Trading Now

Trading Now

Monday, September 14, 2009


*better get used to the dollar trading in a tight range, rather than collapsing like all these well wishers hope. The fed controls it now and is unlikely to let it drop below $70 or go above $80.
Decline of dollar set to continue
The dollar could continue its weeklong decline this week, especially if data on U.S. retail sales show improvement. The dollar hit a nine-month low last week against the euro and a seven-month low against the yen. Investors are moving into higher-yielding currencies such as the yen as the global economic picture brightens. The Wall Street Journal (14 Sep.)

*wish these guys would make up their mind. But I guess they are like me, buy this stock, no sell this stock, no buy, sell buy.
Economic crisis to keep going, IMF director says
The economic crisis will not end soon, and countries must make more regulatory changes to halt the damage, International Monetary Fund Director Dominique Strauss-Kahn told German magazine Der Spiegel. Governments must take steps to curb excessive remuneration for bankers and tighten capital requirements for banks, Strauss-Kahn said. "It is right to say that not enough has happened. I hope the Group of 20 meeting in Pittsburgh will bring new momentum," he said, adding that unless changes are made, banks will continue to act as they did before the crisis. Reuters (12 Sep.)

*Spain will go bankrupt but Germany and France will recover? Yeah right....And Spain will go bankrupt, they have >17% unemployment as I write and a housing market collapse that is unprecedented. No wonder everyone hates us.
Economic troubles in Spain raise questions about euro
Although France's and Germany's economies are recovering, Spain's is still contracting. But the country cannot devalue its currency to boost its economy. The divergence among eurozone members could threaten the survival of their single currency. The Wall Street Journal (14 Sep.)

*I am concerned that these ijiot economists are looking for peak GDP levels to return. Those levels were based on what I call artificial economics (debt). Expecting a rela GDP of around 1 to 3% is much more plausible and that will barely cover the medicare costs let alone sustain a recovery. These ijiots are drinking the kool aid.
Even optimistic economists point to slowest post-1945 recovery
Over the past 10 economic recoveries in the U.S., GDP got back to its pre-downturn levels within 12 months; that isn't going to happen this time around, economists said. Even if all of the most optimistic growth projections turn about to be correct, the U.S. will take longer to return to pre-recession levels than at any time since the end of World War II. Bruce Kasman, chief economist for JPMorgan Chase, said the problem is the sheer depth to which the economy sank at its worst. Bloomberg (13 Sep.)

Asian stock markets fall on strong yen
Most stock markets in Asia-Pacific fell Monday, with a strong yen hurting Japanese exporters. But China's Shanghai Composite rose 1.2% as investors bought into firms that could be listed on the Growth Enterprise Market, a stock market to be created later this year. Japan's Nikkei 225 fell 2.3%, Australia's S&P/ASX 200 dropped 1.4% and South Korea's Kospi Composite slid 1%. Taiwan's Taiex and Hong Kong's Hang Seng Index both lost 1.1%. New Zealand's NZX 50 inched down 0.3%, Singapore's Straits Times Index declined 1.3% and shares in the Philippines main index were off 1.7%. The Wall Street Journal (14 Sep.)

Chinese banks realize counterparty risk of derivatives deals
Until now, foreign financial institutions have been able to structure derivatives deals with China's banks without posting collateral. Bank of China, China Construction Bank, Industrial and Commercial Bank of China and other major banks have started demanding that such deals be collateralized. The change is partially spurred by a push from regulators that warned banks of their exposure. Last month, a Chinese regulator called on banks to bolster their risk management in derivatives transactions. IFR Asia (12 Sep.)

*Boy, China sure is looking more and more like our little brother.
China is worried about ties between funds and securities watchdog
The number of former China Securities Regulatory Commission officers who have moved into jobs with fund managers is starting to raise concerns about whether the regulator is aggressive enough in pursuing insider-trading investigations. Information from public sources indicates that 28 former officials of China's watchdog agency are now executives of fund management companies, according to this article. "It seems there is a tide of CSRC officials moving over to work at the fund management companies. ... For the fund management companies, they could be sheltered by these former CSRC officials," said Cao Zhongming, an independent commentator. China Daily (Beijing) (14 Sep.)

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