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EurAnalysis Kindergarten 24 replies

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  • #5,001
  • Oct 25, 2011 4:58am Oct 25, 2011 4:58am
Quoting AFXFin
I'm running a couple of robots along my traditional trading and I'm going to shut them down in all accounts for tomorrow and trust my own instincts in this.
Very important for everyone to note that Robots can ruin you tomorrow.
If you have any, follow AFXFin's lead and shut them down.
Those who say it cannot be done should not interrupt those who are doing it
  • #5,002
  • Oct 25, 2011 5:12am Oct 25, 2011 5:12am
AFXFin,
Am puzzling over the format for solution as well.

The largest stumbling block to debt reconciliation is that if its good for the Greeks then it has to be good for everyone else.
The enormity of the problem is not containable by the EFSF even if leveraged to 1 trillion Euro.

How does one justify freeing the Greeks but keeping everyone else on the hook.

Italy retail sales where 0 this morning. So without growth, bailouts and debt forgiveness will not work in Europe.

I think we are at the juncture that will force a different course of action to restore Europe to a growth path. The return of a form of closed Europe is a high likelyhood.
  • #5,003
  • Oct 25, 2011 5:18am Oct 25, 2011 5:18am
Quoting drtorque
forextrapips & geges - folks i have acc w ibfx us too. but im considering AU they offer 1:400.. also metals. they are not ecn, usually not much problems, spreads widen yeah. maybe stop hunting a little bit but not much..

pipkiller - MBT im looking seriously into it. tight spreads, metals too.. but a lot of negative reviews too.. do you ever use tight stops? have you seen suspicious stop-hunting , overwidening spreads? withdrawal experience?
If you live in US IBFX AUS is unable to open you an account due to alphabet regs.
  • #5,004
  • Oct 25, 2011 5:19am Oct 25, 2011 5:19am
I was playing some more with those exponential trendlines in an attempt to tell when we are going to spike up (or down , but I see up more likely). And I accidentaly discovered Jupming Skeleton Fish pattern. Where will skeleton fish jump? Will he catch is prey? Place your bets, ladies and gentlemen.

T
Attached Image (click to enlarge)
Click to Enlarge Name: Skeleton sick fish.png Size: 23 KB
"I know one thing, that I know nothing." Sokrates
  • #5,005
  • Oct 25, 2011 5:19am Oct 25, 2011 5:19am
More like Middle Rising Wedge
Attached Daily - 4H Chart Progress
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EU Daily.png Size: 33 KB
Click to Enlarge Name: EU 4H.png Size: 39 KB
If there was easy money lying around,no one would be forcing it into your
  • #5,006
  • Oct 25, 2011 5:27am Oct 25, 2011 5:27am
Euro zone nears flawed crisis strategy

First the good news: European leaders are nearing a strategy to counter the euro zone's sovereign debt crisis. Now, the less good news: it has some apparent flaws and may fall apart.

Under an emerging deal likely to be struck on Wednesday, Greece's debt will be reduced, European banks will be recapitalised, the euro zone's rescue fund will scaled up to provide partial insurance in sovereign bond markets, and Italy will be pressured into getting serious about economic reform.

Each of those planks may fall short of expectations.
Those who say it cannot be done should not interrupt those who are doing it
  • #5,007
  • Oct 25, 2011 5:28am Oct 25, 2011 5:28am
Quoting Tom_D_Trader
I was playing some more with those exponential trendlines in an attempt to tell when we are going to spike up (or down , but I see up more likely). And I accidentaly discovered Jupming Skeleton Fish pattern. Where will skeleton fish jump? Will he catch is prey? Place your bets, ladies and gentlemen.

T
All depends if it's a flying fish
Either way, fish have gills, not lungs
Those who say it cannot be done should not interrupt those who are doing it
  • #5,008
  • Oct 25, 2011 5:35am Oct 25, 2011 5:35am
Quoting PipTrapper
That is Tier 1 basel. 9% capital ratio requirements.
PT, I have been examining a bit that Basel II. This is tier 1 pdf, if some of you are interested, but it is a very sick one reading and I didnt read it, just ctrl+f:

http://www.bis.org/publ/bcbs128b.pdf

Anyway. Minimum capital requirements for Tier 1 are 8%. Tier 1 is supposed to be cushion for credit market and operational risks. I just cant find anywhere that if banks credit risk is higher that T1 cushion, he should receive bailout from taxpayers . Hmm, strange. Moreover, I just cant imagine how Greek bonds could influence 9% of capital. Maybe I have some holes in knowledge here. Would be glad if you guys expanded here. I am going to check Societé generale and Dexia balance sheets.

Pls PT where did you found that statement about 9%?

T
"I know one thing, that I know nothing." Sokrates
  • #5,009
  • Oct 25, 2011 5:36am Oct 25, 2011 5:36am
Quoting Tom_D_Trader
I was playing some more with those exponential trendlines in an attempt to tell when we are going to spike up (or down , but I see up more likely). And I accidentaly discovered Jupming Skeleton Fish pattern. Where will skeleton fish jump? Will he catch is prey? Place your bets, ladies and gentlemen.

T
Kill the ego, or it will kill the mission.
  • #5,010
  • Oct 25, 2011 5:48am Oct 25, 2011 5:48am
  •  AFXFin
  • | Joined Oct 2011 | Status: Price don't have a mind of it's own | 915 Posts
Quoting Tom_D_Trader
I was playing some more with those exponential trendlines in an attempt to tell when we are going to spike up (or down , but I see up more likely). And I accidentaly discovered Jupming Skeleton Fish pattern. Where will skeleton fish jump? Will he catch is prey? Place your bets, ladies and gentlemen.

T
It all depends on used bate - worms are good. Lining should be strong and remember to be quiet. This is common fishing strategy.

  • #5,011
  • Oct 25, 2011 5:55am Oct 25, 2011 5:55am
Ok, noone answered me, so I answered myself by thinking.

8% Is total accumulated risk in credit and operational means. Greek debt pushes total risk above this limit and therefore bank doesnt meet Basel II needs.

I checked 2 of the biggest banks holding Greek bonds. Those are BNP Paribas with 5 Bn and Dexia with 3,5 Bn. Then I examined impact of downwrite of such a loss to their balance sheets. And ehh, well. I wouldnt give em a penny.

BNP paribas has total assets of 2Trillion EUR, so even if they just took a loss of 5Bn, thats 0,25% for em. Too few for them, too much for taxpayer I would say.

Dexia has sum of assets at 608 Bn, so 3,5Bn of Greek bonds are 0,57% of their capital. I wouldnt give a penny to Dexia as well.

I know it is kind of misleading to compare writeof of bonds with balance sheet and it could be very well compared to income statement, but just try to imagine you enter a bad deal at forex and loose 0,25% of your capital. Bad luck sucker, try next time, but you still can make hundreds of such a deals and end up in profit.

EDIT: Misleading, but according to basel II, tier 1, which are we talking about here. Dunno if it was already written here but Tier 1 is (Credit and operational risk)/(total equity). I still cant find what are the fines for unability to follow basel II rules, but bailout surely is a nice one fine.

T.
"I know one thing, that I know nothing." Sokrates
  • #5,012
  • Oct 25, 2011 6:13am Oct 25, 2011 6:13am
  •  AFXFin
  • | Joined Oct 2011 | Status: Price don't have a mind of it's own | 915 Posts
Quoting Tom_D_Trader
I still cant find what are the fines for unability to follow basel II rules, but bailout surely is a nice one fine.

T.
Conditional slap on the wrist.
  • #5,013
  • Oct 25, 2011 6:15am Oct 25, 2011 6:15am
Quoting Tom_D_Trader
PT, I have been examining a bit that Basel II. This is tier 1 pdf, if some of you are interested, but it is a very sick one reading and I didnt read it, just ctrl+f:

http://www.bis.org/publ/bcbs128b.pdf

Anyway. Minimum capital requirements for Tier 1 are 8%. Tier 1 is supposed to be cushion for credit market and operational risks.
.../...
Pls PT where did you found that statement about 9%?

T
It is actually a proposed basel iii rule but Europe is jumping the gun.

Mer-k-ozy and EU Commission have been announcing it for days now. They want 9% for extra cushion not only due to Greece but also due to the other sovereigns at risk.

EU Said to Seek 9% Bank Capital in Response to Fiscal Crisis

Merkel Tempers EU Summit Hopes

Europe’s banks face 9% capital rule

European banks need 9 percent capital by 2013, says France
Those who say it cannot be done should not interrupt those who are doing it
  • #5,014
  • Oct 25, 2011 6:22am Oct 25, 2011 6:22am
Quoting PipTrapper
well then I would say wait till price hits 1.4050/4060 and then sell. But I doubt it will go that high. Maybe 1.4010.. MAYBE
1.406 is monthly pivot R1. Perhaps that is why they picked this level.

And I see my longs would hit their TP's. Okay, no more trade before tomorrow.
  • #5,015
  • Oct 25, 2011 6:31am Oct 25, 2011 6:31am
Quoting PipTrapper
It is actually a proposed basel iii rule but Europe is jumping the gun.
Thx PT, I somehow managed to miss these news in the flood of BS news.

Anyway, while I read it, it seems like a complete mumbo jumbo. Correct me if I am wrong, but Basel II Tier 1 was build exactly for this case! For the case of credit default of purchased assets. Banks already hold mandatory cushion of 8% and biggest loss of CDS of Greek bonds is for Dexia, which is 0,57%. They already have the money for gods sake. No need to make bigger cushion, no need for bailout.

I challenge you to correct me guys, subject is hard and I may have made a mistake.

T.
"I know one thing, that I know nothing." Sokrates
  • #5,016
  • Oct 25, 2011 6:32am Oct 25, 2011 6:32am
Daily Report: Dollar Soft as Sentiments Remain Firm

Dollar remains broadly soft with the dollar index continuing to press 76 level. Talks on the Eurozone debt crisis continued as Institute of International Finance warned that private sector involvement in Greece's second bailout would cause "severe contagion" effects and there are "limits" to voluntary participation. It's believed that the IIF is proposing a loss of at most 40% on Greek but EU finance ministers head Juncker is pushing for a haircut of 50-60% in Greece second bailout. Meanwhile, the it's reported that German parliament will hold a full vote tomorrow on the proposals to leverage the EFSF. Without passing the vote, Merkel cannot agree to changes to the EFSF. There are still much uncertainties in the situation, at least before another EU summit on Wednesday.
Overall sentiments, though, were supported by more talk of QE3. New York Fed Dudley, also a vice chairman of FOMC, said yesterday that Fed has clearly indicated the interest in supporting the mortgage markets and "could potentially do more in that direction." That's seen as a sign of support, or at least being open, to the idea of buying more mortgage backed securities And more explicitly, Dudley explained that "It's possible we can do another round of quantitative easing."
Meanwhile, the US government announced a mortgage plan to boost the housing market. According to the Federal Housing Finance Agency, the Home Affordable Refinance Program (HARP), introduced in 2009 with the aim of providing lowers interest rates for homeowners, will now accept application from borrower whose mortgages were higher than 125% of the property values. Moreover, refinancing fees are waived so as to facilitate mortgage refinancing. Indeed, the policy will only offer modest help to the housing market. While 1M people are expected to benefit from the program in the coming 2 years, they constitute less than 10% of the total number of borrowers.

http://www.actionforex.com/action-in...0111025151820/
  • #5,017
  • Oct 25, 2011 6:38am Oct 25, 2011 6:38am
They cannot stop with Greece. Greece is too small and is containable.
The problem comes once the Barn Doors get opened, and policy gets initiated.

We are seeing strong resistance at the 1.3950 level. Everyone believes that 1.40 is the magic number. If it holds at these levels the Bears will be chasing the market.

But we still have to go through America which generally sells USD
  • #5,018
  • Oct 25, 2011 6:40am Oct 25, 2011 6:40am
1.4 might be see if we break the green lines max around 1.413
Attached Image (click to enlarge)
Click to Enlarge Name: EU Daily.png Size: 31 KB
If there was easy money lying around,no one would be forcing it into your
  • #5,019
  • Oct 25, 2011 6:53am Oct 25, 2011 6:53am
Quoting Tom_D_Trader
Thx PT, I somehow managed to miss these news in the flood of BS news.

Anyway, while I read it, it seems like a complete mumbo jumbo. Correct me if I am wrong, but Basel II Tier 1 was build exactly for this case! For the case of credit default of purchased assets. Banks already hold mandatory cushion of 8% and biggest loss of CDS of Greek bonds is for Dexia, which is 0,57%. They already have the money for gods sake. No need to make bigger cushion, no need for bailout.

I challenge you to correct me guys, subject is hard and I may have...
The potential losses are more than you see with the naked eye Tom
Many of the bank's assets are made up of derivatives of sovereign debt, such as holdings in or loans to other banks/insurance companies/investment firms who also hold sovereign bonds, etc.

There is also the sovereign contagion effect. If Greece gets a haircut, then Italy and Spain may want the same relief, which I am sure they will pursue at some point.

It's complex. Actually so complex, it boggles my mind and gives me a headache, so I rather just focus on my charts and take a more simplistic fundamental view of things
Those who say it cannot be done should not interrupt those who are doing it
  • #5,020
  • Oct 25, 2011 6:56am Oct 25, 2011 6:56am
Quoting PipTrapper
The potential losses are more than you see with the naked eye Tom
Many of the bank's assets are made up of derivatives of sovereign debt, such as holdings in or loans to other banks/insurance companies/investment firms who also hold sovereign bonds, etc.

There is also the sovereign contagion effect. If Greece gets a haircut, then Italy and Spain may want the same relief, which I am sure they will pursue at some point.

It's complex. Actually so complex, it boggles my mind and gives me a headache, so I rather just focus on my charts and take...


I am going to vouch you for this, mate.

mla
"The Heart is the hub of all dances; go there and chill out"
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