EurAnalysis

Note that the MetaQuotes data may differ from your broker's data and you really should only use it if your broker's data is almost useless on particular pairs.

Also I have found that MetaQuotes data has its own list of glitches, but more so in older data (Pre 2007) which won't make a significant difference to current trading.

Another thing to keep in mind is that the more historical data you have in MT4, the slower your charts will respond in heavy volume times. Also lots of historical data causes MT4 to use significantly more system memory, which will also affect system performance.

Guys,

you know I am young guy desperate for attention, so I will give it one more shot with more brutal and straightforwarded post than before.

ECB is going to bailout Spanish banks.

This may lead to 2406 as top of the range, or maybe even to overshoot. If it is some brutal bailout, well, we are going even more up.

T

http://www.economist.com/node/215596...spanishpatient

Jul 28th 2012 | from the print edition




http://media.economist.com/sites/def...8_FND001_0.jpg

IF SPAIN were a patient, the mood in the hospital ward would be tense.

Every attempt by local specialists advised by renowned European consultants to treat the sickness brings no more than temporary relief. Even more worrying, the relapses after each dose are happening sooner and sooner. Spain’s chances of avoiding intensive care—a full bail-out—are receding to near vanishing-point.

The symptoms of Spanish sickness are manifest in ten-year government bond yields touching 7.75% on July 25th; previous bail-outs of Greece, Ireland and Portugal occurred not long after rates had surpassed 7%. Even more perturbing, two-year yields also briefly went above 7%, in effect foreclosing the government’s ability to borrow at anything but short maturities.

So why are investors in such a cold sweat about Spain? One reason is that Mr Rajoy flunked hard choices at the outset, notably the cleansing of the banks. Despite a low starting-point for public debt, deficit overshoots have revealed insufficient central control over the 17 regions that are responsible for a big chunk of spending. Investors fret that more regions may follow Valencia, which applied for aid on July 20th. They are in any case sceptical that Spain can meet its targets for cutting the deficit in the teeth of a recession that is harsher than expected.

The biggest worry is Spain’s external debt. Spain ran hefty current-account deficits in the first decade of the euro. As a result, its liabilities to foreign investors exceeded the assets that its residents own abroad by 92% of GDP last year, among the highest in the euro area. The problem for Spain is that foreign capital has been fleeing over the past year. That has weakened the banks and the economy and left the Spanish government shunned by foreign investors for its own financing needs.

The European summit in late June offered a flicker of hope but it is guttering. Euro-area leaders agreed that the European Stability Mechanism (ESM), their new permanent rescue fund, would be able to inject funds directly into banks rather than via loans to the government.

That perked markets up since it promised to sever the link between weak banks and weak sovereigns. But before long the deal looked less solid: the ESM cannot come into force until September, when Germany’s constitutional court will rule on its legality. Assuming it passes that test, the ESM cannot be used for direct bank recapitalisation until a European supervisor is put in charge.

The course of events is eerily similar to what happened a year ago. Then European leaders appeared to have secured their summer holidays with a “breakthrough” summit. But things soon fell apart. Nerves about Italy and Spain were calmed only when the European Central Bank (ECB) started buying their bonds. The central bank was never keen on this and it has not been buying bonds for several months. Even if the ECB were to resume purchases they might be less effective than before, because its refusal to share in the pain of the Greek debt restructuring in March frightened bondholders elsewhere.

The awkward truth is that the Spanish government is not alone in flunking hard choices. The plight of Spain and the danger of its sickness spreading to Italy call for a decisive countermove by Germany and the ECB. One being discussed would be to give the ESM a banking licence, which would magnify its resources by allowing it to borrow from the central bank. The graver the euro crisis gets, the bigger the response has to be—and the harder it is to sell to sceptical northern electorates.





http://media.economist.com/sites/def...728_FNC709.png

http://www.telegraph.co.uk/finance/f...-the-euro.html

Germany must decide if it really wants to save the euro

Berlin and the ECB hold the key to the future of the single currency. Will the latest crisis finally force their hand?

http://i.telegraph.co.uk/multimedia/...__2291411b.jpgGermany has to start offering some carrots as well as all the sticks it seems so ready to brandish Photo: Reuters







By Jim O'Neill

3:22PM BST 28 Jul 2012

So, the big question is – how do you solve the Spanish crisis? In fact, how do you solve the whole euro crisis?

The simple answer is, first, I don’t think there is anything much more Spain can do. Second, the solution to Spain’s dilemma is, I believe, the solution to the euro problem.


Unfortunately, it still appears as though Europe’s top policymakers – that is, the Germans – are trying to “muddle through”, as opposed to coming up with a good, powerful solution.


To understand this situation, it is instructive to reflect on Spain’s “problems” in comparison with those of Greece and perhaps Ireland.

While Spain’s widely cited problems of high unit labour costs and current account deficit are symptoms of it sitting inside a rigid currency zone, before 2007-08 these problems existed but were not highlighted. They were seen as an understandable consequence of a monetary union such as the euro area.

So what is Spain’s real problem? The answer to British readers is pretty familiar – a large housing market boom that has burst. The consequences for the economy as the fallout grows are all too predictable.

Spain is now facing a severe recession and without lower interest rates, some ability to stimulate growth through the government (close to impossible in the current circumstances) or some other offsetting external factor, there is no sign that it will come to an end.

I say familiar to British readers as this was the problem in 1992 when the UK chose to leave the European Monetary System and the Exchange Rate Mechanism (ERM).

Spain’s option is to leave the eurozone. But – as we have all become accustomed to hearing – eurozone policymakers claim that this is not an option.

Without a solution to lower interest rates to help Spain to get some benefit from its policy adjustments, what is the eurozone offering Spain?

If the country simply persists in trying to reduce its debt by tightening government spending and raising taxes even more, all it will guarantee is even weaker growth and higher unemployment – which might in turn result in greater Spanish debt, not less.

The solution lies beyond Spain and partly in Brussels, but probably much more in Frankfurt and also Berlin. Does Germany really want the eurozone to persist? Its policymakers make it generally pretty clear that they do and quite often express a vision of a United States of Europe with greater fiscal and political union.

If it is a serious goal, then Germany has to start offering some carrots as well as all the sticks it seems so ready to brandish. For Spanish citizens, especially the rapidly rising legions of the unemployed, having German or Brussels policymakers scrutinise Spain’s budget policy is not especially appealing unless they see some clear benefit.

In our July Monthly Insights, Anna Stupnytska, James Wrisdale and I show that both Spain and Italy desperately require lower bond yields. Even with an ambitious forward plan for genuine euro-denominated bonds, unless such future plans bring yields down sharply then these two countries will be in trouble, and hence probably many others will be, inside as well as outside the eurozone.

As Moody’s negative ratings watch on German and other AAA rated euro members, Austria and the Netherlands, highlighted last week, the fiscal consequences of these countries being required to bail out Spain or Italy would cost them dearly.

For this somewhat obvious insight, the credit ratings agency will have strengthened the backbone of the conservative policy wings in Berlin. So the notion of levering up the European Financial Stability Facility seems an unlikely solution.

Of course, some may argue it also puts paid to any slim chance of Germany agreeing the framework for eventual eurobonds. But I am not sure this is right, unless you are looking for reasons to dismantle the whole euro project.

That being said, if Germany really does not want to consider the ultimate logical consequence of eurobonds, then perhaps – as messy as it would be – they should stop the project now.

As we demonstrate in the July Insights, if you could combine forward commitment to eurobonds, together with the belief that Italy and Spain can increase their real GDP (and maintain primary surpluses) it is quite believable that euro-wide bond yields would settle somewhere between 4pc and 5pc. This would be perfectly consistent with long-term trend growth of 2pc with inflation as desired by the ECB at 2pc.

In the absence of such a commitment, or in the interim, the only possible solutions lie with the monetary authority, namely the European Central Bank (ECB). Many, especially the conservative members, hide behind various aspects of the ECB’s legal status and talk about how the central bank can’t monetise debts of member countries directly.

But what is so special about the ECB that doesn’t apply to other central banks in challenged Western economies? The euro area GDP weighted deficit and debt levels are lower than the UK, the US and Japan.

Despite these facts, the current bond yields in all three appear to be a safe haven away from the euro area. This can be true only because markets value their role in guiding both interest rates and general monetary operations.

In contrast, inside the euro area, many countries’ bond markets have become dysfunctional with very few, if any, non-domestic conventional government bond investors prepared still to participate. As a Goldman Sachs colleague suggested to me recently, the bond markets for the periphery have essentially become akin to distressed debt markets, usually a highly specialised and often illiquid market.

The ECB has to start asking itself more searching questions, and soon.

How can it be an effective central bank if it can’t influence overall financial conditions in the euro area? And of course, if the escalating pressures continue to rise – resulting in a collapse of the eurozone – the ECB would cease to exist.

What is the great benefit of the degree of independence to which some ECB members occasionally aspire, if it can’t help ensure the euro survives?

The ECB needs to introduce new ideas. In answering some of the IMF’s highly commendable proposals for solving the crisis, the bank’s president, Mario Draghi, responded that there are no “taboos” for the ECB. On Thursday, Draghi backed this up with even stronger statements suggesting that the bank is prepared to intervene in sovereign spreads. That needs to be demonstrated.

As 2012 creeps forward, there is accumulating evidence that the world economy is slowing down. Inside the euro area, it is quite evident that a recession is present and it is getting worse. The July “flash” PMI survey of business confidence was not much weaker than June, but within the estimate there were some troubling signs, notably the sharp deterioration in Germany’s manufacturing PMI survey.

There are also signs of slowing in other key parts of the world, especially the all-important BRICs (Brazil, Russia, India and China).

The US has also slowed notably since the late spring and given the importance of the US for the rest of the world, that has its own consequences.

The slowdown in the BRIC economies – China and India in particular – might contain a silver lining for the euro crisis, namely the decline in energy and some other commodity prices. Inflation in China has fallen sharply so far in 2012, indeed, the June CPI of 2.2pc is significantly below the 4pc target that the authorities have set for the year.

British policymakers need to be careful that they don’t inadvertently exaggerate the negative consequences for the UK from the euro crisis.

There is little that they can do about exports, but they can at least ensure that the UK’s financial conditions do not tighten to an inappropriate degree because of tightening eurozone financial conditions.

With Spain in the euro spotlight, it is now time for action. On its own, Spain cannot do more. Germany and the ECB need to decide the role they want to play and what they want the future of the eurozone to be – continuation or break-up.

And once they have done that, they need to get on with it.
And quickly.

Well long term wont change, but nevertheless, this sentence from City desk is nonscence. SMP is not bond purchase programme, it is much larger scale and it is Securities market programme. Not Bonds. I dont dare to count impact of such an operation, but imho it wont provide drop in next two weeks at minimum.

T

Spanish bail-out 'impossible’, experts warn A full-blown sovereign bail-out of Spain would be economically and politically impossible and cost up to €650bn (£510bn), an in-depth study has warned.

http://www.telegraph.co.uk/finance/f...erts-warn.html

Well, this article only adds weight to my argumentation. Apart from the fact that author, as it is pretty common it seems, messes up two different markets, he reported quite well. I will put qoutes in italics.

So you understand my reasoning, I will sum up some basics. Underlying problem in Spain is not bond market. Spain Public debt/GDP ratio is @ 65% and thx to Mr. Rajoy growing. But it is because of this “only” 65%, that Spain is not bankrupting while having bond yields above 7%. The real problem in Spain is its massive exposure to Private debt/GDP, which is hovering somewhere @ 204%. This is due to the fact that Spanish private sector runs on foreign capital. So we need to help to this private sector. How do we do it? We help to the banks, not Socialist government. If you calm down private sector in Spain, you will calm down Spanish bond yields. And kick the can.

What I saw in your article:
“The biggest worry is Spain’s external debt. Spain ran hefty current-account deficits in the first decade of the euro. As a result, its liabilities to foreign investors exceeded the assets that its residents own abroad by 92% of GDP last year, among the highest in the euro area.”

Yep, thats what I am talking about. You need to help to private sector. No bonds here.

“So why are investors in such a cold sweat about Spain? One reason is that Mr Rajoy flunked hard choices at the outset, notably the cleansing of the banks. Despite a low starting-point for public debt, deficit overshoots have revealed insufficient central control over the 17 regions that are responsible for a big chunk of spending.”

Sure, I wish you could see budgets of Czech municipalities. This is not why are they fleeing. They are fleeing because Spanish banks were heavily exposed to Southern Europe and lost loads of assets.

“But before long the deal looked less solid: the ESM cannot come into force until September, when Germany’s constitutional court will rule on its legality.”

Kick the can till September maybe?

Anyway, overall, author of the article was not economist, but more of a news reporter. I have already posted here, that ECB sterilized 200Bn assets from its previous SMP operations on last Wednesday.

What do you think of it?

T

Absolute nonsense. That is setting yourself up for "paralysis of analysis". Have you ever heard the phrase "keep things simple stupid"?

I trade from a laptop that has 16 GB RAM and run multiple windows applications at one time. Monitor many pairs on MT4 and also monitor many different markets in addition to EurAnalysis thread. I can take my laptop to my local cafe, have a double espresso and conduct business. Try doing that with six monitors.

Seriously, all you need is this and stop making it harder then it should be:

http://www.msimobile.com/level3_prod...x?cid=6&id=340

Green pips to you.

BTW-How can you see PA on those charts? C'mon man.

... and I would also add to that the fact that a bailout didn't work with Greece because the conditions for the bailout were economically crippling for the country, further exacerbating the problem. So even if the EU/ECB/IMF managed to bailout Spain to the tune of some incredible number, the conditions that would have to be agreed in the bailout contract would likewise (just like in Greece) render Spain's economy completely impotent. Remember how the Euro tanked in 2010 under the threat of Greece defaulting? Well, Greece is a small fish in the E/U accounting for approx 3 or 4% of GDP. Spain is of significant size and importance in the EZ economy accounting for approx 16% of GDP. It is therefore "too big to fail" & "too big to save". The situation is impossible unless the ECB is granted permission to print ala US Fed... which Germany would never agree to.

I suggest to avoid "experts" and "in depth studies" paid by Murdoch. But if you want to have some fun, Daily is the right choice. But he is right, ofc Spanish bailout is impossible, everyone knows that. Even Daily . Thats why we are all short here. Right now, I am talking about bailout of Spanish banking sector. Quite big as well. They currently estimate that 100Bn from EFSF would do + they are supposed to have 30Bn more at ESM later. I have been always saying this wont do and still estimate 150Bn+. Maybe 200+.

T

.

when one say dollar lost 80% purchasing power,it just dont mean it disappear,the challenge is to find out,in whose pocket that 80% of wealth went into.it should be somewhere,where?,where?,where?where?,that 80% of wealth is somewhere where?where?where? and dont forget america is strongest power in whole world.what a contradiction?,what a fraud?
my defination of freedom is being debt free but look at the people 98% population is under debt,100% of students who comes through the system in medicine for example owe debt upto £40,000 to £50,000 even before they start thier first job (that is the figure i get when i ask final year medical student).
all this things pointing toward a big revolution in all the western countries,where bankers will be overturned,heads will roll starting with rothchilds,lazards,skull and bones......

hey PT draghi deserve a voucher as well,he is atleast helping u making money,how can u be so ungrateful

hahahaha... nice cartoon ehh??

Actually, worth does disappear.
Think about this.
I fully own a car that in the free market is 'worth" $1000.
I try to sell it.
Nobody wants sto buy it because...for whatever reason...
I need the cash...so I lower the price to $700.
Somebody comes and purchases it. He takes my car, I take his cash.
Where are the other $300??
Ok, I do not own the car...I bought ir with a loan of $2000.
I take the $700 and I paid the bank...I have no more cash...
They get pissed...so I default!
Where are the $1300? Where?
The banks are in bed with the goverment.
So they go to them, and said, "Hey, I am short of "1300."
Save it me." So the politician goes to the ECB and get the $1300."
Bank is happy, politicians are happy ...
me...I am broke...unemployed...etc.
Something like this is happening...
So simple that is sickening...
that is why, I sell the Euro.
Cheers.

Nice bed time story. Instead of you, there should be some cuddly animal, like a bear. Instead of bank, hmm, magpie and instead of government, you would have snake.

T

u remind me of myself may God bless u for bringing smile on my face and happiness to my heart.

The State as a Fantasy
Jul 28, 2012 12:09 pm by James E. Miller

No Link... My Email...

http://www.mises.ca/wp-content/uploa...ld-300x225.jpgIf there were a prize for the best “do as I say, not as I do” politician, the latest winner would be California Senator Dianne Feinstein. Senator Feinstein, who is currently leading a crusade to plug the White House’s recent spring of classified military leaks, is the Chairwoman of the powerful Select Committee on Intelligence. Because of her position of power, she has become “deeply disturbed by the continuing leaks of classified information to the media.” In other words, Ms. Feinstein finds it appalling that the American public is finding out about the not-so-glamorous doings of its own government. Her scorn for disinfecting sunlight has inspired her to call for the prosecution of Wikileaks founder Julian Assange for espionage.

This talk of super secretive government would be all fine and good for a minion of the security state except for one thing: Senator Feinstein is one of the biggest leakers in Congress herself. And it just so happens that her husband has benefited financially from contracting with the U.S. military. For all her talk of protecting the American people, Feinstein is just another well-connected thief in the societal racket known as the state. As Salon’s Glenn Greenwald trenchantly observes:
That the powerful Senator who has devoted herself to criminally punishing low-level leakers and increasing the wall of secrecy is herself “one of the biggest leakers in Congress” is about as perfect an expression as it gets of how the rule of law and secrecy powers are sleazily exploited in Washington.

In the scum filled world of politics, unscrupulous behavior is a permanent fixture. It’s why the rule makers go out of their way to convince the voting public that its best interests are being taken to heart. The vision of a righteous government is sold to the people not just on Election Day but everyday thereafter. As long as voters stay complacent in the fantasy that their elected representatives are fighting the good fight, outspoken critics of the state will remain a minority. No amount of shoddy logic, guilt tripping, or blatant lies will awake the masses before it’s too late and all previous memories of freedom have been violently stripped away.

The truth is suppressed by the fantasy being continually force fed to the public, not just by politicians and their teleprompters, but by the a vast portion of the media which acts more like a squawk box for the state itself rather than an independent observer.

The New York Times, the supposed great standard-bearer of journalistic quality, recently admitted that its stenographers and reporters allow their writings to be contorted by the same public officials who they claim to cover objectively. These reporters, so desperate to get a few words with any government official, are willing to give full discretion on what is reported right back to the people whose interest lies in manipulating the information the public receives. As the Times article reveals:
From Capitol Hill to the Treasury Department, interviews granted only with quote approval have become the default position.

The unconscionable behavior of the political class should be thought of as a contagious disease that infiltrates any industry that comes within influence of the state. Government contractors, lobbying associations, favored corporations, and even the press all seek to use the monopolized power of government to further their own interests. Instead of attempting to roll back stifling regulations, many of these firms simply wish to get in on the spoils of the great extortionary scheme. The results are always the same. Politicians pretend to be saving the people from cold-natured capitalism while politically-connected businessmen and bankers act as if their commercial success is completely of their own doing. The hidden truth is both act in tandem to fleece the average taxpayer.

The fantasy then continues unabated. As F.A. Hayek recognized in The Road to Serfdom, central planners and their intellectual patrons achieve their power by gathering the
“support of all the docile and gullible, who have no strong convictions of their own but are prepared to accept a ready-made system of values if it is only drummed into their ears sufficiently loudly and frequently.”

No matter how many times government policy fails to deliver on its promises, the reasoning stays the same: Politicians just need more tax dollars to spend goods into existence, central bankers need to print more money, human rights must be stripped away to ensure safety, consumers need to spend more and save less, and government will always know best.

Today as most major economies are taking a turn for the worse, news outlets are filled with the pleas of esteemed intellectuals for further monetary stimulus and spending.

Even those economists generally considered in favor of markets are looking to central banks, which are given a totally non-free market government grant of privilege, to induce a boom in lending and demand through printing money. As Pater Tenebrarum pointed out, it appears that Federal Reserve is close to announcing another round of monetary expansion. The Telegraph’s veteran economics commentator Ambrose Evans-Pritchard even went as far as to pen an editorial titled “Weimar solution beckons as manufacturing crashes in US Fifth District?” No one seemed to ask the more important question of “since when does destroying a nation’s currency and setting the foundation for the rise of a murderous regime actually help out manufacturing when all is said and done? “

Even the man on the street, unlike Evans-Pritchard and his money-crankish peers in academia and print media, realizes that adding to the stock of currency does not add to society’s overall stock of wealth. More paper dollars, euros, yen, etc. isn’t the same as more foodstuffs, personal computers, and cellular phones. When Zimbabwe’s stock market was skyrocketing to heavenly heights in 2007, the inflation lovin’ crowd must have looked on with delight at the uninhibited fruition of their favored policy.

Grandmothers carrying wheelbarrows full of cash to the supermarket to purchase a few loafs of bread meant nothing in the face of accelerating GDP figures.

But again, the fantasy at play here is the idea that the state can create something out of nothing with the magic of the printing press. But as history proves time and time again, unbacked credit expansion always sews the seeds of its own destruction as the boom must inevitably turn to bust. The real beneficiaries of newly created fiat money isn’t society in general but, as Murray Rothbard notes, “the State, State-manipulated banks and their favorites” who are first in line to receive the currency first.

Proponents of central banking must spend a good deal of time concocting nonsensical explanations to ensure the overall public realize how ripped off it really is.

At no place in time were governments ever formed with good intentions in mind. This is the unvarnished truth as opposed to the fantasy world that is indoctrinated first within public school classrooms and is repeated in various outlets until old age. The state being a burden on society is a universal principle that transcends through all governmental levels and sizes. It was recently reported that a thirteen year old had his hot dog cart shut down by city officials in the city of Holland, Michigan. Because of zoning restrictions aimed at protecting already established restaurants, the boy, Nathan Duszynski, saw his small enterprise succumb to the crookedness of local government officials.

Now just think about this for a minute. A thirteen year old was savvy enough and had the foresight to purchase a significant amount of capital to start a modest business. When most kids his age are sitting in front of the television, Duszynski was gaining real world business experience. His customers didn’t say no to his effort; the government did. The public is typically told that zoning laws are for their own safety when quite the opposite is true. Zoning laws, like practically any decree that stems from closed-door dealings of politicians, are to the benefit of some individuals at the expense of others.











Ludwig von Mises Institute of Canada
http://creativecommons.org/images/pu...merights20.png[email protected]

I am doing my best to start conversation on this topic, but it seems noone understands what I am talking about. So I have chosen "the childs way". Shout. Sometimes it is the easiest one.

Btw, CMan, I hope you are going to answer, while you made me to read that economist article .

T