Fed Pushes Into ‘Uncharted Territory’ With Record Assets

Federal Reserve Chairman Ben S. Bernanke’s unprecedented bond buying pushed the Fed’s balance sheet to a record $3 trillion as he shows no sign of softening his effort to bring down 7.8 percent unemployment.

The Fed is purchasing $85 billion of securities every month, using the full force of its balance sheet to stoke the economic recovery. The central bank began $40 billion in monthly purchases of mortgage-backed securities in September and added $45 billion in Treasury securities to that pace this month.

Fed Pushes Into ‘Uncharted Territory’ With Record Assets - Bloomberg

Forex volume slows even more based on FXCM, IG data

From the table, we can clearly see that forex trading volume for both retail and institutional clients slipped in December. Compared to the November, retail trading volume declined by around 16% while institutional trading volume fell 11%. Year-on-year, retail and institutional trading volume dropped 11% and 23%, respectively.

Data on retail and institutional average trading volume per day were mixed. For retail, it decreased month-on-month but increased year-on-year. For institutional accounts, average trading volume fell both month-on-month and year-on-year.

IG Group, another major online broker, also reported a drop in trading revenue across all regions. Take a look at the table below:

Woah, that's a lot of red marks! Not a single region reported an increase in first-half revenue as global forex trading revenue slipped by 14% compared to the same period the previous year. The number of active clients also dropped, with a 29% decrease in Japan and a 14% decline in the U.K.

Read more: http://www.babypips.com/blogs/espipionage/trading-activity-in-fxcm-and-ig-group-continue-to-fall.html?utm_medium=email&utm_campaign=Daily+Newsletter+-+January+24+2013&utm_content=Daily+Newsletter+-+January+24+2013+CID_e1b84e02bee6cb23c16e017340245fbb&utm_source=Campaign%20Monitor&utm_term=trading%20metrics#ixzz2Iu5yZQs9

U.S. Bank Deposits Drop Most Since 9/11 Terror Attacks

Clients of the largest U.S. banks withdrew funds this month at the fastest weekly pace since the Sept. 11 attacks as a deposit-insurance program ended and customers tapped into their year-end cash hoards.

Net withdrawals at the 25 largest U.S. lenders totaled $114.1 billion in the week ended Jan. 9, pushing deposits down to $5.37 trillion, according to Federal Reserve data released last week. The magnitude of the drop was second only to the decline after the Sept. 11, 2001 terrorist attacks, according to Jason Goldberg, a New York-based analyst at Barclays Plc.

U.S. Bank Deposits Drop Most Since 9/11 Terror Attacks - Bloomberg

EES: Pot Stocks Higher, But Is There Room To Grow?

Since the legalization of Marijuana for recreational and medicinal purposes in several states, the jury has been out if this is really a viable industry. In several articles we've posed that the possibility exists thatMarijuana may be the next big growth sector. We built a pot portfolio and narrowed it down to 2 issues, Medical Marijuana (MJNA.PK) and Medbox (MDBX.PK), the latter being the larger in terms of market cap.

Pot Stocks Higher, But Is There Room To Grow? - Seeking Alpha

Financial transactions tax in Europe given go-ahead

EU ministers have given the go ahead for 11 eurozone members, including France and Germany, to prepare a new financial transactions tax.

The approval under "enhanced co-operation" rules allows the smaller group to pioneer the tax.

Governments previously failed to agree to impose the tax across the entire 27-member EU or 17-member eurozone.

The UK and 15 other EU members will not introduce the tax, which is intended to discourage speculative trading.

Some European governments have blamed speculators and excessive trading for exaggerating the swings in financial markets during the 2008 crash and the recent eurozone crisis.

"It is a milestone for EU tax policy, as it paves the way for more ambitious member states to progress on a tax file, even when unanimity could not be achieved," said Algirdas Semeta, the European Commissioner for tax.

"Those who want to move ahead, and who appreciate the merits of working more closely on taxation at EU level, can do so."

BBC News - Financial transactions tax in Europe given go-ahead

EES: Currency Markets Continue To Baffle Traders, Except The Yen

Keynes said markets can remain irrational longer than you can remain solvent. This is especially true for currency traders. For the last 3 months, data indicates the majority of traders have been on the wrong side of the market.

http://seekingalpha.com/article/1123431-currency-markets-continue-to-baffle-traders-except-the-yen

Yen Gains as BOJ Meets; Most Europe Stock Rise, Oil Falls

The yen rebounded from its lowest level since June 2010 against the dollar as the Bank of Japan (8301) began a two-day policy meeting. Most European stocks rose as finance chiefs gathered for the first time this year.

Japan’s currency strengthened 0.5 percent to 89.65 per dollar at 9:45 a.m. in New York. The Stoxx Europe 600 Index added 0.2 percent, with the volume of shares changing hands 31 percent less than the 30-day average. Standard & Poor’s 500 Index futures gained 0.1 percent. In Canada, the S&P/TSX increased 0.1 percent. Oil dropped from a four-month high. U.S. natural gas climbed to its highest level since Dec. 7.

Yen Gains as BOJ Meets; Most Europe Stock Rise, Oil Falls - Bloomberg

EES: Boeing Reaches Endgame, Culmination Of Decade Of Problems With 'Nightmareliner'

The Dreamliner has become the Nightmareliner for Boeing (BA), a company struggling to regain its top place as the world's leading airplane manufacturer since the days of the 747.

http://seekingalpha.com/article/1120681-boeing-reaches-endgame-culmination-of-decade-of-problems-with-nightmareliner 

Europe fires shot in new currency war

The alert from the country that chairs the Group of 20 came as Luxembourg Prime Minister Jean-Claude Juncker complained of a “dangerously high” euro and officials in Norway and Sweden expressed exchange-rate concern.

The push for weaker currencies is being driven by a need to find new sources of economic growth as monetary and fiscal policies run out of room. The risk is as each country tries to boost exports, it hurts the competitiveness of other economies and provokes retaliation.

Yesterday “will go down as the first day European policy makers fired a shot in the 2013 currency war,” said Chris Turner, head of foreign-exchange strategy at ING Groep NV in London.

Ben Bernanke: Get rid of the debt ceiling, it has no practical value

Federal Reserve Chairman Ben Bernanke criticized the debt ceiling as an unusual device that can be used to prevent the United States from paying it’s bills, as he suggested that the country would be better off if the debt limit did not exist.

“I think it would be a good thing if we didn’t have [the debt ceiling],” Bernanke told students at the University of Michigan today. “I don’t think that’s going to happen. I think it’s going to be around.” Those remarks put Bernanke in agreement with Treasury Secretary Tim Geithner, who has said that Congress should eliminate the debt ceiling.

The conversation began when Bernanke was asked if the debt ceiling had any “practical value” as a matter of fiscal policy. “No, it doesn’t really have — it’s got symbolic value,  I guess, but . . . no other countries in the world have this particular institution,” he said.

“If the Congress is approving spending and it’s approving taxing, and those two things are not equal,” Bernanke continued, “the way to addres it is by having a sensible plan for spending and a sensible plan for revenue and make decisions about how big the government should be or how small it should be.”

Ben Bernanke: Get rid of the debt ceiling, it has no practical value | WashingtonExaminer.com

Hitting the debt limit: What bills would be paid?

WASHINGTON (AP) -- In the summer of 2011, when a debt crisis like the current one loomed, President Barack Obama warned Republicans that older Americans might not get their Social Security checks unless there was a deal to raise the nation's borrowing limit.

After weeks of brinkmanship, Republicans consented and Obama agreed to a deficit-reduction plan the GOP wanted. Crisis averted, for a time.

Now that there's a fresh showdown, the possibility of Social Security cuts -and more - is back on the table.

The government could run out of cash to pay all its bills in full as early as Feb. 15, according to one authoritative estimate, and congressional Republicans want significant spending cuts in exchange for raising the borrowing limit. Obama, forced to negotiate an increase in 2011, has pledged not to negotiate again. Inside Bay Area - Associated Press content

UBS Retreat Plotted at Castle as Credit Suisse Cuts Costs

In September, UBS AG Chief Executive Officer Sergio Ermotti gathered the bank’s top executives at Switzerland's Wolfsberg castle.

Switzerland’s 437-year-old Wolfsberg castle has welcomed the likes of Alexandre Dumas and Franz Liszt. In September, UBS AG (UBSN) Chief Executive Officer Sergio Ermotti gathered the bank’s top executives there for dinner.

UBS had been under pressure since losing more than $57 billion during the financial crisis. So had its main competitor, Credit Suisse Group AG. In 2011, Swiss lawmakers approved some of the strictest capital and liquidity rules in the world, forcing the banks to cut risk taking and boost equity at the expense of profit in their securities units.

The end of banking secrecy, which had helped the firms attract funds from rich clients around the world, was challenging a century-old wealth-management model. A 32-year-old former UBS employee, Kweku Adoboli, would go on trial in London the next week in connection with a $2.3 billion loss, the largest from unauthorized trading in British history.

“For banks domiciled in Switzerland, doing business and making money has become more difficult,” central bank President Thomas Jordan told financiers at a conference in Zurich two days before UBS’s Wolfsberg meeting. “Pressure on the Swiss financial center has been intensifying.”

http://www.bloomberg.com/news/2013-01-09/ubs-retreat-plotted-at-castle-as-credit-suisse-cuts-costs.html

EES: Windows 8 and Microsoft

Microsoft (MSFT) has not changed much since 2000, since Steve Ballmer replaced Bill Gates. But the same could be said for a lot of stocks during the 2000 - 2010 era. The Dow is only slightly higher during the same time, peaking near 12,000 in 2000 and now being at 13,350.

Operating Systems ((OS)) are the core business of Microsoft, although they have now expanded into hundreds of niche industries from making keyboards, video games and business applications.

http://seekingalpha.com/article/1100991-windows-8-not-good-for-microsoft 

Banks Win 4-Year Delay as Basel Liquidity Rule Loosened

Global central bank chiefs gave lenders four more years to meet international liquidity requirements and watered down the measures in a bid to stave off another credit crunch.

Banks won the delay to fully meet the so-called liquidity coverage ratio, or LCR, following a deal struck by regulatory chiefs meeting yesterday in Basel, Switzerland. They’ll be able to pick from a longer list of approved assets including equities and securitized mortgage debt as they seek to build up buffers of liquidity for use in a financial crisis.

Banks Win 4-Year Delay as Basel Liquidity Rule Loosened - Bloomberg

10 Banks Agree to Pay $8.5B for Foreclosure Abuse

(WASHINGTON) — Ten major banks and mortgage companies agreed Monday to pay $8.5 billion to settle federal complaints that they wrongfully foreclosed on homeowners who should have been allowed to stay in their homes.

The banks, which include JPMorgan Chase, Bank of America and Wells Fargo, will pay billions to homeowners to end a review process of foreclosure files that was required under a 2011 enforcement action. The review was ordered because banks mishandled people’s paperwork and skipped required steps in the foreclosure process.

10 Banks Agree to Pay $8.5B for Foreclosure Abuse | TIME.com