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swordfish

Currency crisis

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Ive become a fan of currency crisis.

 

Interesting how Roxy pointed out that other nations feel it far more than the U.S. when the dollar drops like a rock. In the U.S., many of us never travel outside our borders. And we buy cheap stuff from China which has its currency tied to that of the U.S. apparently. We almost never need to buy anything in some other currency. So most folks here are oblivious to the dollar's decline.

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I would be interesting to see Nikkei action today for this USDJPY move. Will they pump it up?

 

I thnik that the only way to pump this up is to change the CEO of BoJ with some Muppet guy. Then he will react to goverment direction and will buy tons of debt which will force run away from jpy to other currencies. but maybe not today?

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BTW, I still dont get it - nikkei is falling with stronger JPY, but what about stronger EUR? How can Germany be so happy (DAX) with so strong euro? how can europe be so happy? Why they move up when dollar is falling -this is absurd and insane.

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BTW, I still dont get it - nikkei is falling with stronger JPY, but what about stronger EUR? How can Germany be so happy (DAX) with so strong euro? how can europe be so happy? Why they move up when dollar is falling -this is absurd and insane.

 

Good question. Don't know. Fed money sloshing around had to go somewhere, so it went into everybody's stock markets, not just the U.S.?

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good read, maybe thats why greece indices are falling?

 

 

http://www.investorsinsight.com/blogs/john...tside_the_box/a

rchive/2009/11/24/government-debt-spirals.aspx

 

Japan, Spain, Italy and Portugal are all facing serious fiscal

deficits and funding problems within a few years. But Greece may be

the first country to hit the wall.

The current account deficit hit 14.5pc of GDP in 2008. External debt

has reached 144p (IMF). Eurozone creditors – German banks? – hold

€200bn of Greek debt.

Greece is disturbingly close to a debt compound spiral. It is the

first developed country on either side of the Atlantic to push

unfunded welfare largesse to the limits of market tolerance.

Euro membership blocks every plausible way out of the crisis, other

than EU beggary. This is what happens when a facile political elite

signs up to a currency union for reasons of prestige or to snatch

windfall gains without understanding the terms of its Faustian

contract.

 

 

Greece tests the limit of sovereign debt as it grinds towards slump

Greece is disturbingly close to a debt compound spiral. It is the first developed country on either side of the Atlantic to push unfunded welfare largesse to the limits of market tolerance.

http://www.telegraph.co.uk/finance/comment...ards-slump.html

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The time has come to give tanks.

 

I give tanks to you guys. Tanks a lot. Many tanks. Tanks to all. But as for the market? No tanks!

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BTW, I still dont get it - nikkei is falling with stronger JPY, but what about stronger EUR? How can Germany be so happy (DAX) with so strong euro? how can europe be so happy? Why they move up when dollar is falling -this is absurd and insane.

I think that the market structure is somewhat different in the various countries. What I think are important aspects are whether the futures drives the cash market and what are the laws in place relating to that particular market that restricts certain practises that over the many years have been proven to artificially drive the markets higher.

 

For example, in the US about the time that Glass Steagal restrictions were repealled, further prior restrictions on the market were either removed or no longer enforced. For instance one practise is that a single entity can now sell and buy a security to itself. This was previously prohibited, but now is either no longer prohibited or is not enforced, and there are many examples of this happening being given in BusinessWeek and other mainstream publications.

 

At the time of the Great Depression, the term daisy chaining was used. The securities laws put in place after the Great Depression prohibited this. That no longer is the case. Now rather than daisy chaining, the current term is liquidity trades, and the mainstream media has examples of this happening between Goldman Sachs and JP Morgan for example.

 

Additionally, in the US my prior research into the CFTC showed that the major market players do not have the restriction like individuals or other corporations that they must typically use margin like the rest of us. Without even the need for margin, the major market players can move the futures almost at will ABSENT any overwhelming outside selling coming into the market.

 

Whether the European markets have similar practises unlike Japan, I do not know. But it is the underlying market structure that I think is controlling things now.

 

Further compounding this is the difference between how futures appear on the books of a company as compared to the accounting treatment for stocks. To repeat, futures do not even show-up on the books. Only the mark to market value of the change since the occurrence of the original transaction appears on the financials. Thus in an overall environment in which futures drive cash, then there is little to discourage a few major market players from pushing the markets where they want.

 

Such concepts have been well demonstrated by the economic game theory models over the past few decades, as well as historical examples. Also, there is no doubt any longer about the various algorithms/programs used constantly and consistently by the major market players.

 

Next I would suggest that the Japanese society is different from the European society. There appears to be a much tighter link between Europe and the US as compared to Japan and the US. Similarly, there appears to be a much tighter coordination between the Bank of England and the US' Fed. Again, this in my opinion probably is a result of how the US was formed and settled rather than any ethnic reasons.

 

Finally, remember that the value of the market is based on the last trade. A single share of Google, for example, can impact the perceived value of GOOG stock for everyone.

 

How long can this continue? That I would like to know. All I know is that the legal framework for the markets in the US is not like it was 15 or more years ago. And all the changes in the laws are there to encourage bear hunting. Even in the time of Shakespeare, the government eventually outlawed bear baiting.

 

I understand that Doc may not necessarily agree with what I said here, I know that I have backing for my statements. Of course, none of this is new, but I do think that it impacts the short term trading that we all have been experiencing.

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I don't disagree at all.

 

But markets have always been manipulated, and always respond to the injection or withdrawal of cash by the central banks

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I think that the market structure is somewhat different in the various countries. What I think are important aspects are whether the futures drives the cash market and what are the laws in place relating to that particular market that restricts certain practises that over the many years have been proven to artificially drive the markets higher.

 

For example, in the US about the time that Glass Steagal restrictions were repealled, further prior restrictions on the market were either removed or no longer enforced. For instance one practise is that a single entity can now sell and buy a security to itself. This was previously prohibited, but now is either no longer prohibited or is not enforced, and there are many examples of this happening being given in BusinessWeek and other mainstream publications.

 

At the time of the Great Depression, the term daisy chaining was used. The securities laws put in place after the Great Depression prohibited this. That no longer is the case. Now rather than daisy chaining, the current term is liquidity trades, and the mainstream media has examples of this happening between Goldman Sachs and JP Morgan for example.

 

Additionally, in the US my prior research into the CFTC showed that the major market players do not have the restriction like individuals or other corporations that they must typically use margin like the rest of us. Without even the need for margin, the major market players can move the futures almost at will ABSENT any overwhelming outside selling coming into the market.

 

Whether the European markets have similar practises unlike Japan, I do not know. But it is the underlying market structure that I think is controlling things now.

 

Further compounding this is the difference between how futures appear on the books of a company as compared to the accounting treatment for stocks. To repeat, futures do not even show-up on the books. Only the mark to market value of the change since the occurrence of the original transaction appears on the financials. Thus in an overall environment in which futures drive cash, then there is little to discourage a few major market players from pushing the markets where they want.

 

Such concepts have been well demonstrated by the economic game theory models over the past few decades, as well as historical examples. Also, there is no doubt any longer about the various algorithms/programs used constantly and consistently by the major market players.

 

Next I would suggest that the Japanese society is different from the European society. There appears to be a much tighter link between Europe and the US as compared to Japan and the US. Similarly, there appears to be a much tighter coordination between the Bank of England and the US' Fed. Again, this in my opinion probably is a result of how the US was formed and settled rather than any ethnic reasons.

 

Finally, remember that the value of the market is based on the last trade. A single share of Google, for example, can impact the perceived value of GOOG stock for everyone.

 

How long can this continue? That I would like to know. All I know is that the legal framework for the markets in the US is not like it was 15 or more years ago. And all the changes in the laws are there to encourage bear hunting. Even in the time of Shakespeare, the government eventually outlawed bear baiting.

 

I understand that Doc may not necessarily agree with what I said here, I know that I have backing for my statements. Of course, none of this is new, but I do think that it impacts the short term trading that we all have been experiencing.

 

Makes a lot of sense to me. With regard to the link between the U.S. and Europe being strong, I seem to remember reading some list of who owns the Federal Reserve, and if I remember correctly, a lot of it was European banks. If so, add Europe to the list of who owns/controls the U.S. It's not just China that owns us through having bought tons of our bonds. Of course, more than either of the above, the largest multi-national corporations own and control both the U.S. and the world.

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Makes a lot of sense to me. With regard to the link between the U.S. and Europe being strong, I seem to remember reading some list of who owns the Federal Reserve, and if I remember correctly, a lot of it was European banks. If so, add Europe to the list of who owns/controls the U.S. It's not just China. that owns us through having bought tons of our bonds. Of course, more than either of the above, the largest multi-national corporations own and control both the U.S. and the world.

I do not necessarily disagree, but I just cannot find direct evidence of who may own the Fed. All I know is what the Federal Reserve Act says and it does not have anything in it about non-US qualified banks owning any federal reserve bank shares.

 

But I do not feel that ownership is necessarily required to have influence or control in case of th Fed system.

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post-1110-1259188471_thumb.png

 

Appears to be a breakout on the trend line for the NYSE Advancing volume trend...bearz :ninja:

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