Financial Crisis
Earnings Season Finds Reality as Prices Fall
20/04/09 20:36
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Per the last blog entry, today saw material weakness in equities. We saw the onset of the movement reflected in the Dow futures prices thru Asian into London session. Typically Dow futures weakness of 100pts or more during Asia or London can stimulate USD buying in the current environment.
Another major US bank beat first quarter earnings expectations but investors again remain cautious. The bank said conditions remain difficult and several one-time gains appeared to bolster the first quarter figures. Results of government bank stress tests continue to weigh on investor sentiment and President Obama recently commented that further government support may be needed and said, "Different banks are in different situations. They're going to need different levels of assistance from taxpayers". Since the stimulus money is not finding its way into the pockets of consumers, I’m not convinced the speculation of inflation later in 09’ is likely to find its way. That is a subject for another time. Press reports also suggest there is some debate between the US Treasury and financial regulators on how to release their results, which are scheduled for early May. There are fears that by identifying the banks with the most vulnerable capital positions, further weakness could ensue, for the banks themselves and for the wider financial system. The credibility of the tests themselves has also been called into question as the market remains in the dark about the methodology used. Read More...
Per the last blog entry, today saw material weakness in equities. We saw the onset of the movement reflected in the Dow futures prices thru Asian into London session. Typically Dow futures weakness of 100pts or more during Asia or London can stimulate USD buying in the current environment.
Another major US bank beat first quarter earnings expectations but investors again remain cautious. The bank said conditions remain difficult and several one-time gains appeared to bolster the first quarter figures. Results of government bank stress tests continue to weigh on investor sentiment and President Obama recently commented that further government support may be needed and said, "Different banks are in different situations. They're going to need different levels of assistance from taxpayers". Since the stimulus money is not finding its way into the pockets of consumers, I’m not convinced the speculation of inflation later in 09’ is likely to find its way. That is a subject for another time. Press reports also suggest there is some debate between the US Treasury and financial regulators on how to release their results, which are scheduled for early May. There are fears that by identifying the banks with the most vulnerable capital positions, further weakness could ensue, for the banks themselves and for the wider financial system. The credibility of the tests themselves has also been called into question as the market remains in the dark about the methodology used. Read More...
It's Just Time - Martin Armstrong
22/01/09 16:19
From: Craig Carmichael
Martin Armstrong is the former chairman of Princeton Economics International. He became a millionaire at the age of 15 when working with rare coins and stamps. He gained worldwide notoriety for his proprietary work on economic cycles and has advised many governments and corporations throughout the world. He became the highest paid economist in the world and seemed to have everything going for him. However, in 1999, he was indicted on charges of bilking Japanese investors all the while he was claiming his innocence. Before going to trial, he had been held in contempt for an unprecedented 7 years before finally pleading guilty in 2007. He has adamantly claimed he has been railroaded and his arguments definitely merit consideration. Be that as it may, it is a shame that he has had to spend time in jail wasting away a previously very productive life and a brilliant mind. He has just written a paper from jail titled "Its Just Time". This is well worth reading and will enlighten you to his fascinating cycle work and how amazingly accurate it has been throughout the years. It is a little "rough" around the edges as he did not have the technological capabilities afforded to him as he would outside of prison.
Enjoy!
Read the Article
Read More...
Martin Armstrong is the former chairman of Princeton Economics International. He became a millionaire at the age of 15 when working with rare coins and stamps. He gained worldwide notoriety for his proprietary work on economic cycles and has advised many governments and corporations throughout the world. He became the highest paid economist in the world and seemed to have everything going for him. However, in 1999, he was indicted on charges of bilking Japanese investors all the while he was claiming his innocence. Before going to trial, he had been held in contempt for an unprecedented 7 years before finally pleading guilty in 2007. He has adamantly claimed he has been railroaded and his arguments definitely merit consideration. Be that as it may, it is a shame that he has had to spend time in jail wasting away a previously very productive life and a brilliant mind. He has just written a paper from jail titled "Its Just Time". This is well worth reading and will enlighten you to his fascinating cycle work and how amazingly accurate it has been throughout the years. It is a little "rough" around the edges as he did not have the technological capabilities afforded to him as he would outside of prison.
Enjoy!
Read the Article
Read More...
Roubini Predicts U.S. Losses May Reach $3.6 Trillion
20/01/09 17:43
By Henry Meyer and Ayesha Daya
Jan. 20 (Bloomberg) -- U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is effectively insolvent," said New York University Professor Nouriel Roubini, who predicted last year's economic crisis. "I've found that credit losses could peak at a level of $3.6 trillion for U.S. institutions, half of them by banks and broker dealers," Roubini said at a conference in Dubai today. "If that's true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis." Read More...
Jan. 20 (Bloomberg) -- U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is effectively insolvent," said New York University Professor Nouriel Roubini, who predicted last year's economic crisis. "I've found that credit losses could peak at a level of $3.6 trillion for U.S. institutions, half of them by banks and broker dealers," Roubini said at a conference in Dubai today. "If that's true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis." Read More...
Market fails to hold early risk rally
20/01/09 09:38
Ref: UBS
The market failed to hold to an early risk rally overnight as worries over the longer-term health of the banking sector weighed on news of a new rescue package for the UK's financial services industry. European bourses are broadly in the positive in what will likely be a quiet trading session as the US is on holiday. Nevertheless, it does appear that most governments and central banks are on the cusp of launching a new set of initiatives to guarantee confidence in the banking sector and more importantly, to ensure is provided to those who need it for the good of the economy.
Read More...
The market failed to hold to an early risk rally overnight as worries over the longer-term health of the banking sector weighed on news of a new rescue package for the UK's financial services industry. European bourses are broadly in the positive in what will likely be a quiet trading session as the US is on holiday. Nevertheless, it does appear that most governments and central banks are on the cusp of launching a new set of initiatives to guarantee confidence in the banking sector and more importantly, to ensure is provided to those who need it for the good of the economy.
Read More...
Q1 May start friendly, but beware in March
22/12/08 08:45
FX markets have entered the holiday season on a
quieter note as majors traded in tighter ranges
relative to last week's record swings. Risk appetite
is largely subdued and most indices in the
Asia-Pacific region are in negative territory, with
the notable exception of the Nikkei which is positive
despite more disappointing data out of Japan. The
announcement by the White House last week regarding
the provision of an emergency US$17.4bln loan to the
US car industry has certainly helped steady sentiment
around the world and removes a key short-term event
risk heading into year-end. This could see
significant fallout at the end of the first quarter
when the markets begin to realize how massive this
global financial restructuring is and will be, which
will knock heads and rattle cages and drain accounts
as the tsunami wave 2 hits. This global crisis will
not end overnight and we've much more excitment to
keep is getting out of bed in the morning.
Forturnately, if you know what you're doing, FX is
one of the only sectors to make money in this market.
That is, of course, you can manage risk like the
professionals... ahem, prudent professionals... not
like the former wall streeters.
The dollar was steady in a range of 1.3911-1.4048 against the euro and 89.10-90.24 against the yen. Crude prices are also slightly firmer on the back of recent developments.
Read More...
The dollar was steady in a range of 1.3911-1.4048 against the euro and 89.10-90.24 against the yen. Crude prices are also slightly firmer on the back of recent developments.
Read More...
Macroeconomic Risks Abound
02/12/08 22:06
RBA Cuts Rates to 4.25% - Ref: UBS
Risk sentiment deteriorated further amid the unsurprising, but official confirmation for the US being in a recession, less constructive commentary by Fed Chairman Bernanke, and poor macroeconomic data. According to the National Bureau of Economic Research (NBER) the current recession began in December 2007, due in large part to the decline in jobs. The recession is likely still ongoing, as recent data has been getting worse. Fed Chairman Bernanke highlighted that the US economy remains under considerable stress and that more rate cuts are possible. He also noted that the scope for reductions to aid growth remains limited at this point. Bernanke alluded to quantitative easing (QE) like policies such as buying longer-dated Treasurys and agency debt as a way of injecting liquidity. His comments, while not explicitly mentioning QE, drove down long-term yields, consistent with the experience in Japan when it engaged in QE. The 2y Treasury yield is 0.88% and 3.22% on the 30y Treasury. The 2s10s Treasury curve is now 183bp, down from the mid-November high of 262bp. On the data front, the manufacturing ISM for November fell another 2.7 points to 36.2, following sharp declines in October and September. Read More...
Risk sentiment deteriorated further amid the unsurprising, but official confirmation for the US being in a recession, less constructive commentary by Fed Chairman Bernanke, and poor macroeconomic data. According to the National Bureau of Economic Research (NBER) the current recession began in December 2007, due in large part to the decline in jobs. The recession is likely still ongoing, as recent data has been getting worse. Fed Chairman Bernanke highlighted that the US economy remains under considerable stress and that more rate cuts are possible. He also noted that the scope for reductions to aid growth remains limited at this point. Bernanke alluded to quantitative easing (QE) like policies such as buying longer-dated Treasurys and agency debt as a way of injecting liquidity. His comments, while not explicitly mentioning QE, drove down long-term yields, consistent with the experience in Japan when it engaged in QE. The 2y Treasury yield is 0.88% and 3.22% on the 30y Treasury. The 2s10s Treasury curve is now 183bp, down from the mid-November high of 262bp. On the data front, the manufacturing ISM for November fell another 2.7 points to 36.2, following sharp declines in October and September. Read More...
Technical Dollar Reversal, Retail Sales a Focus for the Week Ahead
10/11/08 11:06
The dollar was undermined on Friday by falling risk
aversion, with the S&P500 rising by 2.9%. In this
context, EURUSD has risen to a high of 1.2833 in the
US session from a low of 1.2718 and has subsequently
traded even higher this morning to current levels
around1.2850. Meanwhile, credit markets look to be
normalising further - the 3-month spread between OIS
and Libor for the US dollar fell to 1.76%, from 1.83%
on Thursday. Read
More...
Global Financial Carnage Persists
27/10/08 23:19
The Dow closed 203.19 points lower at 8,175.77. The
S&P 500 fell 27.85 points to 848.92. Equities had
spent much of the day in positive territory but
plunged in the last half hour, dragged down by energy
shares as oil gave up its gains. Oil closed at
$63.22/barrel, down 1.45%, having risen as high as
$65.77 intraday.
US September new home sales +2.7% m/m, after a 12.6% decline in August (preliminary August -11.5%).
Read More...
US September new home sales +2.7% m/m, after a 12.6% decline in August (preliminary August -11.5%).
Read More...
A Brief History of the Financial Crisis
23/09/08 16:44
Hello Traders;
Here is an excellent article from Joe Trevisani, Chief Market Analyst at FXSOL to give you a brief history of the current financial crisis and environment.
I highly recommend you read this article. I'm heading overseas today and hope to be back on later this week.
Chris
Read More...
Here is an excellent article from Joe Trevisani, Chief Market Analyst at FXSOL to give you a brief history of the current financial crisis and environment.
I highly recommend you read this article. I'm heading overseas today and hope to be back on later this week.
Chris
Read More...