WASHINGTON (MarketWatch) — Europe is a tinderbox waiting for a spark.
The financial volatility in Europe may have created a situation that is now beyond the capacity of policy makers to control or curb.
When an accomplished fixer like Pascal Lamy, the head of the World Trade Organization and the longtime chief of staff for former European Commission President Jacques Delors, describes the situation in Europe as “difficult, very difficult, very difficult, very difficult,” you know it is time to run for cover.
Moody's Investors Service has today revised to negative from stable the outlooks on the Aaa sovereign ratings of Germany, the Netherlands and Luxembourg. In addition, Moody's has also affirmed Finland's Aaa rating and stable outlook.
Bid-rigging was the subject of U.S. v. Carollo, Goldberg and Grimm, a ten-year suit in which the U.S. Department of Justice obtained a judgment on May 11 against three GE Capital employees. Billions of dollars were skimmed from cities all across America by colluding to rig the public bids on municipal bonds, a business worth $3.7 trillion. Other banks involved in the bidding scheme included Bank of America, JPMorgan Chase, Wells Fargo and UBS. These banks have already paid a total of $673 million in restitution after agreeing to cooperate in the government’s case.
"And remember, where you have a concentration of power in a few hands, all too frequently men with the mentality of gangsters get control. History has proven that." John Dalberg Lord Acton
This HSBC scandal is being overshadowed by LIBOR a bit in the States at least, and the usual diversions of the day to day, but it seems about to explode into the headlines of the insular major media.
Europe was plunged into fresh market turmoil as this week’s visit by Greece’s creditors rekindled concern the currency union will splinter and the first call for bailout aid by a Spanish region caused borrowing costs to surge.
Stocks and the euro fell before the arrival in Athens tomorrow of Greece’s troika of international creditors -- the European Commission, the European Central Bank and the International Monetary Fund. In Spain, Catalonia joined a list of the country’s regions that may tap aid from the central government in Madrid, spurring Spanish 10-year yields to surge above 7.5 percent for the first time.
As you aware, PFG filed for liquidation in a U.S. bankruptcy court in Chicago and the U.S. Trustee appointed Ira Bodenstein to act as trustee for PFG and its assets, including customer property. On July 13, the bankruptcy court authorized the trustee to continue to operate PFG's business for a limited time in order to (among other things) prepare and distribute final customer statements, and record transactions related to customer accounts. It likely will take several days for the trustee, working with the remaining PFG employees that he has been authorized by the bankruptcy court to employ, to complete that process. At this time, it is not clear when the trustee will be authorized to release any funds to customers.
In addition, the trustee has established a website www.PFGChapter7.com that contains information about the PFG case. The website was created to assist the trustee in providing information to customers and to receive comments or questions from customers.
Editor's note: Every Sunday, Fortune publishes a story from our magazine archives. With the annual Fortune 500 list ready to be revealed tomorrow, turn this week to our inaugural Fortune 500 list, in July, 1955. General Motors topped the list that year, and writer Duncan Norton-Taylor took an inside look into the lives of America's top executives. What does the boss do with his spare hours--if any? How do vice presidents spend their money, and their time away from the office? Here, some glimpses into the private lives of executives in 1955 who earned more than $50,000.
A global super-rich elite had at least $21 trillion (£13tn) hidden in secret tax havens by the end of 2010, according to a major study.
The figure is equivalent to the size of the US and Japanese economies combined.
The Price of Offshore Revisited was written by James Henry, a former chief economist at the consultancy McKinsey, for by the Tax Justice Network.
Tax expert and UK government adviser John Whiting said he was sceptical that the amount hidden was so large.
Mr Whiting, director of the Office of Tax Simplification, said: "There clearly are some significant amounts hidden away, but if it really is that size what is being done with it all?"
Mr Henry said his $21tn is actually a conservative figure and the true scale could be $32tn. A trillion is 1,000 billion.
(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.
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.
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.
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.
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.”
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