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Anger over failure to block RBS chief's £1m bonus - Herald Scotland
27 Jan 2012 at 8:09pm

The Guardian
Anger over failure to block RBS chief's £1m bonus
Herald Scotland
DAVID Cameron was accused of a "disgraceful failure" after the UK Government claimed it could not stop RBS boss Stephen Hester getting a £1 million bonus. Labour leader Ed Miliband and even senior Conservative politicians expressed astonishment that ...
Treasury feared Hester and board would quitBBC News
David Cameron sparks outrage as he nods through RBS chief Stephen Hester's £1m ...Mirror.co.uk
George Kerevan: Stephen Hester bonus protest political, not economicScotsman
Daily Mail -Financial Times -The Independent
all 935 news articles »
Brothers charged over Stockport decapitated body - BBC News
27 Jan 2012 at 2:53pm

BBC News
Brothers charged over Stockport decapitated body
BBC News
Two brothers have been charged with the murder of a man who was found decapitated and burnt in Stockport. The body of John Grainger, 32, was found by fire crews tackling a blaze in Wellington Street at 05:10 GMT on Thursday. His head was found nearby.
Two held after murder victim's headless body found in flames on Wellington ...Manchester Evening News
Man found decapitated and burnt had been shot in headThe Guardian
First picture of man found decapitated on verge by firefighters called to put ...Daily Mail
The Press Association -Mirror.co.uk -WalesOnline
all 830 news articles »
Three held after bank occupied - Belfast Telegraph
27 Jan 2012 at 7:22pm

The Guardian
Three held after bank occupied
Belfast Telegraph
Police have arrested three people on suspicion of trespass after Occupy London protesters took over a former City bank. The group of anti-capitalist demonstrators entered a branch of the Iraqi Rafidain Bank on Leadenhall Street on Friday.
New Occupy protest in City of London sees three arrestsBBC News
Occupy protesters evicted from empty London office blockThe Guardian
Police raid on protesters in bank squatEvening Standard
LBC 97.3 -BusinessWeek
all 194 news articles »
Cameron softens his stance on euro deal 'to appease Lib Dems' - Daily Mail
27 Jan 2012 at 6:15pm

Daily Mail
Cameron softens his stance on euro deal 'to appease Lib Dems'
Daily Mail
By Tim Shipman and Hugo Duncan David Cameron provoked Tory anger last night by watering down his opposition to a new EU deal to prop up the euro. As Brussels demanded yet more cash from the taxpayer to save the single currency, the Prime Minister ...
David Cameron in U-turn over fiscal policing of eurozoneThe Guardian
Cameron and Sarkozy set to resume tussleFinancial Times
Davos 2012: Can the Germans stop being German?Telegraph.co.uk
The Independent -Mirror.co.uk -BBC News
all 1,189 news articles »
Analysis: Saying No to independence is not enough - Scotsman
27 Jan 2012 at 5:13pm

Scotsman
Analysis: Saying No to independence is not enough
Scotsman
By HENRY MCLEISH FOR the first time in five years, the constitutional question is now a live issue in Scottish politics. Faced with seismic political change over the past five years and the relentless rise of the SNP, no-one is in any doubt about the ...
More than just a Scottish questionIrish Times
Some of Scotland's civil servants know what impartiality isTelegraph.co.uk
Scottish government referendum statementBBC News
The Guardian -Herald Scotland -Daily Mail
all 231 news articles »
Nick Clegg wants higher taxes on high earners - The Independent (blog)
27 Jan 2012 at 2:59pm

The Independent (blog)
Nick Clegg wants higher taxes on high earners
The Independent (blog)
By John Rentoul It seems that I failed in my mission yesterday to explain why Nick Clegg's policy of raising the income tax threshold means more of the higher paid would pay higher rates of tax. Raising the level at which you start to pay income tax, ...
Clegg: Raise tax threshold further and fasterBBC News
Nick Clegg tax cuts speech: We need fewer cheap insults and more real courageDaily Mail
Osbornomics is unravelling, and Nick Clegg is right to sound the alarmTelegraph.co.uk
The Guardian -The Press Association -Financial Times
all 426 news articles »
How islanders in the Falklands are bracing themselves for untold riches...or ...
27 Jan 2012 at 5:39pm

Daily Mail
How islanders in the Falklands are bracing themselves for untold riches...or ...
Daily Mail
By David Jones Chugging away from Port Stanley through choppy, slate-grey waters, the reminders of the costly but glorious military campaign that defined the Thatcher years were etched in the hills behind us. There was Mount Tumbledown, ...
Argentina's senate discusses Falkland Islands' futureBBC News
Argentina doesn't have military power to seize the Falklands says defence ministerTelegraph.co.uk
Argentina hits back over FalklandsThe Press Association
Mirror.co.uk -AFP -Scotsman
all 331 news articles »
Blast Of Cold Weather Sweeping UK - Sky News
27 Jan 2012 at 8:12pm

Sky News
Blast Of Cold Weather Sweeping UK
Sky News
Bitterly cold Arctic air sweeping across Britain could force temperatures down to lows of -5C this weekend, forecasters say. The warnings of freezing conditions come after weeks of unseasonably mild weather. Sky News weather presenter Jo Wheeler said: ...
Britain To Shiver In Blast Of Cold WeatherYahoo! News UK

all 12 news articles »
Politics Weekly podcast: welfare reform, Newt Gingrich and Boris Johnson - Th...
26 Jan 2012 at 7:43am

New York Times
Politics Weekly podcast: welfare reform, Newt Gingrich and Boris Johnson
The Guardian
Michael White, Jackie Ashley and Randeep Ramesh discuss the government's attempts to cap welfare payments; and the second round of Boris v Ken in London. Plus the latest from the Republican primaries in the United States The government suffered six ...
Ministry of Sound plead with Boris Johnson to save the iconic clubNME.com
London AssemblyBBC News
Boris Johnson Invited To Come Clubbing As Ministry Of Sound Faces Renewed ...RWD Online
Energy Efficiency News -The Independent -Londonist
all 28 news articles »
Plans for Diamond Jubilee river pageant unveiled - San Jose Mercury News
27 Jan 2012 at 6:16pm

shropshirestar.com
Plans for Diamond Jubilee river pageant unveiled
San Jose Mercury News
By Gregory Katz AP Undated handout photo issued on Wednesday Jan. 18, 2012, by the Thames Diamond Jubilee Pageant showing Alaska, the oldest working passenger vessel on the Thames which will be taking part in the Thames Diamond Jubilee pageant along ...
The Duchess of Cornwall sets Jubilee Menu challengeTelegraph.co.uk
Jubilee cooking contest may be illegal, says RepublicBBC News
One million trees planted for Queen's Diamond JubileeMirror.co.uk
The Press Association -Evening Standard -Daily Mail
all 132 news articles »
 

Business News
Business News continually updated from thousands of sources around the net.

Canally: Market Wants Political Certainty
27 Jan 2012 at 5:54pm

John Canally, LPL Financial economist, weighs in on the markets, GDP, and how the 2012 election will impact the economy.

Video: Robert Shiller on Housing Market, Economy
27 Jan 2012 at 5:54pm

Robert Shiller, an economics professor at Yale University and co-creator of the S&P/Case-Shiller home-price index, talks about the housing market's role in the economy and his new book "Finance and the Good Society." Shiller speaks with Tom Keene on Bloomberg Television's "Surveillance Midday" at the World Economic Forum's annual meeting in Davos, ... (more)

Video: Gingrich Was `On His Heels' at Debate, Hunt Says
27 Jan 2012 at 5:54pm

Al Hunt, executive editor for Washington at Bloomberg News and a Bloomberg View columnist, talks about last night's Republican presidential debate and the outlook for the Florida primary.

Ashton Woods Homes opens new phase with 40 home sites at The Landings in Sout...
27 Jan 2012 at 1:40pm

TAMPA, Fla. --- Ashton Woods Homes has opened a new phase with 40 single family home sites for three, four and five bedroom homes priced from $229,990 at The Landings in South Tampa, located off Interbay and Westshore Blvds. in the Westshore region of Tampa.

Michael Roche, vice president of sales and marketing at Ashton Woods Homes, said the single family homes in the new phase will range in size from 1,556 square feet of living space to 2,801 square feet.

Roche said Ashton Woods Homes has increased energy efficiency features on its Energy Star Homes in the Tampa Bay area.

Ashton Woods Homes is one of the nation's largest private homebuilding companies, with operations in Orlando, Tampa, Atlanta, Raleigh, Dallas, Houston, Austin and Phoenix. Visit www.ashtonwoodshomes.com.

Lennar's New "Next Gen" Homes in Four Tampa Communities Focus on Changing Ame...
27 Jan 2012 at 1:35pm

TAMPA, Fla. --- Lennar has started construction of its first "Next Gen" homes in four Tampa Bay area communities that feature integrated "home within a home" floor plans for live-in relatives or guests.

Mark Metheny, president of Lennar's Central Florida Division, said Lennar's new five and six bedroom "Next Gen" homes reflect changing American demographics.

"More and more Americans are seeking homes to provide for families that include more than one generation," Metheny said.

"That may include elderly parents or grandparents, adult children with their own families, in-laws or extended families," Metheny said.

The "home within a home" features include a complete living suite with eat-in kitchenette, living area, bedroom, walk-in closet, private bath and private entrance.

Metheny unveiled two new "Next Gen" floor plans. One offers 3,357 square feet of living space with five bedrooms, three-and-a-half baths and three-car garage.

A second "Next Gen" floor plan offers 3,867 square feet with six bedrooms, four- and-a-half baths and three-car garage.

Lennar will premier its "Next Gen" homes at Ayersworth Glen in Riverview off U.S. 301 and Big Bend Road; Concord Station in Land O'Lakes off SR 54 in Pasco County; Live Oak Preserve in New Tampa and Panther Trace in Riverview.

"Next Gen homes aren't for every family, but for larger multi-generation and extended families, Next Gen should be the perfect solution," Metheny said.

NAI Realvest negotiates New Lease for 7,200 square feet at Apopka Industrial ...
27 Jan 2012 at 1:31pm

MAITLAND, Fla. - NAI Realvest recently negotiated a new lease agreement that includes an option for the tenant to buy the property at 2325 Clark St. in Apopka.

NAI Realvest principal Michael Heidrich assisted his son, Michael Heidrich, Jr., a new associate at the firm, in negotiating the lease of the 7,200 square foot facility on behalf of the tenant, Avery Holdings, LLC of Colorado Springs, Colo.

It's the first closed transaction for Michael Heidrich, Jr. who just joined NAI Realvest in the fourth quarter of last year.

The landlord, RJP Properties LLC of Tavares was represented by Robby Robinson of Florida Site Selectors.

About NAI Realvest: NAI Realvest, serving all of Central Florida, is a fully integrated commercial real estate operating company specializing in brokerage, development, investment, leasing and management, consulting and research services in the U.S. and worldwide. NAI Global is an international commercial real estate network with over 350 offices spanning the globe. Since 1978, clients have built businesses on the power of NAI Global's expanding network. Extensive services include multi-site acquisitions and dispositions, sublease, tenant representation, lease administration and audit, investment services, due diligence and related consulting and advisory services. To learn more, visit www.NAIRealvest.com.

NAI Realvest Negotiates Lease for 3,000 square feet at Industrial facility in...
27 Jan 2012 at 1:25pm

MAITLAND, Fla. - NAI Realvest recently negotiated a lease agreement for 3,000 square feet of industrial space at 3665 Delphini Way in the Delphini Airport Industrial Park North in Sanford off Lake Mary Blvd.

NAI Realvest associate Sean DuPree, CCIM brokered the transaction representing the landlord, Delphini Industrial Park at Northstar LLC. of Altamonte Springs and the new tenant Conifer, LLC, a local manufacturer.

About NAI Realvest: NAI Realvest, serving all of Central Florida, is a fully integrated commercial real estate operating company specializing in brokerage, development, investment, leasing and management, consulting and research services in the U.S. and worldwide. NAI Global is an international commercial real estate network with over 350 offices spanning the globe. Since 1978, clients have built businesses on the power of NAI Global's expanding network. Extensive services include multi-site acquisitions and dispositions, sublease, tenant representation, lease administration and audit, investment services, due diligence and related consulting and advisory services. To learn more, visit www.NAIRealvest.com.

Acquisition of NAI Global by C-III Capital Partners Complete, NAI Realvest to...
27 Jan 2012 at 1:22pm

Maitland, Fla., - NAI Global, the largest network of independent commercial real estate firms worldwide, announced that its previously reported acquisition by C-III Capital Partners LLC (C-III) has been completed. The transaction will help create a leading fully integrated commercial property services company that will operate in markets around the world. Locally based NAI Realvest is the central Florida representative of NAI Global.

C-III is a leading commercial real estate services company engaged in a broad range of activities, including primary and special loan servicing, loan origination, fund management, CDO management, principal investment, title services and multifamily property management. C-III is led by chief executive officer Andrew L. Farkas, who founded and was Chairman and CEO of Insignia Financial Group, Inc. (NYSE:IFS). Its principal place of business is located in Irving, TX, and it has additional offices in New York, New York; Greenville, South Carolina; McLean, Virginia; Chicago, Illinois; Dallas, Texas and Nashville, Tennessee.

Video: Defense Budget Jeopardizes Security, Rogers Says
27 Jan 2012 at 12:34pm

U.S. Representative Mike Rogers, a Republican from Michigan and chairman of the House Intelligence Committee, talks about the impact of proposed cuts to the U.S. defense budget on national security.

First 'Super Wi-Fi' Network Goes Live in North Carolina
27 Jan 2012 at 10:29am

Lucky residents of Wilmington, N.C., will be the first in the nation to have access to a "Super Wi-Fi" network.

European leaders stress the positive at Davos
27 Jan 2012 at 6:20am

DAVOS, Switzerland -- Europe's financial chiefs tried Friday to soothe the fears of global chief executives and other political leaders, insisting they have a handle on the eurozone's troubles.

For the Good of the Nation, Broadband for All
27 Jan 2012 at 4:20am

Federal Communications Commission Chairman Julius Genachowski recently announced a plan that would expand the Universal Service Fund's Lifeline program to include broadband Internet service .

Steven Van Zandt's - Lilyhammer' Breaks Ratings Records in Norway
27 Jan 2012 at 4:20am

Steven Van Zandt 's follow up to Sopranos is a hit. At least in Norway. One million viewers or one in five Norwegians tuned in for the premiere of Lilyhammer , the Mafioso comedy starring Van Zandt as a New York mobster turned FBI informer who gets sent to rural Norway on the witness protection plan.

Judge refuses to lift Mirkarimi stay-away order
27 Jan 2012 at 4:20am

A San Francisco judge refused Sheriff Ross Mirkarimi's request Thursday that she lift an order barring him from having any contact with his wife and 2-year-old son while a domestic-violence case against him proceeds.

Netflix Surges After Subscriber Rebound: Los Angeles Mover
27 Jan 2012 at 12:05am

Netflix Inc., the online and mail- order video-rental service, surged the most in two years after reporting fourth-quarter profit that topped analysts' estimates and forecasting improving margins in its streaming business.

 

BBC News - Business
The latest stories from the Business section of the BBC News web site.


Outrage at RBS boss's bonus deal
27 Jan 2012 at 9:50am
A £963,000 bonus in shares awarded to Royal Bank of Scotland boss Stephen Hester is strongly criticised by politicians and unions.

US economic growth rate picks up
27 Jan 2012 at 9:22am
The pace of US economic growth quickened to a 2.8% annualised rate in the three months to December, the Commerce Department says.

Greece debt talks 'close to deal'
27 Jan 2012 at 1:00pm
Greece could reach a deal with its creditors over the weekend, according to the EU's Economic Commissioner, Olli Rehn.

Tackling inequality 'a priority'
27 Jan 2012 at 5:41am
Growing inequality should now be the priority for leaders after the economic crisis, senior figures at the World Economic Forum say.

VIDEO: Tupperware boss gives Davos advice
26 Jan 2012 at 10:14am
Davos veteran Rick Goings, boss of Tupperware, offers "dos and don'ts" for first-time visitors to the World Economic Forum.

Davos 2012: Who's afraid of China?
26 Jan 2012 at 6:48am
Davos comes to terms with a new global power

Davos 2012: Setting the gloom level to 11
25 Jan 2012 at 5:11pm
There's a gloomy mood at this year's meeting of the WEF

Fines threat for credit messages
27 Jan 2012 at 5:02pm
Firms face raids and fines of up to £500,000 for sending unsolicited text messages about credit or compensation.

Bank scraps charity credit cards
27 Jan 2012 at 5:05pm
Halifax and Bank of Scotland charity credit cards which have helped to raise millions of pounds will be withdrawn, Lloyds Banking Group announces

Osborne unveils UK financial bill
27 Jan 2012 at 7:19am
The Chancellor George Osborne has revealed details about the new Financial Services Bill that will overhaul regulation of the sector.

Fitch downgrades Italy and Spain
27 Jan 2012 at 1:28pm
Five eurozone economies, including Italy and Spain, are downgraded by rating agency Fitch, citing financial weakness during the debt crisis.

Spain jobless passes five million
27 Jan 2012 at 7:25am
Spain's unemployment figure rose above the five million mark in the last quarter of 2011, official figures show.

Carmaker Ford's profits increase
27 Jan 2012 at 3:50pm
US carmaker Ford has reported a surge in profits in 2011, fuelled by a one-off payment and strong sales in its home country.

Hundreds of jobs to go at Serco
27 Jan 2012 at 9:57am
Outsourcing group Serco announces it is to cut 500 jobs in the UK, mostly at the company's head office in Hampshire.

Top Euro MP quits in piracy row
27 Jan 2012 at 7:24am
A European Parliament rapporteur has stood down in protest as a controversial anti-piracy agreement is signed by several countries.
 

Financial Services company and industry news from the Financial Times
The financial services company and industry news with expert analysis from the Financial Times on FT.com

Investec agrees ?32m deal to buy Irish broker
27 Jan 2012 at 4:50pm
Move to buy NCB aims to strengthen its operation in Dublin, which offers corporate and personal accounts to clients as well as treasury services
US reverse merger promoter raided
27 Jan 2012 at 12:21pm
Benjamin Wey and his firm New York Global Group specialise in helping Chinese companies acquire US-listed shell companies
Opening shots in Stanford trial
27 Jan 2012 at 10:33am
US prosecutors began to present their evidence to support allegations the Texas banker ran a $7bn Ponzi scheme for more than a decade
Fallout spreads from Einhorn?s improper trading
27 Jan 2012 at 10:10am
The FSA has fined an executive at David Einhorn?s Greenlight Capital hedge fund and a trading desk director at JPMorgan Cazenove
Investor anger at BNP Paribas hybrid bond offer
27 Jan 2012 at 5:04pm
Investor group hits out at an offer to buy back ?3bn of Cashes at a substantial discount in latest sign of tension between European banks and investors
Osborne clears way for more financial security
27 Jan 2012 at 4:33pm
Reforms range from plans to put the chancellor in charge in a future economic crisis to a new crackdown on payday loan companies
Barclays investors warn on lavish bonuses
27 Jan 2012 at 2:58pm
The UK lender?s biggest shareholders say they will not accept higher payouts to its chief executive or its senior investment bankers
UniCredit places bulk of ?7.5bn cash call
27 Jan 2012 at 1:55pm
Italy?s largest bank by assets provides another sign of improved investor sentiment towards the country and the eurozone with its issue success
Bruising finale for NYSE-D Börse tie-up
27 Jan 2012 at 9:52am
US group?s chief says he misjudged Brussels? determination to define the derivatives market as European, rather than global
Halved Hester bonus sparks political row
27 Jan 2012 at 7:52am
Hester to receive nearly £1m on top of £1.2m salary as Royal Bank of Scotland seeks to defuse public and political row
UK unveils bank regulation overhaul
27 Jan 2012 at 6:59am
Chancellor given power to act unilaterally in a crisis, although legislation falls short of MPs? wishes on regulation of central bank
LSE makes a virtue of Italian banks? needs
27 Jan 2012 at 4:02am
Placing of funds at Italian banks by the London Stock Exchange helps its total income rise 17 per cent in third quarter
Stanford tells of $5.5bn cash pile on video
26 Jan 2012 at 3:43pm
Jury watches video of Allen Stanford where he blamed Wall Street ?greed? and the ?stupidity? of underwriting standards on the sharp stock market fall in 2008
BNP Paribas to sell $11bn energy loan portfolio
26 Jan 2012 at 3:28pm
The energy portfolio disposal comes as France?s largest bank by assets aims to reduce its balance sheet by about 10% before the end of 2012
PwC says E&Y tried to poach client bank
26 Jan 2012 at 3:22pm
Auditor points the finger at rival in attempt to persuade regulator there is healthy competition among the Big Four firms
 

Sky News | Business | First For Breaking News
The latest business news on British and international companies, stocks and shares news, the FTSE, Dow Jones and main market movers. What???s up and what???s down in business.

Osborne: Eurozone Must Show Colour Of Money
George Osborne is expected to reinforce his message to the eurozone that Britain is "ready" to help boost IMF resources to bail out struggling economies - but only if strict criteria are met.
UK Food Producers Promised Export Help
British food producers are being promised more help to export their goods to lucrative overseas markets such as India and China.
RBS Boss Under Pressure To Forgo £1m Bonus
The political row over bankers' bonuses is heating up, with the boss of taxpayer-owned Royal Bank of Scotland coming under increasing pressure to turn down his £1m bonus.
Treasury To Get Ultimate Bank Bailout Powers
The Treasury is to be given sole power over when to bail out banks in the event of another financial crisis, under new plans announced by Chancellor George Osborne.
Biz Bulletin: Poor Christmas Sales Hit Hornby
Toymaker Hornby has warned its profits will be hit because of poor UK sales over the Christmas period.
 

Forex Blog
Learn about the world of Forex

Loonie and Aussie Share Downward Bond
by Adam Kritzer
30 Jun 2011 at 9:15am
Tide is Turning for the Aussie
by Adam Kritzer
29 Jun 2011 at 10:40am

“Australia is about to enter a boom that should last decades…The Australian dollar is unlikely to go back to where it was, and manufacturing will shrink in importance to the economy, perhaps even faster than it has been.” This, according to Martin Parkinson, Treasury Minister of Australia. While 30 years from now, Mr. Parkinson’s prognosis might probe to be accurate, I’m not so sure it applies to the period 3 months from now. Here’s why:

First of all, the putative economic boom that is taking place in Australia is being driven entirely by high commodity prices and surging production and exports. Since peaking at the end of April, commodity prices have fallen mightily. You can see from the chart above that there continues to exist a tight correlation between the AUD/USD and commodities prices. As commodities prices have fallen over the last two months, so has the Australian Dollar.

In addition, while demand will probably remain strong over the long-term, it may very well slacken over the short-term, due to declining economic growth across the industrialized world.  Consider also that Australia’s largest market for commodity exports – China – may have difficulty sustaining a GDP growth rate of 10%, and at the very least, new fixed-asset investment (which necessitates demand for raw materials) will temporarily peak in the immediate future.

Finally, the mining sector directly accounts for only 8% of Australia’s economy, which means that only to a limited extent to high commodities prices contribute to the bottom line of Australian GDP. This notion is reinforced by the 1.2% economic contraction in the second quarter – the biggest decline in 20 years – and the fact that GDP is basically flat over the last three quarters. Many non-mining economic indicators are sagging, and the number of corporate bankruptcies is 10% higher than in 2010. In the end, then, the ebb and flow of Australia’s fortune depends less on commodities, and more on other sectors.

Mr. Parkinson’s optimistic forecasts might also be undermined in the short-term by a looser-than-expected monetary policy. The Reserve Bank of Australia last hiked its benchmark interest rate in November 2010, and may not hike again for a few more months due to moderating economic growth and proportionally moderate inflation. Given that an attractive interest rate differential may be driving some of the speculative activity that has girded the Aussie’s rise, a decline in this differential could likewise propel it downward.

That’s because anecdotal reports suggest that the Australian Dollar remains a popular long currency for carry traders, funded by shorting the US Dollar, and to a lesser extent, Japanese Yen. Given that many of these carry trades are heavily leveraged, it wouldn’t take much to trigger a short squeeze and a rapid decline in the AUD/USD. For evidence of this phenomenon, one has to look no further back than May 2010, when the Aussie fell 10-15% in only three weeks.

Ultimately, as one commentator recently pointed out, the Aussie’s 70% rise since 2008 might better be seen as US Dollar weakness (which also catalyzed the rise in commodity prices). The apparent stabilizing of the dollar, then, might let some air out of the currency down under.

Emerging Market Currencies Brace for Correction
by Adam Kritzer
28 Jun 2011 at 2:42am

“It was the spring of hope, it was the winter of despair,” begins Charles Dickens’ The Tale of Two Cities. In 2011, the winter of despair was followed by the spring of uncertainty. Due to the earthquake/tsunami in Japan, the continued tribulations of Greece, rising commodity prices, and growing concern over the global economic recovery, volatility in the forex markets has risen, and investors are unclear as to how to proceed. For now at least, they are responding by dumping emerging market currencies.

As you can see from the chart above (which shows a cross-section of emerging market forex), most currencies peaked in the beginning of May and have since sold-off significantly. If not for the rally that started off the year, all emerging market currencies would probably be down for the year-to-date, and in fact many of them are anyway. Still, the returns for even the top performers are much less spectacular than in 2009 and 2010. Similarly, the MSCI Emerging Markets Stock Index is down 3.5% in the YTD, and the JP Morgan Emerging Market Bond Index (EMBI+) has risen 4.5% (which is reflects declining growth forecasts as much as perceptions of increasing creditworthiness).

There are a couple of factors that are driving this ebbing of sentiment. First of all, risk appetite is waning. Over the last couple months, every flareup in the eurozone debt crisis coincided with a sell-off in emerging markets. According to the Wall Street Journal, “Central and eastern European currencies that are seen as being most vulnerable to financial turmoil in the euro zone have underperformed.” Economies further afield, such as Turkey and Russia, have also experienced weakness in their respective currencies. Some analysts believe that because emerging economies are generally more fiscally sound than their fundamental counterparts, that they are inherently less risky. Unfortunately, while this proposition makes theoretical sense, you can be assured that a default by a member of the eurozone will trigger a mass exodus into safe havens – NOT into emerging markets.

While emerging market Asia and South America is somewhat insulated from eurozone fiscal problems. On the other hand, they remain vulnerable to an economic slowdown in China and to rising inflation. Emerging market central banks have avoided making significant interest rate hikes (hence, rising bond prices) – for fear of inviting further capital inflow and stoking currency appreciation – and the result has been rising price inflation. You can see from the chart above that the darkest areas (symbolizing higher inflation) are all located in emerging economic regions. While high inflation is not inherently problematic, it is not difficult to conceive of a downward spiral into hyperinflation. Again, a sudden bout of monetary instability would send investors rushing to the exits.

While most analysts (myself included) remain bullish on emerging markets over the long-term, many are laying off in the short-term. “RBC emerging market strategist Nick Chamie says his team has recommended ‘defensive posturing’ to clients since May 5 and isn’t recommending new bullish emerging currency bets right now….HSBC said Thursday that it isn’t recommending outright short positions on emerging market currencies to clients but suggested a more ‘cautious’ and selective approach in making currency bets.” This phenomenon will be exacerbated by the fact that market activity typically slows down in the summer chart above courtesy of Forex Magnates) as traders go on vacation. With less liquidity and an inability to constantly monitor one’s portfolio, traders will be loathe to take on risky positions.

NO QE3: What are the Implications for the Dollar?
by Adam Kritzer
25 Jun 2011 at 7:28am

The verdict is nearly in; there will be no QE3. The second round of quantitative easing (?QE2?) will expire at the end of this month, and while it will not be unwound for quite some time, the Fed has indicated that it will not be followed by yet another round. The question on the minds of forex traders, of course, is what does this mean for the Dollar?

In his most recent press conference, Ben Bernanke, himself, indicated that QE3 was unlikely. According to a survey conducted by Bloomberg News, the majority of FX analysts (65%) believe him. Simply, the circumstances don?t support further easing. To be sure, the unemployment rate remains high, and the economy is teetering on the verge of double-dip recession. However, the last two rounds did little to address either of these problems, and companies have hoarded cash rather than investing in new plant and workers.

Interest rates are still hovering around record lows, and there isn?t anything to be gained from trying to lower them further. Besides, given that inflation is now above 3% ? due to an explosion in good and energy prices ? QE3 would simply be too risky. Economist Ken Goldstein summarized the situation as follows: “We will come to the end of QE2 and largely we mark about how little happened when it ended and that?s also an argument about why there may not be persuasive argument to do a QE3.”

On the other hand, there are some analysts who think that QE3 is inevitable (29%). PIMCO?s Bill Gross, manager of the world?s biggest bond fund, recently indicated that, ?Next Jackson Hole in August will likely hint at QE3/interest rate caps.? (Personally, I think that he?s probably just bitter that his forecast of a decline in Treasury Bond prices hasn?t materialized). One columnist wrote that the Fed?s arm will be twisted by the ongoing collapse of the housing market, while others have argued that the recent decline in the S&P 500 will spur the Fed into action. Most of us, however, believe that the Fed will adopt a wait-and-see approach before ultimately conceding that more easing is necessary.

For now at least, then, the prevailing assumption is that there will not be a QE3. As for how forex markets have digested this news, they have taken it in stride. The Dollar is now holding its value, and as I wrote in a previous post, it may even have bottomed out. Of course, it doesn?t hurt that the Euro is being punished by another flare-up in the sovereign debt crisis and investors are getting nervous about bubbles in emerging market currencies, all of which provide support for the dollar.

The fact that QE2 will soon end without having triggered financial apocalypse or hyperinflation ? as some cassandras initially predicted ? is something that is worth nothing. Of course, the proceeds of QE1 and QE2 will be recycled indefinitely into the markets, and forex investors can?t completely put quantitative easing behind them. Still, that there won’t be any more additional cash injected into commodities markets and emerging economy asset markets means that one of the main sources of downward pressure on the dollar has been eliminated.

Ironically, it is possible that the unveiling of QE3 could actually cause the dollar to rally. The reason is that there is still a tremendous amount of uncertainty in the markets, which provides the dollar with some safe haven demand. If the Fed were to concede that all is not well on the economic front and respond by more money printing, it could drive some safe haven flows into the US, even to the extent that it would overwhelm outflows driven by concerns over inflation.

Personally, I think the dollar will continue to hold its value, and perhaps even appreciate slightly in the near-term, as forex markets dither over the way forward.

http://www.forexblog.org/2011/06/has-the-us-dollar-hit-bottom.html Swiss Franc is the Only Safe Haven Currency
by Adam Kritzer
23 Jun 2011 at 10:11am

According to conventional market wisdom, there are three safe haven currencies: the Swiss Franc, Japanese Yen, and US Dollar. It is to these currencies that investors flock whenever there is a crisis, or merely an outbreak of uncertainty, and for much of the period following the collapse of Lehman Brothers, the three were closely correlated. As you can see from the chart below, however, one of these currencies has begun to distinguish itself from the other two, leading some to argue that there is now only one true safe haven currency: the Swiss Franc.

What’s not to like about the Franc? It boasts a strong economy, low inflation, and low unemployment. Unlike the US and Japan, Switzerland is not plagued by a high national debt and perennial budget deficits. Its monetary policy has been extremely conservative: no quantitative easing, asset-purchases, or any other money printing programs with euphemistic names.

Ironically, the only thing that makes investors nervous about the franc is that it has already risen so much. Remember when it reached the milestone of parity against the dollar in 2010? Since then, it has appreciated by an additional 20%, and seems to breach a new record on an almost weekly basis. The same goes for the CHF/EUR and CHF/JPY. The President of Switzerland’s export association is expecting further gains: “Parity is a realistic scenario. Given the indebtedness of the eurozone and the strong attraction of the franc, the euro is likely to continue to lose value.”

Given that Swiss exports have surged in spite of (or even because of) the rising Franc, however, he has very little to worry about at the moment. As you can see fromt he graphic below (courtesy of the Financial Times), the balance of trade continues to expand, and has exploded in a handful of key sectors. To be sure, economists expect that this situation will eventually correct itself and are already moving to revise downward 2011 and 2012 GDP growth estimates. Then again, they made the same erroneous predictions in 2010.

The main variable in the Swiss Franc is the Swiss National Bank (SNB). Having booked a loss of CHF 20 Billion from failed intervention in 2010, the SNB is not in a position to make the same mistake again. In fact, SNB President Philipp Hildebrand has not even stooped to verbal intervention this time around, undoubtedly cognizant of the fact that he has very little credibility in forex markets.

At the same time, the SNB is not in any hurry to raise interest rates, lest it stoke further speculative interest in the Franc. Its June meeting came and went without any indication of when it might tighten. Interest rate futures currently reflect an expectation that the first rate hike won’t come until March 2012. Thus, the downside of holding the Franc is that it will continue to pay a negative real interest rate. The only upside, then, is the possibility of further appreciation. Fortunately, the SNB is unlikely to stop the Franc from rising, since it serves the same monetary end as higher interest rates. In other words, a more valuable Franc serves as a direct check on inflation because it lowers the cost of commodity imports and should (eventually) soften demand for Swiss exports.

It is possible that the Swiss Franc will suffer a correction at some point, if only because it rose by such a large margin in such a short period of time. On the other hand, given that its economy has proved its ability to withstand the Franc’s appreciation, it’s no wonder that investors continue to bet on its rise.

Is it Possible to Trade Forex Part-time?
by Adam Kritzer
22 Jun 2011 at 10:17am

This week, I came across an article in the San Francisco Gate (which, incidentally, has really ramped up its forex coverage over the last year) that addressed this very topic. Given that part-time forex traders probably outnumber those that practice the craft full-time, such an article was long overdue.

In sum, the author advises part-time traders to concentrate their trading during the busiest times of the day, or failing that, to simply trade the most active currency pairs during the period of the day that one happens to have time to trade. For example, if you wish to trade the USD/EUR but only have a limited amount of time to do so, you are advised to trade the opening of the New York and/or London sessions, at 8AM EST and 3AM EST, respectively. Alternatively, if you only have time to trade from midnight to 2am, for example, you are advised to trade currency pairs in which the quote currency is the Yen, because during that time the Tokyo session is “in full swing.”

Alas, this kind of strategy is based on a very dubious assumption, which is that you should aim to trade the currency pairs which are both the most liquid and most volatile (ignore the contradiction here), because this will yield the most profits. In other words, it’s easy to capture profits when trading pairs that tend to bounce around a lot and which are cheap and easy to buy and sell. Right?

If you read the Forex Blog with any regularity and are ware that my bend is towards fundamental analysis, it’s probably already obvious to you that I don’t think this is necessarily the case. Consider that forex is a zero-sum game. In other words, on average, 50% of traders win and 50% lose. [When you account for trading costs (i.e. spreads), its probably closer to 30% win and 70% lose, but let's ignore this for the sake of argument]. Thus, the way I see it, a trader that enters the market during the busiest times has the same chance of winning (~50%) as a different trader that enters the market during the least busy time of day. Either way you cut it, someone has to win and someone has to lose, and no amount of liquidity or volatility can rectify this situation.

Thus, my advice for part-time traders is to forget trading altogether. If you don’t have the time to constantly monitor the market, pore over charts, and develop technical strategy, the odds of winning are pretty low. On the other hand, why not shift your focus from trading to investing? Trading is difficult under the best of circumstances and even more difficult when you don’t have enough time to make a real commitment.

The only way around this is to shift your time horizon from minutes to days – or even weeks. This way, it won’t matter when you have time to trade. Spreads might be marginally higher (as evidenced in the spikes in he chart above, which shows how spreads fluctuate over time) for the USD/EUR at midnight than at 8am, but if you’re planning on holding the pair for more than 10 seconds (and your target profit is greater than 15 pips), this is basically irrelevant.

This way, you also don’t have to worry about carefully planning your entry and exit into positions. Entering a swing trade with a targeted profit of 500pips is probably just as good at 4am as it is at 7am, all else being equal. While this doesn’t necessarily increase the odds of success (above 50%), at least it gives you a great deal more flexibility in being a part-time trader.

Japanese Yen In ?No Man?s Land?
by Adam Kritzer
20 Jun 2011 at 8:52am

This, according to a hedge fund manager that has decided to cancel all of his fund’s bearish bets on the Japanese Yen. The reason: the yen is rising, and it’s unclear when – or even if – the government will intervene to push it back down. Even though the yen’s strength is fundamentally illogical, it seems that investors are growing increasingly wary of betting against it.

As I pointed out in my previous post on the Yen (“Japanese Yen Strength is Illogical, but Does it Matter?“), the yen has actually fallen over the last twelve months, on a correlation weighted basis (though to be fair, it has staged a pretty impressive comeback since the beginning of April). Unfortunately, investors mainly care about how it is performing against a handful of key currencies, namely the US Dollar. Simply, the yen continues to rise against the dollar, and it is unclear when it will stop.

Japanese government analysis has indeed confirmed that “speculators” are behind the strong yen, as the alleged wide-scale repatriation of yen by Japanese insurance companies has yet to materialize. Of course, there isn’t really much doubt: Japan’s economy is contracting, due to decrease in output spurred by the tsunami. In May, it recorded its second largest monthly trade deficit ever.

Meanwhile, interest rates and bond yields are pathetically low, and the Bank of Japan is being urged to expand its asset buying program, which would theoretically result in a devaluation of the yen. As  a result, retail Japanese forex traders (nicknamed “Mrs. Watanabes“) have resumed shorting the Yen as part of a carry trade strategy.

Alas, speculators either don’t share their pessimism or are running out of patience. While everyone continues to assume that the BOJ will intervene if the Yen rises to 80 against the dollar, no one can be sure whether the line in the sand might not be 78 or even 75. At this point, intervention seems to hinge more on politics than on economics, which means predicting it is beyond the scope of this post. In other words, “There is too much uncertainty and volatility in markets right now to make that yen trade appealing.” And sure enough, the most recent Commitments of Traders data shows that speculators have been re-building their yen long positions over the last month.

In the end, the speculators are probably right. The Bank of Japan has intervened twice over the last twelve months, and the impact has always been short-lived. Besides, given that many speculators still remain committed to shorting the yen, it remains extraordinarily vulnerable to the kind of short squeeze that sent it soaring 5% in a single session en route to the record high it touched in March.

I’m personally still bearish on the yen, but I also think it’s too risky to short it against the dollar, which seems to be declining for its own reasons. As you can see from the chart below, the yen has fallen against virtually every other major currency. Yen shorters, then, might be wise to avoid the dollar altogether and focus instead on any number of other currencies.

http://www.bloomberg.com/news/2011-06-17/japan-recovery-means-boj-can-avoid-adding-stimulus-muto-says.html Forex Volatility Continues Rising
by Adam Kritzer
17 Jun 2011 at 9:38am

This week witnessed another flareup in the eurozone sovereign debt crisis. As a result, volatility in the EUR/USD pair surged, by some measures to a record high. Even though the Euro rallied yesterday and today, this suggests that investors remain nervous, and that going forward, the euro could embark on a steep decline.

There are a couple of forex volatility indexes. The JP Morgan G7 Volatility Index is based on the implied volatility in 3-month currency options and is one of the broadest measures of forex volatility. As you can see from the chart above, the index is closing in on year-to-date high (excluding the spike in March caused by the Japanese tsunami), and is generally entrenched in an upward trend. Barring day-to-day spikes, however, it will take months to confirm the direction of this trend.

For specific volatility measurements, there is no better source of data than Mataf.net (whose founder, Arnaud Jeulin, I interviewed only last month). Here, you can find data on more than 30 currency pairs, charted across multiple time periods. You can see for the EUR/USD pair in particular that volatility is now at the highest point in 2011 and is closing in on a two-year high.

Meanwhile, the so-called risk-reversal rate for Euro currency options touched 3.1, which is greater than the peak of the credit crisis. This indicator represents a proxy for investor concerns that the Euro will collapse suddenly, and its high level suggests that this is indeed a growing concern. In addition, implied volatility in options contracts has jumped dramatically over the last week, which confirms that investors expect the euro to move dramatically over the next month.

What does all of this mean? In a nutshell, it shows that panic is rising in the forex markets. Last month, I used this notion as a basis for arguing that the dollar safe-haven trade will make a come-back. This would still seem to be the case, and should also benefit the Swiss Franc, which is nearing an all-time high against the euro. Naturally, it also implies that forex investors remain extremely concerned about a continued decline in the euro, and are rushing to hedge their exposure and/or close out long positions altogether.

Mataf.net suggests that this could make the EUR/USD an interesting pair to trade, since large swings in either direction will necessarily create opportunities for traders. While I have no opinion on such indiscriminate trading [I prefer to make directional bets based on fundamentals], I must nonetheless acknowledge the logic of such a strategy.

http://www.forexblog.org/2011/05/interview-with-arnaud-jeulin-of-mataf-net-try-a-lot-of-strategies.html Euro Nears Breaking Point
by Adam Kritzer
16 Jun 2011 at 8:33am

It’s deja vu all over again in the forex markets as another twist in the sovereign debt crisis has sent the euro tumbling by the greatest margin in nearly a year. It was only last month that I posted “The Euro (Still) has a Greek Problem,” and yet, forex markets are once again reacting to the possibility of a Greek default as thought it were a new development. At the very least, investors finally seem to be acknowledging the inevitable.

There have been several factors at work in this latest episode. On Monday, S&P downgraded its credit rating for Greece to CCC, following on a similar move by Moody’s. That means that Greece’s sovereign credit rating is now the lowest in the world, behind such eminent economies as Grenada and Ecuador. While the move was hardly noteworthy in itself, it represents one more straw on the camel’s back.

Greece’s government is increasingly unstable, and Prime Minister George Papandreou has become so desperate that he has suggested forming an alliance with Greece’s most powerful opposition party. Meanwhile, violent riots outside Greek Parliament have reportedly become a daily occurrence, as the Greek populace has proven unwilling to accept wage cuts and tax increases.

As if that weren’t enough, there is tremendous uncertainty surrounding the next stage of the Greek bailout. No one can agree on what amount to give and what should be stipulated in return. Some parties think that private investors should be involved in the bailout by taking a “haircut” on the bonds that they own. Some members of the eurozone are balking about contributing any funds at all, wary of justifying it to their own citizens and that it is merely forestalling the inevitable.

I think the NYTimes offered the best summary: “Funding fatigue is growing in the north European creditor countries, especially Germany, the Netherlands, Finland and Austria, just as austerity fatigue is mounting in Greece.” When you consider that Greek interest rates and credit default swap spreads have surged to record highs, it seems that default is really inevitable. If the IMF and European Union are so determined, they can push off default until 2013. Still, default now or default then is still default.

At this point, then, the only real question is what happens when Greece defaults. Will it be forced to leave the Eurozone? Will that push the rest of the Eurozone fringe closer towards default? Will the Euro collapse and cease to exist as a currency? What will happen then?

Unfortunately, I think the answer to all of these questions is yes. At the very least, Greece will be forced out of the eurozone. Bondholders will push interest rates in Ireland, Spain, and Portugal up to double-digit levels, trapping them in the same cycle in which Greece is currently ensnared. Given the exposure of French and German banks to the sovereign debt of financially troubled eurozone members, they will also require state bailouts, and so on.

In a recent op-ed published in The Financial Times, celebrity economies Nouriel Roubini argued that the only way to avoid a complete eurozone meltdown is if the euro depreciates rapidly “to restore competitiveness to the periphery” or if the European Union is able to rapidly achieve complete fiscal and economic union. Roubini argues that the former is difficult because of the ECB’s hawkishness, while the latter is precluded by political hurdles that remain too formidable to overcome.

As Greece inches ever closer to default, the markets will increasingly become gripped by utter uncertainty over the questions that I posed above. Central Banks will stop accumulating euro-denominated assets, and investment funds will similarly shun Europe. (In fact, there is already evidence that this is happening). While European interest rates are attractive relative to the rest of the G4, they are hardly enough to compensate investors for this uncertainty. And when the markets come to terms with this, the euro might finally reach its breaking point.

S&P 500 Decouples from Euro?
by Adam Kritzer
14 Jun 2011 at 9:58am

While I have written quite about forex correlations in recent posts, the focus has primarily been on correlations that exist between currencies. In this post, I would like to address a correlation that exists between currencies and other forex markets- specifically the relationship between the Euro and US stocks.

If you look at the chart above, you can see that an unmistakable correlation exists between the S&P500 and the EUR/USD that stretches back at least six months. Generally speaking, when the EURUSD has risen, so has the S&P 500, and vice versa. In fact, this correlation is so airtight that one analyst recently discovered that the two financial vehicles often reach intra-day highs and lows within minutes of one another!

Why is this the case? In a nutshell, it is because the Euro – especially relative to the dollar – is a proxy for risk appetite. The same is necessarily true for US stocks. When investors are confident in the strength of the global economic recovery and the possibility of crisis is distant, the euro will rise. This has nothing to do with fundamentals in Europe, which are probably at least as bad as they are in the US. Of course, it may be connected with dollar weakness, since it is arguably the case that quantitative easing has both depressed the dollar and buoyed US stocks.

As I intimated in the title of this post, however, the S&P recently decoupled from the euro. Since the beginning of June, US equities have declined sharply, to the extent that they have given back most of their gains in the year-to-date. The EUR/USD, meanwhile, continued rising all the way until last week. While this has happened on a couple previous occasions, this was perhaps the sharpest break between the two.

I’m personally at a loss to explain why this happened. It has been conjectured that the driving force behind the correlation is algorithmic trading, and that hence, it must also represent the source of the break. In other words, high-frequency traders – which account for an ever-increasing proportion of forex volume – tweaked their trading algorithms so as not to buy the S&P 500 when the EURUSD rises, and vice versa.

It’s probably also the case that S&P 500 was falling for endogenous reasons- specifically a decline in GDP growth and earnings expectations which need not necessarily reflect itself in a stronger euro. In fact, in a normal functioning market, you would expect an inverse correlation; strong US economic fundamentals should translate into both a strong dollar and rising stocks. Could it be that worsening fundamentals are manifesting themselves in the form of a weak dollar and weak stocks?

Alas, the correlation has re-established itself over the last week, which means this is largely a moot issue. At the very least, it’s still worth being aware of, both insofar as it remains intact and in the event that it breaks down again.

 

DailyFX - Forex Market News
Forex Market News

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US Dollar Bulls Await 9750 To Begin the Next Stampede
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The dollar continued its descent towards Key Fibonacci support in North American trade with the Dow Jones FXCM Dollar Index off by nearly 1.3% on the week. Here’s what to watch as we head into the close of the month.

Guest Commentary: Gold & Silver Daily Outlook 01.27.2012
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Gold and silver sharply increased for the second straight day after the FOMC announced on Wednesday it will keep the interest rates low until late 2014.

Euro Struggles to Continue Rally; Yen Top Performer
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Euro Propped Up On Hopes For Greek PSI Deal, USD Strength Ahead
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Crude Oil, Gold Aim Higher on Accelerating US Economic Growth
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27 Jan 2012 at 2:55am
Crude oil and gold prices are poised to advance as US economic growth accelerates to the fastest pace in over a year in the fourth quarter.

FOREX: Yen Outperforms as Traders Look Past US GDP to EU Summit
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27 Jan 2012 at 1:19am
The Yen is poised to extend overnight gains as markets look past the limited implications of the US GDP report to focus on the upcoming EU leaders’ summit.

Currency Overview, Reflection and Outlook for Major Currencies
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27 Jan 2012 at 12:09am
The gains in the currency market over the past few weeks have been impressive, but ultimately they are still classified as corrective and the US Dollar will once again emerge…

 

World business news - CNNMoney.com
From CNN and Money magazine, CNNMoney.com combines business news and in-depth market analysis with practical advice and answers to personal finance questions.


Italy, Spain downgraded by Fitch
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The great Mediterranean executive migration
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U.S. inches closer to 'Europe moment'
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Greek default is essentially a given: S&P
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IMF cuts growth forecast for all but U.S.
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Greek debt deal hinges on interest rate impasse
24 Jan 2012 at 6:38am
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Can 'Super Mario' save Europe and America?
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IMF calls for larger 'firewall' in Europe
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