$787 billion. A bill so hurried that it is questionable if
any Representative or Senator who voted on it read the entire text. $311
billion in discretionary spending, much of it not until 2010 and 2011, $285
billion in tax cuts and $191 billion in increased benefits spending.
Will this stimulus help the economy in 2009? Last
yearâ€™s $168 billion stimulus did almost nothing to bolster consumer spending,
most of the money went into saving or to pay down debt. Obama advisor David
Axelrod is already downplaying expectations saying only that things would be in
â€śmuch worse shapeâ€ť without the bill.
Consumer spending is crippled by three factors, two real and
one psychological. The economy lost 2.5 million jobs in 2008, three
quarters of those in the last four months of the year. The monthly job
reductions accelerated in January and there is no economic rationale to expect
improvement before the half year. These vanished jobs represent an absolute
decline in consumer spending; no amount of possible unemployment benefits and
personal savings can replace the lost wages. Until the unemployed find new work
the drain on consumption will diminish GDP and the feedback loop to further
cutbacks in employment will continue.
A 7.6% unemployment rate means that over 90% of those who
want work and are actively seeking employment have found it. These consumers
are able to spend but some of their potential consumption is blocked by their
inability to obtain credit. Commercial banks normally supply only about 20% of
the credit in the economy. The balance and much of the credit for consumer
loans is supplied by the shadow banking system, through firms that lend and
then securitize their loans through the asset-backed market and allied
financing methods. This market has been almost completely moribund since last
fall. The normal loan velocity for firms that supply credit to this market is
shut down because they cannot securitize and sell their existing loans to
obtain the capital for new ventures.
The gloom over the economy is led by none other than
President Obama, who has said the recession â€świll get significantly worse
before it gets betterâ€ť. Media coverage of the economy is almost completely
negative. The effect on consumers, especially those who might be
calculating a large purchase like a house or car can only be delay or forbearance.
This psychological recession acts to forestall or eliminate spending as
families that can afford purchases choose not to buy that new sofa or take a
The main goal of the fiscal stimulus package, in the words
of its supporters, is the creation of 3.5 million jobs. Over the next 18 months
Federal spending will strive to replace jobs lost with equivalent work or
government employment. The effect on consumer spending will be delayed into
next year. In the initial months of stimulus expenditures any employment gains
will probably be overwhelmed by continuing jobs losses. For much of 2009 the
stimulus will have negligible effect on consumer spending, the money simply
cannot be spent fast enough.
The dearth of consumer credit and the collapse of the
securitization market cannot be cured quickly even after a bank rescue is
formulated by the government. Trust and confidence between the
institutions that create and market securitized products and with the private
investors who buy them cannot be restored in a matter of weeks. Nor can the
enormous weight of toxic debt be lifted from the balance sheets of lending
firms in short order. Here too it is likely that 2009 will see limited
return of securitization activity and scant improvement in the availability of
If there is little to immediately expect for the economy
from the stimulus can we say the same for the dollar? Will the lack of positive
movement in the US economy endanger the gains the dollar has made since last
Here we move from absolute measures to comparative ones. By
all standards except risk aversion the dollar is unlikely to surrender its edge
to its European or Asian trading partners. The economy of the European
Monetary Union fell faster in the fourth quarter, about a 5.9% annualized rate,
than did the United States at 3.8%. Japanâ€™s GDP shrank at a 12.7% annual
pace in the fourth quarter. It was the third quarterly drop in a row and the
worst fall since the 1974 oil embargo. Fiscal stimulus in Japan or the
EMU will be no more effective or rapid than in the United States. In 2009
neither the European nor the Japanese economy will provide an advantage to its
currency against the dollar.
Ben Bernanke has promised low rates for as long as
necessary. He might as well have been speaking for all of his industrialized
world colleagues. The convergence of central bank rate policy will remain
in place for the next several quarters giving no currency a jump on the next
upward rate cycle.
However, if the US stimulus plan succeeds in stabilizing the
American economy, the returning calm could prompt a return to the activity in
the yen crosses. For the dollar rising yen crosses are a two sided coin,
providing strong support against the yen but weakening it versus the euro,
sterling, aussie and kiwi. But returning risk appetite will not resurrect
the carry trade which has been rendered pointless by rate convergence and it is
unlikely we will see a long term positive trend in the yen crosses.
stability may not be an exciting goal for a politician but if the Obama
stimulus achieves that much (or that little) it may well have a positive effect
on the dollar.
IMPORTANT NOTICE: These
comments are for information purposes only. Past results are not necessarily
indicative of future results. FX Solutions, LLCÂ® believes that customers should
be aware of the risks associated with over-the-counter, spot Forex. Forex
trading is highly speculative in nature which can mean currency prices may
become extremely volatile. Forex trading is highly leveraged, since low margin
deposits normally are required, an extremely high degree of leverage is
obtainable in foreign exchange trading. A relatively small market movement will
have a proportionately larger impact on the funds you have deposited. You may
sustain a total loss of your funds. Since the possibility of losing your entire
cash balance does exist, speculation in the Forex market should only be
conducted with risk capital you can afford to lose which will not dramatically
impact your lifestyle.
To the best of our
ability, FX Solutions believes the information contained herein is accurate and
true. We reserve the right to make corrections and/or update the material when
deemed necessary. Therefore, FX Solutions assumes no responsibility for errors,
inaccuracies or omissions in these materials.
Distributed by: FX Solutions, LLC., Saddle River Executive Centre, One Route 17
South, Suite 260, Saddle River, NJ 0745
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."
Actionable trading levels delivered to YOUR charts in real-time.
Mon 10 Sep 2018 AA 08:30 GB- GDP, Trade, Output Tue 11 Sep 2018 AA 08:30 GB- Employment Decision A 09:00 DE- ZEW Survey Wed 12 Sep 2018 A 12:30 US- PPI A 14:30 US- EIA Crude A 18:00 US- Beige Book Thu 13 Sep 2018 A 1:30 AU- Employment AA 11:00 GB- Bank of England Decision AA 11:45 EZ- European Central Bank Decision A 12:30 US- Weekly Jobless AA 12:30 US- CPI Fri 14 Sep 2018 A 08:30 GB- GDP AA 12:30 US- Retail Sales A 13:15 US- Industrial Production AA 14:00 US- prelim University of Michigan
John M. Bland, MBA co-founding Partner, Global-View.com
Global-View Affiliate Program
We are starting an affiliate program to market some of our products.
Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.
Put the word "affiliate" in the email subject line.
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.