug. 3, and his most recent public appearance was Aug. 10 for China's Financial System Anti-corruption Construction Exhibition.

Zhou is known to have lofty political ambitions and is believed to be a close ally to former Chinese President Jiang Zemin, as well as a core figure for Jiang's "Shanghai Gang." There has been no shortage of rumors about Zhou's possible dismissal in the past five years, as he is believed to be associated with several high-level financial scandals. For example, Zhou was rumored to be under "shuanggui," a form of house arrest administered by the CPC, during the massive crackdown of Shanghai Party Secretary Chen Liangyu in 2006, which was perceived in the country as a crackdown of the Shanghai Gang and part of Hu's effort to consolidate power ahead of the 2007 power transition.

There was also a rumor that he might have been detained following the investigation and arrest of Wang Yi, the vice governor of the China Development Bank, along with several other officials in the financial circle. Currently, several financial scandals are still under investigation, and it is likely that Zhou, as PBC governor and one of the most powerful economic players in the country, could be associated with some cases. Therefore, whether or not the rumor is true at this time, the leaking of this news is very likely to be associated with a power struggle within the Communist Party's economic hierarchy.

By George Friedman

Sunday, August 29, 2010

EES releases FXDF Forex Strategy Documentation Framework
A framework for writing strategy manuals & documentation is needed. Having a standard for documentation of FX strategies will help document writers, by providing an easy to use template, which will increase organization. It will help users understand documents as they will become familiar with the standard and will understand how to use the document and where they can find specific information. FIX provides a standard for trading APIs, and most liquidity providers and FX trading banks have relatively few differences between FIX versions. However, the difference between strategies and their documentation is huge. A developer's work in many cases is only as good as his documentation. If something happens to him (such as "FX Burn Out") and others are forced to re-create his work, this can be difficult without clear, structured documentation.

The billionaire brothers who are waging a war against Obama.
On May 17th, a black-tie audience at the Metropolitan Opera House applauded as a tall, jovial-looking billionaire took the stage. It was the seventieth annual spring gala of American Ballet Theatre, and David H. Koch was being celebrated for his generosity as a member of the board of trustees; he had recently donated $2.5 million toward the company's upcoming season, and had given many millions before that. Koch received an award while flanked by two of the gala's co-chairs, Blaine Trump, in a peach-colored gown, and Caroline Kennedy Schlossberg, in emerald green. Kennedy's mother, Jacqueline Kennedy Onassis, had been a patron of the ballet and, coincidentally, the previous owner of a Fifth Avenue apartment that Koch had bought, in 1995, and then sold, eleven years later, for thirty-two million dollars, having found it too small.

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Thursday, August 26, 2010

Banks back switch to renminbi for trade

Banks back switch to renminbi for trade

By Robert Cookson in Hong Kong

Published: August 26 2010 17:55 | Last updated: August 26 2010 17:55

A number of the world's biggest banks have launched international roadshows promoting the use of the renminbi to corporate customers instead of the dollar for trade deals with China.

HSBC, which recently moved its chief executive from London to Hong Kong, andStandard Chartered, are offering discounted transaction fees and other financial incentives to companies that choose to settle trade in the Chinese currency.

Tuesday, August 24, 2010

EES Strategies Update – 8.24.2010

EES Strategies Update

EES has completed a modification of the DRS system, and has coded a new system, Tick Monster, soon to be officially released.

All referenced strategies are now available for customers who have access to Elite Meta Sync. Please sync up to get the latest strategies.

For questions about these updates, please use the EES FX forums at:

DRS – TM updates Changelog

Drs R 3.5

1. Modified lot multiplier for double orders to accept 0.1. Please take note that if set too low calculated lot size will be less than minimum allowed by broker in which case the minimum lot size allowed will be used.

2. added option to use autogrid value for takeprofit, autogrid must be on for setting to take effect

3. added "check spread" function which will check if spread is within limits before sending orders

4. added options to trade again after global profit or stop

5. added use_PercentAccountStart feature for calculating starting lot


1. Added pivot indicator filter - If ON EA will buy only above specified resistance line and will sell below support line

2. Added SMA indicator filter - If ON EA will only buy above SMA and only sell below. MA default type is simple moving average, 200 period but this can be changed at user input

3. Added "MovingAveragePlus" input parameter where user can define additional pips above/below MA to allow buy/sell orders. Set value to 0 to turn this feature off

Tick Monster V1.4

1. Fixed bug in pivots indicator filter

Saturday, August 21, 2010

ShoreBank of Chicago Said to Be Closed Today by FDIC
ShoreBank Corp., the Chicago lender operating under a Federal Deposit Insurance Corp. cease-and- desist order for 13 months, will be shut and most of its assets will be bought by Urban Partnership Bank, two people with direct knowledge of the matter said.

Urban Partnership, created to make the acquisition, will keep branches in Chicago, Cleveland and Detroit and continue to focus on low-income communities, the people said, speaking anonymously because the matter is private. Urban Partnership will have Tier 1 capital of at least 8 percent and its chief executive officer will be William Farrow, a former executive at the Chicago Board of Trade and Bank One Corp., they said.

"The good news is that the bank, under this new management, will still be there and serving the South Side community," said Dory Rand, president of the Chicago-based Woodstock Institute, a non-profit that studies community lending. "They have made the South Side a decent place to live and work and do business."

Friday, August 20, 2010

CIA forms new center to combat nukes, WMDs

WASHINGTON (AP) - The CIA is opening a counterproliferation center to combat the spread of dangerous weapons and technology, a move that comes as Iran is on the verge of fueling up a new nuclear power plant.

CIA Director Leon Panetta said Wednesday that the new unit would place CIA operators side by side with the agency's analysts to brainstorm plans to "confront the threat of weapons of mass destruction - nuclear, chemical and biological."

The center would formalize the collaboration between the agency's analysts and operators, a close working relationship that CIA spokesman George Little said already has yielded intelligence successes.

Little cited their work in last year's revelation of the "discovery of the Syrian covert nuclear reactor and Iran's undeclared uranium enrichment facility near Qom." That Iranian city is the ideological center of Iran's Shiite rulers.

Paul Brannan, a senior analyst at the Institute for Science and International Security, said another CIA success was the slowing down of Iran's nuclear centrifuge operations at Natanz. The agency, he said, sneaked "faulty parts into Iran's nuclear supply chain."

That operation, Brannan said, "is an example of where you'd need both analysts to tell you what type of parts would Iran need that you could inject, and the operations side to work with trading companies to try to get the parts in there."

Active ISO Burner Freeware
Active ISO Burner will allow you to burn an ISO image file to CD-R, CD-RW, DVD-R, DVD+R, DVD+R DL(Dual Layer), DVD-RW and DVD+RW (including double layer, DL). Active@ ISO Burner software accepts command line parameters to automate ISO images burning process.

Thursday, August 19, 2010

MT4 on the decline? Crashing build 226 unresolved Posted support ticket on customer support forums

Last week, the number of first-time filers for unemployment insurance rose for the third time in a row, to 500,000
NEW YORK ( -- A government report Thursday brought bad news for workers and the economy: The number of unemployed Americans seeking a financial lifeline has reached its highest level in nine months.

Last week, the number of first-time filers for unemployment insurance rose for the third time in a row, to 500,000, according to a Labor Department report released Thursday.

Wednesday, August 18, 2010

Google suggests name changes to escape misspent youth
Eric Schmidt suggested that young people should be entitled to change their identity to escape their misspent youth, which is now recorded in excruciating detail on social networking sites such as Facebook.

"I don't believe society understands what happens when everything is available, knowable and recorded by everyone all the time," Mr Schmidt told the Wall Street Journal.

Saturday, August 14, 2010

The Federal Reserve is undertaking a "dangerous gamble"

The Federal Reserve is undertaking a "dangerous gamble" by keeping rates at near zero for so long, and must start raising rates or risk damaging the nascent U.S. recovery, a top Federal Reserve official said on Friday.


"To be clear, I am not advocating a tight monetary policy," Kansas City Reserve Bank President Thomas Hoenig said in the text of a speech to the Lincoln, Nebraska, Chamber of Commerce. "I am advocating a policy that remains accommodative but slowly firms as the economy itself expands and moves toward more balance."

Hoenig has been the lone dissenter on the Fed's policy-setting panel, which on Tuesday repeated the U.S. central bank's pledge to keep interest rates extraordinarily low for an "extended period."

The Fed took the further step of saying it would begin reinvesting cash from maturing mortgage bonds to buy more government debt. The decision reflected the Fed's concern over the 

slowdown in the economic recovery it helped bring about by cutting rates to near zero in December 2008 and buying nearly $1.3 trillion in mortgage-linked debt to shore up the housing market.

However, Hoenig said Friday he believes the economy "barring specific shocks and bad policy ...should continue to grow over the next several quarters."

The Fed should raise its short-term target to 1 percent, pause to wait for the economy to adjust, and then raise it to 2 percent once it is clear the recovery is on a reasonable growth path, he said, repeating a proposal he has made before.

"I believe that zero rates during a period of modest growth are a dangerous gamble," Hoenig said Friday.

Thursday, August 12, 2010

QE2 signals economic collapse

FORTUNE -- The Great Depression. Wall Street in 1987. Japan in 1997. Points of economic collapse are generally crystal clear in the rear-view mirror. Professional politicians in Japan have been telling stories for 20 years as to why they can prevent economic stagnation. In the US, the storytelling started in 2007. All the while, stock market and real-estate prices have repeatedly rallied to lower-highs, then collapsed again, to lower-lows.

Despite the many differences between Japan and the US, there is one similarity that continues to matter most in the risk management model my colleagues and I use at Hedgeye, our research firm -- debt as a percentage of GDP. Now that the US can't cut interest rates any lower, the only option left on the table is what the Fed just announced it would start doing -- buying Treasury debt. And that could lead the country to the brink of collapse: According to economists Carmen Reinhart & Ken Rogoff, whose views we share, crossing the 90% debt/GDP threshold is the equivalent of crossing the proverbial Rubicon of economic growth. It's a point from which it's almost impossible to return.


On July 2nd, we cut both our third quarter 2010 and full year 2011 GDP estimates for the US to 1.7%. At the time, the consensus around US economic growth estimates was about 3%. Now we're starting to see both big brokerage analysts and the Federal Reserve gradually cut their GDP estimates, but not by enough. Even our estimate for 2011 is still too high.

Slowing growth, both domestically and in China, is core to our bearish views on both the strength of the US dollar and US equities. There will be a downward bias to our US growth estimates as long as debt-financed-deficit-spending continues to be the solution politicians and central bankers turn to as a fix to our financial crisis.

Markets trade on expectations. Yesterday's zig-zag in the S&P 500 was unlike most sleepy August trading days in America. That's because the 'government is good' crowd leaked word that this second round of "quantitative easing," known as QE2, was coming, and that Ben Bernanke was going to respond to our buy-and-hope begging. (The first round of quantitative easing was the Fed's unprecedented purchase of agency debt to prop up the housing market, along with credit facilities for big banks, which began in 2008 and ended earlier this year.)

To think that we have institutionalized market expectations to this degree is downright frightening. It seems impossible but true that all rallies start and end with rumors about what Fed Chairman Ben Bernanke, a humble looking man of government, had to say at 2:15 PM EST yesterday afternoon, or any other day he makes a statement.

So now what?

With 40.8 million Americans on food stamps (record high) and 45% of the unemployed having been seeking employment for 27 weeks or more (record high), what's left if (or when) QE2 doesn't kick start GDP growth? Should we start begging for QE3? Should we cancel the bomb of the National Association of Realtors' existing home sales report, scheduled for public release on August 24th? Or should we bite the bullet and accept that current economic policy dictates 0% returns-on-savings, even as Washington continues to lever-up our future to the point of economic collapse?

Before the Fiat Fools -- Hedgeye's name for political actors and bankers who have placed their hopes of economic recovery in printing endless supplies of new cash -- run out campaigning for QE3, maybe they should analyze some real time market results to yesterday's announcement of QE2:

1)The US dollar is battling for resuscitation after 9 consecutive down weeks -- down 9% since June.

2) US Treasury yields are making record lows on the short end of the curve, with 2-year yields striking 0.49%.

3) The yield spread (in this case the difference in return between 10-year and 2-year Treasury bills, which shows a long-term confidence when high) continues to collapse, down another 4 basis point day-over-day to 223 basis points.

4) The S&P 500 is down below its 200-day moving average (a common signpost for the health of a market or stock) of 1115.

5) US Volatility (VIX) is spiking from its recent stability.

6) In Japan, long time quantitative easing specialists found their markets closing down overnight by 2.7%, which makes them down 11.9% for the year to date.

Lest our doom and gloom seem built entirely on technical measurements, what they boil down to is actually quite simple -- an idea about our country which dates back to 1835. Alexis De Tocqueville, author of Democracy in America, which was published that year, seemed to warn of this day when he wrote: "The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."

-- Keith R. McCullough is CEO of Hedgeye, a research firm based in New Haven, Conn. 

Wednesday, August 11, 2010

Taleb betting on the collapse of government bonds

Nassim Nicholas Taleb, who warned that unforeseen events can roil markets in "The Black Swan," said he is "betting on the collapse of government bonds" and that investors should avoid stocks.

"I'm very pessimistic," he said at the Discovery Invest Leadership Summit in Johannesburg today. "By staying in cash or hedging against inflation, you won't regret it in two years."

Treasuries have rallied amid speculation the global economic recovery is faltering, driving yields on two-year notes to a record low of 0.4892 percent today. The Federal Reserve yesterday reversed plans to exit from monetary stimulus and decided to keep its bond holdings level to support an economic recovery it described as weaker than anticipated. The Standard & Poor's 500 Index retreated 16 percent between April 23 and July 2, the biggest slump during the bull market.


Let’s get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills.

Let's get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills.

What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess...

Thousands of online banking customers have accounts emptied by 'most dangerous trojan virus ever created'

Thousands of online banking customers have accounts emptied by 'most dangerous trojan virus ever created'

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