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EurAnalysis Kindergarten 24 replies

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  • #22,021
  • Feb 8, 2012 4:00am Feb 8, 2012 4:00am
Quoting FX Tsunami
The only choice for them is, may be to print
The FED just buys up Bonds and T-Bills that nobody wants any more. The best thing is that they buy them at a discount and therefore the US treasury effectively pays back less than they borrowed in the first place.
Those who say it cannot be done should not interrupt those who are doing it
  • #22,022
  • Feb 8, 2012 4:01am Feb 8, 2012 4:01am
  •  AFXFin
  • | Joined Oct 2011 | Status: Price don't have a mind of it's own | 915 Posts
http://www.telegraph.co.uk/finance/d...#disqus_thread

To put some grease in to fire, here is live feed of this quite greasy situation.
  • #22,023
  • Feb 8, 2012 4:05am Feb 8, 2012 4:05am
Quoting PipTrapper
The FED just buys up Bonds and T-Bills that nobody wants any more. The best thing is that they buy them at a discount and therefore the US treasury effectively pays back less than they borrowed in the first place.
Affirmative !!!!
  • #22,024
  • Feb 8, 2012 4:07am Feb 8, 2012 4:07am
  •  AFXFin
  • | Joined Oct 2011 | Status: Price don't have a mind of it's own | 915 Posts
My wives aunt is living in Athens and I just got a note that if party leaders accept this austerity plan, they will be lynched.

There is a huge riot in athens and we will see instead of Arab spring - Mediterranean Spring, if they cannot figure out something.

Arab refugees are returning to their home countries because it is more peaceful there
  • #22,025
  • Feb 8, 2012 4:10am Feb 8, 2012 4:10am
Quoting TheSwede
Lets just start with the following disclaimer! I'm not an options trader, never will be. My knowledge comes from programming trading systems and working with structured products.

What is an option?
An option is just a contract that gives the owner the right to buy (call option) or sell (put option) something (the underlying, e g EUR/USD) at a certain time (expiration time) and at a certain price (strike price). These contracts are traded (think saxo bank is big on options with forex underyings). By excercise an option one means to trade...
You just made the front page...

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Those who say it cannot be done should not interrupt those who are doing it
  • #22,026
  • Feb 8, 2012 4:25am Feb 8, 2012 4:25am
  •  AFXFin
  • | Joined Oct 2011 | Status: Price don't have a mind of it's own | 915 Posts
Quoting PipTrapper
You just made the front page...
Congrats Swede!
There seems to be something in the other side of puddle after all...
  • #22,027
  • Feb 8, 2012 5:11am Feb 8, 2012 5:11am
Which side first
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If there was easy money lying around,no one would be forcing it into your
  • #22,028
  • Feb 8, 2012 5:20am Feb 8, 2012 5:20am
Thanks, well sometimes there is

Time to hit the sack and get well.

Quoting AFXFin
Congrats Swede!
There seems to be something in the other side of puddle after all...
  • #22,029
  • Feb 8, 2012 5:52am Feb 8, 2012 5:52am
Quoting TheSwede
Thanks, well sometimes there is

Time to hit the sack and get well.
Thanks to TheSwede and PipTrapper we have another basic tool in out toolbox. I will try to add to this by reporting on options from time to time that might affect the market on a daily basis each day at 10:00 AM, Option Expiry Time.

Get Better TheSwede and thank you again. I personally appreciate your time and effort on this subject that I am now motivated to learn more about than I know at the moment. Let's see if EUR/USD can break the 1.3300 Barrier. The HIGH I see at the moment is 1.32899

More Later after breakfast.

Here is my Greek Link for the latest. The other link posted is excellent as well.

http://www.ekathimerini.com/4dcgi/_w...02/2012_426664

Wow Another Perfect Can Kicking Plan...

Good Work Guys !!!


Greek bailout to be split into two parts?




http://sup.kathimerini.gr/kath/engs/...e_390_2602.jpg http://wwk.kathimerini.gr/kathnews/images/dot_clear.gif
Greece might receive its next bailout, of 130 billion euros, in two parts in an attempt to maintain the pressure on Greek politicians to carry through the reforms they are set to agree to on Wednesday.
The Financial Times Deutschland reported on Wednesday that German Finance Minister Wolfgang Schauble wants to split the package so the first part, consisting of 30 billion euros earmarked for Greek banks that participate in the private sector debt reduction deal, could be released within days.
But Schauble would delay presenting legislation to the German parliament for the remaining 100 billion euros, the newspaper said without citing its sources.

Delaying the approval would give Germany and other eurozone countries more time to secure additional austerity measures from Greece or even prepare for a Greek default, the paper said.

FTD added that Schaeuble had discussed the plan with the finance ministers of the Netherlands and Finland.
  • #22,030
  • Feb 8, 2012 6:12am Feb 8, 2012 6:12am

Germany


http://hosting.fyleio.com/17735/publ...-flag-map2.png



The Greek bailout comedy was back in the news today. Sooner or later the nonsense of “this time we really mean it” stuff will fall on deaf ears; however, we haven’t reached that point yet.

Greece may have come to an agreement with its creditors today – maybe, maybe not. Future meetings have already been postponed, which is par for the course, but some people are growing weary of this charade: the German people.

From Der Spiegel
It's Time to End the Greek Rescue Farce
Whether it be an escrow account or a budget commissioner, the latest demands by Germany show just how absurd negotiations over Greece's future have become. It is high time to bring an end to this tragicomedy.

For the past two years, Greece has wrangled with the euro-zone states and the International Monetary Fund (IMF) over its so-called "rescue." Austerity measures have been agreed to, aid has been paid and private creditors have been forced to accept "voluntary" debt haircuts. Despite all this, Greece is in even worse shape today than it was then. Its economy is shrinking, the debt ratio is rising and the country and its banks have been cut off from capital markets. There isn't even the slightest sign that the situation might improve. Something has gone very wrong with this rescue.

But none of the protagonists seem to have grasped this. They continue to negotiate as if things are business as usual, they let one "final ultimatum" after the other pass and they persistently fail to realize that their discussions have started to verge on the absurd. It would be a lot better to end this farce.

For weeks now, the Greek government has been negotiating with private creditors and the troika comprised of the IMF, European Union and European Central Bank (ECB) over a second bailout package. But it is already clear that this aid package will not save the country. It appears it will only delay a Greek insolvency -- and it will serve to create new hardships for the country's population.

It is time for politicians to admit that their carrot and stick strategy has failed. The idea that the country can be freed from its debt quagmire though austerity programs and aid pledges tied to conditions just isn't going to work. It won't even work if private creditors forgive part of the country's debt.



Broken Promises

For months, Greek government politicians as well as the so-called rescuers in Berlin, Paris and Brussels have all been deceiving themselves. Each supposedly final rescue package is followed by yet another, and austerity pledges aren't being adhered to.
That has a lot to do with domestic political considerations. German Chancellor Angela Merkel and French President Nicolas Sarkozy must convey to their voters that they have the situation and, especially the Greeks, under control. Meanwhile, the government in Athens must, out of self-preservation, limit the burdens to its own people as much as possible.

That's why both sides repeatedly agree to promises that everyone knows they will not be able to keep. The current rescue package, for example, officially agreed at the euro summit at the end of October, already has to be improved because it has become too small.

The Greek economy is shrinking faster than assumed. And the austerity plan Greece approved last summer under pressure from its euro-zone partners is also failing to live up to expectations. That's no wonder, either, because €50 billion of the €78 billion in total savings pledged was tied to proceeds from privatizations that, not surprisingly, have failed to generate the profits expected.

Out of Thin Air

The truth is that it must have been obvious to all parties concerned, including the Germans, that the figures were pulled out of thin air. What kind of investor would invest so much money in a country that, for the foreseeable future, will be stuck in a serious economic depression?

The supposed rescue efforts have culminated in the latest German proposals. The German government would like to send a "budget commissioner" to Athens to keep an eye on the Greeks. If that doesn't work, then the Germans also want, at the very least, to be able to impound Greek accounts if they don't pay back their debts through an escrow account.

The suggestions have justifiably provoked outrage. Quite apart from the humiliation these measures would entail for the Greeks, Athens would almost certainly find a way to circumvent them. In the end, Germany would wind up turning an entire nation into its enemy without even gaining anything.

Greece Must Go Bankrupt

Perhaps, the Greece rescuers on both sides of the negotiating table should try being honest for a change. Here's the truth: If the country is to lastingly reduce its mountain of debt and, at some point, be able to borrow money on the capital markets again, then it needs a comprehensive debt haircut. In other words, it needs to go bankrupt.
And it's not just private creditors who will have to forego a large part of their outstanding Greek debts. It is also other European countries and the European Central Bank. That would be expensive for taxpayers across Europe, and it would also be economically risky. Indeed, no one knows what consequences a Greek bankruptcy would have for other crisis-ridden countries like Portugal, Ireland or Italy. But at least it would be an honest solution.

Of course, things wouldn't stop there. The euro-zone states would also have to build a bigger firewall around the remaining crisis countries in order to prevent contagion. They would have to help some banks that get into trouble as a result of a debt cut. And they would have to provide Greece with a real opportunity to get back on its feet and start growing under its own steam -- in other words, a kind of Marshall Plan.

All this would be very expensive, and German taxpayers would also be forced to do what they have feared from Day One -- which is to pay for Greece. But this solution has two major advantages. The payments would be limited, and they would actually help Greece.
And unlike everything that has been negotiated up until now, the solution would also be worthy of being called a rescue package.

Although this lone editorial in Germany won’t change anything, it is a start. Hopefully the rest of the nation will cry out – ENOUGH! The people of Greece need to get on with the painful process of healing, which the current carrot-and-stick game is only postponing.

Trade well and follow the trend, not the so-called “experts.”

Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.





  • #22,031
  • Feb 8, 2012 6:19am Feb 8, 2012 6:19am
ForexLive European wrap: At least the wrap isn’t delayed, but then it’s not coming from Greece

Written by Joe Brown
February 8, 2012 at 11:49 GMT


Greek political leaders meeting delayed till 1PM GMT

Germany proposes postponing majority of new Greek aid

S&P: Japan’s Sony downgraded to BBB+ from A-; outlook negative

German December trade surplus s.a Eur 13.9 bln vs Reuters forecast of 14 bln

Swiss January unadj jobless rate 3.4% vs Reuters forecast 3.5%, sa 3.1% as expected

Greek trump card fails as stronger Europe shrugs off break-up threat-UK Telegraph

EFSF’s Deputy CEO Frankel: EFSF will probably play a significant role in PSI and Greek programme

German auction result: Sold Eur 3.293bln of 5yr benchmark 0.75% Feb 2017 Bobl’s out of target Eur 4 bln

EU’s Barnier: Financial Transaction Tax would be financially productive..

A fairly controlled session ahead of the news out of Greece, which naturally has been delayed….

EUR/USD got an early boost just ahead of the main European opening as M/E names bought from around 1.3255 up to around 1.3286.

BIS then popped up and turned the tide again, but the Middle East buyers persisted and a second wave took us up to 1.3289 before offers said to be from “ the large German ” bank supposedly protecting the 1.3300 barrier, pushed the focus lower again along with some real money selling.

News that the Greek leaders meeting was delayed, hardly surprised but took the gloss off the eur with a slip to 1.3249, but then recovered as a large buying order into the 1100 GMT EUR/GBP fixing lifted the cross from around 0.8345 to 0.83675, before heading back down to 0.8350.

Elsewhere USD/JPY faded from highs of 77.19 on exporter sales down to 76.99 and EUR/JPY bounced around between 102.05-45

GBP/USD was happy minding it’s own business but failed to break up through offers stacked up at 1.5925/35 (session high 1.5929) and then fell on the EUR/GBP rally to 1.5875.

EUR/CHF hits highs of 1.2128 before slipping back but has held the session above 1.2100 so far

Equity markets have been relatively steady with tiny % age gains ahead of the Greek meeting.

Gold and silver are both holding firm with WTI up around 50c at 99.50 and Gold steady between 1742-1752
Those who say it cannot be done should not interrupt those who are doing it
  • #22,032
  • Feb 8, 2012 6:22am Feb 8, 2012 6:22am
http://club.ino.com/trading/2012/02/...umes-printing/

A Great Informative Article - Thanks

Snippet:

The Fed Resumes Printing

February 8, 2012 6:02am EST by Jeremy
Filed under: Guest Bloggers
http://quotes.ino.com/img/sites/ino/email/2466.jpgIf you haven’t heard by now, the Fed is back at it! Bud Conrad of Casey Research has written a great article on how it is affecting current markets and what to expect in the near future. Be sure to take a look and comment below with your own thoughts. For more from Bud and Casey Research click here.

The Federal Reserve recently announced important policy changes after its Federal Open Market Committee (FOMC) meeting. Here are the three most important takeaways, in its own words:


The Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions – including low rates of resource utilization and a subdued outlook for inflation over the medium run – are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

The Committee judges that inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with the Federal Reserve’s statutory mandate. In the most recent projections, FOMC participants’ estimates of the longer-run normal rate of unemployment had a central tendency of 5.2 percent to 6.0 percent.

The Fed released FOMC participants’ target federal funds rate for the next few years.

Immediate Reactions
The first item is the most important as it was not expected – and it had an immediate effect on markets. As seen in the chart below, gold spiked higher on the surprise news of extending the zero-rate policy through 2014.

Kno's Comments: That was what I noticed and pointed out. I do not have the skill set to do the research as has been done here. I am going to print out the article and study it over and over later this evening. A great article to explain what is going on behind the curtain. We are watching you Benny ALL the time.
  • #22,033
  • Feb 8, 2012 7:10am Feb 8, 2012 7:10am
Quoting knoholygrail
http://club.ino.com/trading/2012/02/...umes-printing/

A Great Informative Article - Thanks

Snippet:

The Fed Resumes Printing

February 8, 2012 6:02am EST by Jeremy
Filed under: Guest Bloggers
http://quotes.ino.com/img/sites/ino/email/2466.jpgIf you haven’t heard by now, the Fed is back at it! Bud Conrad of Casey Research has written a great article on how it is affecting current...
Kno's Comments:

A Suggestion to PipTrapper

This article is so clear, real and powerful that you might want to consider putting it on the Resource Page. I even think my Gentleman Friend, AaronWard might like it as well. I am still waiting to see if EUR/USD can get past 1.3300 and the 100 Day Moving Average at 1.3333

See I use Technicals also...
  • #22,034
  • Feb 8, 2012 7:14am Feb 8, 2012 7:14am
Quoting knoholygrail
See I use Technicals also...
I observe your reality but live my own.
  • #22,035
  • Feb 8, 2012 7:21am Feb 8, 2012 7:21am
Quoting knoholygrail
Kno's Comments:

A Suggestion to PipTrapper

This article is so clear, real and powerful that you might want to consider putting it on the Resource Page. I even think my Gentleman Friend, AaronWard might like it as well. I am still waiting to see if EUR/USD can get past 1.3300 and the 100 Day Moving Average at 1.3333

See I use Technicals also...
Attached Image (click to enlarge)
Click to Enlarge Name: page-1.jpg Size: 74 KB
Those who say it cannot be done should not interrupt those who are doing it
  • #22,036
  • Feb 8, 2012 7:31am Feb 8, 2012 7:31am
  •  AFXFin
  • | Joined Oct 2011 | Status: Price don't have a mind of it's own | 915 Posts
Here is a nice one about current price development
http://www.zerohedge.com/news/goldma...optimism-again
  • #22,037
  • Feb 8, 2012 8:27am Feb 8, 2012 8:27am
http://www.ekathimerini.com/4dcgi/_w...02/2012_426712

Snippet:


Private creditors to meet in Paris on PSI

Talks aimed to wrap up crucial debt swap are scheduled for Thursday http://wwk.kathimerini.gr/kathnews/images/dot_clear.gif


http://sup.kathimerini.gr/kath/engs/...f_390_0109.jpg http://wwk.kathimerini.gr/kathnews/images/dot_clear.gif
By Aaron Kirchfeld and Maria Petrakis
Greece’s private creditors plan to meet in Paris on Thursday to discuss a debt-swap deal that’s contingent on the country securing a second aid package from European and international officials, two people familiar with the plan said.

The Institute of International Finance is holding the meeting to go over technical matters so that if an accord between Greece and the so-called troika, comprising the European Commission, the European Central Bank and the International Monetary Fund, is reached, the debt swap could be implemented quickly, said the people, who declined to be identified because talks are private.

Private creditors are still prepared to accept an average coupon as low as 3.6 percent on new 30-year bonds in the exchange, said one of the people, who declined to be identified. While the framework of the swap and many of the details have been agreed upon, the deal can’t be completed until the government agrees on the terms with domestic political parties and the Troika on the second financing package, the person said.

Greek Prime Minister Lucas Papademos is set to meet with leaders of the political parties supporting his caretaker government on Wednesday in Athens after delays plagued negotiations over the terms required for a 130 billion-euro ($172 billion) rescue package from international creditors. The government is struggling to arrange financing to avert a collapse of the economy, risking a new round of contagion in the euro area.

With the country facing a 14.5 billion-euro bond payment on March 20, German Chancellor Angela Merkel warned this week that “time is running out” to reach an accord.

The debt-swap deal with private bondholders, a critical element of the second rescue package, would slice 100 billion euros off more than 200 billion euros of privately-held debt. The rescue blueprint includes a net present value loss of 70 percent or more for bondholders in the voluntary debt exchange as well as loans that will probably exceed the 130 billion euros now on the table.

Even if a deal is reached, a question remains over how many of Greece’s private creditors will take part in the debt swap.
  • #22,038
  • Feb 8, 2012 8:42am Feb 8, 2012 8:42am
It's just one delay after another.
G-Spot ministers and party leaders were supposed to have a meeting to go over the "draft" debt swap deal documents at 1300 GMT
Now it's been postponed to 1500 GMT
How much longer do you think the market is going to wait for the results of this meeting, before just shrugging off everything and trading as if G-Spot just didn't exist any more?

Of course even after any such meeting, if/when it ever happens, then what? Does it mean that they will agree to everything in the draft document before Sunday? How can a draft document become a final document in 3 days when they can't even agree on anything (including meeting dates) in 3 months?

Anyway, the above matters not in the long run. G-Spot is just the focus of the week. The real problem is contagion to the other periphery countries, especially P-Spot and S-Spot... not to mention i-Spot. Hey if Apple loses that lawsuit regarding the trademark infringement claim by that Chinese company over the iPad name, they could change the name to i-Spot I hope Italy won't sue them over that.

For this week, the real and more important focus should be what the ECB plans to do at tomorrow's council meeting and what Draghi says at the press conference to follow. I don't feel there will be an additional rate cut tomorrow. Actually I think he will just re-iterate what he said last month. The chances of any policy change before they get to analyse the results of the next LTRO are slim to none (my opinion)

So, there's my rant for today. The rest looks pretty boring and uneventful. Perhaps chicken little will announce that the sky is falling and the markets may do something about it.

Trade safe
PT
Those who say it cannot be done should not interrupt those who are doing it
  • #22,039
  • Feb 8, 2012 8:45am Feb 8, 2012 8:45am
Quoting TheSwede
Lets just start with the following disclaimer! I'm not an options trader, never will be. My knowledge comes from programming trading systems and working with structured products.

What is an option?
An option is just a contract that gives the owner the right to buy (call option) or sell (put option) something (the underlying, e g EUR/USD) at a certain time (expiration time) and at a certain price (strike price). These contracts are traded (think saxo bank is big on options with forex underyings). By excercise an option one means to trade...

Excellent "V"ouch

Thank you. I was just looking into FX options hedging yesterday. Your timing was perfect.

Rest up and get well soon.
I don't care which way the market is going as long as it's going my way
  • #22,040
  • Feb 8, 2012 8:47am Feb 8, 2012 8:47am
Quoting PipTrapper
You just made the front page...

Attachment
TY, makes it much easier for me to find as I look deeper into options hedging.
I don't care which way the market is going as long as it's going my way
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