news – Page 26694

The Forex Paradox – Is Forex a net loser?

The Forex market is the largest in the world and the least understood. Since the late 90’s, traders and asset managers have flocked to it as an alternative to trade, compared to other common markets (Stocks, Bonds, Futures).

But due to the fact that the market is decentralized, and unregulated, it also attracted a large amount of fraud, on many levels. First, there was outright theft by groups such as the one led by Trevor Cook ($190 Million Ponzi scheme). Then there were sham brokers, in the most extreme case, like One World Forex, that simply didn’t bother clearing client orders and used client funds to finance lavish lifestyles and a movie that was never released featuring Busta Rhymes. Those in the new growing retail market on both sides of the dealing desk developed a special bond going through a unique experience that just wasn’t possible in other markets.

It was said that this was a retail problem, that serious institutional Forex was not aparty to such nonsense. But now the world’s largest investment banks are under investigation by the Department of Justice for Forex market rigging. This includes names such as Goldman Sachs, Lloyds of London, JP Morgan Chase, Barclays, Citigroup, just to name a few (the full list of names has not been released).

– Forex nixon shock

fx concepts

forex fraud

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/KkvF30XPPNM/story01.htm globalintelhub

WTF Chart Of The Day: European Equities Edition

Once again, the flood of momentum-chasing hot-money provided by the world’s central banks’ printfest is leading investors to push up European equities markets to the highest level since 2011 amid optimism that the region is recovering (top-down GDP dashed that hope this morning). Furthermore, since earnings are apparently the mother’s milk of stocks, investors are entirely ignoring the fact that earnings expectations for the European region are collapsing to their lowest since September 2009. As Bloomberg notes, “investors in Europe continue to buy hope for an upcoming earnings recovery,” but as Tristan Abet of Louis Capital warns, “there is a limit to that rationale… the risk is that the market loses patience.”

Chart: Bloomberg

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/81_qaTtri_4/story01.htm Tyler Durden

Goldman: Yellen Confirmation Hearing Largely As Expected

In response to questions from members of the Senate Banking Committee at her confirmation hearing, Janet Yellen emphasized the need to maintain a highly accommodative stance of monetary policy in light of the disappointing economic recovery. Her comments were broadly in line with what Goldman would have expected, and by-and-large were very similar to statements made by Chairman Bernanke in the past; confirming moar of the same blindness to bubbles, lots of tools, and over-optimism.

(image h/t @PatoNet)

MAIN POINTS:

1. Yellen emphasized the high level of unemployment as a reason for continuing the highly accommodative stance of monetary policy, noting in particular the high level of long-term unemployment. She stated that “I consider it imperative that we do what we can to promote a strong recovery” and later said that “it is important not to remove support, especially when the recovery is fragile and the tools available to monetary policy, should the economy falter, are limited” in light of the zero lower bound.

2. On asset purchases, Yellen stated that “I believe the benefits exceed the cost” and that purchases “have made a meaningful contribution to economic growth and improving the outlook.” More generally, she noted that “as the program gradually winds down, we have indicated that we expect to maintain a highly accommodative monetary policy for some time to come.”

3. There was very little to go on with respect to the outlook for near-term policy decisions, whether tapering asset purchases or adjusting the forward guidance. She did indicate that “at each meeting we are attempting to assess whether or not the outlook is meeting the criterion that we have set out to begin to reduce the pace of asset purchases.”

4. Asked about lowering interest paid on excess reserves, she cited concern about money market functioning, but noted that “it’s a possibility.”

5. Regarding financing stability, Yellen reiterated her view that asset price bubbles or financial imbalances can best be dealt with (at least initially) through regulatory policy rather than adjusting the overall stance of monetary policy.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/YO9wYrN_e4g/story01.htm Tyler Durden

Federal Student Loans Surpass $1 Trillion; Delinquency Rate Soars To All Time High

There is a reason why US consumer revolving (credit card) credit growth is getting lower and lower and lower and at last check posted a mere 0.2% annual increase.

That reason is that as the NY Fed disclosed moments ago, federal student loans officially crossed the $1 trillion level for the first time ever. Notably: the quarterly student loan balance has increased every quarter without fail for the past 10 years!

And just to prove that while credit card balances are plunging due to more stringent bank repayment requirements, this is more than offset by borrowers shifting to student loans, where the delinquency rate on student loans is soaring and has just hit an all time high of 11.83%, an increase of almost 1% compared to last quarter. Even according to just the government lax definition of delinquency, a whopping $120 billion in student loans will be discharged. Thank you Uncle Sam for your epically lax lending standards in a world in
which it is increasingly becoming probably that up to all of the loans will end up in deliquency.

Full report here

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/756LK3iTUy4/story01.htm Tyler Durden

French Army Chief Says Troops Should Hunt Al Qaeda Beyond Mali's Borders

French army
chief Admiral Edouard Guillaud has said that French troops should
be allowed to pursue Al Qaeda-linked fighters beyond Mali,
where the French military has been engaged in operations against
Islamic militants since January this year.

Speaking to Europe 1 radio, Guillaud said, “I think we should
hunt them down everywhere. That’s why we are working with our
neighbours Niger, Burkina Faso, and Chad, and also cooperating with
Algeria so that there is no sanctuary for them.”

From
Euronews:

PARIS (Reuters) – French troops should be allowed to hunt
down al Qaeda-linked militants beyond Mali’s borders, French army
chief Admiral Edouard Guillaud said in a rare interview on
Thursday.

Nine months after they were scattered across the Sahara by waves
of French air strikes, Islamists in Mali are making a comeback –
naming new leaders, attacking U.N. peacekeepers and killing two
French journalists.

Follow these stories and more at Reason 24/7 and don’t forget you
can e-mail stories to us at 24_7@reason.com and tweet us
at @reason247.

from Hit & Run http://reason.com/blog/2013/11/14/french-army-chief-says-troops-should-hu
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French Army Chief Says Troops Should Hunt Al Qaeda Beyond Mali’s Borders

From
Euronews:

PARIS (Reuters) – French troops should be allowed to hunt
down al Qaeda-linked militants beyond Mali’s borders, French army
chief Admiral Edouard Guillaud said in a rare interview on
Thursday.

Nine months after they were scattered across the Sahara by waves
of French air strikes, Islamists in Mali are making a comeback –
naming new leaders, attacking U.N. peacekeepers and killing two
French journalists.

Follow these stories and more at Reason 24/7 and don’t forget you
can e-mail stories to us at 24_7@reason.com and tweet us
at @reason247.

from Hit & Run http://reason.com/blog/2013/11/14/french-army-chief-says-troops-should-hu
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Sheldon Richman on Avoiding War With Iran

Iranian flag Look at
recent history, writes Sheldon Richman. In 2003 Iraq’s government
had no nuclear weapons. The U.S. government invaded, and before
long Iraqi President Saddam Hussein was hanging from a rope. In
2011 Libya’s government had no nuclear weapons. The U.S. government
led NATO on a bombing campaign to help a group of rebels, and
before long Libyan Col. Muammar Qaddafi lay dead on a roadside.
Today Syria has no nuclear weapons. The U.S. government and NATO
are currently aiding rebels seeking to overthrow President Bashar
al-Assad. On the other hand, North Korea has nuclear weapons, and
Supreme Leader Kim Jong-un appears safe from any regime change
sponsored by the U.S. government and NATO. Lesson for foreign
leaders who are in the doghouse with the U.S. government: Get a
nuke. But Iran is not building a bomb.

View this article.

from Hit & Run http://reason.com/blog/2013/11/14/sheldon-richman-on-avoiding-war-with-ira
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Former Federal Reserve Official: Sorry About that Quantitative Easing

A few days old but just came to my attention this morning, a

Wall Street Journal apologia from former Federal
Reserve worker Andrew Huszar (he “managed the Federal Reserve’s
$1.25 trillion agency mortgage-backed security purchase
program”) on how QE wasn’t necessarily good for me or
thee:

As a former Federal Reserve official, I was responsible for
executing the centerpiece program of the Fed’s first plunge into
the bond-buying experiment known as quantitative easing. The
central bank continues to spin QE as a tool for helping Main
Street. But I’ve come to recognize the program for what it really
is: the greatest backdoor Wall Street bailout of all time….

The Fed said it wanted to help—through a new program of massive
bond purchases. There were secondary goals, but Chairman Ben
Bernanke made clear that the Fed’s central motivation was to
“affect credit conditions for households and businesses”: to drive
down the cost of credit so that more Americans hurting from the
tanking economy could use it to weather the downturn. For this
reason, he originally called the initiative “credit easing.”

Huszar was called in to help the Fed navigate new waters of
economic intervention:

In its almost 100-year history, the Fed had never bought
one mortgage bond. Now my program was buying so many each day
through active, unscripted trading that we constantly risked
driving bond prices too high and crashing global confidence in key
financial markets. We were working feverishly to preserve the
impression that the Fed knew what it was doing.

It wasn’t long before my old doubts resurfaced. Despite the
Fed’s rhetoric, my program wasn’t helping to make credit any more
accessible for the average American. The banks were only issuing
fewer and fewer loans. More insidiously, whatever credit they were
extending wasn’t getting much cheaper. QE may have been driving
down the wholesale cost for banks to make loans, but Wall Street
was pocketing most of the extra cash….

Trading for the first round of QE ended on March 31, 2010. The
final results confirmed that, while there had been only trivial
relief for Main Street, the U.S. central bank’s bond purchases had
been an absolute coup for Wall Street. The banks hadn’t just
benefited from the lower cost of making loans. They’d also enjoyed
huge capital gains on the rising values of their securities
holdings and fat commissions from brokering most of the Fed’s QE
transactions. Wall Street had experienced its most profitable
year ever in 2009, and 2010 was starting off in
much the same way.

Huszar says he was unhappy with that result, and quit.

Where are we today? The Fed keeps buying roughly $85 billion in
bonds a month…

And the impact? Even by the Fed’s sunniest calculations,
aggressive QE over five years has generated only a few percentage
points of U.S. growth. By contrast, experts outside the Fed, such
as Mohammed El Erian at the Pimco investment firm, suggest that the
Fed may have created and spent over $4 trillion for a total return
of as little as 0.25% of GDP (i.e., a mere $40 billion bump in U.S.
economic output). Both of those estimates indicate that QE isn’t
really working.

Reason on
quantitative easing.

from Hit & Run http://reason.com/blog/2013/11/14/former-federal-reserve-official-sorry-ab
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Weak Reception For Latest Batch Of $16 Billion In 30 Year Paper

If yesterday’s 10 Year auction was a success, today’s $16 billion issue of 30 Year paper was poorly received by the market, with the 3.810% yield tailing the 3.796% When Issued, accentuated by a tumble in the Bid To Cover from 2.64 to 2.16, the third lowest in the past 4 years, excluding just the auctions from August of 2011 and 2013 when there was led indicated demand. The internals were less remarkable, with Directs taking down a stronger than average 18.3%, Indirects holding 35.3% of the auction and Dealers left with 46.5% of the auction. Overall, hardly the ringing endorsement in the long-end the Treasury needs.

Perhaps in retrospect this weak auction is not that surprising. As we pointed out earlier, hedge funds have the most conviction in this “asset class” second only to the Nasdaq. And you know what they say about the herd…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/gNxfx5tKChU/story01.htm Tyler Durden

All Aboard for a Sun-Filled, Intellectually Stimulating Week at Sea! You Won’t Want to Miss Fixing the World: Reason Seminar Cruise 2014!

www.reasoncruise.com

Join Reason’s own Nick Gillespie, Matt Welch, and some of most
interesting speakers around for a spectacular week in the western
Caribbean on board the brand-spanking new Celebrity Silhouette!
Beginning February 9, 2014, you’ll embark on a seven-day cruise
through five countries and enjoy thought-provoking seminars,
exclusive gourmet dinners, and private cocktail parties with other
liberty-loving friends. Currently joining us on board
will be:

Skeptical Environmentalist Bjorn
Lomborg,
Historian Johan Norberg,
Author and former Reason Editor in Chief
Virginia Postrel
Reason Editor in Chief Matt
Welch,
ReasonTV Editor in Chief Nick
Gillespie,
Reason Science Correspondent Ron
Bailey, and
Reason Senior Editor Jacob
Sullum

We’ll be traveling in style on the Celebrity Silhouette, and
all-inclusive accommodations start at just $1,650 per person (and
range up to deluxe cabins with incredible ocean views and private
verandas).

reason cruise 2014

Make your reservations now and start planning how free minds and
free markets will fix the world! For more information, or to
register today, visit www.reasoncruise.com.

from Hit & Run http://reason.com/blog/2013/11/14/all-aboard-for-a-sun-filled-intellectual
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