Latest Posts

  • The Calm Before the Storm

    Jul 31, 2008 / 4:00pm / in Americas, Economics, General, News Releases, United States Dollar, Forex News

    Tomorrow is the one for all the marbles. The single most important economic announcement for the USD takes place tomorrow: Non-Farm Payrolls (NFPs). Despite today’s very important announcement of US GDP for Q2, the EUR/USD essentially stood pat around 1.56. What is special about NFPs is that, unlike announcements such as rate decisions or GDP results, predicting the outcome is often like finding a needle in a haystack. The unpredictability of this announcement, coupled with its importance, generally make it the largest “market-moving” announcement for the USD.

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  • Too Big, or not Too Big: That is the question!

    Jul 14, 2008 / 4:17pm / in Americas, Economics, General, Forex News

    Many people involved with the market are adamantly opposed to any actions justified by the term “too big to let fail.” In capitalism, a company should be able to experience without interference both the profits and the losses that come with business. In theory, if a company has placed itself in a position where there is a possibility of failure, so be it; the company will have to deal with the consequences of their mistakes. The notion that the government — posing as a white knight — will ride in and rescue the company from danger is a thought that repulses many market followers.

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  • End of the World Trade

    Jul 2, 2008 / 4:16am / in Americas, derivatives, International Investing

    I asked one investment banker what might cause half of North America’s top corporations to default. No ordinary economic recession or natural disaster short of an asteroid strike could do it: no hurricane, for example, and not even ‘the big one’, a catastrophic earthquake devastating California. All he could think of was ‘a revolutionary Marxist government in Washington’. That’s not a likely scenario, yet the cost of insuring against it had shot up ten-fold. Normally one can buy $10 million of end-of-the-world insurance for between two and three thousand dollars a year.

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  • If You Start Pushing A Snowball Down A Hill…

    Jun 19, 2008 / 12:42pm / in Americas, General, News Releases, Forex News

    On June 28, 1914, Gavrilo Princip assassinated the heir to the Austro-Hungarian throne, leading to the onset of the Great War. Indirectly, Princip’s actions led not only to WWI, but also to WWII and as the Cold War. In other words, Princip inadvertently became one of the most important figures of the 20th century.

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  • "Should Analysts Who Don't Own Stocks Be Trusted?"

    Jun 17, 2008 / 9:40am / in Americas, Equities, International Investing

    Remove the part about "Who Don't Own Stock" and you've got a legit story. Another silly rule designed to prevent conflicts makes analyst guesses less trustworthy.

    You've almost certainly seen it: Every time an analyst on CNBC comes on to talk about a stock there is The Screen. We find out whether they own the stock, their family owns the stock, their firm owns the stock, their pet owns the stock, etc.

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  • US Dollar - Predicting the Future (Part 2!)

    Jun 16, 2008 / 12:25pm / in Americas, Currency, Fundamental, Interest Rates, Oil, United States Dollar, Forex News

    Last week I mentioned that though the G8 conference would impact the US dollar in the short term, the ultimate fate of the USD will ultimately be determined more by Bernanke than by anyone else. The Group of Eight’s meeting has come and gone, offering little good news for the USD. In the FOREX market, that “little good news” led to bad news for the USD, as the greenback surrendered some of the territory it had gained last week. So with the conference in the rear-view mirror… let’s look ahead.

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  • "The Criminalization of Failure"

    Jun 16, 2008 / 11:57am / in Americas, International Investing

    Great John Carney post at The cure is worse than the problem:

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  • Protectionism for Profit – Now Doctors get in on the Racket

    Jun 13, 2008 / 8:16am / in Americas, Asia, International Investing

    How can doctors get fat off the tax payer if the tax payer has a choice? MD lobbyists are preemptively shoring up their bottom line under the guise of safety. Add this to the existing list of readymade excuses to steal from the tax payer whose greatest hits already include, “it’s for the children,” and “the war on drugs/terrorism/poverty/whatever people are riled up about this week.”

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  • "Ever wonder why fund managers can't beat the S&P 500? "

    Jun 12, 2008 / 11:14am / in Americas, International Investing

    The headline quote from Gordon Gekko from the 1987 movie Wall Street show this has been common knowledge for decades: Fund managers cannot beat the index after fees.

    According to this Bloomberg article, consumers are finally starting to catch on:

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  • Oil Up Again

    Jun 11, 2008 / 10:59am / in Americas, Oil, International Investing

    Previously a $5 move would be front page news. Now it's just to be expected:

    Crude oil for July delivery rose $5.07, or 3.9 percent, to settle at $136.38 a barrel at 2:48 p.m. on the New York Mercantile Exchange. Oil reached a record $139.12 a barrel on June 6. Futures have doubled in 12 months as investors looking to hedge against the dollar's drop helped push oil, gold and corn to records this year.

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