Sunday, November 22, 2009
Sunday, November 15, 2009
The Worst is yet to Come: Unemployed Americans Should Hunker Down for More Job Losses
From the Daily News:
Think the worst is over? Wrong. Conditions in the U.S. labor markets are awful and worsening. While the official unemployment rate is already 10.2% and another 200,000 jobs were lost in October, when you include discouraged workers and partially employed workers the figure is a whopping 17.5%.
While losing 200,000 jobs per month is better than the 700,000 jobs lost in January, current job losses still average more than the per month rate of 150,000 during the last recession.
Also, remember: The last recession ended in November 2001, but job losses continued for more than a year and half until June of 2003; ditto for the 1990-91 recession.
So we can expect that job losses will continue until the end of 2010 at the earliest. In other words, if you are unemployed and looking for work and just waiting for the economy to turn the corner, you had better hunker down. All the economic numbers suggest this will take a while. The jobs just are not coming back.
There's really just one hope for our leaders to turn things around: a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers. Helping the unemployed just by extending unemployment benefits is necessary not sufficient; it leads to persistent unemployment rather than job creation.
The long-term picture for workers and families is even worse than current job loss numbers alone would suggest. Now as a way of sharing the pain, many firms are telling their workers to cut hours, take furloughs and accept lower wages. Specifically, that fall in hours worked is equivalent to another 3 million full time jobs lost on top of the 7.5 million jobs formally lost.
This is very bad news but we must face facts. Many of the lost jobs are gone forever, including construction jobs, finance jobs and manufacturing jobs. Recent studies suggest that a quarter of U.S. jobs are fully out-sourceable over time to other countries.
Other measures tell the same ugly story: The average length of unemployment is at an all time high; the ratio of job applicants to vacancies is 6 to 1; initial claims are down but continued claims are very high and now millions of unemployed are resorting to the exceptional extended unemployment benefits programs and are staying in them longer.
Based on my best judgment, it is most likely that the unemployment rate will peak close to 11% and will remain at a very high level for two years or more.
The weakness in labor markets and the sharp fall in labor income ensure a weak recovery of private consumption and an anemic recovery of the economy, and increases the risk of a double dip recession.
As a result of these terribly weak labor markets, we can expect weak recovery of consumption and economic growth; larger budget deficits; greater delinquencies in residential and commercial real estate and greater fall in home and commercial real estate prices; greater losses for banks and financial institutions on residential and commercial real estate mortgages, and in credit cards, auto loans and student loans and thus a greater rate of failures of banks; and greater protectionist pressures.
The damage will be extensive and severe unless bold policy action is undertaken now.
Roubini is professor of Economics at the Stern School of Business at New York University and Chairman of Roubini Global Economics.
Saturday, November 14, 2009
Wall Street Spends $1.8 Billion A Year on Data Centers, Tabb Group Says
Wall Street Spends $1.8 Billion A Year on Data Centers, Tabb Group Says
Proximity attracts a hefty premium from ultra-low-latency trading firms; 82% of firms say power is their overriding concern.
By Penny Crosman
April 01, 2009
With financial markets firms investing an average of $1.8 billion annually on data center space, power and cooling — sell-side firms and execution venues alone spend nearly 75% of that total — power, location, connectivity, flexibility and security are critical elements in the creation and selection of financial data centers. According to research from Tabb Group in a new report published today, "Financial Services Data Centers: Power, Proximity and Profit," 66% of the current US equity trading volume is driven by fewer than 1% of the firms deploying ultra low latency strategies that physically require being located within feet of an execution venue matching engine.
The report is based on interviews with front-office staff and technologists at bulge bracket broker-dealers, proprietary trading firms, execution venues and IT solution providers. "Once hidden only in basements of downtown Manhattan buildings and staffed with people in ripped jeans and sneakers, today's data centers contain some of the world's most bleeding-edge technology, run by some of the industry's best and brightest," says Kevin McPartland, senior analyst and TABB and author of the IT research report. "These centers house the heart of nearly every financial services business. From high-speed trading to derivatives pricing, the soaring need for compute power has made data center space the virtual replacement of Wall Street."
Although data centers will remain the realm of engineers, the front office has grown acutely aware of their importance, forced to recognize the impact of the world's changing politics and economics, specifically how cutting-edge hardware requires considerable electricity to run. Multiply that need, says McPartland, by tens of thousands of servers used in any given data center, which explains why 82% of those interviewed ranked power as their most pressing concern, surpassing connectivity and cost.
He cites an example using a single blade server that consumes about 100 watts per hour, same as an incandescent light bulb. With 30 blades per rack and an estimated 100 racks in a single data center cage, 300,000 watts per hour would be used, approximately the same amount of power used by 3,000 suburban homes in the U.S., excluding additional energy to heat and cool the servers. The 300,000 watts must then be multiplied by 24 hours, multiplied by seven days, multiplied by 365 days — all for one cage of one firm's data center. Reinforcing the point, he says, "Financial services data centers are the largest users of power in the State of New Jersey."
The TABB report covers data center business models, third-party product and service solutions, power density, carrier density, security and proximity. For this last point, he explains that the trading engine needs to be optimized, market data must by gathered with the least latency possible and the hardware this runs on must be perfectly suited for the task. "Except for a dozen or so firms at the top of the low-latency trading world, very few have a correctly optimized infrastructure to benefit from such close proximity to an execution venue's matching engine."
In the not-so-distant future, the shared services facility business model will move beyond common power, heating and cooling into the area of cloud computing where firms can rent CPU cycles and memory-on-demand.
NSA To Build $1.5 Billion Cybersecurity Data Center
http://www.informationweek.com/news/government/security/showArticle.jhtml?articleID=221100260
NSA To Build $1.5 Billion Cybersecurity Data Center
The massive complex, comprising up to 1.5 million square feet of building space, will provide intelligence and warnings related to cybersecurity threats across government.
The National Security Agency, whose job it is to protect national security systems, will soon break ground on a data center in Utah that's budgeted to cost $1.5 billion.
Ericsson has become the first vendor to prove end to end interoperability in TD-LTE, another standard of 4G radio technologies designed to increase the capacity and speed of mobile telephone networks.
The NSA is building the facility to provide intelligence and warnings related to cybersecurity threats, cybersecurity support to defense and civilian agency networks, and technical assistance to the Department of Homeland Security, according to a transcript of remarks by Glenn Gaffney, deputy director of national intelligence for collection, who is responsible for oversight of cyber intelligence activities in the Office of the Director of National Intelligence.
"Our country must continue to advance its national security efforts and that includes improvements in cybersecurity," Sen. Robert Bennett, R-Utah, said in a statement. "As we rely more and more on our communications networks for business, government and everyday use, we must be vigilant and provide agencies with the necessary resources to protect our country from a cyber attack."
The data center will be built at Camp Williams, a National Guard training center 26 miles south of Salt Lake City, which was chosen for its access to cheap power, communications infrastructure, and availability of space, Gaffney said. The complex will comprise up to 1.5 million square feet of building space on 120 to 200 acres, according to the NBC affiliate in Salt Lake City.
According to a budget document for the project, the 30-megawatt data center will be cooled by chilled water and capable of Tier 3, or near carrier-grade, reliability. The design calls for the highest LEED (Leadership in Energy and Environmental Design) standard within available resources.
The U.S. Army Corps of engineers will host a conference in Salt Lake City to provide further detail the data center building and acquisition plans. The project will require between 5,000 and 10,000 workers during construction, and the data center will eventually employ between 100 and 200 workers.
As part of its mission, NSA monitors communications "signals" for intelligence related to national security and defense. Gaffney gave assurances that the work going on at the data center will protect civil liberties. "We will accomplish this in full compliance with the U.S. Constitution and federal law and while observing strict guidelines that protect the privacy and civil liberties of the American people," Gaffney said.
On Nov. 30, the Department of Homeland Security will formally open a new cybersecurity operations center, the National Cybersecurity and Communications Integration Center, in Arlington, Va. The facility will house the National Cyber Security Center, which coordinates cybersecurity operations across government, the National Coordinating Center for Telecommunications, which operates the government's telecommunications network, and the United States Computer Emergency Readiness Team, which works with industry and government to protect networks and alert them of malicious activity.
InformationWeek Analytics has published a report on the 10 steps to effective data classification. Download the report here (registration required).
French Currency Trader and Fund Manager Blochet leaves Brevan Howard
By Tom Cahill
Nov. 14 (Bloomberg) -- Jean-Philippe Blochet, a founding partner in Brevan Howard Asset Management LLP and the source of the "B" in its name, is leaving Europe's biggest hedge fund.
Blochet, 46, a French native, worked with co-founder Alan Howard on Credit Suisse First Boston's proprietary fixed-income trading desk before starting the London-based money manager in 2002. The first part of the firm's name comes from the initials of founding partners Blochet, Christopher Rokos, James Vernon and Trifon Natsis.
Blochet is at least the second European hedge-fund founder to step down this week. John Horseman of London's Horseman Capital Management LP said Nov. 12 he was leaving as manager of the Horseman Global Fund Ltd. Blochet, who was a currency trader at Credit Suisse, had taken a sabbatical in 2008.
"Over the last few years they've built up a very extensive infrastructure and business," said Clayton Heijman, founder and chief executive officer of Darwin Platform, an Amsterdam-based provider of hedge-fund services. "It's only natural that at a certain point of time people move on."
The Brevan Howard Master Fund, the firm's largest, returned 20.4 percent in 2008 when the average fund lost 19 percent, according to Hedge Fund Research Inc. The fund is up 18 percent this year through Nov. 6, Bloomberg data show.
Blochet declined to comment. Brevan Howard, which managed $25.7 billion at the end of September, confirmed his departure in an e-mail yesterday.
Management Team
Brevan Howard isn't expected to alter its management structure, according to people familiar with the firm. Blochet was part of the firm's macro team, focusing on currencies, interest rates and other investments linked to global economic trends.
Blochet completed the Marathon des Sables, a six-day, 151- mile (243 kilometer) foot race across the Sahara desert, in 2006. Competitors cover the equivalent of five and a half marathons over six days in temperatures reaching 120 degrees Farenheit (49 celsius), with packs for food and sleeping gear on their backs. The race, which raises money for charities, was described as "The Toughest Footrace on Earth" in the 2007 book "Seven Days in the Sahara" by an event competitor.
Blochet finished the race 157th out of 800 competitors, according to Marathon des Sables' Web site.
"Following his return from sabbatical last year, Jean- Philippe Blochet has decided to cease to be an active member of Brevan Howard Asset Management LLP," the company said in the e- mail.
To contact the reporter on this story: Tom Cahill in London at tcahill@bloomberg.net
Last Updated: November 13, 2009 19:01 EST
Thursday, November 12, 2009
IEA says world running out of oil
The International Energy Agency (IEA) issued their annual World Energy Outlook, and despite a drop in 2009 demand due to the global recession, the numbers look grim. As Nobuo Tanaka, Executive Director of the IEA put it;
"...a continuation of current trends in energy use puts the world on track for a rise in temperature of up to 6°C and poses serious threats to global energy security."
The IEA is to consuming countries what OPEC is to producing ones, advising members on energy supply and policy.Their activities include estimating how much oil is available and what future energy consumption will look like, and things may be even grimmer than they have been letting on.
Oil supplies in flux
According to a report in the Guardian, the Agency may have deliberately overstated world oil supplies, in order to avoid a worldwide buying panic. An unnamed (and therefore unverified) sources claim that the US has played an influential role in encouraging the organization to "underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves." Another (also unnamed) source was quoted as saying "We have [already] entered the 'peak oil' zone. I think that the situation is really bad."
"Peak oil" refers to the point at which the rate of production of oil, which has generally marched steadily upwards, begins to decline. If we continue our current energy habits and assume no change in government policies (called the 'Reference Scenario'), we will need to produce an additional 20 million barrels a day by 2030. It is not clear where that oil supply would come from, and is projected as "crude oil fields yet to be found."
Is even '450' a stretch?
In the 'Reference Scenario', the world's primary energy demand in 2030 is estimated to grow by a staggering 40% over the current figures. Much of this increase would be in coal use, which would grow by 50% and have a severe impact on climate change.
The IEA also looked at the alternative scenario needed to hold greenhouse gasses to 450 ppm, which is generally considered the maximum upper limit to avoid irreversible and possibly cataclysmic change (we are currently at 385.) What would need to happen? By 2030, a third of the world's power needs to come from renewables and/or nuclear, 60% of cars need to be plug in or hybrid, and we need to invest nearly $10 Trillion globally in energy efficiency. These are all what I would call 'stretch goals', and is partially why others have described staying below 450 ppm as pursuing "the greatest achievement in the history of the human race."
The IEA didn't even bother figuring out what it would take to reduce total ghg back to 350 ppm, a 'do no harm' target which seems to be completely out of reach.
Pay now or pay later
Conspiracy theorists claim that global warming is a hoax designed to create new 'green' profits via cap-and-trade and clean technology. While some concerns about Wall Street are always warranted, here is the simple math: The IEA estimates that carbon should eventually carry a cost of around $50 per ton, which translates to $20 per barrel of oil. If we continue on our current path, however, demand will likely drive up oil prices by at least $50 per barrel, sending over $4 trillion dollars to OPEC members in the next 20 years, just for the oil And the cost of climate change? The NRDC estimates that in the US alone, it will be $300 Billion a year by 2030. Many put the global figure in the Trillions.
So whether for the planet or the pocketbook, it's time to wake up. Things simply will not stay the way they are. We can either start spending on clean energy and efficiency now, or pay even more for the privilege of using up more fossil fuel and polluting the planet, with dire consequences. Why does this seem like a difficult choice?
Read more: global warming, 350, climate change, 450, peak oil, iae
Wednesday, November 11, 2009
Sunday, November 8, 2009
Beat the banks: alpari UK offers 28.6% Interest on Free Margin
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Monday, October 26, 2009
Saturday, October 24, 2009
Tuesday, October 20, 2009
100 words to make you sound smart
Below is a complete list of the words in 100 Words to Make You Sound Smart:
accolade | kitsch | |
Saturday, October 17, 2009
Thursday, October 15, 2009
“We can no longer stop the big wave of dollar weakness,”
Oct. 15 (Bloomberg) -- The dollar may drop to 50 yen next year and eventually lose its role as the global reserve currency, Sumitomo Mitsui Banking Corp.'s chief strategist said, citing trading patterns and a likely double dip in the U.S. economy.
"The U.S. economy will deteriorate into 2011 as the effects of excess consumption and the financial bubble linger," said Daisuke Uno at Sumitomo Mitsui, a unit of Japan's third- biggest bank. "The dollar's fall won't stop until there's a change to the global currency system."
The dollar last week dropped to the lowest in almost a year against the yen as record U.S. government borrowings and interest rates near zero sapped demand for the U.S. currency. The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, has fallen 15 percent from its peak this year to as low as 75.211 today, the lowest since August 2008.
The gauge is about five points away from its record low in March 2008, and the dollar is 2.5 percent away from a 14-year low against the yen.
"We can no longer stop the big wave of dollar weakness," said Uno, who correctly predicted the dollar would fall under 100 yen and the Dow Jones Industrial Average would sink below 7,000 after the bankruptcy of Lehman Brothers Holdings Inc. last year. If the U.S. currency breaks through record levels, "there will be no downside limit, and even coordinated intervention won't work," he said.
China, India, Brazil and Russia this year called for a replacement to the dollar as the main reserve currency. Hossein Ghazavi, Iran's deputy central bank chief, said on Sept. 13 the euro has overtaken the dollar as the main currency of Iran's foreign reserves.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a_A5nqmw9Dq8
Dollar weakness, curious comments from Japan
Wednesday, October 14, 2009 11:35:00 PM
* 15 Oct 09: 03:35 GMT (SGA) - FX NOW! USD/JPY, GBP/JPY Flows - MoF Fujii (after Minezaki yest): stable FX important
Alas! Some comments from MoF Fujii after "curious" comments from MoF Naoki Minezaki yesterday. MoF Hirohisa Fujii says stable FX is important both domestically and internationally - Jiji- Reuters. On FX, USD/JPY at 89.40-43, with MoF seen cautious of USD/JPY breaking toward 88.00 handle and January 87.10-12 lows - lows since 1995 - even as MoF Minezaki comments yesterday that no need to intervene when JPY rises, pushed USD/JPY from 89.30 to 88.83 - something which MoF Fujii may not want? USD/JPY bids at 89.00-20, offers still 89.80-90.00, stops on break of 90.00-05.WL
* 15 Oct 09: 03:31 GMT (SGA) - FX NOW! GBP/JPY, USD/JPY Flows - USD/JPY offers 90.00; but Cross/JPY demand to push it over
USD/JPY at 89.44-46, capped by exporters, Asian selling, but supported on back of Cross/JPY demand - with higher Aussie, Kiwi, and Euro, including Cable supporting Cross/JPY. Offer 90.00, stops above 90.00 level, while bids at 89.00-20 on the downside. Talks M.E. accounts, real money have been good buyers on dips, not surprised to hear more support at 88.50-60. GBP/JPY edging back up, to 143.55-65, while Cable up at 1.6050-55, as BoE MPC Paul Fisher rejects market views that BoE is talking down Cable to boost exports. GBP/JPY Bids at 143 lows, eye stops above 144.00. WL
US Dollar Crashes Through Major Support Level
Posted: Oct 14 2009 By: Dan Norcini Post Edited: October 14, 2009 at 12:51 am
Dear Friends,
This evening in Asian trade, the Japanese Minister of Finance once again restated the new view out of Japan that the level of the Yen is no longer an obsession with the monetary authorities of that nation. His comments were interpreted by the Forex markets that intervention to stem the advance of the Yen is most unlikely. With that, market participants wasted little time bidding the Yen into a strong advance.
Those statements of his, combined with that of Federal Reserve Vice Chairman, Donald Kohn, that the US economy would not experience a quick or sharp recovery out of its recession, were both read by traders that US interest rates were not going anywhere anytime soon. Carry traders then beat the Dollar down below critical support near the 76 level on the USDX as they rushed into higher yielding currencies such as the Aussie and Loonie. The Euro also shot up to another new yearly high.
It is looking more and more like the current Administration has set on a course of deliberate destruction of the US Dollar and with it, the economic might that the US has enjoyed since post World War II. As said many times on the pages of this web site, the profligacy of the US has inescapable consequences and we are now seeing a rapid acceleration of the same. The fall in the Dollar is picking up momentum and that is why we are witnessing gold moving into new highs.
But gold is more than a Dollar phenomenon – Gold priced in terms of British Pounds and in Euros is relentlessly moving higher as both Great Britain and Europe, the fading West, are debasing their currencies as well.
Protect yourself from the theft of your wealth by these conscienceless politicians and monetary officials for they have sold their citizenry down the river and plundered them in the process far more thoroughly than Attila and his army of Huns ever did to Rome of old. At least the Roman inhabitants were aware of the rape and pillaging of their substance – when the general public finally awakens to the despicable looting of their treasures by these reeking buzzards, they will rush into gold with a fury that will shock even many of the readers of this site.
Click chart to enlarge this evening's action in the US Dollar in PDF format with commentary from Trader Dan Norcini
Tuesday, October 6, 2009
Seeking Alpha: Is the world conspiring against the US Dollar?
http://seekingalpha.com/article/165092-is-the-world-conspiring-against-the-u-s-dollar It is not unusual to see the U.S. dollar down against the Canadian dollar, and other currencies, on a day when stock market indexes are rallying. In the old days of this stock market recovery, this action would be attributed to investors leaving the safety of U.S. Treasuries and embracing risk overseas.
However, on Tuesday, the U.S. dollar's downturn is being blamed on something a little scarier: The Independent newspaper has a scoop whose headline says it all: "The demise of the dollar."
http://www.breitbart.com/article.php?id=CNG.e272eaa74dccc30f21c6ff7638b0f37b.461&show_article=1
The United Nations called on Tuesday for a new global reserve currency to end dollar supremacy which has allowed the United States the "privilege" of building a huge trade deficit.
"Important progress in managing imbalances can be made by reducing the reserve currency country?s 'privilege' to run external deficits in order to provide international liquidity," UN undersecretary-general for economic and social affairs, Sha Zukang, said.
Speaking at the annual meetings of the International Monetary Fund and World Bank in Istanbul, he said: "It is timely to emphasise that such a system also creates a more equitable method of sharing the seigniorage derived from providing global liquidity."
He said: "Greater use of a truly global reserve currency, such as the IMF?s special drawing rights (SDRs), enables the seigniorage gained to be deployed for development purposes," he said.
The SDRs are the asset used in IMF transactions and are based on a basket of four currencies -- the dollar, euro, yen and pound -- which is calculated daily.
China had called in March for a new dominant world reserve currency instead of the dollar, in a system within the framework of the Washington-based IMF.
Monday, October 5, 2009
New Currency Announced – Dollar Alternative
http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html
The demise of the dollar
In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading
The demise of the dollar
In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading
Sunday, October 4, 2009
Roubini warns stock markets have risen too fast as Fujii Japanese Finance Minister warns against JPY rise
http://www.bloomberg.com/apps/news?pid=20601087&sid=aM2YCVc3cUOI Oct. 5 (Bloomberg) -- New York University Professor Nouriel Roubini, who predicted the financial crisis, said stock and commodity markets may drop in coming months as the gradual pace of the economic recovery disappoints investors.
"Markets have gone up too much, too soon, too fast," Roubini said in an interview in Istanbul on Oct. 3. "I see the risk of a correction, especially when the markets now realize that the recovery is not rapid and V-shaped, but more like U- shaped. That might be in the fourth quarter or the first quarter of next year."
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajTxz9pHQaNw Oct. 5 (Bloomberg) -- Japanese Finance Minister Hirohisa Fujii issued his clearest warning yet that his nation is open to intervening in the currency market even as the Group of Seven declined to criticize the tumbling dollar.
"If currencies show some excessive moves in a biased direction, we will take action," Fujii said Oct. 3 in Istanbul after a meeting of G-7 finance ministers and central bankers. He declined to say if the yen is now trading in such a way.
Thursday, October 1, 2009
TONY Blair is set to be made the first President of Europe in weeks, The Sun can reveal.
http://www.thesun.co.uk/sol/homepage/news/2663036/Tony-Blair-to-head-the-EU-within-weeks.html
TONY Blair is set to be made the first President of Europe in weeks, The Sun can reveal.
Democratic Fundraiser Gets 24 Years For Fraud
http://www.npr.org/templates/story/story.php?storyId=113318532
Former Democratic fundraiser Norman Hsu was sentenced to more than 24 years in prison Tuesday by a judge who accused him of funding his fraud with a "conniving use of the political process."
U.S. District Judge Victor Marrero sentenced Hsu to 20 years in prison for his guilty plea to fraud charges and another four years and four months in prison for his conviction at trial for breaking campaign finance laws.
The judge said Hsu stole more than $50 million from hundreds of investors in a 10-year fraud by winning their confidence with a pristine reputation, even as he ripped them off in a complex Ponzi scheme, a recipe that the judge noted fits many white-collar crimes.
He called Hsu a "wolf in sheep's clothing."
He said his "conniving use of the political process to fund his fraud" made his crimes "much more sinister and reprehensible."
Wednesday, September 30, 2009
USD Index Flows
FX NOW! USD Index Flows - IMF snapshot shows USD drops as % of total reserves in Q2 2009
Wednesday, September 30, 2009 12:17:00 PM
* 30 Sep 09: 16:16 GMT (LDN) - FX NOW! USD Index Flows - IMF snapshot shows USD drops as % of total reserves in Q2 2009
A report that may be of some interest has come over Reuters. the IMF released a report that during Q2 2009, USD as a percentage of total reserves fell from 65% to 62.8%. The decline comes in the context of a climb in total reserves during the quarter by 4.8% to USD6.8 trln. The chart above shows what the USD Index did during the time period highlighted. It is worth noting that the USD index has continued to fall, which may suggest that whatever is happening to total reserves, the USD is likely to be an even smaller percentage once the Q3 data is compiled and released. M.B.
* 30 Sep 09: 15:35 GMT (NYC) - FX NOW! AUD/USD, USD/CAD Flows - Crude oil bounce helping commodity currencies
Since the release of what was a mixed bag on the EIA inventory data report, crude oil rallied to USD68.45 from USD66.25 and has helped commodity currencies AUD and CAD take back losses. In terms of the EIA data, the report showed a larger than expected rise in crude stocks while gasoline fell further than expected and distillates were up by less than anticipated. Equities are now starting to drift off lows but will need more momentum to break AUD/USD's high of 0.8837 and USD/CAD's 1.0712 low. SI
* 30 Sep 09: 15:11 GMT (NYC) - FX NOW! EUR/USD, GBP/USD Flows - No great excitement at fixing
No great excitement on EUR or GBP at the month/quarter end fixing. Cable is off lows of 1.5946 but bounce is not gathering much steam. EUR is near 1.4620/30 as equities hover near lows, but eye crude oil which has advanced in the wake of the EIA inventory report and could boost energy sector stocks (and the overall index), which would thereby give EUR a nudge. SI
Wednesday, September 30, 2009 12:17:00 PM
* 30 Sep 09: 16:16 GMT (LDN) - FX NOW! USD Index Flows - IMF snapshot shows USD drops as % of total reserves in Q2 2009
A report that may be of some interest has come over Reuters. the IMF released a report that during Q2 2009, USD as a percentage of total reserves fell from 65% to 62.8%. The decline comes in the context of a climb in total reserves during the quarter by 4.8% to USD6.8 trln. The chart above shows what the USD Index did during the time period highlighted. It is worth noting that the USD index has continued to fall, which may suggest that whatever is happening to total reserves, the USD is likely to be an even smaller percentage once the Q3 data is compiled and released. M.B.
* 30 Sep 09: 15:35 GMT (NYC) - FX NOW! AUD/USD, USD/CAD Flows - Crude oil bounce helping commodity currencies
Since the release of what was a mixed bag on the EIA inventory data report, crude oil rallied to USD68.45 from USD66.25 and has helped commodity currencies AUD and CAD take back losses. In terms of the EIA data, the report showed a larger than expected rise in crude stocks while gasoline fell further than expected and distillates were up by less than anticipated. Equities are now starting to drift off lows but will need more momentum to break AUD/USD's high of 0.8837 and USD/CAD's 1.0712 low. SI
* 30 Sep 09: 15:11 GMT (NYC) - FX NOW! EUR/USD, GBP/USD Flows - No great excitement at fixing
No great excitement on EUR or GBP at the month/quarter end fixing. Cable is off lows of 1.5946 but bounce is not gathering much steam. EUR is near 1.4620/30 as equities hover near lows, but eye crude oil which has advanced in the wake of the EIA inventory report and could boost energy sector stocks (and the overall index), which would thereby give EUR a nudge. SI
Thursday, September 24, 2009
Volcker Criticizes Obama Plan on ‘Systemically Important’ Firms
http://bloomberg.com/apps/news?pid=20601070&sid=aKPBxT0cjj5E
Sept. 24 (Bloomberg) -- Former Federal Reserve Chairman Paul Volcker criticized the Obama administration's plan to subject "systemically important" financial firms to more stringent regulation by the Fed.
Volcker told lawmakers today that such a designation would imply government readiness to support the firms in a crisis, encouraging even more risky behavior in a phenomenon known as "moral hazard."
Wednesday, September 23, 2009
FOMC Statement The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent.
FOMC Statement
Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn. Conditions in financial markets have improved further, and activity in the housing sector has increased. Household spending seems to be stabilizing, but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.
With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.
In these circumstances, the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt. The Committee will gradually slow the pace of these purchases in order to promote a smooth transition in markets and anticipates that they will be executed by the end of the first quarter of 2010. As previously announced, the Federal Reserve's purchases of $300 billion of Treasury securities will be completed by the end of October 2009. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
http://www.frbatlanta.org/invoke.cfm?objectid=E83004B9-5056-9F12-126EED5322A86646&method=display
Tuesday, September 22, 2009
FX Markets in stop hunting mode
* 23 Sep 09: 00:52 GMT (SGA) - FX NOW! USD/JPY, EUR/JPY Flows - USD back up as market in hunt for stops, above 91.00
Markets in "stoploss hunting mode" - with USD/JPY stops below 90.80-90, and EUR stops/options above 1.4825 taken out - now the reverse is happening. Sell USD earlier on stops, now market players are buying back USD on short-squeeze in lack of fresh news. USD/JPY up at 90.89-90, up from 90.47-50 lows, eye stoploss above 91.00, the level where huge US investment, funds sellers started the morning sales. EUR/USD stops below 1.4780/ 1.4750 now as market now after running into good offers ahead of 1.4850 barriers after charging to 1-year highs of 1.4840-43 from 1.4800-10. EUR/JPY at 134.45-50, off its lows of 134.10-13, eye test of 135.00 on short-squeeze in USD/JPY again. WL
Collective2.com Trading Volume Surges 1,000% to $11.65 Billion
http://preview.collective2.com/pressreleases/C2_pr_20090804.pdf
Contact: Michael Robinson
510-428-2167
New York -- Aug. 4, 2009 -- In a sign of the continued flight of
investors from high-priced money managers to do-it-yourself Internet
investing, Collective2.com today announced that it facilitated a record
$3.6 billion in self-directed trades in June 2009, roughly a 10-fold
increase from the year before.
For the first six months of this year, the nominal value of financial
instruments traded through Collective2.com totaled $11.65 billion.
That compares with about $1.1 billion in the similar 2008 period. Also
during the period, registered users grew 25 percent to 32,000.
Collective2.com acts as an online repository for automated trading
systems. The site allows any investor with an Internet connection to
select from nearly 9,000 trading systems that have been developed
by mathematicians and traders from around the world. Once an
investor selects his systems, trades are automatically placed in the
customerʼs regular brokerage account.
A trading system is a set of formulas and rules that generate buy and sell
recommendations based on price, volume or other data. Collective2.com
trading systems cover stocks, options, futures and foreign exchange.
"Were seeing more investors flee from so-called professional money
managersʼ and decide they can do better, and pay less, while
maintaining complete control over their brokerage accounts," said
Matthew Klein, President of Collective2. "At Collective2, an investor
with only $10,000 can have access to the same high-end automated
trading strategies as a money manager running a $100 million
portfolio."
The Collective2 automated trading platform is completely transparent.
Funds remain in the customers brokerage account. The customer
alone selects which trading strategies are automated in his account
and can see, in real time, exactly which trades are being placed
NFA Blasting Florida based firms
NFA permanently bars True Vector Trading Group LLC and its principal
September 22, Chicago - National Futures Association (NFA) has permanently barred from NFA membership True Vector Trading Group LLC http://www.nfa.futures.org/basicnet/Details.aspx?entityid=0383441 (True Vector), an Introducing Broker formerly located in Delray Beach, Florida, and its principal James Douglas http://www.nfa.futures.org/basicnet/Details.aspx?entityid=0320266 of Galveston, Texas. The Decision, issued by NFA's Business Conduct Committee, is based on an NFA Complaint filed in June 2009.
The Committee found that True Vector and Douglas made misleading sales solicitations to customers and had the customers sign blank account opening documents which Douglas completed with inaccurate information. The Committee also found that True Vector and Douglas failed to adequately implement an anti-money laundering program and failed to supervise True Vector's employees in the conduct of their commodity futures activities.
http://www.nfa.futures.org/news/newsRel.asp?ArticleID=2357
For Immediate Release
For more information contact:
Karen Wuertz (312) 781-1335, kwuertz@nfa.futures.org
NFA permanently bars Florida firm GlobeFX Club Inc.
September 21, Chicago - National Futures Association (NFA) has permanently barred GlobeFX Club Inc. (GlobeFX Club) from NFA membership. GlobeFX Club is a Commodity Pool Operator located in Homestead, Florida. The Decision, issued by NFA's Business Conduct Committee, is based on an NFA Complaint filed in June 2009.
The Committee found that GlobeFX Club provided false and misleading information to NFA and failed to cooperate in NFA's investigation of the firm's operations. In addition, the Committee found that GlobeFX Club failed to supervise the firm's forex activities.
In March 2009, NFA took an emergency enforcement action that suspended GlobeFX Club because NFA was unable to determine the nature of GlobeFX's business operations, the identities of its customers and the treatment of its customer funds. See previous press release.
The complete text of the Complaint and Decision can be found on NFA's website (http://www.nfa.futures.org).
NFA is the premier independent provider of innovative and efficient regulatory programs that safeguard the integrity of the futures markets.
For Immediate Release
For more information contact:
Karen Wuertz (312) 781-1335, kwuertz@nfa.futures.org
NFA permanently bars Florida commodity trading advisor Capital Blu Management LLC
September 18, Chicago - National Futures Association (NFA) has permanently barred from NFA membership Capital Blu Management LLC (Capital Blu), a Commodity Trading Advisor located in Melbourne, Florida. The Decision, issued by NFA's Business Conduct Committee, is based on an NFA Complaint filed in June 2009.
The Committee found that Capital Blu failed to cooperate fully and promptly with NFA in its investigation of the firm's operations.
The Decision is one of a series of actions taken against Capital Blu. In September 2008, NFA issued a Member Responsibility Action (MRA) prompted by NFA's investigation which was based upon customer allegations that Capital Blu had provided false statements to customers and participants in the CBM FX Fund LP and possibly other pools. See previous press release.
Additionally in April 2009, the Commodity Futures Trading Commission (CFTC) filed an action in federal court in Florida charging Capital Blu along with other defendants with depositing customer funds into multiple Capital Blu bank accounts, which were commingled and misappropriated for personal use. The Court entered a temporary restraining order freezing their assets and prohibiting Capital Blu from destroying books and records. See narrative of the CFTC Action.
The complete text of the Complaint and Decision can be found on NFA's website (http://www.nfa.futures.org)
NFA is the premier independent provider of innovative and efficient regulatory programs that safeguard the integrity of the futures markets.
Monday, September 21, 2009
Too Much Mathematics in Trading
By Thomas R. Keene and Shannon D. Harrington
Sept. 21 (Bloomberg) -- Financial markets have grown too dependent on mathematicians who use models to anticipate price moves and need to start injecting "common sense" into the equation, said Paul Wilmott, a London-based author and quantitative finance instructor.
Wilmott has warned that so-called quants who use mathematics to forecast how markets will behave can overlook errors in the models, leading to flawed predictions. In a New York Times column July 28, Wilmott also said so-called high- frequency trading, where hedge funds and other firms use advanced computers to buy and sell thousands of shares a second, threatens to destabilize the market.
"There is too much mathematics in this business," Wilmott, author of "Paul Wilmott on Quantitative Finance," said in a Bloomberg Radio interview. "I just want people to stop and think for once. People just rush into these things without any thought for what the consequences might be."
Wilmott is the co-founder of the Certificate in Quantitative Finance, a six-month program founded in 2003 that stresses the "practical" application of math in finance and admitted 195 students in January.
"We explain to people how to think for themselves," said Wilmott, who also founded the Diploma in Mathematical Finance at Oxford University, according to his Web site. "People don't really question those assumptions enough. If the assumptions are wrong, then obviously the models and what follows can be wrong as well."
Reliance on computer models and trading using algorithmic formulas also has led to a shift in the types of people hired by Wall Street, he said.
"You go back 20 years, and people running finance, they were maybe history graduates," Wilmott said. Now, much of the industry is run by mathematicians, he said. "A lot of mathematicians do not have that common sense that the old guard had," he said.
To contact the reporter on this story: Thomas R. Keene in New York tkeene@bloomberg.net; Shannon D. Harrington in New York at sharrington6@bloomberg.net.
Last Updated: September 21, 2009 15:39 EDT
http://www.bloomberg.com/apps/news?pid=20601087&sid=aD4y2TBuy4gQ
Sunday, September 20, 2009
Friday, September 18, 2009
EES reaches 10,000 downloads from MQL4.com
http://codebase.mql4.com/en/author/eliteeservices
Original eFibo trader: 6240
EES Hedger: 2025
V Speed Indicator: 674
Wednesday, September 16, 2009
New NFA Rule - Forex only managers do not need to register
Account Managers
Generally, a person exercising trading authority over a customer's futures or
options account must register as a commodity trading advisor (CTA). The
Advisory states, however, that a person that manages the funds of
customers held by an authorized counterparty solely to trade forex is not
required to register as a CTA but may do so voluntarily. Obviously, if the
person also exercises trading authority over a customer's account for
exchange-traded futures or options contracts, the person must register as a
CTA.
A person exercising trading authority over a customer's account may not
receive or hold the customer's funds. Those funds must be held by an
authorized counterparty.
Nfa Forex Regulatory Guide
Generally, a person exercising trading authority over a customer's futures or
options account must register as a commodity trading advisor (CTA). The
Advisory states, however, that a person that manages the funds of
customers held by an authorized counterparty solely to trade forex is not
required to register as a CTA but may do so voluntarily. Obviously, if the
person also exercises trading authority over a customer's account for
exchange-traded futures or options contracts, the person must register as a
CTA.
A person exercising trading authority over a customer's account may not
receive or hold the customer's funds. Those funds must be held by an
authorized counterparty.
Nfa Forex Regulatory Guide
Tuesday, September 15, 2009
Introduction to Regulation of Hedge Funds in Germany
hedge funds companies -
SEC Staff Clarifies that Cash Solicitation Rule
Does Not Apply to Investment Pool Referrals
http://www.dechert.com/library/FS_09_10_08.pdf
Monday, September 14, 2009
China US Trade war begins
Mr. Obama's Trade War
If President Obama thought he could pander to his domestic political base without any consequences abroad, he needs to think again. Beijing's response to the tire tariffs Mr. Obama announced late Friday evening is a warning that America's trading partners won't take protectionism lying down.
China's Ministry of Commerce announced Sunday that it will launch antidumping investigations against imported U.S. auto parts and chickens. The move is being interpreted as retaliation for Mr. Obama's imposition of a 35% tariff on cheap Chinese tires imported into the U.S. (Beijing denies a link.) Apparently Beijing wasn't mollified by the fact the tariff is less than the 55% domestic lobbies in the U.S. had sought. The Commerce Ministry also put out a strongly worded statement denouncing the tire tariffs and not-so-gently reminding Mr. Obama of the Group of 20 statements he has endorsed about the importance of resisting protectionism amid a world-wide slowdown.
On their own these measures won't mark dramatic protectionism. Many imports of U.S. poultry already face stiff limits stemming from a pre-existing trade dispute over a U.S. ban on some Chinese chickens. Beijing had already slapped duties on car parts during an earlier trade dispute, too.
Rather, the Chinese government may want to send a signal to discourage Mr. Obama from future protectionism. They have reason to worry. Unlike in normal antidumping cases, Mr. Obama can't plead that his tire decision was simply made by career bureaucrats following a standard rule book. The trade law he applied, Section 421, gives the President full discretion, and Mr. Obama signaled he's willing to use his discretion to pay back domestic political supporters like the United Steelworkers union that filed the tire case. And because Mr. Obama's decision sets a precedent for similar cases, Beijing has to worry it will face more protectionism in short order if it doesn't nip this trend in the bud now.
This kind of Chinese response was predictable, if the Obama Administration had cared to read the signs. As a political matter, Beijing can't afford to do nothing. The China Rubber Industry Association, a trade group, puts the potential cost to the Chinese economy of the U.S. tariffs at $1 billion and 100,000 lost Chinese jobs. The Commerce Ministry said yesterday it wants to discuss the issue with the U.S. at the World Trade Organization, but a formal WTO challenge would face an uphill climb. Section 421 was specifically allowed as part of China's agreement to join the WTO in 2001.
Plus, China has its own protectionist lobbies at home. "Chinese poultry companies have been struggling over the past couple of years amid bird flu and a flood of imports, and the financial crisis is making that worse," Ma Chuang of the China Animal Agriculture Association, told Bloomberg over the weekend. Tire tariffs from the world's traditional free-trade leader makes it harder for governments like China's to stand up to such pressure from their own domestic interests.
That doesn't make Beijing's apparent retaliation right, of course. Beijing could best claim the global economic leadership role it craves by resisting tit-for-tat protectionism and instead further reducing its own subsidies, trade protections and limits on foreign investment. That might be wishful thinking, but at a minimum it would be wise to drop these antidumping cases as soon as attention has shifted elsewhere.
The bigger lesson here is for Mr. Obama, though. He appears to have thought he could both appease his far-left antitrade supporters in the U.S. and paper over the resulting disagreements with America's trading partners. No such luck. Instead he ceded America's historical leadership on trade when he imposed the tire tariffs. Now China's weekend moves are offering a first sign of where this will end up if he doesn't rediscover the virtues of free trade soon.
Is this a looming trade war between the US and the world's largest holder of US debt? Or is it saber-rattling setting up the G-20 meeting in Pittsburgh
http://online.wsj.com/article/BT-CO-20090914-702705.html
European stock markets traded lower Monday, weighed down by fears of protectionism and a possible US/China trade war.
http://www.marketwatch.com/story/dollar-gives-up-early-gains-after-trade-war-fears-2009-09-14
By marketwatch The US dollar slides against major rivals in late morning, giving up a small lift amid rising US-China trade tensions
Saturday, September 12, 2009
New Merk funds offers currencies for all
BOSTON (Reuters) - Money manager Axel Merk has a proposition for average investors: play the currency markets like a hedge fund for a mere $2,500.
Normally the world's foreign exchange markets -- where dollars, euros and yen exchange hands at lightning speed and in enormous sums -- are off limits to people who are saving a few hundred dollars a week for retirement or college tuition.
But on Wednesday, Merk -- a computer scientist turned asset manager with a growing reputation for bringing currencies to Main Street investors -- will launch his third fund that will be stocked with the world's biggest and most liquid currencies.
The Merk Absolute Return Currency Fund will join the four-year-old Merk Hard Currency Fund and the one-year-old Merk Asian Currency Fund as part of the Merk Mutual Funds' lineup.
"This fund will allow the public to have access to the forex markets," Merk said in a telephone interview.
"The main goal is to offer true diversification with a mix of currencies that can go long or short," Merk said, describing the portfolio as something for investors who want to own more than stocks and bonds.
Investors will be able to access the fund through the Internet, brokerages such as Fidelity and Charles Schwab (SCHW.O), and through financial advisors.
The new fund will share characteristics of the two existing funds: it will never use leverage or borrowed money to make returns grow faster and it will make long-term allocations, not minute by minute calls, Merk said.
Thursday, September 10, 2009
Barclays Capital launches enhanced FX Algorithmic Trading
http://www.automatedtrader.net/news/algorithmic-trading-news/15924/barclays-capital-launches-enhanced-fx-algorithmic-trading
Barclays Capital, the investment banking division of Barclays Bank PLC, has announced the launch of PowerFill+, a suite of online foreign exchange tools providing clients with order management and access to deeper liquidity. This new functionality on BARX, the firm's electronic trading platform, is free to use, providing execution capability without brokerage fees.
The main feature of PowerFill+ is that it allows clients to anonymously work bids and offers. The best bid/offer forms part of the price that users see, which is intended to enable BARX to provide all clients with tighter spreads and deeper liquidity.
"Traditionally, platforms offering this level of order functionality charge their clients fees, but PowerFill+ is brokerage free," said Tim Cartledge, Head of BARX FX Trading at Barclays Capital. "Zero brokerage plus Barclays Capital's certainty and depth of liquidity, coupled with the extra liquidity resulting from our clients' own orders, means we are providing clients with an optimal trading environment."
"PowerFill+ demonstrates Barclays Capital's commitment to providing clients with outstanding service and reinforces our position as a leader in market innovation," said Nick Howard, Head of Foreign Exchange and Emerging Markets Distribution at Barclays Capital. "This is a great addition to our BARX platform which is recognised globally for its reliability and stability with a proven track record during times of market volatility."
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