Forex Blog - Fed Chairman Delivered Last Rites on US Economy
Fed Chairman Delivered
Last Rites on US Economy
I had to pinch myself today
while Bernanke spoke to the Austin Chamber of Commerce today. I thought I
was at the death bed of the US economy and the Chairman was delivery the last
rites. After 425bps of rate cuts, more liquidity programs by the Fed than
Jerry Lucas could memorize (former New York Knickerbocker who
has a photographic memory and took to memorizing the Manhattan phone book to
impress his teammates), $750bln in taxpayer money to invest in banks ($290bln
spent), an explosion in the Fed balance sheet to over $2trln from around
$880bln in August, Fed buying GSE debt outright to the tune of several hundreds
of billions of dollars, around $800bln in bank write downs, downfall of Lehman,
Bear and Wachovia, $160bln fiscal stimulus package, untold efforts at
pressuring mortgage servicers to modify home loans facing foreclosure, FDIC
backing of bank debt, FDIC insurance for deposits up to $250,000 from $100,000,
private capital infusions into banks in the billions of dollars and virtual
nationalization of AIG, the banking system remains broken and the economy is
following suit. Bernanke said so today while delivering the last
rites. And he hinted at nonconventional monetary policy or quantitative
easing ahead as interest rate cuts ahead are rendered meaning less by the
liquidity trap (buying longer-dated US Treasury debt and GSE debt). About
the only positive point he made after untold Fed efforts to restore a
functioning banking system was that it would be even worse if the Fed had done
nothingâ€¦now that is the kind of low bar children use to justify unacceptable
behavior and outcomesâ€¦but that was the Chairman of the Fed.
Well the adverse feedback
loop is in full bloom. Central banks are climbing all over each other to
cut rates â€“ the BOJ (wonâ€™t be cutting but will be announcing measures to
address a Japanese banking system credit freeze) and the Riksbank (expected to
cut 100bps) announced today they would be holding emergency board meetings this
week ahead of scheduled ones later this month. The BOE and ECB are seen
cutting rates 50bps Thursday, but very few think this is realistic in light of
the rapidly deteriorating economic fundamentals. Indeed 100bps cut is the
new 50bps cut. I would not rule out the ECB cutting 100 and the BOE cutting
another 150bps as it did in November. RBA is expected to cut 100-125bp on
Tuesday while the RBNZ is expected to cut 150-175bps on Thursday. Both
banks will signal more is likely needed ahead.
everywhere, is impacting more than commodity prices â€“ look at US Black Friday
retail sales â€“ all driven by discounting and this means lower profit
margins. Deflation is two quarters away as weak demand and rising
inventories drive most prices down for manufactured goods. And emerging
markets, the safety net for world demand, as so many asserted through the last
year, is a no show economically. It turns out that emerging economies are
not only coupled to developed economies but they are joined at the hip. China is rapidly becoming a basket case and needs massive
domestic fiscal spending to keep a restless population from becoming
Bernanke said today in so
many words that it is bad now but is likely to get worse aheadâ€¦most official
forecasts have unemployment peaking in the second half of 2009 and I would say
that is optimistic.
And today I could not help
but worry about banks cutting unsecured credit lines to households and firms
ahead based on remarks Oppenheimerâ€™s Meredith Whitney made on CNBC â€“ she has
been ahead of the pack by a country mile on the severity of the banking
crisis. Whitney said banks only started to cut back on consumer credit
card lines in Q3 and this will soar to around $2trln in 2009. So for the
unfortunate who lose a job, will also be facing much reduced access to
credit. Seems like a dangerous cocktail.
Paulson also spoke today and
indicated Treasury could use TARP money to support commercial mortgage market
(CMBS) as this segment is looking more like residential mortgage market â€“ more
tenants in commercially rented spaces not paying rent and property owners down
stream not paying bank loans on commercial properties sitting vacant or with
US auto firms will be in Washington Tuesday to resell bailout requests. But short
of a government bridge loan GMâ€™s days are numbered and Chrysler and Fordâ€™s
months are numberedâ€¦I would be betting on government help but at a high price
(major concessions from unions, suppliers and management, executive
housecleaning and equity stakes). Auto firms also release car and truck
sales for November tomorrow.
US stocks posted their largest weekly advance since the 1930â€™s through
Friday and today posted one of the largest decreases on record (an 8% decline
in DJIA). US 30-year Treasury yield is the lowest since June 1955. Fixed
income is trading as if quantitative easing is upon us and the US yield curve is turning Japanese.
I also do not like the news
from the hedge fund space where Tudor Investment reportedly is gating investors
in hopes of splitting assets and funds into good bank (liquid) and bad bank
(illiquid) on its $10bln flagship BVI fund (investors have to approve it,
though the gate is the discretion of the fund itself). This fund was down
only 5% for the year yet faced high redemptionsâ€¦in this world investors are
selling good hedge fund investments because the bad ones are locked down with
gatesâ€¦Tudor decision will force more redemptions at strong fundsâ€¦.some are
advocating the whole industry gate but this seems unlikely â€“ a poison
pill. The good news in this sector is that funds have deleveraged for the
most part (where they can). Private equity has multi-year lock-ups and
this sector will face similar redemptions if investors could get their
fundsâ€¦and unless asset prices recover they will be in the same boat in due
It is enough to go back into
the bunker and get fetal. Can we make through another horrific jobs
report Friday? I am hopefulâ€¦hopeful the Obama administration and
economists will end the wasted efforts at pretending the market still works as
an allocator of capital and credit. After much rehab maybe the private
sector can be released to resume the function it so badly corrupted in this
crisis. But we are in for an extended period of Fed and Treasury doing
what the private capital market used to do â€“ allocating capital and credit to
credit and cash starved firms and households. The sooner we all come the
terms with the government as last resort the sooner we can get on with the
rehab and hopefully bring the banking system and economy back from the
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Elevate Your Trading With The Amazing Trader!
The Amazing Trader includes:
Actionable trading levels delivered to YOUR charts in real-time.
Mon 19 Feb 2018
00:00 CN, US- Holiday Tue 20 Feb 2018
00:00 CN- Holiday A 10:00 US- ZEW Survey Wed 21 Feb 2018
00:00 CN- Holiday A All Day flash PMIs A 15:00 US- Existing Homes Sales A 15:30 US- EIA Crude AA 19:00 US- Fed Meeting Minutes Thu 22 Feb 2018 A 09:00 DE- IFO Survey A 09:30 GB- GDP AA 13:30 CA- Retail Sales A 13:30 US- Weekly Jobless Fri 23 Feb 2018 A 10:00 EZ- Final HICP AA 13:30 CA- CPI
John M. Bland, MBA co-founding Partner, Global-View.com
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.