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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

Socialnomics: Social Media Revolution

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.

The essence of the banking industry

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

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."

Are We Real? Insights for evolution

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