EurAnalysis

so if PT find a super spot for short then post in here ya,all of us make million

Yup, we dont have to go far. I have been shorting from 3177 till now and already lost 4% on this correction.

T

http://www.telegraph.co.uk/finance/f...be-enough.html

What will eurozone leaders do to Luis de Guindos this time? Last time Spain's finance minister met with fellow finance ministers, a photographer snapped him being throttled by Jean Claude Juncker, the head of the eurogroup.

http://i.telegraph.co.uk/multimedia/...2_2180975b.jpg Thursday's demonstrations rattled the markets and pushed Spain's shares down and borrowing costs up Photo: AP

Spain is the big worry: it's raced to the head of market fears - as well as the political agenda - with alarming speed.

International leaders and traders are now watching in horror. The tightrope Rajoy is trying to walk between austerity and human costs is the fault line dividing the whole of Europe.

On one side there's the German-led plan to forcibly reduce debt by axing public spending, raising taxes and executing structural reforms; on the other is a demand for more support of the sinner states to avoid depression and anarchy.

But with hopes fading that massive support will be agreed in Copenhagan, the world is watching Rajoy instead. Can he turn around Spain's economy alone?

Friday's Budget is a vital test. Earlier this week, Rajoy promised a "very, very austere budget". He was backed by Cristobal Montoro, the Budget minister, who said the Budget was "tough".

Over the 100 days they've been in power the pair have proved their mettle, pushing through a raft of radical reforms from axing severance pay to overhauling contract laws, and announcing sweeping cuts to the public sector. After Friday, Spain is expected to attempt €35bn of cuts, on top of the €8.9bn already budgeted, as well as €6bn of tax rises.

But, in a country whose regions hold considerable power, passing reforms are very different to implementing them. On Sunday, Rajoy's PP party failed to win control in the crucial Andalusia elections, leading to warnings that his austerity measures would struggle in the regions.

Spain's banks are more critical still. Rajoy has overseen some consolidation and has demanded the banks come up with a €50bn recapitalisation programme by the end of March. A European Commission assessment this week suggested it would be woefully inadequate, even if it were successful.

On top of the current debts, the banks - which lent billions of euros during the property boom - stand to suffer more as Spain's housing market continues to fall.

Citgroup's Buiter said: "New property and real estate-related losses are likely to come their way as a result of further property price declines. The Spanish banks are unlikely to be able to absorb these losses. If these institutions are deemed too important to fail, these losses could migrate to the public sector, which could have severe problems carrying them."
Experts have called for the bail-out fund, the European Finacial Stability Fund, to be used to help recapitalise the banks, if not the country.
So far, the answer from Brussels is no. But faced with losing its fourth biggest economy, the eurozone may be forced to reconsider.

The Solution Is Clear Now ... Kno

The only other alternative put forward in Brussels on Thursday was an April Fool's statement from the European Council. The Pope would "pray for divine intervention to save the euro", it said. "This is now seen as the most credible strategy."

Daily Key 1.347

u ageins the trend , but on the long run u could be in good side.

I do only long runs. I keep shorting this mofo, untill I hit the top and then I wait for 1,17 for a year .

T

Thank you for your comments.

But don't you think that if this is so obvious (the crisis/the debt), the big players already assumed that in their calculations and that's why we don't see much movement below 1.30 area?

We say "Maybe Italy/Spain are next", but after what's happen in Greece and after increasing monitoring of the debt/economy and how these countries deal with their problems - the "big boys" already know if there will be bad news this summer?

And if EU is in worst shape comparing to USA and Asia - how they will manage to win the war to bring and hold the euro down - the opposite that others want?

Possible scenario

London low taken out,possible visit daily TL again
Seriously Cha cha again

http://3.bp.blogspot.com/_9VYyCoqp2N...s320/pr1-1.jpg

today this thread is dead man..

Everybody is yawning and sleeping

wanted to stop by to say what a great work you guys do here. I have noticed that especially on weekends (yeah, you Kno ) when you give an indepth analysis regarding the economy, fundamentals and interesting as well as funny comments/opinions and articles.

Keep up the good work (Y).

PS. Anybody thinking about euraud ?

Europe warned crisis not over yet

By Peter Spiegel in Copenhagen and Miles Johnson in Madrid

European finance ministers were warned on Friday that the underlying causes of the continent’s debt and banking crisis had yet to be resolved, as Spain, struggling to rein in its fiscal deficit, published its most austere budget since democracy returned after the Franco era.

http://im.media.ft.com/content/image...144feabdc0.img

Two confidential analyses prepared by European Union officials and distributed to ministers meeting in Copenhagen said €1tn in cheap loans to banks provided since December by the European Central Bank had provided a reprieve, but sovereigns and financial institutions needed to use the relative calm to shore up finances and balance sheets.

“Contagion may ... re-emerge at very short notice, as demonstrated only a few days ago, and re-launch the potentially perverse triangle between sovereign, bank funding risk and growth,” one of the analyses, prepared by the EU’s economic and finance committee and seen by the Financial Times, said. The existence of the documents was first reported by the Italian daily La Stampa.

The reference was a clear allusion to the recent sharp rise in Spanish borrowing costs, which have hovered near 5.5 per cent for more than a week. Eurozone and Spanish officials have launched a two-front offensive in an attempt to prevent the country becoming the next crisis victim.

In Copenhagen, ministers agreed to increase the ceiling of their two bailout funds to €700bn, an attempt to erect a firewall big enough to convince markets the EU can protect Spain. In Madrid, the government announced €27bn in benefit cuts and tax increases as part of the toughest budget since the death of General Francisco Franco in 1975.

As part of what Cristóbal Montoro, the budget minister, referred to the “the biggest fiscal consolidation of the democracy”, €12.3bn will be raised in new taxes, with €5.3bn coming from corporate taxes, and €2.5bn projected to come from a temporary amnesty on tax evasion.

Other savings will come from cutting ministry budgets by almost 17 per cent to €65.8bn this year. The foreign affairs ministry is hardest hit, losing 54 per cent of its funding. Industry and agriculture both lost just over 31 per cent each.

“We are convinced that Spain will no longer be a problem, especially for the Spanish, but also for the European Union,” Luis de Guindos, finance minister, said.

The warning on the fragility of the European recovery undercuts optimistic rhetoric by government leaders. Nicolas Sarkozy, French president, this month said the eurozone had “turned the page”, and Mario Monti, his Italian counterpart, this week said the “financial aspect” of the crisis had ended.
However, senior officials at EU institutions – particularly the ECB and the European Commission, the EU’s executive branch – have been more sanguine, warning the ECB’s long-term refinancing operation has bought time but cannot replace reforms in national economies and the financial sector.

The second document, which was prepared by the Commission, warned bluntly: “The euro crisis is not over. Many of the underlying imbalances and weaknesses of the economies, banking sectors or sovereign borrowers remain to be addressed.”

The paper argued the elements of the recent restoration of confidence – finalising a second Greek bailout, increasing the eurozone’s rescue fund, EU-wide bank recapitalisation, new eurozone fiscal discipline rules, and efforts to pass policies to encourage growth – must be fully implemented or leaders risk losing their last chance to act.

“If this window of opportunity is not most effectively used … we might have missed the last chance for a considerable amount of time,” the analysis said.

This week's COT report from the CFTC


EUR shorts 89K vs 82K prior
JPY shorts 67K vs 26K prior
GBP shorts 11K vs 15K prior
AUD longs 59K vs 45K prior
CAD longs 23K vs 42K prior
NZD longs 3.9K vs 4.2K prior
CHF shorts 15K vs 11K prior


http://www.cftc.gov/dea/futures/deacmelf.htm

For Information and Understanding thanks to email from GATA.

Submitted by cpowell on 12:21PM ET Friday, March 30, 2012. Section: Daily Dispatches

The Dangers of an Interventionist Fed
By John Taylor
The Wall Street Journal
Friday, March 30, 2012

http://online.wsj.com/article/SB1000142405270230381650457730740397182409...
America has now had nearly a century of decision-making experience under the Federal Reserve Act, first passed in 1913. Thanks to careful empirical research by Milton Friedman, Anna Schwartz, and Allan Meltzer, we have plenty of evidence that rules-based monetary policies work and unpredictable discretionary policies don't. Now is the time to act on that evidence.

The Fed's mistake of slowing money growth at the onset of the Great Depression is well-known. And from the mid-1960s through the '70s, the Fed intervened with discretionary go-stop changes in money growth that led to frequent recessions, high unemployment, low economic growth, and high inflation.

In contrast, through much of the 1980s and '90s and into the past decade the Fed ran a more predictable, rules-based policy with a clear price-stability goal. This eventually led to lower unemployment, lower interest rates, longer expansions, and stronger economic growth.

Unfortunately the Fed has returned to its discretionary, unpredictable ways, and the results are not good. Starting in 2003-05 it held interest rates too low for too long and thereby encouraged excessive risk taking and the housing boom. It then overshot the needed increase in interest rates, which worsened the bust. Now, with inflation and the economy picking up, the Fed is again veering into "too low for too long" territory.

Policy indicators suggest the need for higher interest rates, while the Fed signals a zero rate through 2014.

It is difficult to overstate the extraordinary nature of the recent interventions, even if you ignore actions during the 2008 panic, including the Bear Stearns and AIG bailouts, and consider only the subsequent two rounds of "quantitative easing" (QE1 and QE2) -- the large-scale purchases of mortgage-backed securities and longer-term Treasurys.
The Fed's discretion is now virtually unlimited. To pay for mortgages and other large-scale securities purchases, all it has to do is credit banks with electronic deposits ”called reserve balances or bank money. The result is the explosion of bank money, which now dwarfs the Fed's emergency response to the 9/11 attacks.

Before the 2008 panic, reserve balances were about $10 billion. By the end of 2011 they were about $1,600 billion. If the Fed had stopped with the emergency responses of the 2008 panic, instead of embarking on QE1 and QE2, reserve balances would now be normal.

This large expansion of bank money creates risks. If it is not undone, then the bank money will eventually pour out into the economy, causing inflation. If it is undone too quickly, banks may find it hard to adjust and pull back on loans.

The very existence of quantitative easing as a policy tool creates unpredictability, as traders speculate whether and when the Fed will intervene again. That the Fed can, if it chooses, intervene without limit in any credit market -- not only mortgage-backed securities but also securities backed by automobile loans or student loans -- creates more uncertainty and raises questions about why an independent agency of government should have such power.

The combination of the prolonged zero interest rate and the bloated supply of bank money is potentially lethal. The Fed has effectively replaced the entire interbank money market and large segments of other markets with itself -- i.e., the Fed determines the interest rate by declaring what it will pay on bank deposits at the Fed without regard for the supply and demand for money. By replacing large decentralized markets with centralized control by a few government officials, the Fed is distorting incentives and interfering with price discovery with unintended consequences throughout the economy.

For all these reasons, the Federal Reserve should move to a less interventionist and more rules-based policy of the kind that has worked in the past. With due deliberation, it should make plans to raise the interest rate and develop a credible strategy to reduce its outsized portfolio of Treasurys and mortgage-backed securities.

History shows that reform of the Federal Reserve Act is also needed to incentivize rules-based policy and prevent a return to excessive discretion. The Sound Dollar Act of 2012, a subject of hearings at the Joint Economic Committee this week, has a number of useful provisions. It removes the confusing dual mandate of "maximum employment" and "stable prices," which was put into the Federal Reserve Act during the interventionist wave of the 1970s. Instead it gives the Federal Reserve a single goal of "long-run price stability."

The term "long-run" clarifies that the goal does not require the Fed to overreact to the short-run ups and downs in inflation. The single goal wouldn't stop the Fed from providing liquidity when money markets freeze up, or serving as lender of last resort to banks during a panic, or reducing the interest rate in a recession.

Some worry that a focus on the goal of price stability would lead to more unemployment. History shows the opposite.

One reason the Fed kept its interest rate too low for too long in 2003-05 was concern that raising the interest rate would increase unemployment in the short run. However, an unintended effect was the great recession and very high unemployment. A single mandate would help the Fed avoid such mistakes. Since 2008, the Fed has explicitly cited the dual mandate to justify its extraordinary interventions, including quantitative easing. Removing the dual mandate will remove that excuse.

A single goal of long-run price stability should be supplemented with a requirement that the Fed establish and report its strategy for setting the interest rate or the money supply to achieve that goal. If the Fed deviates from its strategy, it should provide a written explanation and testify in Congress. To further limit discretion, restraints on the composition of the Federal Reserve's portfolio are also appropriate, as called for in the Sound Dollar Act.

Giving all Federal Reserve district bank presidents -- not only the New York Fed president voting rights at every Federal Open Market Committee meeting, as does the Sound Dollar Act, would ensure that the entire Federal Reserve system is involved in designing and implementing the strategy. It would offset any tendency for decisions to favor certain sectors or groups in the economy.

Such reforms would lead to a more predictable policy centered on maintaining the purchasing power of the dollar. They would provide an appropriate degree of oversight by the political authorities without interfering in the Fed's day-to-day operations.
-----
Mr. Taylor is a professor of economics at Stanford and a senior fellow at the Hoover Institution. This is adapted from his testimony this week before the Joint Economic Committee, which drew on his book "First Principles: Five Keys to Restoring America's Prosperity." (W.W. Norton, 2012).

My Forecast for the next 1-2 month over..

1.34 then..
1.314 then...
1.37 then...
1.27 then...
1.33 and..

Tank...

http://theeconomiccollapseblog.com/a...-to-be-alright

So what is your opinion?
Do you believe that everything is going to be alright?
Please feel free to leave a comment with your thoughts below....
http://theeconomiccollapseblog.com/w...le-440x439.png


When Barack Obama first took office, the number of "long-term unemployed workers" in the United States was approximately 2.6 million. Today, that number is sitting at 5.6 million.

Don't worry about a thing - Nancy Pelosi says everything is going to be alright.

The BRICS countries (Brazil, Russia, India, China and South Africa) are publicly declaring that it is time to move away from the U.S. dollar as the primary reserve currency of the world.

Don't worry about a thing - Barack Obama says everything is going to be alright.

One out of every five Americans will be 65 or older by 2030 and nobody has any idea where all the money is going to come from to pay them the benefits that they have been promised.

Don't worry about a thing - Rachel Maddow says everything is going to be alright.

More Americans are dependent on the government right now than at any other time in all of U.S. history.

Don't worry about a thing - Barack Obama says everything is going to be alright.

The number of Americans on food stamps has increased by 14 million since Barack Obama became president and is sitting at an all-time record high.

Don't worry about a thing - Hillary Clinton says everything is going to be alright.

The U.S. government will add more to the national debt in 2012 than it did from the time that George Washington became president to the time that Ronald Reagan became president.

Don't worry about a thing - Barack Obama says everything is going to be alright.

The U.S. national debt is currently increasing by about 150 million dollars every single hour.

Don't worry about a thing - Federal Reserve Chairman Ben Bernanke says everything is going to be alright.

The Federal Reserve bought approximately 61 percent of all government debt issued by the U.S. Treasury Department in 2011. This is a Ponzi scheme that will completely collapse at some point.

Don't worry about a thing - Barack Obama says everything is going to be alright.

http://www.actionforex.com/action-in...0120331162596/

Highlights...

The major theme last week was buy European majors, sell commodity currencies. Euro was firm on anticipation of the finance ministers meeting during the weekend and on expectation that there would be a final agreement on boosting the firepower of Eurozone's bailout funds. Such expectation was fulfilled as EU finance ministers concluded the meeting by raising the ceiling of the combined lending power of ESM and EFSF to EUR 800b. On the other hand, commodity currencies, in particular Aussie, was pressured on concern of slow down in China. US dollar was mixed as equities consolidated while treasury yield dipped for most of the week. Fiscal year end repatriation balanced selling pressure in the Japanese yen and most yen crosses were stuck in range last week.


Our view on long European/commodity crosses was correct last week as as GBP/AUD, AUD/CHF and EUR/AUD occupied the top three positions in the top movers table. The bias is still there and we'd continue to favor stronger rise in EUR/AUD and GBP/AUD this week. In particular, EUR/AUD could break through 1.3 psychological level as reaction to the Eurozone finance meeting news. Buying in EUR/AUD could intensify if the official Chinese manufacturing PMI to be released on Sunday dipped below 50. Though, we'll hold back on this view if the Chinese data beat expectation and would assess the outlook again after the week starts.


We also mentioned last week that we favored short in commodity/yen crosses. Such a strategy wasn't fruitful last week as repatriation buy in yen was not strong enough. We anticipated a slightly deeper pull back in yen crosses but that didn't happen. Indeed, the tide seemed to be turning to yen shorts against. Technically, we should note that most yen crosses seemed to have completed a three wave consolidation on Thursday or Friday and we'd possibly likely seen upside breakout this week. In addition, we should note the strong rebound in US treasury yield on Friday, which could also mark completion of recent pull back. 2.3% in 10 year US yield will be watched this week and if broken, stronger selloff in the Japanese yen would likely be seen. Anything other than commodity currencies against yen would be favored. That is, we would prefer long in USD/JPY, EUR/JPY and GBP/JPY. Though, considering the above strategy of long EUR/AUD, GBP/AUD etc, we're slightly prefer long in USD/JPY this week as a hedge.


After the meeting in Copenhagen, Eurozone finance ministers have agreed to mobilize an "overall firewall" of approximately EUR 800b, more than USD 1T. The detail of the program is that before July 2012, EFSF is the main instrument. After July 2012, ESM is the main instrument and EFSF will only continue to program that has already started. But during the the transitional period between July 2012 and mid-2013, EFSF can still engage in new programs to "ensure a full fresh lending capacity" of EUR 500n. And the overall ceiling of ESM/EFSF will be raised to EUR 700b even after mid-2013, as programs started by then would continue. In addition to the mentioned EUR 700b, EUR 59b out of EFSF and EUR 53b out of the bilateral Greek loan facility has already be paid. So altogether, the total is around EUR 800b.


Besides, EU finance ministers also agreed to accelerate the make available the paid-in capital of the ESM. Two tranches of capital will be paid in 2012, one in July and one by October. Another two tranche will be paid in 2013 and the fourth tranche will be paid in 1H 2014. And to maintain a 15 ratio between the paid-in capital and outstanding amount of EMS issuances, the paid-in could be further accelerated.


Also, Eurozone finance ministers pledged an additional EUR 150b bilateral contributions to the IMF. IMF chief Lagarde welcomed the decisions to "strengthen the European firewall. And EU ministers now urged IMF to increase its resources by raising as much as $ 600b in April in Washington. ECB Vice President Vitor Constancio played down the significance of raising the IMF warchest to Eurozone but empathized that it's "not a specific fund or specific account for Europe" but "a recognition that in general for the world economy the IMF needs to have more resources". However, it's known that BRICS countries would only support increase in IMF resources if they are give more say. So such political development would be watched in the coming weeks.


The Week Ahead
With quarter end volatility now passed, focus will turn back to economic data to guide the risk sentiments trends. A number of important data will be released this week which starts with Chinese manufacturing PMI on Sunday. The most important data to be watched include US and UK PMIs, Aussie retail sales and trade, Canada employment and US non-farm payroll. RBA, ECB and BoE are expected to be on hold this week. FOMC will also release meeting minutes.

1. Sunday: China manufacturing PMI
2. Monday: Japan Tankan; Australia building approvals; Swiss retail sales, SVME PMI; UK manufacturing PMI; Eurozone unemployment; US ISM manufacturing, construction spending
3. Tuesday: RBA rate decision, Australia retail sales; UK construction PMI; US factory orders, FOMC minutes
4. Wednesday: Australia trade balance; UK services PMI; ECB rate decision, Eurozone retail sales; US ADP private employment, ISM services
5. Thursday: Swiss CPI; BoE rate decision, UK industrial and manufacturing production; Canada building permits, employment, Ivey PMI
6. Friday: US non-farm payroll

Technical Highlights
DOW engaged in sideway trading in the pass two weeks and the development indicates that recent up trend is still in progress. An upside break out could be seen this week or next to 13500 level. Possibly, current rally could eventually hit 138.2% projection of 10404 to 12284 from 11231 at 13829 before topping. And we'd at least want to see sustained trading below 13000 psychological level before considering reversal. Such development could give dollar some pressure. However, note that Aussie has somewhat decoupled from US equities and thus, European majors would possibly benefit more from further rally in US stocks.

US 10 year yield staged strong rebound on Friday with single reversal. The development argues that recent retreat is finished already. Stronger rally in $TNX would be seen this week and break of 2.287 should send yield through 2.407 towards 2.5. Such development would prompt another selloff in the Japanese yen, including rally.

Dollar index was weak last week but selling pressure was so far limited. Nonetheless, near term outlook remains bearish as fall from 80.73 is in favor to extend to 78.09 support and below. We'd prefer to see sustained trading above 55 days EMA (now at 79.37) to confirm near term reversal. Otherwise, deeper decline is expected.