Friday, September 27, 2013

Why are Americans giving up their citizenship?

The number of Americans giving up their citizenship has rocketed this year - partly, it's thought, because of a new tax law that is frustrating many expats.
Goodbye, US passport.
That's not a concept that Americans contemplate lightly. But it's one that many of them seem to be considering - and acting on.
The number of expatriates renouncing their US citizenship surged in the second quarter of 2013, compared with the same period the year before - 1,131 cases to 189 in 2012. It's still a small proportion of the estimated six million Americans abroad, but it's a significant rise.
The list is compiled by the Federal Register and while no reasons are given, the big looming factor seems to be tax.
A new law called the Foreign Accounts Tax Compliance Act (Fatca) will, from 1 July next year, require all financial institutions around the world to report directly to the US Internal Revenue Service (IRS) all the assets and incomes of any US citizens with $50,000 (£31,000) on their books. The US could withhold 30% of dividends and interest payments due to the banks that don't comply.

Are you an ex?

  • Have you given up the citizenship of any country?
  • Tell us why, using the form at the bottom of the story
  • We will publish a selection
It's an attempt by the US authorities to recover an estimated $100bn a year in unpaid taxes on US citizens' assets overseas. Unlike other countries, Americans are taxed not only as residents of the US but also as citizens, wherever they live.
Suddenly, some expats are waking up in a cold sweat. They have always had to file tax returns and disclose foreign accounts on a form called the FBAR, although in practice many didn't. But now Fatca means they have to be more rigorous or face huge fines, in the knowledge that the US authorities could know a lot more than they have in the past.
Many would say the IRS is only trying to get what it is owed, but critics say that in trying to track down the wealthy tax-dodgers, ordinary people are being dragged into an expensive and time-consuming form-filling nightmare. And for some, it's become too much.

Bridget, who asked the BBC not to use her real name, gave up her US citizenship in 2011, 32 years after leaving for a new life in Scandinavia.
"This has nothing to do with avoiding taxes. I was never in danger of having to pay taxes in the US since I pay more here. The issue for me was that it was becoming harder and harder to follow the tax code and comply. It was difficult already but when I knew Fatca was coming, I thought, 'Do I want to go through with it anymore?'"
She felt threatened even if she did everything to fulfil her responsibilities, she says. A simple loyalty card at the local grocery store caused her anxiety when she realised it was linked to a bank account she never knew she had.
It became so complicated to do her tax return that she turned to professionals, at an annual cost of nearly $2,000 (£1,250), with the prospect of Fatca raising the price to $5,000. Also, fewer tax lawyers were taking on American clients, she says, and some banks were even turning away American money.
"In the end, I sleep better now knowing that I no longer have to worry about the US requirements. I will never be able to live or own property in the US but I can visit and that's enough for me."

Notable ex-Americans

  • Novelist Henry James
  • Director Terry Gilliam
  • Violinist Yehudi Menuhin
  • Facebook co-founder Eduardo Saverin
  • Socialite Denise Rich
Bridget, who runs an editing and translation company, says her strong emotional bond with the US has been frayed.
"I've enjoyed being an American even though I haven't lived there since I was young. I identified with America so I felt angry that I had to get to this point where it wasn't viable to keep my citizenship anymore.
"When you're an American living in America, it's one thing but when you live abroad in another country, in certain ways that feeling becomes even stronger because you realise that things that you think are individual characteristics are actually national ones so you identify even more strongly with your nationality.
"I used to always introduce myself as American but not now, although I will always be American in my heart even though I won't carry the passport. I will still celebrate Thanksgiving and 4 July."
She says the tax issue is the biggest topic of conversation among the expat Americans she knows. And tax lawyers in the US who deal with people living abroad say it has become a huge issue.

http://www.bbc.co.uk/news/magazine-24135021

The Smell of Financial and Economic Collapse is in the Air

Stock-Markets / Financial Crash Sep 25, 2013 - 12:38 PM GMT

This is a continuation from part 1 - read it here.
CAUTION! Before you continue...
  • If you believe that total government debt can grow FOREVER and more rapidly than the underlying economy, this article is NOT for you.
  • If you believe that governmental deficit spending, QE, and bond monetization can continue FOREVER without major consequences, this article is NOT for you.
  • But if you are sane enough to know that our current economic policies will produce a "train wreck," read on...
  • The U.S. economy is being overwhelmed by a loss of faith and trust in politicians, government, and bankers, excessive debts, artificially low interest rates, unsustainable deficit spending, expensive wars, QE (money printing) to infinity, "Inflate or Die" monetary policy, potential derivatives implosion, Obamacare and so much more. A slow-motion collapse is occurring and most of us do not see it. Consider these thoughts from insightful writers:

    Collapse Indicated by Stalling Growth in Global Financial Reserves:

    Hugo Salinas Price: (link)
    "As it is, the US can only continue to monetize government debt. Higher dollar interest rates are inevitable and will cause further government deficits; the debt overhang in both the US and Euro Zone is so great that a rise of a few points in interest rates will explode the deficits, and so on and so forth.
    Bottom line: Stalling growth in International Reserves tells me that a world financial collapse is in the offing."

    Collapse Indicated by Loss of Trust in Western Economic Systems:

    David Stockman: (link)
    "There is no honest pricing left at all anywhere in the world because central banks everywhere manipulate and rig the price of all financial assets. We can't even analyze the economy in the traditional sense anymore because so much of it depends not on market forces, but on the whims of people at the Fed."
    "The Blackberry Panic of September 2008, in which Washington policy makers led by former Goldman Sachs CEO Hank Paulson, panicked as they saw Wall Street stock prices plummet on their mobile devices, had very little to do with the Main Street economy in the United States. The panic and bailouts that followed were really about protecting the bonuses and incomes of very wealthy and politically well-connected managers at banks and other heavily leveraged businesses that were eventually deemed too big to fail. What followed was a massive transfer of wealth from the taxpayers and middle-class savers, in the form of bailouts and zero interest rates on bank deposits imposed by the Fed, to the so-called One Percent."
    "I think the political realities of the situation make the most likely scenario one in which there will be some kind of real financial collapse and disorder that will require a total reconstruction of the system."
    The Burning Platform: (link)
    "Despite the frantic efforts of the financial elite, their politician puppets, and their media propaganda outlets, collapse of this aristocracy of the moneyed is a mathematical certainty. Faith in the system is rapidly diminishing, as the issuance of debt to create the appearance of growth has reached the point of diminishing returns."
    "We are witnessing the beginning stages of political collapse. The government and its leaders are being discredited on a daily basis. The mismanagement of fiscal policy, foreign policy and domestic policy, along with the revelations of the NSA conducting mass surveillance against all Americans has led critical thinking Americans to question the legitimacy of the politicians running the show on behalf of the bankers, corporations and arms dealers."
    "We are supposedly five years past the great crisis. Magazine covers proclaimed Bernanke a hero. If we are well past the crisis, why are the extreme emergency measures still in effect? If the economy is growing and jobs are being created, why do we need $85 Billion of government debt to be monetized each and every month?"
    "Just the slowing of debt creation will lead to collapse. Bernanke needs a Syrian crisis to postpone the taper talk. Those in control need an endless number of real or false flag crises to provide cover for their printing presses to keep rolling."
    Bill Fleckenstein: link
    "Since April, the 10-Year has gone from about 1.6% to as high as 3% recently. Now we have to see when this rally in bonds stops. The bond market will then roll over and then the Fed won't have the tapering as an excuse. It means the bond market has ceased to price in the scenario that the Fed wants, and the bond market is not responding to the Fed's moves in the short-run. In the old days we would call that 'losing control of the bond market.' And if that starts to happen, all hell is going to break loose."
    Michael Pento: link
    "The 10-Year went from 1.4% to 3%, and that made Mr. Bernanke panic. The average on that (10-Year) yield is 7% in the modern era since 1971 when we closed the 'gold window.' So, if the average is 7%, and the United States of America, this once great land, can't (even) tolerate a 3% yield on the 10-Year Note, that means the Fed can never unwind QE.
    That's enough to cuff Mr. Bernanke's hands. So the Fed is indeed trapped as you indicated. They cannot significantly bring down QE. That means a perpetual increase in the Fed's balance sheet. That (also) means an inexorable rise in asset bubbles like stocks, bonds, and real estate, and it's going to end (very) badly."
    Hank Paulson Interview: link
    "Paulson believes there will be another financial crisis."
    "It's a certainty. As long as we have markets, as long as we have banks, no matter what the regulatory system is, there will be flawed government policies. Those policies will create bubbles."
    Alternate Interpretation: As long as we have Treasury Secretaries who represent the interests of Goldman Sachs and Wall Street bankers instead of the US economy, then we can be certain of another financial crisis.

    Collapse in Retirement Income:

    Dennis Miller: link
    "While the Federal Reserve holds down interest rates and floods the banking system with money, it's destroying the retirement dreams of several generations. The Employee Benefit Research Organization reports that 25 - 27% of baby boomers and Generation Xers who would have had adequate retirement income - under return assumptions based on historical averages - will run out of money if today's low interest rates are permanent."
    In addition to the problem of low yielding investments caused by the historically low interest rates created by the Fed, even more retirees will run out of money, much sooner, when the inevitable inflation in food and energy prices smacks the U.S. economy, and especially retirees.

    Discussion:

    • It seems clear that we are losing faith in our politicians, our leaders, and our financial systems. Approval levels for congress and the President of the United States are low. Too-Big-To-Fail banks and "banksters" are despised and openly criticized.
    • The Federal Reserve is losing credibility; more and more people are realizing that QE is good for the bankers and the wealthy, but that it does little for "Main Street" people except drive up the prices they pay for food and energy.
    • The American public is generally opposed to war in the Middle East but that seems to matter little to the political and financial elite who will profit from the war.
    • Most people, so it appears, know that inflation is much higher than officially stated, and that inflation will become far worse than it is today. (When was the last time you saw a cup of premium coffee or a gallon of gasoline for less than $1.00?)
    Consider this verse from "Desolation Row" - by Bob Dylan (in the 1960s). Does it describe our currently collapsing financial and political systems?
    "They're selling postcards of the hanging They're painting the passports brown The beauty parlor is filled with sailors The circus is in town Here comes the blind commissioner They've got him in a trance One hand is tied to the tight-rope walker The other is in his pants And the riot squad they're restless They need somewhere to go As Lady and I look out tonight From Desolation Row"

    http://www.marketoracle.co.uk/Article42430.html 

    Thursday, September 26, 2013

    The Stunning Truth About Inequality In America

    Talk about inequality has been in the news recently, but you won’t believe what’s really happening in America today:
    • Staggering inequality in America has become permanent [11]
    • The super-rich [15] are raking in more than ever
    • The middle class has more or less been destroyed [18]

    Wal-Mart Nails The "Consumer Recovery" Coffin Shut

    UPDATE: CNBC Damage Control - Story was "misunderstood" and "misleading"...but not denied... CNBC is to Wal-mart as Hilsenrath to the Fed

    [4]

    Bloomberg's Joe Brusuelas has some thoughts...



    and... more generally...



    Welcome to the new normal recovery... if ever there was a headline that summed up the idiocy of the mal-invested distorted new normal, Wal-Mart just managed it:
    • *WAL-MART CUTTING ORDERS (In Q3 & Q4) AS UNSOLD MERCHANDISE PILES UP IN U.S.
    So, it seems the "if we build it (or stock it), they will come (and buy)" mentaility has failed yet again... As we noted before, as goes Wal-Mart, so goes America... [9]


    [10]
    Via Bloomberg,
    Wal-Mart Stores Inc. is cutting orders it places with suppliers this quarter and next to address rising inventories the company flagged in last month’s earnings report.

    ...

    U.S. inventory growth at Wal-Mart outstripped sales gains in the second quarter at a faster rate than at the retailer’s biggest rivals. Merchandise has been piling up because consumers have been spending less freely than Wal-Mart projected...

    Wednesday, September 25, 2013

    The Fed's 'hidden agenda' behind money-printing

    The markets were surprised when the Federal Reserve did not announce a tapering of the quantitative easing bond buying program at its September meeting. Indeed, its signal to the market that it was keeping interest rates low was welcome, but there may be a hidden agenda.
    Since it began in late 2008, QE has spurred a vigorous debate about its merits, both positive and negative.
    On the positive side, the easy money and low interest rates resulting from quantitative easing have been a shot in the arm to the economy, fueling the stock market and helping the housing recovery. On the negative side, The Fed accomplished QE by "printing money" to buy Treasurys, and through the massive power of its purchases drove interest rates to record lows.
    But in the process, the Fed accumulated an unprecedented balance sheet of more than $3.6 trillion which needs to go somewhere, someday.
    But we know all this.
    I believe that one of the most important reasons the Fed is determined to keep interest rates low is one that is rarely talked about, and which comprises a dark economic foreboding that should frighten us all.
    Gartman: Leave tapering to next Fed group
    The economy is stronger than it looks, said Dennis Gartman, The Gartman Letter, sharing his outlook on gold, the next Fed chairman and the fate of Treasury rates.
    (Read more: Fed assertion of 'tight' conditions looks shaky)
    Let me start with a question: How would you feel if you knew that almost all of the money you pay in personal income tax went to pay just one bill, the interest on the debt? Chances are, you and millions of Americans would find that completely unacceptable and indeed they should.
    But that is where we may be heading.

    Thanks to the Fed, the interest rate paid on our national debt is at an historic low of 2.4 percent, according to the Congressional Budget Office.
    Given the U.S.'s huge accumulated deficit, this low interest rate is important to keep debt servicing costs down.
    But isn't it fair to ask what the interest cost of our debt would be if interest rates returned to a more normal level? What's a normal level? How about the average interest rate the Treasury paid on U.S. debt over the last 20 years?
    (Read more: Fed in 'monetary roach motel,' won't taper: Schiff)
    That rate is 5.7percent, not extravagantly high at all by historic standards.
    So here's where it gets scary: U.S. debt held by the public today is about $12 trillion. The budget deficit projections are going down, true, but the United States is still incurring an annual budget deficit by spending more than we take in in taxes and revenue.
    The CBO estimates that by 2020 total debt held by the public will be $16.6 trillion as a result of the rising accumulated debt.
    Do the math: If we were to pay an average interest rate on our debt of 5.7 percent, rather than the 2.4 percent we pay today, in 2020 our debt service cost will be about $930 billion.
    Now compare that to the amount the Internal Revenue Service collects from us in personal income taxes.
    In 2012, that amount was $1.1 trillion, meaning that if interest rates went back to a more normal level of, say, 5.7 percent, 85 percent of all personal income taxes collected would go to servicing the debt. No wonder the Fed is worried.
    Some economists will also suggest that interest rates may go much higher than 5.7 percent largely as a result of the massive QE exercise of printing money at an unprecedented rate. We just don't know what the effect of all this will be but many economists warn that it can only result in inflation down the road.

    (Read more: Did the Fed just pop the stock market bubble?)
    As of today, interest rates are rising, and if this is a turning point, it is a major one.
    Rates in the U.S. peaked in 1980 (remember the 14 percent Treasury bonds?) so if we are at the point of reversing a 33-year downward trend, who wants to predict how this will affect the economy?
    One thing is clear: Based on CBO projections, if interest rates just rise to their 20-year average, we will have an untenable, unacceptable interest rate bill whose beneficiaries are China, Japan, and others who own our bonds.
    And if Americans find out that the lion's share of their income tax payments are going to service the debt, prepare for a new American revolution.

    Peter J. Tanous is president of Lepercq Lynx Investment Advisory in Washington D.C. He is the co-author (with Arthur Laffer and Stephen Moore) of The End of Prosperity (2008), and co-author (with CNBC.com's Jeff Cox) of Debt, Deficits, and the Demise of the American Economy (2011).

    http://www.cnbc.com/id/101062461 

    Edward Snowden NSA Scandal: EU to Suspend US Data Sharing After Swift's Interbank Messaging System Breach

    The European Union has threatened to suspend or even terminate the crucial EU-US Terrorist Finance Tracking Programme, after allegations that the US National Security Agency (NSA) spied on bank-to-bank messaging via the Society for Worldwide Interbank Financial Telecommunication (Swift) network.
    More than 10,000 banking organisations, securities institutions, and corporate customers in 212 countries use Swift every day to exchange millions of standardised financial messages.
    The NSA has been widely criticised over its surveillance programme that spied on politicians, bureaucrats, and businesses across the world via phone calls and internet activity.
    The revelations about the NSA surveillance came from top-secret documents leaked by Edward Snowden, a former contractor at the agency, who is currently in exile in Russia.

    http://m.ibtimes.co.uk/edward-snowden-nsa-scandal-swift-tftp-eu-508882.html

    Tuesday, September 24, 2013

    Open a Forex Account

    Open a Forex Trading Account

    The foreign exchange market (forex, FX, or currency market) is a form of exchange for the global decentralized trading of international currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies. Non-US Citizens have the ability to use non-US brokers. Click here to open a Forex account - Non-US Citizens only.

    Credit Suisse Closing "Non-Super Rich", "Risky" Client Accounts

    In a move that clearly seeks to distance the second largest Swiss bank from potentially "risky" or just not that profitable (read "rich or super rich") accounts, Credit Suisse announced today that it plans to close some clients' accounts as it focuses on high-value customers in some countries and pulls out of others altogether. The development is somewhat ironic: while banks around the world scramble to obtain ultra cheap funding, of which deposits are currently the cheapest alternative, Credit Suisse is saying to people, thanks but no thanks, we don't want your money. Then again, perhaps this is an admirable stance by the bank. It certainly is preferable to CS eagerly accepting every last Swiss Franc only to pull a Cyprus in a few months (indicatively speaking) and "bailing in" said money. It does however pose the question: has CS found an alternative method of funding its assets now that it is actively deleveraging, and if so what, and who is the source?
    More from AFP:
    "We've decided to focus on certain segments and markets and exit some countries that are too small," said a spokeswoman for the Swiss banking giant.

    Switzerland's Tages-Anzeiger newspaper reported that the accounts involved would be closed by the end of the year, affecting clients in nearly 50 countries.

    The Credit Suisse spokeswoman said the bank would exit some countries entirely, including Congo, Angola and Turkmenistan. In others, such as Denmark and Israel, it will close small accounts to focus on the top segment of the market, she said.

    Tages-Anzeiger said the bank considered the risk to its reputation in countries such as Turkmenistan, Uzbekistan and Belarus to be too high, and elsewhere wanted to focus on "rich and super-rich clients" with balances of at least one million Swiss francs (800,000 euros, $1.1 million).

    In Israel, where many clients have dual US citizenship, the bank also wanted to reduce the regulatory burden of complying with American tax law, the report said.

    The bank had said in July it planned to exit smaller markets, as it announced second-quarter profits of 1.04 billion francs, a 32-percent increase from the year before.

    ...

    Pressure has increased on banks in recent years to help identify accounts linked to organised crime, high-level corruption or other wrongdoing, causing the cost of complying with regulatory procedures to rise sharply.
    Taking this to its next logical step, assuming the disposed capital is indeed illegally acquired, it would be unable to bypass US, and western, Anti-Money Laundering checks for securities accounts, which would leave it only one option: US real estate, where as we have been reporting over the past 18 months, the NAR is explicitly exempt from AML provisions. In fact, the NAR would welcome all illegally procured foreign capital, especially if in a few months the US District Attorney earns some cheap brownie points announcing said real estate has been confiscated (as we saw recently in New York not once but twice).

    http://www.zerohedge.com/news/2013-09-24/credit-suisse-closing-non-super-rich-risky-client-accounts

    Bakken - Hype Versus Reality

    As Wall Street, CNBC, and feckless politicians tout American energy independence from the miracle of shale oil, reality is already rearing its ugly head. Production grew by 24% over the first six months of 2012. Production has grown by only 7% over the first six months of 2013. That is a dramatic slowdown. The fact is that these wells deplete at an extremely rapid rate. Oil companies will always seek out the easiest to access oil first. They have already accessed the easy stuff. This explains the dramatic slowdown. Peak Bakken oil production will be below 1 million barrels per day. The last time I checked, we consumed 18 million barrels per day. I wonder when that energy independence will be achieved? Reality is a bitch.
    Bakken Oil Production Growth Has Slowed Significantly In 2013

    By: Devon Shire

    http://seekingalpha.com/author/devon-shire [9]

    The headlines ring of “booming” American oil production and “gluts” of oil (USO [10]). I’m here to tell you that while the boom is real, there is no glut of oil and we need to be aware that the huge production growth of the past eighteen months is going to slow.

    It already is slowing.

    I’ve been watching what is going on in the Bakken pretty closely because I think it is going to be an excellent proxy for what will happen across the country.

    Let’s take a look at what happened to production in North Dakota during the first six months of last year (2012). Here is the raw data [11] detailing barrels of oil production per day:

    December 2011 – 535,000 boe/day

    January 2012 – 547,000 boe/day

    February 2012 – 559,000 boe/day

    March 2012 – 580,000 boe/day

    April 2012 – 611,000 boe/day

    May 2012 – 644,000 boe/day

    June 2012 – 664,000 boe/day

    Daily production in North Dakota increased by 129,000 barrels per day from December 2011 to June 2012.

    Now let’s look at the same period for this year (2013):

    December 2012 – 768,000 boe/day

    January 2013 – 739,000 boe/day

    February 2013 – 780,000 boe/day

    March 2013 – 785,000 boe/day

    April 2013 – 793,000 boe/day

    May 2013 – 811,000 boe/day

    June 2013 – 821,000 boe/day

    Where last year production increased by 129,000 barrels per day in the first six months of the year, this year production is up by only 53,000 barrels per day.

    Yes, the rate of growth in the Bakken has slowed considerably in 2013.

    To understand why, a person needs to look at the production profile for these horizontal oil wells.

    By the end of the first year of production, a new well is producing at a rate that is 30% of where it was the year before. That means a huge amount of drilling each year has to be done just to offset the production lost due to these steep decline rates.
    Without a continuous step change each year in the number of wells being drilled and the capital available to do so, production in the Bakken is going to flatten.
    Good things are still happening, but we can’t repeat every year the hyperbolic growth that we saw in 2012.
    What this means for investors is that we shouldn’t expect oil prices to fall much from where we have seen them over the past three years.

    For the past three years WTI oil prices have ranged from $85 per barrel to $105 per barrel. I think $85 is about as low as we can go for an extended period of time because that is likely just about the marginal cost of production for oil in the world today.
    Production growth in the Bakken is slowing and so too will production growth in the Eagle Ford. That is the nature of these horizontal oil fields. We get an initial surge in production as capital comes into the play. Then that growth rate slows steadily until it flattens and enters a decline.
    http://www.zerohedge.com/print/479286

    Monday, September 23, 2013

    $3.39T Quantitative Explosion: Fed Owns More Treasuries and MBSs Than Publicly Held Debt Amassed From Washington Through Clinton

    The same day that the Federal Reserve's Federal Open Market Committee announced last week that the Fed would continue to buy $40 billion in mortgage-backed securities (MBSs) and $45 billion in U.S. Treasury securities per month, the Fed also released its latest weekly accounting sheet indicating that it had already accumulated more Treasuries and MBSs than the total value of the publicly held U.S. government debt amassed by all U.S. presidents from George Washington though Bill Clinton.

    Since the beginning of September 2008, in fact, the Fed's ownership of Treasury securities and MBSs has increased seven fold.

    As of the close of business Thursday, the Fed said, it owned approximately $2,052,055,000,000 in U.S. Treasury securities and approximately $1,339,771,000,000 in mortgage-backed securities—for a combined total of about $3,391,826,000,000 in Treasury securities and MBSs.

    The U.S. Treasury divides the U.S. government debt into two parts: debt held by the public, which includes publicly traded Treasury securities such as Treasury bills, notes and bonds, and intra-governmental debt, which is money the Treasury has borrowed out of the Social Security trust fund and other government trust funds and then used to pay current expenses.

    As of the opening of business back on Nov. 23, 2001, according to the Daily Treasury Statement, the federal government’s total debt held by the public was $3,383,605,000,000. (By the close of business that day, the total debt held by the public would increase to 3,406,661,000,000.) The $3,383,605,000,000 in U.S. Treasury debt held by the public as the morning of Nov. 23, 2001, represented the total publicly held debt the federal government had accumulated until that date from the moment the Treasury first opened during the presidency of George Washington.

    The $3,383,605,000,000 the Treasury owed to the public as of the morning of Nov. 23, 2001 was less than the $3,391,826,000,000 in Treasury and mortgage-backed securities owned by the Federal Reserve as of the close of business last Thursday.

    Thus the Federal Reserve now owns more debt in the form of U.S. Treasury securities and MBSs than the sum total of the publicly held debt that the U.S. government accumulated from George Washington’s administration into November 2001, during President George W. Bush’s first term.

    The mortgage-backed securities owned by the Fed are those that have been issued and guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. Ginnie Mae is government-owned corporation operated by the U.S. Department of Housing and Urban Development. Fannie Mae and Freddie Mac are congressionally chartered, government-sponsored enterprises, that are now held in conservatorships by the federal government.

    “Fannie Mae and Freddie Mac are chartered by Congress as government-sponsored enterprises (GSEs) to provide liquidity in the mortgage market and to promote homeownership for underserved groups and locations,” the Congressional Research Service explained in a report published this August. “They purchase mortgages, guarantee them, and package them in mortgage-backed securities (MBSs), which they either keep as investments or sell to institutional investors. In addition to the GSEs’ guarantees, investors widely believe that MBSs are implicitly guaranteed by the federal government. In 2008, the GSEs’ financial condition had weakened and there were concerns over their ability to meet their obligations on $1.2 trillion in bonds and $3.7 trillion in MBSs that they had guaranteed. In response to the financial risks, the federal government took control of these GSEs in a process known as conservatorship as a means to stabilize the mortgage credit market.”

    The federal government first took control of Fannie Mae and Freddie Mac on Sunday, Sept. 7, 2008. In its last weekly accounting sheet released before that, on Thursday, Sept. 4, 2008, the Fed said that it owned $479.726 billion in U.S. Treasury securities. That sheet did not even include a line item for mortgage-backed securities.

    The Fed’s combined ownership of  $3,391,826,000,000 in Treasury securities and mortgage-backed securities is now more than 7 times as great as the $479.726 billion in Treasury securities it owned five years ago before the takeover of Fannie and Freddie.

    Of the ten members of the Federal Open Market Committee who voted on whether the Fed should continue purchasing $40 billion in MBS each month and $45 billion in Treasury securities, only one voted no. That was Esther George, who is president of the Federal Reserve Bank of Kansas City.

    The Fed’s  press release announcing the vote said George voted against the continued buying of Treasury securities and MBS because she was “concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.”

    - See more at: http://cnsnews.com/news/article/terence-p-jeffrey/339t-quantitative-explosion-fed-owns-more-treasuries-and-mbss#sthash.lMYAYAJU.toT70JK9.dpuf
    The same day that the Federal Reserve's Federal Open Market Committee announced last week that the Fed would continue to buy $40 billion in mortgage-backed securities (MBSs) and $45 billion in U.S. Treasury securities per month, the Fed also released its latest weekly accounting sheet indicating that it had already accumulated more Treasuries and MBSs than the total value of the publicly held U.S. government debt amassed by all U.S. presidents from George Washington though Bill Clinton.
    Since the beginning of September 2008, in fact, the Fed's ownership of Treasury securities and MBSs has increased seven fold.
    As of the close of business Thursday, the Fed said, it owned approximately $2,052,055,000,000 in U.S. Treasury securities and approximately $1,339,771,000,000 in mortgage-backed securities—for a combined total of about $3,391,826,000,000 in Treasury securities and MBSs.
    The U.S. Treasury divides the U.S. government debt into two parts: debt held by the public, which includes publicly traded Treasury securities such as Treasury bills, notes and bonds, and intra-governmental debt, which is money the Treasury has borrowed out of the Social Security trust fund and other government trust funds and then used to pay current expenses.
    As of the opening of business back on Nov. 23, 2001, according to the Daily Treasury Statement, the federal government’s total debt held by the public was $3,383,605,000,000. (By the close of business that day, the total debt held by the public would increase to 3,406,661,000,000.) The $3,383,605,000,000 in U.S. Treasury debt held by the public as the morning of Nov. 23, 2001, represented the total publicly held debt the federal government had accumulated until that date from the moment the Treasury first opened during the presidency of George Washington.
    The $3,383,605,000,000 the Treasury owed to the public as of the morning of Nov. 23, 2001 was less than the $3,391,826,000,000 in Treasury and mortgage-backed securities owned by the Federal Reserve as of the close of business last Thursday.
    Thus the Federal Reserve now owns more debt in the form of U.S. Treasury securities and MBSs than the sum total of the publicly held debt that the U.S. government accumulated from George Washington’s administration into November 2001, during President George W. Bush’s first term.
    The mortgage-backed securities owned by the Fed are those that have been issued and guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. Ginnie Mae is government-owned corporation operated by the U.S. Department of Housing and Urban Development. Fannie Mae and Freddie Mac are congressionally chartered, government-sponsored enterprises, that are now held in conservatorships by the federal government.
    “Fannie Mae and Freddie Mac are chartered by Congress as government-sponsored enterprises (GSEs) to provide liquidity in the mortgage market and to promote homeownership for underserved groups and locations,” the Congressional Research Service explained in a report published this August. “They purchase mortgages, guarantee them, and package them in mortgage-backed securities (MBSs), which they either keep as investments or sell to institutional investors. In addition to the GSEs’ guarantees, investors widely believe that MBSs are implicitly guaranteed by the federal government. In 2008, the GSEs’ financial condition had weakened and there were concerns over their ability to meet their obligations on $1.2 trillion in bonds and $3.7 trillion in MBSs that they had guaranteed. In response to the financial risks, the federal government took control of these GSEs in a process known as conservatorship as a means to stabilize the mortgage credit market.”
    The federal government first took control of Fannie Mae and Freddie Mac on Sunday, Sept. 7, 2008. In its last weekly accounting sheet released before that, on Thursday, Sept. 4, 2008, the Fed said that it owned $479.726 billion in U.S. Treasury securities. That sheet did not even include a line item for mortgage-backed securities.
    The Fed’s combined ownership of  $3,391,826,000,000 in Treasury securities and mortgage-backed securities is now more than 7 times as great as the $479.726 billion in Treasury securities it owned five years ago before the takeover of Fannie and Freddie.
    Of the ten members of the Federal Open Market Committee who voted on whether the Fed should continue purchasing $40 billion in MBS each month and $45 billion in Treasury securities, only one voted no. That was Esther George, who is president of the Federal Reserve Bank of Kansas City.
    The Fed’s  press release announcing the vote said George voted against the continued buying of Treasury securities and MBS because she was “concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.”
    - See more at: http://cnsnews.com/news/article/terence-p-jeffrey/339t-quantitative-explosion-fed-owns-more-treasuries-and-mbss#sthash.lMYAYAJU.toT70JK9.dpuf
    The same day that the Federal Reserve's Federal Open Market Committee announced last week that the Fed would continue to buy $40 billion in mortgage-backed securities (MBSs) and $45 billion in U.S. Treasury securities per month, the Fed also released its latest weekly accounting sheet indicating that it had already accumulated more Treasuries and MBSs than the total value of the publicly held U.S. government debt amassed by all U.S. presidents from George Washington though Bill Clinton.
    Since the beginning of September 2008, in fact, the Fed's ownership of Treasury securities and MBSs has increased seven fold.
    As of the close of business Thursday, the Fed said, it owned approximately $2,052,055,000,000 in U.S. Treasury securities and approximately $1,339,771,000,000 in mortgage-backed securities—for a combined total of about $3,391,826,000,000 in Treasury securities and MBSs.
    The U.S. Treasury divides the U.S. government debt into two parts: debt held by the public, which includes publicly traded Treasury securities such as Treasury bills, notes and bonds, and intra-governmental debt, which is money the Treasury has borrowed out of the Social Security trust fund and other government trust funds and then used to pay current expenses.
    As of the opening of business back on Nov. 23, 2001, according to the Daily Treasury Statement, the federal government’s total debt held by the public was $3,383,605,000,000. (By the close of business that day, the total debt held by the public would increase to 3,406,661,000,000.) The $3,383,605,000,000 in U.S. Treasury debt held by the public as the morning of Nov. 23, 2001, represented the total publicly held debt the federal government had accumulated until that date from the moment the Treasury first opened during the presidency of George Washington.
    The $3,383,605,000,000 the Treasury owed to the public as of the morning of Nov. 23, 2001 was less than the $3,391,826,000,000 in Treasury and mortgage-backed securities owned by the Federal Reserve as of the close of business last Thursday.
    Thus the Federal Reserve now owns more debt in the form of U.S. Treasury securities and MBSs than the sum total of the publicly held debt that the U.S. government accumulated from George Washington’s administration into November 2001, during President George W. Bush’s first term.
    The mortgage-backed securities owned by the Fed are those that have been issued and guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. Ginnie Mae is government-owned corporation operated by the U.S. Department of Housing and Urban Development. Fannie Mae and Freddie Mac are congressionally chartered, government-sponsored enterprises, that are now held in conservatorships by the federal government.
    “Fannie Mae and Freddie Mac are chartered by Congress as government-sponsored enterprises (GSEs) to provide liquidity in the mortgage market and to promote homeownership for underserved groups and locations,” the Congressional Research Service explained in a report published this August. “They purchase mortgages, guarantee them, and package them in mortgage-backed securities (MBSs), which they either keep as investments or sell to institutional investors. In addition to the GSEs’ guarantees, investors widely believe that MBSs are implicitly guaranteed by the federal government. In 2008, the GSEs’ financial condition had weakened and there were concerns over their ability to meet their obligations on $1.2 trillion in bonds and $3.7 trillion in MBSs that they had guaranteed. In response to the financial risks, the federal government took control of these GSEs in a process known as conservatorship as a means to stabilize the mortgage credit market.”
    The federal government first took control of Fannie Mae and Freddie Mac on Sunday, Sept. 7, 2008. In its last weekly accounting sheet released before that, on Thursday, Sept. 4, 2008, the Fed said that it owned $479.726 billion in U.S. Treasury securities. That sheet did not even include a line item for mortgage-backed securities.
    The Fed’s combined ownership of  $3,391,826,000,000 in Treasury securities and mortgage-backed securities is now more than 7 times as great as the $479.726 billion in Treasury securities it owned five years ago before the takeover of Fannie and Freddie.
    Of the ten members of the Federal Open Market Committee who voted on whether the Fed should continue purchasing $40 billion in MBS each month and $45 billion in Treasury securities, only one voted no. That was Esther George, who is president of the Federal Reserve Bank of Kansas City.
    The Fed’s  press release announcing the vote said George voted against the continued buying of Treasury securities and MBS because she was “concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.”
    - See more at: http://cnsnews.com/news/article/terence-p-jeffrey/339t-quantitative-explosion-fed-owns-more-treasuries-and-mbss#sthash.lMYAYAJU.toT70JK9.dpuf
    (CNSNews.com) - The same day that the Federal Reserve's Federal Open Market Committee announced last week that the Fed would continue to buy $40 billion in mortgage-backed securities (MBSs) and $45 billion in U.S. Treasury securities per month, the Fed also released its latest weekly accounting sheet indicating that it had already accumulated more Treasuries and MBSs than the total value of the publicly held U.S. government debt amassed by all U.S. presidents from George Washington though Bill Clinton.
    Since the beginning of September 2008, in fact, the Fed's ownership of Treasury securities and MBSs has increased seven fold.
    As of the close of business Thursday, the Fed said, it owned approximately $2,052,055,000,000 in U.S. Treasury securities and approximately $1,339,771,000,000 in mortgage-backed securities—for a combined total of about $3,391,826,000,000 in Treasury securities and MBSs.
    The U.S. Treasury divides the U.S. government debt into two parts: debt held by the public, which includes publicly traded Treasury securities such as Treasury bills, notes and bonds, and intra-governmental debt, which is money the Treasury has borrowed out of the Social Security trust fund and other government trust funds and then used to pay current expenses.
    As of the opening of business back on Nov. 23, 2001, according to the Daily Treasury Statement, the federal government’s total debt held by the public was $3,383,605,000,000. (By the close of business that day, the total debt held by the public would increase to 3,406,661,000,000.) The $3,383,605,000,000 in U.S. Treasury debt held by the public as the morning of Nov. 23, 2001, represented the total publicly held debt the federal government had accumulated until that date from the moment the Treasury first opened during the presidency of George Washington.
    The $3,383,605,000,000 the Treasury owed to the public as of the morning of Nov. 23, 2001 was less than the $3,391,826,000,000 in Treasury and mortgage-backed securities owned by the Federal Reserve as of the close of business last Thursday.
    Thus the Federal Reserve now owns more debt in the form of U.S. Treasury securities and MBSs than the sum total of the publicly held debt that the U.S. government accumulated from George Washington’s administration into November 2001, during President George W. Bush’s first term.
    The mortgage-backed securities owned by the Fed are those that have been issued and guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. Ginnie Mae is government-owned corporation operated by the U.S. Department of Housing and Urban Development. Fannie Mae and Freddie Mac are congressionally chartered, government-sponsored enterprises, that are now held in conservatorships by the federal government.
    “Fannie Mae and Freddie Mac are chartered by Congress as government-sponsored enterprises (GSEs) to provide liquidity in the mortgage market and to promote homeownership for underserved groups and locations,” the Congressional Research Service explained in a report published this August. “They purchase mortgages, guarantee them, and package them in mortgage-backed securities (MBSs), which they either keep as investments or sell to institutional investors. In addition to the GSEs’ guarantees, investors widely believe that MBSs are implicitly guaranteed by the federal government. In 2008, the GSEs’ financial condition had weakened and there were concerns over their ability to meet their obligations on $1.2 trillion in bonds and $3.7 trillion in MBSs that they had guaranteed. In response to the financial risks, the federal government took control of these GSEs in a process known as conservatorship as a means to stabilize the mortgage credit market.”
    The federal government first took control of Fannie Mae and Freddie Mac on Sunday, Sept. 7, 2008. In its last weekly accounting sheet released before that, on Thursday, Sept. 4, 2008, the Fed said that it owned $479.726 billion in U.S. Treasury securities. That sheet did not even include a line item for mortgage-backed securities.
    The Fed’s combined ownership of  $3,391,826,000,000 in Treasury securities and mortgage-backed securities is now more than 7 times as great as the $479.726 billion in Treasury securities it owned five years ago before the takeover of Fannie and Freddie.
    Of the ten members of the Federal Open Market Committee who voted on whether the Fed should continue purchasing $40 billion in MBS each month and $45 billion in Treasury securities, only one voted no. That was Esther George, who is president of the Federal Reserve Bank of Kansas City.
    The Fed’s  press release announcing the vote said George voted against the continued buying of Treasury securities and MBS because she was “concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.”
    - See more at: http://cnsnews.com/news/article/terence-p-jeffrey/339t-quantitative-explosion-fed-owns-more-treasuries-and-mbss#sthash.lMYAYAJU.toT70JK9.dpuf
    (CNSNews.com) - The same day that the Federal Reserve's Federal Open Market Committee announced last week that the Fed would continue to buy $40 billion in mortgage-backed securities (MBSs) and $45 billion in U.S. Treasury securities per month, the Fed also released its latest weekly accounting sheet indicating that it had already accumulated more Treasuries and MBSs than the total value of the publicly held U.S. government debt amassed by all U.S. presidents from George Washington though Bill Clinton.
    Since the beginning of September 2008, in fact, the Fed's ownership of Treasury securities and MBSs has increased seven fold.
    As of the close of business Thursday, the Fed said, it owned approximately $2,052,055,000,000 in U.S. Treasury securities and approximately $1,339,771,000,000 in mortgage-backed securities—for a combined total of about $3,391,826,000,000 in Treasury securities and MBSs.
    The U.S. Treasury divides the U.S. government debt into two parts: debt held by the public, which includes publicly traded Treasury securities such as Treasury bills, notes and bonds, and intra-governmental debt, which is money the Treasury has borrowed out of the Social Security trust fund and other government trust funds and then used to pay current expenses.
    As of the opening of business back on Nov. 23, 2001, according to the Daily Treasury Statement, the federal government’s total debt held by the public was $3,383,605,000,000. (By the close of business that day, the total debt held by the public would increase to 3,406,661,000,000.) The $3,383,605,000,000 in U.S. Treasury debt held by the public as the morning of Nov. 23, 2001, represented the total publicly held debt the federal government had accumulated until that date from the moment the Treasury first opened during the presidency of George Washington.
    The $3,383,605,000,000 the Treasury owed to the public as of the morning of Nov. 23, 2001 was less than the $3,391,826,000,000 in Treasury and mortgage-backed securities owned by the Federal Reserve as of the close of business last Thursday.
    Thus the Federal Reserve now owns more debt in the form of U.S. Treasury securities and MBSs than the sum total of the publicly held debt that the U.S. government accumulated from George Washington’s administration into November 2001, during President George W. Bush’s first term.
    The mortgage-backed securities owned by the Fed are those that have been issued and guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. Ginnie Mae is government-owned corporation operated by the U.S. Department of Housing and Urban Development. Fannie Mae and Freddie Mac are congressionally chartered, government-sponsored enterprises, that are now held in conservatorships by the federal government.
    “Fannie Mae and Freddie Mac are chartered by Congress as government-sponsored enterprises (GSEs) to provide liquidity in the mortgage market and to promote homeownership for underserved groups and locations,” the Congressional Research Service explained in a report published this August. “They purchase mortgages, guarantee them, and package them in mortgage-backed securities (MBSs), which they either keep as investments or sell to institutional investors. In addition to the GSEs’ guarantees, investors widely believe that MBSs are implicitly guaranteed by the federal government. In 2008, the GSEs’ financial condition had weakened and there were concerns over their ability to meet their obligations on $1.2 trillion in bonds and $3.7 trillion in MBSs that they had guaranteed. In response to the financial risks, the federal government took control of these GSEs in a process known as conservatorship as a means to stabilize the mortgage credit market.”
    The federal government first took control of Fannie Mae and Freddie Mac on Sunday, Sept. 7, 2008. In its last weekly accounting sheet released before that, on Thursday, Sept. 4, 2008, the Fed said that it owned $479.726 billion in U.S. Treasury securities. That sheet did not even include a line item for mortgage-backed securities.
    The Fed’s combined ownership of  $3,391,826,000,000 in Treasury securities and mortgage-backed securities is now more than 7 times as great as the $479.726 billion in Treasury securities it owned five years ago before the takeover of Fannie and Freddie.
    Of the ten members of the Federal Open Market Committee who voted on whether the Fed should continue purchasing $40 billion in MBS each month and $45 billion in Treasury securities, only one voted no. That was Esther George, who is president of the Federal Reserve Bank of Kansas City.
    The Fed’s  press release announcing the vote said George voted against the continued buying of Treasury securities and MBS because she was “concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.”
    - See more at: http://cnsnews.com/news/article/terence-p-jeffrey/339t-quantitative-explosion-fed-owns-more-treasuries-and-mbss#sthash.lMYAYAJU.toT70JK9.dpuf

    Apple Touch ID fingerprint tech 'broken', hackers say

    Hackers claim to have broken Apple's iPhone 5S Touch ID fingerprint recognition system just a day after the phone was launched.
    Germany's Chaos Computer Club claims it "successfully bypassed the biometric security of Apple's Touch ID using easy everyday means".
    By photographing a fingerprint left on a glass surface and creating a fake finger they were able to unlock the phone, the hackers claim.
    But Apple maintains Touch ID is secure.
    On its website the iPhone maker says there is a one in 50,000 chance of two separate fingerprints being alike and the technology provides "a very high level of security".
    Karsten Nohl, chief scientist at SRLabs, a German hacking think tank, told the BBC: "It would have been incredible if Apple had managed to do something the rest of the biometrics industry has failed to achieve after decades of trying, so I'm not surprised it was hacked after just one day.
    "Claiming this system offers a high level of security is just ridiculous," he added.
    Convenience Apple does not suggest that Touch ID is a total replacement for traditional passcode security, simply a more convenient way of unlocking the phone.
      The Chaos Computer Club believes fingerprint biometrics "should be avoided"
    "Touch ID is designed to minimise the input of your passcode; but your passcode will be needed for additional security validation," Apple says.
    But it does not address the ability of hackers lifting individual prints and creating fake fingers, as the Chaos Computer Club claims to have done.
    Mr Nohl says a five-digit password would be more secure than a fingerprint and believes Apple should have focused on convenience rather than security in its marketing of the Touch ID feature.
    On Friday, an influential US senator called for Apple to answer "substantial privacy questions" arising from the technology.
    Apple did not respond to the BBC's request for a comment.

    http://www.bbc.co.uk/news/technology-24203929  

    Sunday, September 22, 2013

    Gold And Monetary Inflation Prospects

    On Wednesday last the Fed surprised most people by deciding not to taper. What is not generally appreciated is that once a central bank starts to use monetary expansion as a cure-all it is extremely difficult for it to stop. This is the basic reason the Fed has not pursued the idea, and why it most probably never will.
    That is a strong statement. But consider this: Paul Volcker faced this same dilemma in 1979, when he was appointed Chairman of the Fed. In raising interest rates to choke off inflation he had two things going for him that his successor has not: rising inflation was already over 10% so was an obvious priority, and importantly private sector debt-to-GDP was at a far lower level than today. It was a tough decision at the time to nearly double interest rates. Today, with official inflation low and private sector indebtedness high it would be extremely difficult.
    Until official inflation picks up, it is far more comforting to pretend it won’t be an issue, which reasonably describes the Fed’s approach. Instead it is targeting unemployment rates, on the basis that price inflation is tied to capacity utilisation, which in turn is tied to employment.
    One thing is certain in life, besides death and taxes, and that is if you expand the quantity of money prices eventually rise; or more accurately the purchasing power of debased money falls. The problem is how to measure currency debasement, and this has been a topic of heated debate since fiat currencies first developed. This has led me to propose a new measure of money, which at James Turk’s suggestion I am calling the Fiat Money Quantity (FMQ). The purpose is to gives us a measure of fiat money that enables us to assess the danger of currency hyperinflation. I shall be publishing a paper on this shortly explaining the methodology.
    The principle behind it is to signal deviations from the long-term trend of currency growth to alert us to both monetary crises and excessive inflation. The approach is to unwind the historic progression from full gold convertibility to the current state of no convertibility. Our gold was first deposited with our banks, and then from there with the central bank. In return for our gold deposits we have been issued cash notes and coin and credits in the form of deposits at the bank, and our bank equally has deposits at the central bank.
    The FMQ is therefore comprised of the sum of cash and coin, plus all accessible deposits, plus our bank’s deposits held at the central bank. This for the US dollar is illustrated in the chart below.
    Fiat money quantity
    The dotted line is the long-term exponential trend rate, and it is immediately obvious that the FMQ is now hyper-inflating. It currently requires a $3.6 trillion contraction of deposits to return this measure of currency quantity back to trend.
    This accurately sums up the problem facing the Fed. We must understand they are in an almost impossible position that dates back to their monetary response to the banking crisis. Not even Paul Volcker could have got us out of this one. Once the addiction to weak money hits this pace there is no solution without threatening to bring down the whole system.

    http://www.zerohedge.com/news/2013-09-22/guest-post-gold-and-monetary-inflation-prospects

    Saturday, September 21, 2013

    Alpari leaves US market


    Letter from Alpari

    Dear Trader,

    I am writing to inform you of upcoming changes to Alpari (US) LLC's ("Alpari") business model that will impact your relationship with us. Following a strategic review, Alpari has decided to exit the US retail foreign exchange market as a Retail Foreign Exchange Dealer ("RFED") and focus on developing its successful institutional division, QuantumFX.

    As of the close of business on Friday, September 27, 2013, Alpari will no longer be the counter-party to your trades. To facilitate the transition, Alpari has made arrangements to transfer your MetaTrader 4 trading account to Forex Capital Markets, LLC ("FXCM"). FXCM is a leader in online forex trading headquartered in the heart of New York City's Financial District at 55 Water Street, and is dually registered with the Commodity Futures Trading Commission ("CFTC") as a Futures Commission Merchant ("FCM") and an RFED with the National Futures Association ("NFA"), member ID 0308179.

    Moving your account from Alpari to FXCM is simple, all you need is to complete this short form. There will be several changes to your account including your account number and login details, as your account will be transferred to a different counterparty but you can continue to trade through your MetaTrader 4 platform after the transfer is complete. For more information about the transfer, please visit our FAQ page.

    Please note that after the close of business on September 27, 2013, Alpari will no longer be the counterparty to your trades. As such, all open positions will be liquidated and all floating profits/losses will be realized. The subsequent cash balance of your account will then be transferred to your new counterparty, FXCM.

    Please be aware, FXCM intends to re-establish all open positions liquidated by Alpari. The re-establishment of positions is limited to positions liquidated by Alpari and does not include positions manually liquidated by clients between the time of this notification and the close of business at 5:00PM ET on Friday, September 27, 2013. Please manage any open positions with these considerations in mind. For more information about the transfer, please visit our FAQ page

    Note: You are not required to accept the proposed transfer and may direct Alpari to liquidate your positions or transfer your account, including open positions, to a firm of your selection. If you wish to discuss alternative options regarding this transfer, please contact Alpari's customer service no later than 4:00PM ET Friday, September 27, 2013; otherwise, your account will be transferred to FXCM at the close of trading day.

    Once again, for more information about the transfer, please visit our FAQ page. If you have any additional questions, please direct them to Alpari's customer service by email at cs@alpari-us.com, by phone at 1 (646) 825-5760, or via live chat. You may also contact FXCM's customer support by phone at 1 (212) 897-7660 or by email at clients@fxcm.com.

    We sincerely appreciate your business with us and I would like to personally thank you for your continued support over the years. We wish you the best of luck in all of your future trading endeavors.

    Sincerely,

    Jermaine C. Harmon
    CEO, Alpari (US), LLC

    FXCM announced that it will be assuming the retail client accounts of Alpari US, in a notification issued today. The listed firm was chosen by Alpari US, as it exits the retail FX arena in the United States.
    Alpari US has revealed that the 27th of September, the last Friday of the month, as its departure date. FXCM will take over client accounts from the specified date.
    Alpari US issued a statement earlier today, providing further details of the reason the company was pulling out of the US market. The statement came after the news release issued by Forex Magnates about the move. In addition, the firm  sent out an email to all of its clients, providing details about the withdrawal, and also contained specific questions and answers that could be raised by clients.
    One of the most important questions for current clients was answered in the email.
    “What will happen to my open positions? Alpari will not transfer open positions to FXCM. All open positions will be liquidated, and all pending orders will be cancelled at close of business at 5:00PM ET on Friday, September 27, 2013. Alpari recommends that you manage all your positions prior to this date. However, FXCM intends to re-establish the positions liquidated by Alpari. Please note, that the re-establishment of positions is limited to positions liquidated by Alpari, and does not include positions manually liquidated by clients, between the time of this notification and the close of business at 5:00PM ET on Friday, September 27, 2013. Additionally, FXCM will only be able to re-establish positions offered by both Alpari and FXCM.”
    The US FX brokerage space has been systematically declining over the last three years since the implemetation of the new rules, which have affected leverage, capital adequacy and order types. Once a flourishing industry, the US FX brokerage sector was home to the world’s largest providers. The regulatory changes have had a negative impact, with a flurry of brokers packing their bags. Alpari US follows in the shadows of FX Solutions, Easy Forex, Forex Club and GFT.
    The new rulings are thought to be positive for the market. However, when assessing their impact on traders, the results are quite the opposite. The reduction in the number of brokers from whom traders can choose, means that there will be little or no competition, in addition, brokers will not have the need nor desire to innovate and introduce new trading solutions. Only regulated firms in the USA are allowed to solicit US clients. Therefore, US clients will lose out.
    Capital adequacy requirements for FX brokers in the US are extraordinarily high, when compared to other major regulators. In the UK, firms need to hold a minimum of seven hundred and thirty thousand Euros. In Singapore firms are obliged to hold one million Singapore dollars.
    The $20 million bounty set by the US regulator, has been one of the major factors that has been drowning the FX markets in USA.
    Turkey’s financial regulator, SPK, issued a circular specifying that it intends to increase capital requirements for brokers. Unlike other regulators, the SPK is following the direction of the NFA.
    Financial terms of the transaction between FXCM and Alpari US have not been disclosed.
    http://forexmagnates.com/fxcm-adopts-retail-fx-accounts-from-alpari-us/ 

    Wednesday, September 18, 2013

    NFA fines New York forex firm FXDirectDealer LLC $1.1 million and orders the firm to pay $1.8 million in restitution to customers

    For Immediate Release
    September 18, 2013
    For more information contact:
    Larry Dyekman (312) 781-1372, ldyekman@nfa.futures.org
    Karen Wuertz (312) 781-1335, kwuertz@nfa.futures.org
    NFA fines New York forex firm FXDirectDealer LLC $1.1 million and orders the firm to pay $1.8 million in restitution to customers
    September 18, Chicago - National Futures Association (NFA) has issued a $1.1 million fine and a $1.8 million restitution order against FXDirectDealer LLC (FXDD), a registered futures commission merchant Forex Dealer Member of NFA located in New York City. The Decision, issued by NFA's Hearing Committee (Committee), is based on Complaints filed on June 29 and October 23, 2012 and a settlement offer submitted by FXDD.
    The June 29 Complaint charged FXDD with using asymmetrical price slippage settings that favored FXDD over its customers; failing to supervise the trade integrity of the firm's electronic trading systems; failing to maintain complete and accurate records; and failing to review the use of promotional material. The June Complaint also charged FXDD with making improper price adjustments in customers' accounts; converting customer funds; willfully submitting misleading information to NFA and others; and failing to treat all customers equally when giving price adjustments.
    In addition, the June Complaint charged FXDD with failing to implement an adequate anti-money laundering (AML) program; failing to develop and implement adequate screening procedures to determine whether persons and entities with whom FXDD intended to do forex business were required to be registered with the Commodity Futures Trading Commission (CFTC) and Members or Associates of NFA.
    The October 23 Complaint charged FXDD with failing to implement an adequate AML program and failing to adequately supervise the firm's AML program.
    As part of the settlement offer, FXDD agreed to pay restitution in the amount of $1,828,261 to FXDD customers who experienced unfavorable price slippage on "limit-fill-or-kill" trades placed in their accounts from December 10, 2009 until June 29, 2011.
    In addition, FXDD will pay a fine of $1.1 million, of which $914,131 is attributable to FXDD's unfavorable price slippage practices. In a related action taken by the Commodity Futures Trading Commission, FXDD will pay an additional penalty of $914,131 to the CFTC.
    FXDD neither admitted nor denied the allegations.
    The complete text of the June 29 Complaint, October 23 Complaint and Decision can be viewed on NFA's website (www.nfa.futures.org).

    http://www.nfa.futures.org/news/newsRel.asp?ArticleID=4299 

    The Machines Win: Within Milliseconds, The Move Was Over

    We hope everyone is enjpying the spoils of war from reading the FOMC statement and buying appropriately. Of course, as Nanex shows, unless your trigger finger hit that big green button within a millisecond or so, you missed the entire move...

    Via Nanex,
    Market reaction to the FOMC news was instant. Within a thousandth of a second, the move was already over. What any human saw was like reading yesterdays newspaper.
    1. SPY Showing Trades color coded by exchange. This is 150 milliseconds of time.



    2. December 2013 eMini (ES) Futures trades.



    3. SPY Showing Trades color coded by exchange. Zooming out to 1 second of time.



    4. December 2013 eMini (ES) Futures trades. Zooming out to 1 second of time.



    5. SPY Showing bids and asks color coded by exchange.