Alternative Currency Systems and Open Source Banking

(Thomas Dishaw)  Below is a comprehensive  list of alternative currency systems from around the world. As the economy continues to be propped up by fiat currency and fake data numbers, more and more people are using alternative ways  to buy sell and trade for services. View the complete list here.
http://govtslaves.info/list-of-alternative-currency-systems-from-around-the-world/

A Community Currency is often used as synonym for complementary currency, local currency, regional currency, alternative currency, auxiliary currencies, and private currencies. The debate is not easy to solve, since the words have different meanings to different people. All are currencies that have different designs and serve different purposes than our conventional money. They depart from the notion that money is essentially a human invention and instrument to influence the relations between citizens and organizations. A solid theoretical framework legitimizes this idea and in the past hundred years a lot of experimentation and experience was picked up with realizing social goals by the implementation of community currencies.
http://en.wikipedia.org/wiki/Local_currency

Cyclos is a project of STRO, a leading organisation on monetary innovations. Cyclos offers a complete on-line payment system with additional modules such as e-commerce and communication tools. The Cyclos platform permits institutions such as local banks and MFI`s to offer banking services that can stimulate local trade and development. Cyclos is also used by manyorganizations and communities to provide community currency services. 

With the latest version it is possible to roll out mobile banking services such as SMS banking and apps for smartphones. Cyclos is published under the GPL (open source) license meaning that it can be downloaded for free and used at no cost. Cyclos is currently available in ten languages and new languages are added with each release.

http://project.cyclos.org/

PFG customers claims priced 25 cents on the dollar

Customers’ claims on Peregrine Financial Group Inc., whose founder is accused by regulators of misappropriating more than $200 million, may fetch less than a quarter of their value in the wake of the firm’s bankruptcy, a trader said.

Quotes of 22 cents on the dollar to 25 cents were given to half a dozen Peregrine customers yesterday who called CRT Capital Group LLC, which buys and sells distressed debt, said Joseph Sarachek, managing director of claims trading. He is being “deluged” by calls today, he said. By comparison, bankrupt MF Global Inc.’s U.S. claims have always sold in the high 70s, he said.

http://www.businessweek.com/news/2012-07-11/peregrine-customers-claims-priced-at-25-cents-on-dollar 

Grid Strategy

Grid strategies are common alternatives for traders that do not have an opinion on market direction. They are almost exclusively associated with forex trading. I've never seen grid trades in any other context.

The goal of a grid strategy is to outline a ranging or trending bias without committing to the underlying direction. That may sound confusing.

The goal is to only summarize the type of market. Trending conditions prevail in today's market. If a trader did not know the future direction of the price, he might place stop entry orders a certain distance away from the current market. If the market happens to increase 10 pips, then perhaps that triggers a buy stop order on the expectation of a continuation. Another 10 pips later, another buy order triggers, and so on. The goal is to keep stacking orders on one way moves.



Ranging grids work on the opposite assumption. They use a limit entry instead of a stop entry order. The grid assumes that if the price drifts very far, then it's likely to come back to where it started.

Problems with Grid Strategies

Position sizing and money management are always some of the biggest concerns with an expert advisor. Two of the more common approaches that I see in grids are either to use a fixed lot size or to use a Martingale approach.

I see merit in the idea of varying lot sizes at different levels. Martingale, however, takes it way too far. It's a mathematical fact that it will blow up at some point in time. A more reasonable approach is to increase at a very slow rate like 10% as trades become increasingly likely to exit. If a trade is decreasingly likely to exit, the idea of not trading should come to mind. Alternatively, trading smaller sizes is always an option.

The other problem is that grids only work at the moment in time where it's applied. When a ranging grid expert advisor is placed at the top of a range, the grid will correctly anticipate the market conditions but poorly implement the prediction. The top of the range means that the price falls back down into the middle. The grid, however, assumes it was placed in the middle. The grid buys as the price falls into the mid-range on the errant expectation that it will return to the top of the range.

This is precisely what I dislike about grids. They are totally blind to the context of their current placement. They are best used, in my opinion, in the context of slight directional bias but where outright trades may not make sense.

The Chronology Of A Collapse: Santelli's Primer On The PFG Debacle

EES: The frightening truth about PFG

Forex brokers have been going under nearly on a monthly basis, as any forex trader or client can attest for the last few years. The most recent, PFGBest, was also a futures commissions merchant with over 70,000 clients and a reported $500 million in customer funds.

http://seekingalpha.com/article/717721-the-frightening-truth-about-pfgbest

Russell Wasendorf Sr. on NFA advisory committee, NFA removes from site

Above snapshot google cache:

http://webcache.googleusercontent.com/search?q=cache:_9gmnxqiRn0J:www.nfa.futures.org/nfa-about-nfa/committees/advisory-committee.HTML+&cd=3&hl=en&ct=clnk&gl=us

Current site:

http://www.nfa.futures.org/nfa-about-nfa/committees/advisory-committee.HTML

Citigroup Lets Clients See Fund Data After Peregrine

Citigroup Inc. (C), the third-biggest U.S. bank, said it will show trading clients how the lender is managing their funds as regulators probe missing customer cash at MF Global Holdings Ltd. (MFGLQ) and Peregrine Financial Group Inc.

Customers using New York-based Citigroup to buy and sell futures and over-the-counter derivative products can now see how much client funds the bank holds, Christopher Perkins, global head of OTC clearing, said today in a phone interview. Clients can use a Citigroup website to monitor the composition of the funds and where they’re being held, he said.

Citigroup is responding to allegations surrounding MF Global and Peregrine, which filed for bankruptcy after shortfalls in client accounts. This has raised scrutiny of how regulators ensure that banks and brokerages separate and protect customer cash when trading in futures.

“It’s almost impossible for regulators to come up with rules that prevent malfeasance and fraud,” Perkins said. “You can come up with the best rules in the world but if people violate them, you’ve still got a problem. The best way to mitigate these kinds of threats to client money would be through enhanced transparency.”

http://www.bloomberg.com/news/2012-07-11/citigroup-lets-clients-see-fund-data-after-peregrine.html 

EES Articles now available on Seeking Alpha

Elite E Services, Inc. (EES) announces a publishing agreement with Seeking Alpha.  EES has published articles on the topics of finance and technology in publications such as Futures Magazine, Stocks & Commodities Magazine, FX Trader Magazine, and on websites such as barchart.com. 

About Seeking Alpha

Seeking Alpha is the premier website for actionable stock market opinion and analysis, and vibrant, intelligent finance discussion. We handpick articles from the world's top market blogs, money managers, financial experts and investment newsletters - publishing approximately 250 articles daily. Seeking Alpha gives a voice to over 5,000 contributors, providing access to the nation's most savvy and inquisitive investors.  Our site is the only free, online source for over 1,500 public companies' quarterly earnings call transcripts, including the S&P 500.  Seeking Alpha was named the Most Informative Website by Kiplinger's Magazine and has received Forbes' 'Best of the Web' Award.

EES Profile URL: http://seekingalpha.com/author/elite-e-services

EES analysis advises international clients on Forex markets.  For customized Forex research, hedging solutions, and Currency Overlay, contact Elite E Services at http://contact.startelite.com

PFG shut down by NFA

NFA takes emergency enforcement action against Chicago futures firms Peregrine Financial Group, Inc. and Peregrine Asset Management, Inc.

July 9, Chicago - National Futures Association (NFA) announced today that it has taken an emergency enforcement action againstPeregrine Financial Group, Inc. (PFG), an NFA Member futures commission merchant (FCM) and Peregrine Asset Management, Inc. (PAM), an NFA Member commodity trading advisor (CTA) and commodity pool operator (CPO) located in Chicago, Illinois.

NFA has taken the Member Responsibility Action (MRA) to protect customers because PFG has failed to demonstrate that it meets capital requirements and segregated funds requirements. NFA also has reason to believe that PFG does not have sufficient assets to meet its obligations to its customers.

Effective immediately, PFG and PAM are prohibited from soliciting or accepting any additional customer accounts or customer funds, except as margin for existing positions. Additionally, PFG and PAM are prohibited from accepting or placing trades for any customer accounts except for the liquidation of existing customer positions and are prohibited from distributing, disbursing or transferring any funds, including to existing customers, without the prior approval of NFA.

PFG and PAM may request a hearing on this matter before NFA's Hearing Committee.

The complete text of the MRA is available on NFA's website (www.nfa.futures.org).

NFA is the premier independent provider of innovative and efficient regulatory programs that safeguard the integrity of the futures markets.

Topic Research:

http://www.businessinsider.com/the-pfg-cash-shortfall-crisis-heres-what-we-know-so-far-2012-7

http://www.cbsnews.com/8301-500395_162-57469161/peregrine-financial-group-brokerage-said-to-be-$220-million-short-in-customer-funds/

Roubini Says 2013 `Storm' May Surpass 2008 Crisis

JPMorgan, Goldman Shut Europe Money Funds After ECB Cut

JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. and BlackRock Inc. (BLK) closed European money market fundsto new investments after the European Central Bank lowered deposit rates to zero.
JPMorgan, the world’s biggest provider of money-market funds, won’t accept new cash in five euro-denominated money-market and liquidity funds because the rate cut may result in losses for investors, the company said in a notice to shareholders. Goldman Sachs won’t accept new money in its GS Euro Government Liquid Reserves Fund, and BlackRock, the world’s largest asset manager, is restricting deposits in two European funds.

“The European market environment is in unchartered territory with such historically low -- or even negative --yields for high-quality issuance,” Goldman Sachs (GS) said in a memo to fund shareholders, citing the ECB’s rate cut. “It is not currently feasible for our portfolio managers to deploy capital without substantially diluting the yield for the existing base of shareholders.”

The ECB yesterday reduced its benchmark rate to a record low of 0.75 percent and took its deposit rate to zero. Money funds have been struggling to invest client assets at a profit as interest rates globally are near record lows and Europe’s sovereign debt crisis has reduced the supply of available debt. Managers have been forced to cut fees to keep customer returns above zero, and some have abandoned the business.
All three firms said the restrictions are temporary and they will monitor market conditions. Investor redemptions from the funds are not being limited.

http://www.bloomberg.com/news/print/2012-07-06/jpmorgan-shuts-europe-money-market-funds-on-ecb-rate-cut.html

ECB cuts rates by quarter point, other central banks join in

The European Central Bank cut rates by a quarter point, as expected, and the Bank of England moved forward with more quantitative easing. In a surprise move, the People's Bank of China joined in Thursday, moving forward with surprise rate cuts at about the same time as the Bank of England news.

http://www.cnbc.com/id/48082851


The euro sank to a one-month low as Spanish and Italian bonds plunged, while stocks retreated, after the European Central Bank disappointed investors anticipating a more aggressive effort to fight the debt crisis.


http://www.bloomberg.com/news/2012-07-05/asian-stocks-oil-copper-drop-as-europe-slump-may-worsen.html

http://www.dailymail.co.uk/money/news/article-2169209/Pound-moves-half-year-highs-euro.html

(Reuters) - Stocks fell on Thursday after the biggest three-day rally of the year and the euro and commodities slid too as investors awaited clues on Federal Reserve stimulus and a jobs report likely to show Europe's crisis weighing on the U.S. economy.

A slowdown in the U.S. service sector to a 2-1/2-year low in June was in line with investor fears the euro zone debt crisis was sapping global growth. The data encouraged traders to take profits from a strong equity market rally that began last Friday and extended into the first two sessions of this week.

http://www.reuters.com/article/2012/07/05/us-markets-global-idUSBRE8520GN20120705

What is Libor and why should we care?

The LIBOR manipulation story has exploded into a major scandal overseas. The CEO of Barclays, Bob Diamond, has resigned in disgrace; his was the first of what will undoubtedly be many major banks to walk the regulatory plank for fixing the interbank exchange rate. The Labor party is demanding a sweeping criminal investigation. Mervyn King, Governor of the Bank of England, responded the way a real public official should (i.e. not like Ben Bernanke), blasting the banks:

It is time to do something about the banking system…Many people in the banking industry are hardworking and feel badly let down by some of their colleagues and leaders. It goes to the culture and the structure of banks: the excessive compensation, the shoddy treatment of customers, the deceitful manipulation of a key interest rate, and today, news of yet another mis-selling scandal.

Read more: http://www.rollingstone.com/politics/blogs/taibblog/why-is-nobody-freaking-out-about-the-libor-banking-scandal-20120703#ixzz1zlE8PbwZ

EES: Put on the Euro

In a recent article on Seeking Alpha, we outlined a strategy to strangle the euro which is a bet on volatility, not direction. However, a growing number of analysts are becoming more bearish on the euro and overall European situation. With any meltdown in the eurozone, the best way to profit from a collapse of the euro is by buying a euro Put option (ideally spot EUR/USD (FXE)).

http://seekingalpha.com/article/702181-a-put-on-the-euro-to-parity

EES: Modern Institutional Decay

What has happened to our institutions?

The trend of the modern institutionalization of our system began in the late 19th century, but didn't gain worldwide support until the early 20th century. It reached its peak after World War 2, when the feeling was that global institutions could stave off further bloody conflicts. Without WW2, establishing institutions such as the United Nations, the International Monetary Fund, and eventually the European Union, would not have been possible.

http://seekingalpha.com/article/695701-modern-institutional-decay