EurAnalysis

interesting observation and I totally agree with you

just reading through that speech make my BP touch the roof and my blood boiling with anger.in the 2nd paragraph this arsehole talking about saving,what a hypocrite bastard,when he is doing everything possible to steal that savings through his interest policies and destroying the whole of middle class in the world.
then this stupid want to teach little kids how to take loan and teach how to go for a cheapest loan and shop around.what a dangerous man he should be kept away from student and kids i really dont understand how he becomes fed chairman.damn speech destroyed my whole evening.
students and kids should have a carefree life rather than a life where they will be working there bum off to pay back the loan and interest on it.on the money he created out of thin air.

add:i am sorry for my french, not very good in the above poster

I know what you mean about equities not being short, and in the current time context I agree with you 100%. However I was more referring to the short covering that started at the lows on 24th July. For example, the IBEX was definitely short.

As for the commodities, you probably know more than I on that subject so I won't argue that point. I mentioned all the markets just to make sure all bases were covered

Cheers Sisse and thanks for your comments. Much appreciated.

IBEX Daily

Very excellent attitude. Actually Doc money is not the ultimate objective in our live , it just a tool / a vehicle for us to survive in this challenging world. We must be able to balance ourselves between this world and the ‘next life’. Pray to God and seek ‘His’ forgiveness as if we are going to die tomorrow. Be a good ‘servant’ and don't be slaved to the materialistic world. If you have achieved your 1 million goals , don't forget to drop-by at this thread once a while.

This is what I'm working on too Minimum 1:10 R/R for me though. Just quietly I think this is the way to go, but plenty of people will tell you not to pick tops and bottoms.

I've been there. It's nice but the palm trees are a little too prickly for me!

G-D Bless ... Good Night

Have a PMA and do good. The rest will follow...

That's my cat in action! I trained him well to shoot down any bulls that even come close to 1.2450 (which is probably why my sell limits didn't get triggered today even though we broke 1400 on the S&P).

Go kitty, go!

Stop complaining! It's a 5 minute walk for you! Sheesh! I had to drive for 3 hours to get to it today!

5 Min? I feel bad for PT... thats a long way

Under 60 seconds to the beach or bust IMHO

Wulf, you seem to be a good guy and I feel for your recent loses, but after that post, there's only one thing I can do ... http://www.featurepics.com/FI/Thumb3...on-1842005.jpg

From Trade The News

Wednesday, August 8th

01:45 CHF SECO Consumer Climate

05:30 GBP BOE Inflation Report

06:00 EUR German Industrial Production

Tentative EUR German 10-y Bond Auction

08:30 USD Prelim Nonfarm Productivity; Prelim Unit Labor Costs

10:30 USD Crude Oil Inventories

13:00 USD 10-y Bond Auction


18:45 NZD Employment Change; Unemployment Rate

19:50 JPY Core Machinery Orders

21:30 AUD Employment Change; Unemployment Rate

21:30 CNY CPI; PPI

Tentative JPY Monetary Policy Statement; Overnight Call Rate

Thursday, August 9th

01:30 CNY Fixed Asset Investment; Industrial Production

Tentative JPY BOJ Press Conference

04:00 EUR ECB Monthly Bulletin

04:30 GBP Trade Balance

08:15 CAD Housing Starts

08:30 CAD Trade Balance; NHPI

08:30 USD Trade Balance; Unemployment Claims

10:30 USD Natural Gas Storage

21:30 AUD RBA Monetary Policy Statement
Friday, August 10thTentative CNY Trade Balance

10th-14th CNY New Loans

02:45 EUR French Industrial Production

04:30 GBP PPI Input

08:30 CAD Employment Change; Unemployment Rate

08:30 USD Import Prices

14:00 USD Federal Budget Balance

No Link - Good Things Here To Read...

August 7, 2012

Europe Is Not a Matter of Opinion... It's a Matter of Math

It's a simply question of math.

I realize my views on Europe are much in the minority. The entire world continues to believe that somehow Mario Draghi or Ben Bernanke have a magical button they can hit that will solve the EU Crisis.

Most people believe that magical button is the "print" button. But this completely overlooks the fact that Europe is facing a solvency crisis, not a liquidity crisis. It's a key difference. In a liquidity crisis, financial firms needs easy money to meet short-term funding needs because interbank lending has dried up.

In a solvency crisis, a bank has far too many assets relative to its equity/ capital base. In this scenario the issue is NOT one of too little liquidity, but one of TOO MUCH Debt relative to actual capital/equity (neither of which can be increased by lending more money to the firm).

Put it this way... Europe's banks in general are leveraged at 26 to 1. This means that for every €1 they have in equity/ capital, they have €26 in assets (which are in fact loans they've made to EU governments, EU businesses, etc.).

When you have this much leverage, if your asset base (all those loans) falls by even 4%, then you've erased ALL of your capital/equity. At that point there is NO MONEY to fall back on and you are forced to liquidate your loans at massive losses.

This in turn brings about a crisis of confidence, resulting in people pulling their money out of the bank... which renders the bank even moreinsolvent.

Thus, in this situation, for the ECB to come along and say, "here Bank XYZ, take €5 billion in debt from us at an interest rate of 3%" accomplishes nothing. It fact it actually increases the bank's leverage, which was the basic problem to begin with.

There's a second component here.

Everyone now knows that many EU banks are in serious trouble. So when the ECB came along with its LTRO 1 and LTRO 2 plans (basically providing cheap loans to EU banks to help them meet funding needs), the bond and credit markets took this as an admission of guilt on the part of the banks.
In plain terms, when Bank XYZ stepped up and said to the ECB "please give us some money via the LTRO 2" the markets realized "this bank is in serious trouble... why else would it be asking for help?"

As a result, the bank's bonds dropped, pushing the cost of meeting its interest payments higher (draining even more of its much needed capital).
So in many ways, asking the ECB for help actually made things worsefor the bank from a private sector funding perspective (investors were far less willing to lend money to the bank).

That is precisely what happened after LTRO 1 and LTRO 2. ECB President Mario Draghi knows this, which is why he's not issued LTRO 3.

With all of this out of the way, let's look at the actual math regarding Europe today.

The EFSF fund, after the Spanish bailout, has just €65 billion in firepower left. That won't do anything to help Italy which is on the brink, let alone Slovenia and other smaller EU countries.

The other EU bailout fund, the ESM, has not even been ratified yet (Germany won't vote on it until September 12).

Moreover, Spain and Italy are supposed to provide 30% of the ESM's funding. Does anyone see a problem with the idea that nearly €1 out of every€3 meant to prop up the EU will be coming from two bankrupt countries?

In the end, it all boils down to Germany... whose finances are getting worse and worse by the day.

Axel Weber, the former head of Germany's Central Bank has admittedpublicly that Germany's real debt to GDP ratio is over 200%. However, even if we ignore unfunded liabilities, Germany is just €300+ billion away from hitting an official Debt to GDP ratio of 90%.

We all know what happens to countries when they reach this point.
Moreover, Germany has already made nearly €1 trillion in backstops/ loans to the EU via its Central Bank. Not only does this put Germany's official Debt to GDP well over 100%, but it means that should these loans go bad (what are the odds given that they were made to the PIIGS?) then Germany will be on the hook for hundreds of billions of Euros' worth of losses.

Do you really think Germany has the firepower to handle this? It doesn't. It would most assuredly lose its AAA status and get dragged down with the rest of Europe.

This is simple math, not my opinion. You can argue about magic solutions and hitting "print" all you like, but in the end Europe doesn't have the capital needed to solve this Crisis. There is truly only one solution: default.

Only a default cleans out the debts, lowers leverage ratios, and brings the EU's financial house in order.

However, there's a major problem with the "default" option. Indeed, this is THE "check mate" position for the ECB and Germany. It's the reason why EVERYONE was so desperate to claim that the second Greek bailout wasn't a default.

It's also why the EU has been spending as much money as possible to avoid a default (seriously, they decided to give €300 billion to Spain in justone weekend).


From Gains Pains & Capital

Graham Summers
Chief Market Strategist
Phoenix Capital Research

Good Night ....... CurrencyMan

Your kitty was trigger happy ....... but from that window he shot the bear ... Tell him to point the barrel up.

Hourly update ... a fresh day ! =))

LOL!!

I probably deserved that

Yep .... I can see u

No additional trade since Friday. These are my EURUSD H1 , H4 and the 3rd chart EU H1 , my projection for today if there is no changes in fundamentals and no intervention from ECB/ CBs. (IMHO)

Your charts are too small and faint to be read - why don't you attach the chart instead of using links