EurAnalysis | Page 315 | Forex Factory

Options

Go to
Permalinks
Print Thread

Related Instruments

EUR/USD

Similar Threads

EurAnalysis Kindergarten 24 replies

Attachments: EurAnalysis
Exit Attachments

EurAnalysis

  • #6,281
  • Oct 29, 2011 11:09am Oct 29, 2011 11:09am
I challenge you to read some about economic systems, if you didnt already done so. If you did, you must understad what oligopoly means. I am looking at whole issue only as an economist, I abstract from human rights aspects now and wont judge what has been done right or wrong.

From economical point of view, there are just too many negative aspects brought by oligopoly. I could probably write an essay here, but I will just focus on some aspects. Keep in mind, that oligopoly is not very far from monopoly. I disagree with any form of such a system. These systems are extremely inefficient and if you have such a system in international boundaries, it is much worse. Since whole world runs on oil right now, it is the worst case when it is oligopolized. I was spilling some hate here about rating agencies and it is simmilar issue. Small force affecting too many. And part of this force lives in middleage beliefes and doesnt know a heck about democracy. Those nations could send whole world into depression.

Sure, there are other bad guys who deserve to get their asses kicked, but free flow of oil is essential.

T.

Quoting AaronWard
There are many bad guys in the world...but only the ones with oil get their ass kicked. And then, after finishing with the ass kicking, the US kinda "forgets" to go home. You can believe rhetoric... or actions.
"I know one thing, that I know nothing." Sokrates
  • #6,282
  • Oct 29, 2011 11:19am Oct 29, 2011 11:19am
Quoting AaronWard
You forgot the picture of what happens when we go to work...
I prefer to not think obout work on the weekend, but if you want to see a picture of me at work 15 years ago and now, look at any of the pictures in the right hand column.
The only thing that has not changed
Those who say it cannot be done should not interrupt those who are doing it
  • #6,283
  • Oct 29, 2011 11:43am Oct 29, 2011 11:43am
Quoting Tom_D_Trader
You have very clever thoughts Fool, I really enjoy your posts. And I assume this was a typo or I misunderstood. I agree with rest of the post, but this is a huge misleading simplification.

T
i heard he was going to demand gold for oil instead of usd but now that hes dead hmmmm
  • #6,284
  • Oct 29, 2011 11:45am Oct 29, 2011 11:45am
Berlusconi Says Italy ‘Most Solid’ EU Country After Germany

Italy’s low level of household borrowing helps buffer the euro-region’s second-largest debt, making the nation “the most solid country in Europe after Germany,” Prime Minister Silvio Berlusconi said.

Italy’s austerity measures will only produce the desired effect if they are accompanied with robust economic growth, Berlusconi also said today in remarks at an event in Rome broadcast by Sky TG24. Italy will balance its budget in 2013, when public debt “will start to decline,” the premier said.
Those who say it cannot be done should not interrupt those who are doing it
  • #6,285
  • Oct 29, 2011 11:49am Oct 29, 2011 11:49am
The US Paper Dump Continues: Norway's Sovereign Wealth Fund Sells All Of Its US MBS Exposure

Two days ago we noted that foreigners are selling US paper at a record pace, whether to raise capital in a locked out liquidity environment like French banks, or to make a politicial statement, like China. Today we get the first confirmation to this from Norway's Sovereign Wealth fund, best known for its prediction that it would buy and hold Greek bonds in perpetuity back in September 2010. Just recall: "Norway has taken the view that [Greek bonds] will not [default]. The Greek holdings are particularly interesting because the consensus in the market is that they will at some point restructure or default."
Those who say it cannot be done should not interrupt those who are doing it
  • #6,286
  • Oct 29, 2011 12:09pm Oct 29, 2011 12:09pm
Quoting Tom_D_Trader
But to the point. CB aint superpowerfull. The only CB in the world who has actually power is FED. And even FED has its limits and is weak when compared to actions of politicians. Right now, not only FED, but SNB as well (ECB as well, but from another reason) suffer huge losses because they are going against the market. At some point, they will be politically pressured to step away when their losses accumulate.
"against the market" - what does that mean?

What do you really know about CB losses? Can you substantiate your claims? Show the losses you allude to on the CB balance sheets? Or are you just assuming?

In the case of the Fed, it is not possible to know exactly what it is doing in real-time, in toto, because the information is not made public. During the 2008 banking crisis, we now know that the Fed loaned trillions of usd ($16T?) to foreign banks, but this infomation only came to light two years after the fact. The Fed isn't obligated to publicize what it does, and even more, it contracts out lending functions to private banks (Wells Fargo, MS, etc) - and those entities do not have to expose what they do, either.

FA is interesting, but it is problematic in the fx market, because fx is so huge. The rates will move on the largest capital flows. Sentiment of the mass of market participants can produce these flows, but CB's acting in coordination can turn these flows aside, and once the flow changes, sentiment changes along with it.

I think it is good for a trader to try to undestand as much as possible about how all fundamental influences affect the rates, but that is mostly because I am interetsed in macroeconomics, and ultimately I trade what I see is occurring on the charts.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,287
  • Oct 29, 2011 12:22pm Oct 29, 2011 12:22pm
Quoting PipTrapper
The US Paper Dump Continues: Norway's Sovereign Wealth Fund Sells All Of Its US MBS Exposure

[i][u]Two days ago we noted that foreigners are selling US paper at a record pace, whether to raise capital in a locked out liquidity environment like French banks, or to make a politicial statement, like China. Today we get the first confirmation to this from Norway's Sovereign Wealth fund, best known for its prediction that...
I dont know this is good or bad for USD since I am not real good on this one,Would be nice if PT can explain the good and bad side regarding Selling US Paper


Thanks
If there was easy money lying around,no one would be forcing it into your
  • #6,288
  • Oct 29, 2011 12:38pm Oct 29, 2011 12:38pm
Quoting The Fool
"against the market" - what does that mean?

What do you really know about CB losses? Can you substantiate your claims? Show the losses you allude to on the CB balance sheets? Or are you just assuming?

In the case of the Fed, it is not possible to know exactly what it is doing in real-time, in toto, because the information is not made public. During the 2008 banking crisis, we now know that the Fed loaned trillions of usd ($16T?) to foreign banks, but this infomation only came to light two years after the fact. The Fed isn't obligated to publicize...
This was a very good post. Most traders don't realize the banks (CBs and thier minions) are the one's that actually control where price will eventually go. And as you stated, it will benefit traders to understand the fundamentals, but the bottom line is one needs to trade what thier charts are telling them.
Mark ... Everything you have been told is a LIE
  • #6,289
  • Oct 29, 2011 12:44pm Oct 29, 2011 12:44pm
Quoting FXMindset
I dont know this is good or bad for USD since I am not real good on this one,Would be nice if PT can explain the good and bad side regarding Selling US Paper


Thanks
It's quite simple.

Selling US paper is like selling USD if you are selling it to exchange the cash for another currency (In this case it is Norwegian Kroner or NOK)
This further devalues the USD which is keeping the Euro and the equity markets artificially inflated and is partially responsible for the recent rally. That's the bad side.

The good side is that with a weaker USD, the US stands a slightly better chance at a recovery from it's very slow growth.
Those who say it cannot be done should not interrupt those who are doing it
  • #6,290
  • Oct 29, 2011 12:48pm Oct 29, 2011 12:48pm
Quoting PipTrapper
It's quite simple.

Selling US paper is like selling USD if you are selling it to exchange the cash for another currency (In this case it is Norwegian Kroner or NOK)
This further devalues the USD which is keeping the Euro and the equity markets artificially inflated and is partially responsible for the recent rally. That's the bad side.

The good side is that with a weaker USD, the US stands a slightly better chance at a recovery from it's very slow growth.
Well,Seems things look not good for EU short & UJ Long then?
If there was easy money lying around,no one would be forcing it into your
  • #6,291
  • Oct 29, 2011 12:51pm Oct 29, 2011 12:51pm
Quoting FXMindset
Well,Seems things look not good for EU short & UJ Long then?
The paper is already dumped.

Quote
Norway’s $570 billion sovereign wealth fund sold all its holdings in U.S. mortgage-backed securities as part of a shift of its fixed-income portfolio
Attached Image (click to enlarge)
Click to Enlarge Name: un-d1.gif Size: 19 KB
Those who say it cannot be done should not interrupt those who are doing it
  • #6,292
  • Oct 29, 2011 12:56pm Oct 29, 2011 12:56pm
Quoting PipTrapper
It's quite simple.
Norway's SWF sold off its MBS - the mortgage-backed securities - not its US Teasurys. Why? Noway is flush with oil/gas revenue and (probably) does not need to raise emergency liquidity.

Norway sold the MBS because it sees their value falling as a function of the continuing refi risk - this is not necessarily a commentary on usd strength/weakness at all. And other bond buyers will buy what Norway sheds.

http://confoundedinterest.wordpress.com/
"If The Fool persists in his Folly he will become wise." - William Blake
  • #6,293
  • Oct 29, 2011 12:58pm Oct 29, 2011 12:58pm
Quoting PipTrapper
The paper is already dumped.
Then Short EU must be Dump and Long UJ must Be Dump also

Edit,Sorry Just take a look your chart and Understand
If there was easy money lying around,no one would be forcing it into your
  • #6,294
  • Oct 29, 2011 1:08pm Oct 29, 2011 1:08pm
Quoting The Fool
Norway's SWF sold off its MBS - the mortgage-backed securities - not its US Teasurys. Why? Noway is flush with oil/gas revenue and (probably) does not need to raise emergency liquidity.

Norway sold the MBS because it sees their value falling as a function of the continuing refi risk - this is not necessarily a commentary on usd strength/weakness at all. And other bond buyers will buy what Norway sheds.

http://confoundedinterest.wordpress.com/
Thanks for the explanation also Sir
and thanks for the active contribution also In PT Chart
If there was easy money lying around,no one would be forcing it into your
  • #6,295
  • Oct 29, 2011 2:31pm Oct 29, 2011 2:31pm
I'm happy that there is someone like you specially in this thread ...
thank you Bro (PipTrapper)
  • #6,296
  • Oct 29, 2011 2:39pm Oct 29, 2011 2:39pm
Quoting PipTrapper
there is a script on MT4 that will allow you to close all orders at once, but sometimes it does not work properly and leaves some orders opened.

It is called close_all and you can find it in the scripts section of the navigator.
Simply drag it to any open chart and it will close all your open orders for all instruments (not just the one of the chart)

If you do not have the close_all script installed, I have attached it here.

As for a gap down or up, I do not know. I doubt there will be any significant gap, just a small one. However, there could...

  • #6,297
  • Oct 29, 2011 2:40pm Oct 29, 2011 2:40pm
Hi Fool, here are my answers,
Quoting The Fool
"against the market" - what does that mean?

QE is against the market. Right now, they are flooding market with liquidity. Purpose of CB actions is in controlling money supply, by influencing different monetary bases. QE is a liquidity swap and has its costs, which accumulate. Market reacts and buys long term assets as he knows there will be a swap. When CB intervenes and starts swapping price of long term assets is already higher. They are buying expensive garbage now. Take a look at US treasuries yield (interest rate). While price of an asset grows, yield lowers. 30 years bonds are offering 3,5 interest now. Those are some heavy one costs as they will get paid much less for holding these.

30 Y interest rates:
http://finance.yahoo.com/echarts?s=%5ETYX+Interactive#chart1:symbol=^tyx;range=1y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

I hope this answered even your second question:

Quoting The Fool
What do you really know about CB losses? Can you substantiate your claims? Show the losses you allude to on the CB balance sheets? Or are you just assuming?
Quoting The Fool
FA is interesting, but it is problematic in the fx market, because fx is so huge. The rates will move on the largest capital flows. Sentiment of the mass of market participants can produce these flows, but CB's acting in coordination can turn these flows aside, and once the flow changes, sentiment changes along with it.
Yes, they can turn the flow aside, but only at high costs.


Regards,

Tom
"I know one thing, that I know nothing." Sokrates
  • #6,298
  • Oct 29, 2011 4:10pm Oct 29, 2011 4:10pm
Quoting Tom_D_Trader
If it wasnt for these regulations and we were allowed to mine the coal we would totally wipe out whole our nations debt. Moreover, atomic power is the most clean power ever made and we are leaning away from it. Fook the green socialistic bastards I say!
I support the nuclear power plant in Poland (as we don't have one, and our biggest coal power plant - Belchatow - will soon run out of its resources), and in general I think they should provide part of electricity worldwide, until we won't create effective termonuclear power plants.

However, I don't really support mining coal and coal based electricity, as the mines are somewhat a problem in Poland. Miners used to have special priviledges in socialistic Poland, and now they refuse to let them go, even if they are absurd. And our mines aren't safe, accidents happen. So if we can cut coal usage down, I will support the idea.

In addition, we should attempt to make most of our energy from renewable sources. That is why I support ethanol as fuel, works great in Brazil.

========================================================

I think, we may get trapped sideway for the beginning of the week. There is a lot of important data coming, and until we get it we will be moving in tight ranges... so scalpers can have some occasions

And I think I pointed it some time before, but in case I didn't, history shows, that EURUSD sometimes makes a fallstart, goes back to its start position, and makes the actual rally. In past this was an upward fallstart, but who knows, maybe we are repeating the thing upside down In this case, even higher levels may be on schedule. But if it happens, then it means... Bear feast in January I hope we will get the drop faster, but as the size of USD lending is impossible to measure, than all I have is trying careful shorts, and scalping.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd.gif Size: 24 KB
  • #6,299
  • Oct 29, 2011 4:38pm Oct 29, 2011 4:38pm
Quoting Blobik
However, I don't really support mining coal and coal based electricity, as the mines are somewhat a problem in Poland. Miners used to have special priviledges in socialistic Poland, and now they refuse to let them go, even if they are absurd.
It is the same here my friend. They are mining it the old wrong way and totally destroying enviroment, unwilling to let go their power. Old socialistic structures. Thats why it is limited.

In order to break mining limits, you would need to change legislation. For example miners could mandatory recultivate enviroment after certain period of time. So they mine the coal for a 5 years, sell it, and as soon as they recultivate what they damaged from yields, they will be allowed to mine further.

T.
"I know one thing, that I know nothing." Sokrates
  • #6,300
  • Oct 29, 2011 7:34pm Oct 29, 2011 7:34pm
Since we all seem to like to discuss charts, globalization and fundamentals...this provides something new to look at.

http://www.businessinsider.com/atlas...exity-2011-10#
Kill the ego, or it will kill the mission.
8 traders viewing now