STOCK ROLLERCOASTER...
BEAR STEARNS Bailed Out by Fed, JPMORGAN CHASE...
*Cash 'significantly deteriorated'...
PAPER: Wall Street fears big bank is in trouble...
President Bush expresses confidence in economy-boosting measures...
Dollar falls below Swiss franc...
Friday, March 14, 2008
Black Bear Friday
Thursday, March 13, 2008
How far can the dollar fall?
How far can the dollar go down?
Theoretically, the US Dollar can go to zero. While unlikely, it should be remembered that nearly every currency that has ever existed throughout history, eventually has a crash that destroys 90% of absolute value, or more.
Won't foreign Central Banks support the dollar?
Why should they? If you are hungry, and your 600 lb. neighbor (who is now so fat he can't even walk anymore he needs to use one of those little carts) missed a few meals, which happen to be 5x expensive as yours, would you finance his dessert? Of course not. You are thinking many things, but supporting his habit of overeating isn't one of them. The US consumes over 25% of the world's resources but produces less than 10%. Economists may not care for such a crude analogy, but the situation with the US Dollar is very, very simple, and should not be overcomplicated. The USD has been a reserve currency for the post WW2 world, but since Nixon abandon gold standard, the USD is backed by only the belief and faith in US Government. We are seeing a commodity boom, not because of a bubble in commodity asset prices, but because of a decline in the USD, the world's reserve currency in which many commodities (especially Oil and Gold) are priced. In any event, it's not likely that foreign central banks will bail out the dollar, because that would in effect make them eat a realized loss in their current account. Moderately wealthy nations cannot afford to take the loss of the US, the largest and wealthiest economy in the world. The US has been a financial big brother who have bailed out other failing economies – but the US has no big brother to lean on, except maybe Russia, although that wouldn't go over too well in Washington. So if the US Defaults, who can come to the rescue?
Gold is cheap
Adjusted for inflation, Gold should be above 1500 – without considering any boom. Many are wondering if commodities can continue to increase, without considering how depressed commodity prices were in the late 90's. An economy can live without services, or money, but people cannot decide not to eat or use Oil. Gold is money, the high price in Gold is reflective of investors concern about the value of money – any money. The US Dollar is a reserve currency so when USD goes down, so do many other currencies. The majority of USD holders are foreigners, but that is changing (in the past 10 years foreign USD holders have decreased from 77% to 62%).
What to do?
An argument of this nature should end in a 'what's next' or 'what you should do'. Unfortunately, this is a complex situation with no magic bullet solution. On a basic personal finances level, one should sell your mortgage at any price and become debt free with low cost of living. Don't bet on any economic upturn that will save your finances, things will only get worse. Second, do what you do well – no matter what the value of the dollar or the state of the economy, there will always be demand for goods and services (unless you happen to be in real-estate business, in which case you could start looking into farms.) The good news is that in any time of chaos, uncertainty, and reorganization, there are always massive opportunities. Taking advantage of them may not require huge amounts of capital. Knowledge of the situation can cause one to be 'in the right place at the right time' or at least not 'in the wrong place at the wrong time' – for example it would not be smart to be in south Florida amidst economic suffering which could lead to crime, rioting, overall fraud, and a depressed local economy.
Property surrounding small country towns has been doubling in 1 year! Farmland has increased by as much as 500% in some areas over the last few years. There are plentiful opportunities in this market, but they may not be the traditional opportunities that investors are accustomed to.
It's 2008
There is a new market thinking, accept it or not. We don't live in the 1970's, it's not 1970 it's 2008. In 1970 Russia was communist, now there are more billionaires in Moscow than in New York. In 1970 Oil had not yet peaked, there was no Internet, financial markets were not deregulated to the extent that they are now, there were no derivatives, no climate change, and no Oil hungry China. In 1970 Europe was scarcely organized, only 25 years of reconstruction post ww2, and there was no Euro.
Thinking Different
Therefore, the only way to survive in the New Investment Paradigm is to be nimble and stay ahead of the information curve. In any field, applied intelligence can earn a solid position and even great profits. Safe havens are no longer safe as they were, the bond market is getting destroyed by inflation, TIPS (inflation protected bonds) are trading negative for the first time ever, meaning you are betting inflation will be worse than the small loss you will take on the bonds.
A trader named Paulson made a record Wall Street profit on single trade, shorting SubPrime loans. Gold investors are happily sitting on 300%+ returns since 2002. Those holding US Dollar short positions have doubled their money in several years. CTA programs have achieved 70% - 150% in 2007, trading currencies, commodities, and futures. Anyone long Oil or Gasoline futures in the past months would have been very profitable.
Clearly, there are hundreds of opportunities but no clear 'magic bullet' solution that could be recommended, compared to 5 years ago when a US Dollar short or Long Gold portfolio could have been safely recommended. It is for this reason Elite E Services is launching a Global Opportunities Hedge Fund, which should be ready by late spring. If you are trading for yourself, take quick profits and don't hold any positions for the long term, and seek new opportunities. Keep in mind the opportunities may be biased toward the Short side than the long side, as DOW and NASDAQ components will be hit by a sinking dollar, sinking US Economy, and credit problems.
Elite E Services offers forex managed accounts www.fxv1.com , FX trading strategies www.startelite.com , and market intelligence www.eliteforexblog.com . 646-837-0059
US Dollar on the verge of crash
Gasoline station purchases, which so far had been boosted by record-high fuel prices, also tumbled 1%...... http://money.cnn.com/2008/03/13/news/economy/feb_retailsales/index.htm?postversion=2008031308
``Sentiment for the dollar continues to deteriorate very, very rapidly and if we're not careful this will turn into a dollar crash,'' said Mitul Kotecha, head of foreign-exchange research in London at Calyon, the securities unit of Credit Agricole SA, France's second-biggest bank. ``The risk is that we see a fairly aggressive move sharply lower towards 95 yen, and that could really perk up the interest of the Bank of Japan.''.. http://www.bloomberg.com/apps/news?pid=20601087&sid=aQ3ZEkeI8x0g&refer=home
March 13 (Bloomberg) -- Want the inside skinny on Federal Reserve Chairman Ben Bernanke's next moves as he battles to avert recession, bank bankruptcies and the collapse of capitalism?... http://www.bloomberg.com/apps/news?pid=20601039&sid=a8R_nSQd9wKU&refer=home
"The Fed's actions are keeping banks from having to write down large losses and quite likely go into bankruptcy," he writes on his blog at the American Prospect. "The result is that the bank executives, whose inept management pushed them into bankruptcy, get to keep their jobs and their salaries, which run into the tens of millions a year." Meanwhile, homeowners facing foreclosure - not to mention ordinary savers who are watching inflation erode the value of their nest eggs - remain quite unbailed-out.
Simons says the whole mess points up the limitations of the Fed. "They're not crisis managers," he says. "There's no playbook for this." http://money.cnn.com/2008/03/12/markets/fedfollies.fortune/index.htm
"My wage tripled in two years!" boasts Barbara Wasik, a Polish graphic designer.
But the pay rise was not a result of moving to the UK, instead the money rolled-in when she came back home. ... http://news.bbc.co.uk/2/hi/business/7282923.stm
PAPER: Fed takes boldest action since the Depression to rescue mortgage industry...
Gold hits $1,000 record high...
'Magic is over' for USA, says foreign minister of France...
Riot police called to control crowd at housing authority in Boca Raton...
http://www.nytimes.com/2008/03/13/technology/13net.html?ei=5065&en=765ff5f673bfdfee&ex=1206072000&partner=MYWAY&pagewanted=print Video Road Hogs Stir Fear of Internet Traffic Jam In a widely cited report published last November, a research firm projected that user demand for the Internet could outpace network capacity by 2011.
Wednesday, March 12, 2008
Forex Bastards gets exposed as fraud
www.forexbastards.com was one of the highest ranked forex sites on the net for a long time.
THE OWNER OF FOREX BASTARDS & SECREAT FOREX SOCIETY [ FELONY ARREST MADE & FRAUD CHARGES FILED.
> >
There is an on going investigation into the activities of Dmitri Chavkerov Poster child of 21 century Internet fraud as you know or may not know he has been under investigation for a number of things for the last few years and charges have been placed against his criminal partner in a fraudulent scheme to defraud the people of the united states. Its people like this that have made the need for homeland security a must. We must all do our due diligence to detect fraudsters and terrorist. There are also numerous complaints by investors and a pending case of identity theft and transmission of personal banking information on a female victim. As well as black mail, slander and defamation. Its time to bring Mr. Dmitri Chavkerov to justice, arrest have already been made more are sure to follow if your company has been a victim of black mail, false slander or you have lost money from his services or products or feel he has caused you financial harm please contact www.ic3.gov or your report can be documented by the arresting agent [William James Cunningham ] Documentation of the current case can be found at: >>
http://www.ice.gov/pi/news/newsrelea...osangeles1.htm
Mr. dimitri has made headlines around the world for his cutting edge class of fraud. And is the first to be caught in this type of Online fraud. Based on current information he is pretending to be a trading expert but based on financial statements he has lost a large sum of money in trading the forex market and all of his current income is from fraudulent product sales. He scares people into not buying or trusting his competitor’s products then thru his massive network of forex sites sell them his forex product. A scare then magic solution that many internet scammers / fraudsters use today. He hides behind other names and web-sites and shady people.
U.S. Immigration and Customs Enforcement (ICE) was established in March 2003 as the largest investigative arm of the Department of Homeland Security. ICE is comprised of five integrated divisions that form a 21st century law enforcement agency with broad responsibilities for a number of key homeland security priorities.
http://www.ripoffreport.com/reports/0/305/RipOff0305422.htm
Dmitri Chavkerov has been busted by I.C.E Agents on 11/30/07 He is also not an American Citizen
United States District Court Documents
Below is the actual Governments complaint against Dmitri's girlfriend Yuliya M. Kalinina note in the interview she admits he is not a U.S citizen, and in his interview (pg-12) he admits he had knowledge of and willingly took part in this FRAUD against the United States Of America.
Also note that Dmitri is not the big shot Forex Mogul he tries to make everyone believe he is, he runs his little operation from the coffee table of his law breaking girlfriends apartment.
Official Criminal Complaint Documents (PDF) -
Case NO 07-1636M-1
Press Release-
Busted in Marina Del Rey, CA for Marriage Fraud
CNN VIDEO -
CNN Story On Just How Foolish They Were
L.A Times Story -
About Dmitri and Yuliya's Fraudulent Scheme
More info:
http://www.pipwizard.com/forexbastards
http://answers.yahoo.com/question/index?qid=20071228203505AAlJyT7
Tuesday, March 11, 2008
Fed Sells Dollars, EUR/USD down 200 pips
Fed to Lend $200 Billion, Take on Mortgage Securities (Update3) The Federal Reserve, struggling to contain a crisis of confidence in credit markets, plans to lend up to $200 billion in exchange for mortgage-backed securities.
New Tool
The Fed today set up a new tool, the Term Securities Lending Facility, to lend Treasuries to primary dealers for 28- day periods through weekly auctions. The Fed also said it's increasing the amount of dollars available to European central banks through swap lines.
The Federal Open Market Committee authorized increasing currency swap lines with the European Central Bank and Swiss National Bank to $30 billion and $6 billion, respectively, increasing the ECB's line by $10 billion and the Swiss line by $2 billion. The Fed extended the swaps through Sept. 30.
The ECB announced it will lend banks in Europe up to $15 billion for 28 days and the SNB announced a similar auction of up to $6 billion. The Bank of England will offer $20 billion of three-month loans on March 18 and hold another auction on April 15. The Bank of Canada announced plans to purchase $4 billion of securities for 28 days.
Treasuries slid after the announcement, with yields on 10- year notes rising to 3.60 percent at 10:32 a.m. in New York, from 3.46 percent late yesterday.
* 11 Mar 08: 14:42(LDN) - FX NOW! USD/JPY Flows - While equities retain gains, USD/JPY has room to move higher
USD/JPY traders are having some fun with the markets. Supported by the positive equity performance, dealers took prices up to challenge the offers seen earlier that stopped the rally around 103.20, where at least one Asian sovereign had been seen in the selling group. The offers were not there this time around and stops in the 103.25-30 range were tripped sending prices up to highs of 103.40. While equities are holding their gains, USD/JPY has more room on the upside. M.B.
* 11 Mar 08: 14:37(LDN) - FX NOW! EUR/USD Flows - more a buy opportunity than marking a top
We suspect that the run to 1.5495 on EUR/USD has proved 'near enough' to 1.5500 for a good many longs. However, while the US trade gap was better than expected, we suspect that the real US dollar policy is that it will get better yet if the USD weakens some more. Add that to ECB intransigence on interest rates, chances that the Fed will still cut by 75bps next week, more signs of peg-related unrest in the Middle East and ongoing reserve diversification (especially if the M.East story gets to take off), then we doubt that we have seen the EUR/USD high yet. PB
* 11 Mar 08: 13:26(LDN) - FX NOW! USD/JPY, EUR/JPY Flows - Asian sovereigns seen in group offering USD/JPY, stops near
USD/JPY has run into offers, rumored to include Asian sovereigns at the highs of 103.20. It is worth noting that the offers are in front of stops that are resting in the 103.25-30 range. While JPY has dropped vs USD reflecting the advanced in equities that has been sustained, with S&P futures still up 28 points at 1304, JPY is still slipping modestly vs EUR that has been moving higher ever since the stronger than expected ZEW was released this morning. M.B.
* 11 Mar 08: 13:03(LDN) - FX NOW! EUR/USD, EUR/JPY Flows - Central Bank liquidity efforts
Somewhat of a relief rally for the USD and equities on what has essentially been a signal from the major central banks. But signal it is, and a signal that might well discourage (for a while) what have become widespread expectations for another 75bps of cuts on March 18. In the meantime, the biggest USD move has been versus the JPY - which fits with the reverse flows previously seen with USD/JPY moving in lockstep with major equity indices. This has left EUR/JPY higher - a move which has restricted the pullback on EUR/USD to the 1.5350 area. C.F.
Sunday, March 9, 2008
EES FXV1 Managed Account Update
FXV1 update
The FXV1 program has undergone a major, material change that will affect our AUM, DDOC, and the setup of the account. We have closed several accounts under the old program and will re-open under the new structure. The reason for this change is due to brokerage issues and technical issues, which caused unnecessary loss of opportunity. While our system had been performing well, the good results simply weren't translated to accounts. No client accounts were adversely affected by this issue, only EES corporate account. Under the new structure, all issues should be solved and we can return to our aggressive growth, but this time with limited risk as we have developed a Dynamic Risk Strategy (DRS). www.dynamicriskstrategy.com
Tech Changes
FXV1 will no longer use TradeRobot automation technology, we will use Meta Trader platform to execute our blended systems. Elite E Services will develop our own proprietary signal aggregation software which will replace MT once it is ready, approximately in 8 months time. This technology will be a 'signal server' that will be our own Strategy Runner style 'system selector' that can be linked up to any brokerage. When this is available, FXV1 will be available at ANY brokerage, in the meantime, it will be available at any broker that uses Meta Trader platform. Any broker who wants to use the FXV1 program and does not have MT platform, can pay a development fee of $15,000 to connect FXV1 to their API, which can be repaid once fees begin to be generated.
Brokerage Changes
FXV1 will now trade with Meta Trader on major FX brokers, such as Gain Capital, ODL Securities, FX Solutions, FXCM, and any other MT broker. We welcome opportunities from IB's who want to raise money for FXV1. The initial minimum to setup FXV1 at a new brokerage is $100,000 – but once a master account is established at the new brokerage, the individual client minimum can be as low as $1,000. FXV1 will charge only performance fees, and will give rebates to any participating IBs. This is a fair 25% of the profit performance based model. NO OTHER FEES.
Return Targeting
We will structure the program to achieve 1% per week, which could be greater than 50% per year.
Account Protection
Our new system will include drawdown protection, in the event of a catastrophic market move or other technical problem, the account cannot drop below 5%.
These changes will be reflected in our DDOC soon. Please visit www.fxv1.com for more information.
Liquidity Issues
The 28-day repurchase agreements will allow primary dealers (banks and broker dealers that trade directly with the Fed) to borrow against all and any class of securities, including the agency-backed mortgages being shunned by many private-sector institutions.
The effect of the Fed's measures is to supply banks and financial institutions with the liquid funds that they can't currently obtain on the commercial markets. ..... http://www.bbc.co.uk/blogs/thereporters/robertpeston/
U.S. Unexpectedly Lost 63,000 Jobs in February
Tons of food aid rotting in Haiti ports
Already we have riots, hoarding, panic: the sign of things to come?
Las Vegas gambling revenues are falling for the first time since 2001, adding to the evidence that the US economy is on a losing streak.
The city has been on a roll for seven years, fuelled by increased tourism and domestic spending, with visitors flocking to the new generation of resort casinos that have sprung up along the Las Vegas Strip.
http://www.gcnlive.com/NewsStory/Gold.html U.S. central banks may have less than half the gold they claim to possess in their vaults, charges a watchdog group in an ad scheduled for publication in the Wall Street Journal this week.
Friday, March 7, 2008
Fed pumps more liquidity while Congress grills CEOs
The Federal Reserve moved to add as much as $200 billion to the banking system over the next month !!!!!!!! http://www.bloomberg.com/apps/news?pid=20601087&sid=abqaRvWOHeFc&refer=home
http://www.businessweek.com/magazine/content/08_11/b4075000870869.htm?chan=rss_topStories_ssi_5 Hedge Funds Frozen Shut
To buy time and stave off losses, more funds are blocking withdrawals. Are they just postponing the inevitable?
http://money.cnn.com/2008/03/07/news/newsmakers/ceo_pay/index.htm?cnn=yes
High-profile ex-banking CEOs fire back following attacks on packages, telling lawmakers that figures were exaggerated by the media.
Thursday, March 6, 2008
Trade Idea: Long Coffee, War in Columbia?
EES Trade Logic
Coffee will continue to be consumed regardless of market price. The average New Yorker spends $6 USD per day on coffee. Unstable political situation in Columbia can cause coffee price to temporarily skyrocket on the world market. Conflict is not imminent, but Venezuela is moving troops to the border. A freeze on Columbian coffee is enough to cause the price to explode. Here is our research:
http://www.researchwikis.com/Coffee_Market_Research
Background
Coffee is produced from roasted seeds or beans and is a widely consumed beverage. Coffee consumption of coffee was recorded in 9th century Ethiopia and spread from there through Africa to Egypt and then to Italy, from there being introduced to the rest of Europe.
Coffee beans are picked, processed, and dried. The major producing countries are in Asia, Africa and Latin America. Coffee seeds are roasted at a temperature of about 200 °C, allowing the sugars in the beans to caramelize. The bean changes color and flavor is drawn out. Next, the beans are roasted to a light, medium, or dark brown color depending on the desired flavor. After roasting, beans are ground and brewed in order to create the beverage coffee.
Effects on human health are continually debated. Some studies indicate that coffee may reduce the risk of certain diseases but a negative side effect, an increase of stress, due to excessive intake, is also noted.
Market Structure
Coffee is one of the most heavily traded commodities in the world and ranks sixth by value in the world. In 2000, the coffee trade was worth US $33 billion. Coffee demand dropped in 2001 to 2003, with growth falling to 1%. Small and medium sized producers suffered the most from this drop, while the growth in retail sales mitigated the effect on coffee retailers.
When prices of green coffee rise, producers make profits while the retailers lose margins. Conversely, when green coffee is relatively cheap, the distributors and retailers earn higher profits. Rarely do the large players financially integrate the two operations, that of production and retailing. There have been periodic attempts to regulate and better control the coffee trade but trade arrangements consistently fail and the trade is currently subject to market forces.
Commercially, two types of coffee banes are in highest demand - Coffee Arabica and Coffee Robusta, the latter of which has seen strong growth due to increase in instant coffee sales. Brazil and Vietnam are world's largest producers of robusta coffee.
Industry Definitions
- Caffeine: an alkaloid compound which acts as psychoactive stimulant. Various flavors have different amounts of caffeine, some of which are listed below:
Drip coffee: 115–175 mg
Espresso: 100 mg
Brewed: 80–135 mg
Instant: 65–100 mg
Decaf, brewed: 3–4 mg
Decaf, instant: 2–3 mg
- Café latte: espresso coffee with milk.
- Café Macchiato: espresso with small amount of steamed milk added to top.
- Cappuccino: made of equal parts of espresso and milk froth, occasionally garnished with spices or powdered cocoa.
- Americano: popular in the U.S., it is served as small shots topped with hot water to give a similar strength to drip-brewed coffee.
- Chocolate-like: an aroma reminiscent of the aroma and flavor of cocoa powder and chocolate (including dark chocolate and milk chocolate). Sometime referred to as sweet.
- Caramel: an aroma similar to the odor and flavor produced on caramelizing sugar, without burning it.
- Body: an attribute used to describe the physical properties of the beverage.
- Astringency: an attribute characteristic of an after-taste sensation very similar to a dry feeling in the mouth, undesirable in coffee.
Market Metrics
United States Exports and Imports
Total US imports for the 4th quarter 2006 totaled 5.773 million bags, down 7.4% from the 3rd quarter's 6.232 million bags. Compared with last year same quarter, US imports were up by 2.1% from 5.653 million bags.
Average retail prices in the 3rd quarter 2006 decreased by nearly one percent over the third quarter, decreasing to $3.14 per pound from $3.17. Compared to the year-ago period, prices were down by 19 cents or 5.7%. The United States consumes one-fifth of all the world's coffee, making it the world's largest consuming country.
World Market
The US Department of Agriculture's December estimate for 2006-007 was that world coffee production had increased to 128.6 million bags, up 4.9 million bags from its June 2006 estimate. Production in 2006-07 was estimated at 13% above the 2004-05 period.
World coffee exports totaled 7.75 million bags in July 2007, an increase of 1% compared with the volume of 7.67 million bags recorded in July last year. Total exports in the first 10 months of coffee year 2006-07 (Oct-06 to Jul-07) were up by 13.3% from the same period last year, totaling 81.52 million bags compared to 71.94 million bags in the prior year.
Total annual production of coffee was estimated at approximately 6.8 million tons in 2007. It is usually sold in bags of 60 kilograms.
The top global producers of coffee are as follows:
Country Annual Production
Brazil 35 million bags
Columbia 11 million bags
Vietnam 11 million bags
Ethiopia 4.5 million bags
There are several other key producing countries. The following countries each produce more than 2 million bags annually:
- Costa Rica
- Guatemala
- Guinea
- Honduras
- India
- Indonesia
- Ivory Coast
- Mexico
- Peru
- Uganda
Colombia, traditionally, the second largest coffee exporter, slipped to second place in the early 2000s behind Vietnam. This country, a relative newcomer to the world coffee market, dramatically boosted production through the 1990s and by the early 2000s had overtaken Colombia.
But you can see from the following chart how the top 3 dominate everyone:
Industry Players
- Nestle
The market leader in coffee production with Nescafe as its flagship product. The company's chief markets are the United States, France, Germany, Brazil, the United Kingdom, Italy, and Japan. Popular coffee brands include Nescafé, Taster's Choice, Ricoré, and Ricoffy. Roasted and ground coffee brands include Nespresso, Bonka, Zogas, and Loumidis.
- Kraft Foods Inc
Philip Morris spun off Kraft Foods, one of the world's largest coffee producers, in June 2001, while retaining 84 percent ownership. Philip Morris first entered the coffee market by purchasing the world's largest coffee roaster, General Foods Corporation, in 1985. Kraft Foods' coffee brands in the United States included General Foods International Coffees, Gevalia, Maxim, Maxwell House, Sanka, Starbucks (under a licensing agreement), and Yuban. Its international brands included Carte Noire, Gevalia, Grand' Mère, Kaffee HAG, Jacobs Krönung, Jacobs Milea, Jacobs Monarch, Jacques Vabre, Saimaza, Kenco, Maxwell House and others.
- Sara Lee/DE
Formerly Sara Lee Coffee & Tea Worldwide, a business segment of Sara Lee. Caters to both the retail and the foodservice sectors around the world. Sara Lee's European coffee brand is Douwe Egberts and its South American brands are Caboclo, Cafe do Ponto, and Pilao. Its SENSEO coffee pod system, sold throughout Europe and in the United States, brews single servings of frothy-style coffee.
Trends and Recent Developments
Coffee prices in mid 2007 have slumped 15% from their recent peak in late 2006. Not surprisingly, retail coffee companies have not been passing along the savings to consumers.
http://www.researchwikis.com/Coffee_Market_Research
http://futures.tradingcharts.com/chart/CF/38
http://youtube.com/watch?v=MMXRjF7ERHQ Comerciales viejos Juan Valdez. Juan Valdez' Old Commercials
Summary: Venezuela is moving troops to the border with Colombia after a Colombian raid across the Ecuadorian border targeting Revolutionary Armed Forces of Colombia camps. Venezuelan President Hugo Chavez needs something to increase his stature at home, and a wave of anti-Colombianism in Venezuela could serve that purpose. However, Chavez cannot afford to turn this into a real fight.
http://www.stratfor.com/analysis/venezuela_chavezs_calculations_colombia
Ecuador, Venezuela, Colombia in war of words
CTV.ca, Canada - Mar 3, 2008
FARC has been in a state of civil war with Columbia since the 1960s. Both Canada and the United States consider it to be a terrorist organization that is ..
Wealthy Moving to Hedge Funds, NY no longer #1 for billionaires
Wealthy 'moving to hedge funds'
Largest denominations - £100 dollar bill and £50 note
The world's wealthiest want more stable returns, the study finds
The world's wealthiest private investors are planning to put more money into alternative investments over the next three years, a report says. http://news.bbc.co.uk/2/hi/business/7059631.stm
http://www.breitbart.com/article.php?id=080306001953.xvguehx7&show_article=1 Moscow: new world capital for billionaires
Wednesday, March 5, 2008
Oil Shakeup
Is Your Gift Card Suddenly Worthless?
OPEC set to snub Bush call for extra crude oil
UK banks write off record £6.8bn in household debt
Gulf investors may not save Citigroup, Dubai executive says
Hard times are on the menu at restaurants
US auto sales fall amid economic woes
Boom times for 'gently used' clothes
U.S. Stocks Fall on Bernanke Plan, Oil's Retreat; Banks Decline U.S. stocks fell, led by financial and commodity shares, after Federal Reserve Chairman Ben S. Bernanke urged banks to forgive more late loans and oil, gold and copper prices dropped from records.
Bernanke Urges Banks to Forgive Portion of Mortgages (Update6) Federal Reserve Chairman Ben S. Bernanke, battling the worst housing recession in a quarter century, urged lenders to forgive portions of mortgages held by homeowners at risk of defaulting.
There's a headline this morning that the government's "Loans program for coal plants suspended" which goes to the idea that because of global warming and tons of uncertainty, new technology coal plant development should be suspended. This, after a lot of states including in our backyard here in East Texas, were out fighting tooth and nail to get nods for new coal-fired plants.
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Curiously, the price of oil has not yet reacted, although it certainly seems possible. Although oil took a dip on Monday, there's an OPEC meeting today which could see output held steady which wouldn't help the US economy any. The US is pushing for higher production quotas in order to contain prices.
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In the Middle East, stress is building because Syria is floating a proposal for a transitional government to lead to early parliamentary elections. And in Iraq, the Oil Ministry has been given the green light to sell oil to key Western corporate customers.
Monday, March 3, 2008
Credit Crisis deepens
March 3 (Bloomberg) -- U.S. states and local governments may extend the worst slump in municipal bonds on record as they replace as much as $166 billion of auction-rate securities.
California, Boston's biggest hospital and Duke Energy Corp. are converting their bonds to other types of tax-exempt debt after auction failures drove rates as high as 20 percent. The potential supply equals almost 40 percent of the municipal securities sold last year, overwhelming a market that tumbled 4.9 percent last month, according to indexes maintained by Merrill Lynch & Co., which began compiling market data in 1989.
``When you've got many issuers representing hundreds of billions of dollars trying to restructure their bonds all at once, there's obviously a glut,'' said Paul Rosenstiel, California's deputy treasurer. ``It doesn't make for any easy solutions.''
http://www.bloomberg.com/apps/news?pid=20601010&sid=aJpRkYBhnffQ&refer=news
PAPER: Federal Reserve's rescue has failed...
Buffett: USA Essentially in Recession...
Grim News in Arizona State Budget and Sacramento City Budget
Buffett defends sovereign funds
Iran shifts oil sales away from dollar
Saturday, March 1, 2008
Sovereign Wealth Funds and Soaring commodities as Subprime Defaults spread to other markets
Oil money is coming - and there is little the west can do about it
A study by one of the biggest banks, HSBC, noted: "The owners of emerging SWFs look unlikely just to roll over. They are enjoying the boot being on the other foot after an awfully long time. The train wreck that was the 1990s, when they had to go cap-in-hand to the developed world, was bad enough.
"Going back further, western jibes about state capitalism would, perhaps, have more power had they themselves not ruled many of these countries for years via state-licensed companies."
Gerard Lyons, chief economist at Standard Chartered, said: "Sovereign wealth funds have existed since 1953 and are here to stay. Their size and influence is set to grow. Already valued at $2.2tn, on current trends they could reach $13.4tn in a decade.
http://www.guardian.co.uk/business/2008/mar/01/oil.globaleconomy1
Soaring cost of gold causes jewellery market pandemonium
By Ellen Kelleher
Published: March 1 2008 02:00 | Last updated: March 1 2008 02:00
The soaring cost of gold and platinum is causing pandemonium in the UK's jewellery market as retailers and private owners rush to reappraise the value of necklaces, brooches and rings.
Jewellers in London's Hatton Garden - the capital's jewellery quarter - are raising the price of wedding bands on a weekly basis, with less-expensive palladium rings now coming into vogue. And insurers are urging clients to get another assessment of the value of their jewellery collections in response to the rapid rise in the price of precious metals, sparked by investors seeking refuge from volatile stocks.
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Ben Bernake on the hill, Russia sells oil in Rubles, Dollar reaches new lows
Key home price index shows record decline
Drop of 8.9 percent in late 2007 is largest in index's 20-year history.
Dollar dives to record euro low; oil and gold score record highs
In early European deals, the euro touched a record 1.5088 dollars, after smashing through the 1.50 barrier for the first ever time on Tuesday. It later stood at 1.5048 dollars, from 1.4979 dollars in New York late on Tuesday.
Manufactured goods orders plunge
Orders for big-ticket durable goods for January fall 5.3%, the largest amount in five months.... http://money.cnn.com/2008/02/27/news/economy/durable_goods.ap/index.htm?postversion=2008022709
February 27, 2008
Market Place
Russia Quietly Starts to Shift Its Oil Trade Into Rubles
By ANDREW E. KRAMER
MOSCOW — Americans surely found little to celebrate when the price of oil settled above $100 a barrel last week.
They could, though, be thankful that oil is still priced in dollars, making the milestone of triple-digit oil prices noteworthy at all.
Russia, the world's second-largest oil-exporting nation after Saudi Arabia, has been quietly preparing to switch trading in Russian Ural Blend oil, the country's primary export, to the ruble from the dollar. Industry analysts and officials, however, say that this change, if it comes, is still some time off.
The Russian effort began modestly this month, with trading in refined products for the domestic market.
Still, the effort to squeeze the dollar out of Russian oil sales is yet another project notable for swagger and ambition by the Kremlin, which has already wielded its energy wealth to assert influence in Eastern Europe and former Soviet states.
"They are serious," said Yaroslav Lissovolik, the chief economist at Deutsche Bank in Moscow. "This is something they are giving priority to."
Oil trading is nearly always denominated in dollars. When Middle Eastern oil is sold to Asia, for example, the price is set in dollars.
Similarly, Russia's large trade with Western Europe and the former Soviet states in crude oil and natural gas is conducted in dollar-denominated contracts. Gazprom, the natural gas monopoly, set the price of gas in Ukraine at $179 per 1,000 cubic meters in 2008, for example. There are no proposals yet to switch gas pricing away from dollars.
As a result, companies and countries that buy petroleum products are encouraged to hold dollar reserves to pay for their supplies, coincidentally helping the American economy support its trade deficit.
Russia would like to change this practice, at least among its customers, as a means of elevating the importance of the ruble, a new source of national pride after gaining 30 percent against the dollar during the current oil boom.
In a speech on economic policy this month, Dmitri A. Medvedev, a deputy prime minister and the likely successor to President Vladimir V. Putin in elections on March 2, said Russia should seize opportunities created by the weak dollar.
"Today, the global economy is going through uneasy times," Mr. Medvedev said. "The role of the key reserve currencies is under review. And we must take advantage of it." He asserted that "the ruble will de facto become one of the regional reserve currencies."
Other oil-exporting countries are also chafing at dealing in the weakening dollar.
Since 2005, Iran, the world's fourth-largest oil exporter, has tried to open a commodity exchange to trade oil in currencies other than the dollar. The Iranian ambassador to Russia said Iran might choose rubles to free his country from "dollar slavery."
To be sure, some economists have dismissed the project as improbable, given the exotic nature of a security — oil futures contracts denominated in rubles — that would blend currency risk with the dollar-based global oil market.
Ruble-denominated futures contracts for Ural Blend, the main Russian grade, would be attractive only if the dollar continues to depreciate, said Vitaly Y. Yermakov, research director for Russian and Caspian energy at Cambridge Energy Research Associates.
"There is a big distance between the desire to trade commodities for rubles and the ability to do so," he said.
All this has not stopped the Kremlin from trying.
In a sign of the government's seriousness, a new glass-and-marble high-rise home for a ruble-denominated commodity exchange is rising this spring in a prestigious district in St. Petersburg, Russia's second-largest city after Moscow. The exchange will occupy three floors of the 16-story tower on Vasilievsky Island, one of the islands that make up the historic city center.
The director of the St. Petersburg exchange, Viktor V. Nikolayev, said that the intention was to move slowly and gain market acceptance; the government will not strong-arm sellers or buyers onto the exchange, even in an industry dominated by the state.
Web-based trading for refined products like gasoline or diesel is being introduced in three phases for domestic customers, beginning with government buyers like the Russian navy or municipal bus companies. Private brokers will be allowed to trade in March; futures contracts will be introduced in April.
Mr. Nikolayev said no timeline had been established for trading for export on the exchange, which also handles grain, sugar, mineral fertilizer, cement and esoteric financial products like Russian government beef and pork import quotas — all in rubles.
"We are in Russia, and the currency is rubles, not euros, not dollars," he said. "We don't want to depend on the rise or fall of the dollar."
"We will trade in rubles, to strengthen the ruble," he said.
Bernanke Vision for Fed Evokes Investors' Frustration (Update1)
By Craig Torres
Feb. 27 (Bloomberg) -- In the second week of August, the short-term fixed-income sales team at JPMorgan Securities Inc. sat stunned as the trillion-dollar market for asset-backed commercial paper began to collapse.
In normal markets, JPMorgan sells $25 billion of short-term IOUs for clients daily. ``Within the span of six or seven business days, every single investor stopped buying asset-backed commercial paper tied to structured investment vehicles,'' said John Kodweis, a managing director at the New York bank.
How the Federal Reserve has responded to that credit debacle -- the worst since the savings and loan crisis of the early 1990s -- defines Chairman Ben S. Bernanke's reshaping of the world's most important central bank.
With its focus on building consensus around long-term goals and attempts to separate liquidity from broader monetary policy, Bernanke's approach evokes appreciation among some economists. He's also caused frustration among traders trying to discern his intentions.
``The chairman walked into a job that I can best describe as trial by fire,'' said Allen Sinai, president of New York- based Decision Economics Inc. Separating interest-rate policy from liquidity tools was ``absolutely brilliant,'' he said.
To critics, his failure to quickly recognize the economic impact of the market tumult exacerbated the slowdown and meant that when the Fed began cutting rates, reductions needed to be deeper and faster.
`Awfully Smug'
``It's hard to be democratic in a crisis when leadership and image are so key,'' said Karl Haeling, head of strategic debt distribution in New York at Landesbank Baden-Wuerttemberg, Germany's fourth-largest bank. ``The Fed seemed awfully smug until August that this subprime issue was not a big issue. Then, they had to come out with both barrels blasting.''
The 54-year-old Fed chairman is giving his semi-annual testimony to the House Financial Services Committee today. He pledged to act in a ``timely'' manner to help revive the economy. Inflation risks are greater than a month ago, he said.
In August, Bernanke defied traders' predictions of an immediate cut in the federal funds rate, which affects borrowing costs for consumers and businesses. Instead, as credit dried up, he responded with a $35 billion cash injection into banks Aug. 10. Seven days later, he lowered the cost for banks to borrow directly from the Fed.
Inflation Still Emphasized
Officials waited a month before lowering the federal funds rate. Even then, they said ``inflation risks remain,'' leading some on Wall Street to complain Bernanke was out of touch.
``They stepped on their message in the first five months,'' said Vincent Reinhart, former director of the Fed's Division of Monetary Affairs. ``They weren't willing to emphasize why, or how they arrived at that inflation risk.''
Meanwhile, the economy continued to weaken.
As mortgage delinquencies rose to a 20-year high in the third quarter, Fed officials cut the federal funds rate just a quarter-point in October and said they thought inflation risks ``roughly balance'' risks to growth. Coming after a half-point cut the previous month, the October action was seen by economists including Stephen Stanley as a signal that policy makers thought they had eased credit enough to sustain the economic expansion.
``It really kind of scares me that the Fed had no idea things were going to get worse,'' said Stanley, chief economist at RBS Greenwich Capital Markets Inc., and a former member of the Richmond Fed staff. ``They were totally blindsided by the deterioration in liquidity conditions after the October meeting.''
December Disappointment
By December, investors were expecting some promise of year- end liquidity following the Federal Open Market Committee's meeting on Dec. 11. They didn't get one. Instead, policy makers again cut the benchmark rate a quarter point and maintained their view that ``some inflation risks remain.''
Investors showed their disappointment, driving the Dow Jones Industrial Average down 2.1 percent. Markets were setting up for a panic.
The Fed again surprised Wall Street the following morning, announcing that the central bank would loan as much as $40 billion for 28 days through a facility that would let banks borrow directly from the Fed.
The Fed also arranged swap lines with the European Central Bank and the Swiss National Bank, allowing them to channel dollars into their markets.
`Credit for Trying'
The Fed's response to the credit squeeze ``wasn't handled with the aplomb you would have liked,'' said E. Craig Coats Jr., co-head of fixed income at Keefe Bruyette & Woods Inc. in New York. Still, ``it was actually pretty creative, and I give them credit for trying.''
Only after Fed officials saw the potential for higher unemployment and indicators such as retail sales declining did they have confidence that inflation risks were subsiding. They then cut the benchmark rate 1.25 percentage points in nine days in January, the fastest reduction in two decades.
Bernanke's goal of keeping policy trained on a medium-term forecast while flooding the banking system with short-term cash shows how the chairman has adopted some of the discipline of inflation-targeting central banks in the United Kingdom and Sweden.
``Good central banking is not a matter of magic touch,'' said Doug Elmendorf, a senior fellow at the Brookings Institution in Washington, and a former Fed staff economist under both Bernanke and former chairman Alan Greenspan. ``It is a matter of doing something systematically right.''
The Bernanke system also includes changes in governance and communication. Bernanke persuaded fellow members of the Federal Open Market Committee to publish their projections four times a year instead of two, and stretch out to a third year. The exercise transformed the undefined preferences of Greenspan into numeric priorities of an institution.
Last to Vote
Bernanke votes last in policy meetings, unlike Greenspan who argued his policy choice first. Bernanke calls it ``depersonalization.''
``It is commendable that they are implementing these changes in the midst of the most challenging environment for central banks in decades,'' said Angel Ubide, director of global economics in Washington at Tudor Investment Corp., a hedge fund.
Bernanke's scholarly work on the Great Depression also came into play as he retooled the Fed's function as lender of last resort to grapple with what NYU economist Nouriel Roubini calls ``the first crisis of financial globalization and securitization.''
Instead of bank depositors fleeing banks, as in the Depression, it was commercial paper investors who wanted safety. These investors were running from off-balance-sheet structured investment vehicles, which have some features of banks with none of the backstops.
`Frightening at Times'
Kodweis recalled how the normal din of ringing phones fell quiet inside JPMorgan's mid-town Manhattan trading room as credit markets dried up in early August. ``It was frightening at times,'' he said. ``It took longer to sell commercial paper, it was later in the day when we were done, and maturities were increasingly shorter.''
The rush by money market funds to securities not tied to mortgages or consumers created new problems for the Fed.
On Aug. 20, the three-month Treasury bill yield declined 0.66 percentage point in one day to 3.09 percent, the biggest fall in two decades, in a stampede to safety.
On Aug. 21, Bernanke, who had been holding twice-daily conference calls with the New York Fed, reached for another tool. The New York bank halved the fee for dealers borrowing securities from the central bank's portfolio.
New Challenge
By November, Fed officials faced a new challenge. ``Banks wouldn't lend to each other,'' said Haeling. ``There was enough liquidity in the system. The trouble was it wasn't getting to the right places.''
The price of three-month interbank dollar loans in London rose to an average 60 basis points over the federal funds rate in November, from 10 basis points in January to July.
By mid-February, the Fed had auctioned $130 billion in term reserves. The Libor to federal funds rate spread fell back.
Now, Fed officials have said they are considering making the facility permanent.
``He did creative intelligent things about the banking problem. He recognized that a central bank has two concerns -- the financial problem and the macroeconomic problem,'' said Allan Meltzer, a Fed historian and Carnegie Mellon University economist. ``He acted appropriately.''
To contact the reporters on this story: Craig Torres in Washington at ctorres3@bloomberg.net .
Last Updated: February 27, 2008 10:02 EST
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