IDS World Markets Wed 18th November 09

[aussiebear]

 

 

Bread rolls found in Beijing.

[aussiebear]

 

 

 

 

 

 

 

 

 

http://finance.yahoo.com/intlindices?e=asia

[aussiebear]

 

 

http://money.cnn.com/markets/morning_call/

 

 

 

 

 

 

 

http://www.kitco.com

 

 

http://www.kitconet.com/webcharts/base_metals.html

 

Energy futures

[aussiebear]

 

 

Loads of joyous green today. All Ords +0.8% led by Miners +1.6% and Gold/Materials +1.5%. Not a red sector in sight: Energy and Healthcare have the least gains, +0.2%.

[Rationalize]

Same rules. Different skills. Same FX Swaps, Forwards & Options for big & small.

 

Not so much bets, as hedges. Dat's the way the world generally operates outside of retail directional spec land.

 

You got a Euro receivable commin in next month, .. well .. you sell that sh*t forward today n lock in your FX rate.

 

For a small biz, check out the CME's e-micro contracts. E.g. EUR 12K5 nominal.

 

Theory is good, but I sincerely doubt the practicability or widespread practice of what you suggest.

 

Have you ever even tried setting up a futures trading account for a small corporation?

 

Not to mention that one is not fully offsetting the complete risk, but really increasing the risk due now to the fluctuations in the futures market. Plus the added time, expenses, and else due to now having the task of monitoring and maintaining the futures position.

 

Plus tying up capital at low to no interest rate to maintain a futures account and the required margin. (Unless one is a major market player that are generally exempt from the CFTC margin requirements.)

 

How many even medium sized businesses in the US or other countries have the sophistication and expertise to do such. My experience with foreign businesses says very, very few from a range of industries.

 

Again, the theory is wonderful, but the devil is in the details and the completed thought process.

 

Theory is good, but I sincerely doubt the practicability or widespread practice of what you suggest.

 

- This is exactly what FX futures are for. Perhaps small businesses don't know what they don't know.

 

Have you ever even tried setting up a futures trading account for a small corporation?

 

- Yes. Recently. Took about a 5 days to setup, with Interborkive Actors.

 

Not to mention that one is not fully offsetting the complete risk, but really increasing the risk due now to the fluctuations in the futures market. Plus the added time, expenses, and else due to now having the task of monitoring and maintaining the futures position.

 

- The futures offset the cash receivable. Each move in opposite directions with fluctuations. That's the whole idea!

 

- No net fluctuation.

 

Plus tying up capital at low to no interest rate to maintain a futures account and the required margin. (Unless one is a major market player that are generally exempt from the CFTC margin requirements.)

 

- This is priced in to the futures. [Check the vanilla pricing model].

 

How many even medium sized businesses in the US or other countries have the sophistication and expertise to do such. My experience with foreign businesses says very, very few from a range of industries.

 

- Yes. Most SME treasurers are not up to speed. If the were, then they might be working for a bank instead.

 

Again, the theory is wonderful, but the devil is in the details and the completed thought process.

 

- Accurate hedging is not for kids. It requires actual knowledge of the products and exposures.

 

- Hedging an exposure takes more math, than speculating on direction .. But it is easy once you know what to do.

 

Which is the bigger cost -- the real cash loss due to an unhedged currency move, OR spending the time to learn how to hedge?

 

I might also say that it concerns me a little that some stoolies have great ideas about spec bets on direction, but maybe not so much an understanding of the underlying instruments.

[cwd]

That's a cheap car.

QUOTE (Charmin @ Nov 17 2009, 03:43 PM)

A car crashes into a 50' utility pole and I get to see the estimate to replace it. This is not anything special. You want to know what it cost, plus labor to restore it?

 

1 gold coin

2 gold coins

3 gold coins

4 gold coins

 

Well, I'll just put the estimate in dollars. $4,600.

 

I couldn't believe it when I saw that.

 

 

That's a cheap car.

 

That is the cost of the pole.

[aussiebear]

 

 

Another one of those dwindling away days. All Ords drifted down to close +0.2%. REITS got the highest bid, +1.4% followed by Gold +0.7% and Financials/Telecomms both +0.6%. At the other end, IT -1.6%, Healthcare -0.9% and Energy -0.5%.

 

Not too much excitement in Asia: China +0.5%, Honkers -0.7%, India +0.1% and Nikkers -0.8%.

 

 

On to UK/Europe:

 

Footsie

 

 

 

DAX

 

 

 

CAC 40

 

[swordfish]

VERY VERY good reads - goodbye chimarica. I hope so, go America:)

 

 

The End of Chimerica - Niall Ferguson & Moritz Schularick, New York Times

http://www.nytimes.com/2009/11/16/opinion/...rss&emc=rss

 

China has now become the biggest risk to the world economy - Ambrose Evans-Pritchard, Telegraph

http://www.telegraph.co.uk/finance/comment...ld-economy.html

 

The Chinese disconnect - Paul Krugman, The New York Times

http://www.nytimes.com/2009/10/23/opinion/...amp;ref=opinion

[POTUS]

VERY VERY good reads - goodbye chimarica. I hope so, go America:)

 

 

The End of Chimerica - Niall Ferguson & Moritz Schularick, New York Times

http://www.nytimes.com/2009/11/16/opinion/...rss&emc=rss

 

China has now become the biggest risk to the world economy - Ambrose Evans-Pritchard, Telegraph

http://www.telegraph.co.uk/finance/comment...ld-economy.html

 

The Chinese disconnect - Paul Krugman, The New York Times

http://www.nytimes.com/2009/10/23/opinion/...amp;ref=opinion

 

Those authors are paid to write that kind of nonsense.

 

They are in absolute denial about the self-destruction of America.

 

This is a marathon and Team China is just tying their shoe laces.

[alceringa]

70's Interlude-The Doobie Brothers

[Lemur]

Hmm! lets see dollar down, everything else up, gold still going to the moon. What a surprise.

[Lemur]

I must confess to feeling very frustrated as I gave up my gold position (took profits) at $1100 instead of staying with my original plan to let it run. Another example, of making a good call but not really capitalising on it.

 

At least I still have quite a bit of physical bullion (since $320 or so). I am not giving it up either. Right now the inflationists are clearly winning the argument. Deflationists are just not listening to the market.

 

Meanwhile, the Elliott wave guys are still calling tops in the metals and I have been listening to them doing that since I first got into gold at $320. These guys need to get a grip.

[Lemur]

Well here is one of the reasons USDCHF and USDJPY just cannot seem to get it up despite been close to monthly support.

 

http://forexforums.dailyfx.com/ssi/13877-t...ositioning.html

[ChickenLittle]

The vast majority of Forex trading is done interbank - futures account for less than 10% I believe. So one neds to take "sentiment " measures of futrures traders with a grain of salt. The realy big players in FX dont use futures by and large - they do forwards on the cash market with banks.

 

Well here is one of the reasons USDCHF and USDJPY just cannot seem to get it up despite been close to monthly support.

 

http://forexforums.dailyfx.com/ssi/13877-t...ositioning.html

[ChickenLittle]

The Fx markets and gold are getting very frothy and whippy. Easy to get churned up trying to play short term swings. My solution is to develop some conviction on a direction , then pick a reasonably long time frame - like 2-3 weeks and make SMALL bets. Avoid the churn.

This kind of churn indicates to me perhaps a topping/end of move type action - seems we are quite close to turning points in all markets.