Staff Report KARACHI: The country's foreign exchange reserves have declined to $14.243 billion on the week ending on September 05 as compared with $14.307 billion last week, data released by the State Bank of Pakistan shows on Thursday.The overall reserves recorded a loss of $64 millions during the last week. The reserves held by the SBP witnessed a decrease of $52 million to reach $10.739 billion, compared with $10.791 billion last week. The reserves held by the banks other than SBP recorded a decline of $11 million to reach $3.504 billion as compared with $3.515 billion last week. The third tranche of the loan approved by the IMF recently had boosted the foreign exchange reserves of the country, but economists have criticized the approach of the government. They say that obtaining loans to increase reserves was not a good strategy. They add that government should try to increase reserves by boosting exports. They also say that reserves will start declining once again once the payments of these loans begin. By obtaining the loan in November 2008 Pakistan avoided a default on its obligations as it had to pay $500 million that it had borrowed by launching bonds a few years ago. However, government's continued reliance on IMF is not desirable, say the economists.
Thursday, September 10, 2009
Forex reserves decline to $14.243 billion
Staff Report KARACHI: The country's foreign exchange reserves have declined to $14.243 billion on the week ending on September 05 as compared with $14.307 billion last week, data released by the State Bank of Pakistan shows on Thursday.The overall reserves recorded a loss of $64 millions during the last week. The reserves held by the SBP witnessed a decrease of $52 million to reach $10.739 billion, compared with $10.791 billion last week. The reserves held by the banks other than SBP recorded a decline of $11 million to reach $3.504 billion as compared with $3.515 billion last week. The third tranche of the loan approved by the IMF recently had boosted the foreign exchange reserves of the country, but economists have criticized the approach of the government. They say that obtaining loans to increase reserves was not a good strategy. They add that government should try to increase reserves by boosting exports. They also say that reserves will start declining once again once the payments of these loans begin. By obtaining the loan in November 2008 Pakistan avoided a default on its obligations as it had to pay $500 million that it had borrowed by launching bonds a few years ago. However, government's continued reliance on IMF is not desirable, say the economists.
Monday, September 7, 2009
Forex Trading With a Focus on Volume
Forex trading you will discover that Forex market has several benefits over other capital markets. As well as amongst others; it has considerably low margins, free forex trading platforms, high leverage and round-the-clock trading options. It is like a computerized forex broker you can vouch on for correct math.
Computerized Currency Trading
The currency trading is over three trillion dollars a day moving around, making it the largest market in the world. Computerized or Automated currency trading is very much helpful for the comfort and security of a trader.
Forex Strategies - Unstable Trends
Trading in foreign exchange currencies is not a lot like trading with stocks or with futures trading. In situations when you are dealing with unstable trends, there are forex trading strategies that provide investors with beneficial plans which can help them avoid bigger risk thereby avoiding big loss and making better profits in the short run. Though there are countless forex trading strategies accessible to the investor, real time experience matters a lot.
Information About The Forex Indicators
There are lots of forex indicators out on the forex market, but for a few causes there are two eccentric but very powerful ones that a large number of traders every time look past. The % Bullish and Commitment of Traders Report are devices that can mark a few very important trends if you get the time to study them and place them in to excellent use.
Watching Signal Providers Can Be The Key To Success
Trading Signals are provided by the forex trading company. A signal chart provides with the valuable advice for the traders to have a better success in the trading. They are called as signal providers. Signal providers are the experienced traders who have been in the forex industry for quite a stretched amount of time and they are those who have made some substantial earnings with their approaches. These signal providers will contribute their valuable information about the price ranging from low to high. With their information you have to pick out the apt guidelines that go with your trade.
The Forex Scalping Strategy
Do you know about the forex scalping strategy? Lots of traders condemn this matter, others are very much concerned in it, and just a marginal group of traders is uninterested. Why is a forex scalping strategy so striking? Almost certainly people are concerned for the reason that forex scalping trading is one of few methods of fast improvement.
Qatar Keen to Invest in Iran
Iran's Deputy Economic Affairs and Finance Minister Behrouz Alishiri met with Kamal on Monday and discussed ways to expand the two countries' economic and trade cooperation. During the meeting, the Qatari minister called for the setting up of Qatar's Bank in Iran, and added that Qtel which is among major telecommunication companies in the Middle East is eager to invest in Iran. Also during the meeting, the two sides stressed implementation of agreements singed between Tehran and Doha on customs and tax tariffs. The two sides also agreed about briefing Qatari investors on the investment opportunities in Iran during an upcoming meeting on Qatar's investment to be attended by Iran's state and private trade officials. Elsewhere, Alishiri discussed investment opportunities in the tourism sector in a meeting with head of Qatar's Tourism Organization Ahmad al-Naeimi. Alishiri said that establishment of a company for join ventures was proposed during the meeting with the Qatari tourism official. The Iranian official also pointed out that the two sides agreed to set up an exhibition of Iran's industrial and agricultural products in Qatar.
Iran, Venezuela swap $760 mln energy investments
Venezuela and Iran will each invest $760 million in the other's energy sectors under deals signed during a visit to Tehran by Venezuelan President Hugo Chavez, Iran's Oil Ministry website SHANA said on Monday.
It said state oil company Petroleos de Venezuela SA (PDVSA) would invest $760 million in the development of phase 12 of Iran's giant South Pars natural gas field in the Gulf.
"Based on the agreement, Iran also pledged to invest $760 million in the development of Venezuelan oil field Dobokubi as well as the development of Block 7 of the Ayacucho oil field," SHANA said.
Venezuela also pledged to export 20,000 barrels of gasoline per day to Iran to a total value of $800 million, the website said adding that the amount would be put in a fund that will be used to finance sales of machinery, technology and other services by Iran to Venezuela.
Iran is the world's fifth leading oil exporter but its refineries lack the capacity to meet domestic fuel demand, so it imports up to 40 percent of its gasoline. Iran imports an estimated 120,000 bpd per day of gasoline.
Tehran, in a face-off with the West over its nuclear programme, may face sanctions on its gasoline imports if a diplomatic solution is not found.
On Sunday, Chavez announced the plan to export gasoline to Iran. Iran's state television quoted him as saying the exports would start in October.
U.S. President Barack Obama has given Iran until later in September to take up an international offer of talks on trade if it shelves uranium enrichment, or face harsher punitive measures.
7 Ways to Stretch Your Retirement Income
Most people probably don't expect to outlast their financial assets in retirement. But between the shortage of traditional pensions, paltry savings levels and ever-expanding life spans, many Americans could see their money dry up before retirement ends.
Nearly three out of five middle-class retirees will likely run out of money if they maintain their preretirement lifestyles and don't reduce spending by at least 24 percent, according to a 2008 study by Ernst & Young.
Nearly three out of five middle-class retirees will likely run out of money if they maintain their preretirement lifestyles and don't reduce spending by at least 24 percent, according to a 2008 study by Ernst & Young.
Curbing spending will undoubtedly help your money last longer, but it's not the only factor in the equation.
You can also stretch your retirement income by proactively managing your investment accounts and savings, which means understanding how they produce income over time and what risks they carry.
Be realistic about whether you can afford the lifestyle you want in retirement. And stay healthy. Out-of-pocket medical expenses can eat away at your assets or income significantly as you get older.
Will copycat Meme prove a viable option for Yahoo?
Yahoo’s launch of its microblogging site Meme in English was no surprise as it had already started the service in German and Portuguese languages. What leaves many stunned is its decision to take on Twitter, the grand old father of the trade, that too by just attempting to copy it.
FOREX-Dollar, yen down on G20 pledge; commodity FX jumps
The U.S. dollar and yen fell on Monday and the Australian dollar hit a one-year high, after a meeting of global finance chiefs boosted investor appetite for growth-related "riskier" assets like commodities and stocks.
Investors were slightly more inclined to put on trades after Group of 20 finance ministers and central bankers agreed to continue implementing expansionary monetary and fiscal policy, analysts said. [ID:nL5327479]
New draft rules in China to ease investment limits also boosted broad market sentiment, which pushed European shares up 1.8 percent .FTEU3 and oil up 1 percent .CLc1. [ID:nPEK33586]
Gold also neared $1,000 an ounce XAU which, along with strong Australian jobs data, helped hoist the Australian dollar to its highest levels in a year, while the New Zealand dollar neared its strongest in almost a year ahead of the Reserve Bank of New Zealand meeting this week.
But trading was thin thanks to the U.S. Labor Day holiday.
"There wasn't a big market reaction to G20, but in general the outcome was seen as pro-risk appetite, mainly because there will be no early exit from the stimulus packages," said Robert Minikin, currency strategist at Standard Chartered in London.
Investors were slightly more inclined to put on trades after Group of 20 finance ministers and central bankers agreed to continue implementing expansionary monetary and fiscal policy, analysts said. [ID:nL5327479]
New draft rules in China to ease investment limits also boosted broad market sentiment, which pushed European shares up 1.8 percent .FTEU3 and oil up 1 percent .CLc1. [ID:nPEK33586]
Gold also neared $1,000 an ounce XAU which, along with strong Australian jobs data, helped hoist the Australian dollar to its highest levels in a year, while the New Zealand dollar neared its strongest in almost a year ahead of the Reserve Bank of New Zealand meeting this week.
But trading was thin thanks to the U.S. Labor Day holiday.
"There wasn't a big market reaction to G20, but in general the outcome was seen as pro-risk appetite, mainly because there will be no early exit from the stimulus packages," said Robert Minikin, currency strategist at Standard Chartered in London.
Sunday, September 6, 2009
GOOD TRADING
In the last post 2-4 “The Power of Pessimism” I talked about facing your fears by using a plan of attack and addressing what those fears are that are keeping you in place.I would like to define this process in greater depth.
Define the nightmare. Create in your mind what that trading experience would be: whether it is a first loss, a streak of losses, or a serious drawdown causing a set back inyour trading account. Create that scenario in your mind and then live as if you are there in that moment. (possibly you have already experienced it or are living inside thatnightmare right now?) Either way put yourself there and record the emotions that you feel. Once you have defined the emotions you are feeling, refer back to your plan of attack.Make sure that you have defined the fear as it really is, then make any adjustments to how you will cope with the emotions that you are having and define a plan to extinguish them.
GOOD TRADING
Define the nightmare. Create in your mind what that trading experience would be: whether it is a first loss, a streak of losses, or a serious drawdown causing a set back inyour trading account. Create that scenario in your mind and then live as if you are there in that moment. (possibly you have already experienced it or are living inside thatnightmare right now?) Either way put yourself there and record the emotions that you feel. Once you have defined the emotions you are feeling, refer back to your plan of attack.Make sure that you have defined the fear as it really is, then make any adjustments to how you will cope with the emotions that you are having and define a plan to extinguish them.
GOOD TRADING
Forex Strategy Secrets
Forex trading simplified. Learn how to get into the forex trading market as a beginner or tricks and tips to further your existing knowledge.
Trust Yourself
When you turn on the TV (especially mainstream media) you are inundated with news of the demise of the dollar. Business news, national news and even your local news channels are leading into events with reports of the dollar and the economy. Analysts are featured and opinions are smattered across the airwaves in an attempt to provide an oracle response to current economic events.Beware the source and follow your system.In these volatile times it is easy to get caught up in the hype provide by all the news media and analyst. It is natural to want to look for guidance. Remember to trust your system and more important trust yourself. You, after all, are the single largest determinant of your success.Your approach should remain consistent, almost impervious to the events occurring because you follow your plan with discipline and ruthless detail to executing at optimum performance.Be disciplined and follow your plan. If market conditions don’t suite your style – sit this one out until conditions provide your with your personal edge!Happy Trading!!
LWMA 55
One of my favorite indi is LWMA 55. I dont know why but the price seems to react a lot of this line. People say that MA is a lagging indicator and I agree with them 100% but do not use MA as a signal generator, instead use them as a dynamic support and resistance.For those of you who love to experiment, try putting LWMA 55 on a chart and see how price actually interact with the line. Its not magic but its a mathematical calculation. Dont get me wrong, you may not be able to trade using MA 55 alone. Try putting LWMA 13 in there as well and remember they are not signal generators. Treat them as dynamic support and resistance. Put it into a simple formula. If price > LWMA 13 & LWMA 55 = long. If price < LWMA 13 & LWMA 55 = short. Try it, you may like what you find. Just needed to add in a filter to improve accuracy.
TRADING THE DAILY CHARTS
Due to restricted time and Internet connection that I have now, I have opted to trading using the daily charts.Its not as aggressive and thrilling as trading on the shorter time frame but the result is about the same minus the headache. I'm beginning to like daily trading. I need to make decision once in a while and the rest of the time I just hold my position. On a daily chart, the candlestick is much easier to read and pattern is much clearer. On 13th August I opened 3 position. 2 of which is still holding while 1 has been closed. At the moment all position are in profit. Daily trading is not for everyone. It took me sometime to adjust on the requirements of daily trading, but once you are there you never look back.Till next time, good luck everyone
Wednesday, September 2, 2009
Schering-Plough loses $473 million tax dispute
A company spokesman said Schering-Plough is considering an appeal.
The transactions, which occurred in 1991 and 1992, involved interest rate swap agreements created by Merrill Lynch, financial adviser to Schering-Plough, a maker of hepatitis treatments and allergy drugs including Nasonex and Clarinex.
"The transactions were designed to bring previously untaxed profits made by Schering-Plough's foreign subsidiaries into the United States without paying the tax owed on repatriation," the statement said.
It said the court found "the transactions lacked economic substance, did not have a genuine business purpose, and were designed to avoid tax."
According to a filing with the Securities and Exchange Commission this spring, the case dates to October 2001, when Internal Revenue Service auditors asserted that the transactions were really loans from affiliated companies. In 2004, Schering-Plough paid the IRS $194 million for income tax and $279 million in interests -- the $473 million total -- but then sought a refund of that amount.
After the IRS denied the refund request, Schering-Plough sued in federal court in Newark, leading to the latest ruling.
"We disagree with the court's decision and are considering our options, including appealing the decision," Schering-Plough spokesman Fred Malley said.
Schering-Plough, based in Kenilworth, N.J., is in the process of being acquired by New Jersey neighbor Merck & Co. for $41.1 billion, in a deal that would leapfrog the new drugmaker into the No. 2 position in global sales.
In midday trading, shares of Schering-Plough fell 15 cents to $27.64.
The transactions, which occurred in 1991 and 1992, involved interest rate swap agreements created by Merrill Lynch, financial adviser to Schering-Plough, a maker of hepatitis treatments and allergy drugs including Nasonex and Clarinex.
"The transactions were designed to bring previously untaxed profits made by Schering-Plough's foreign subsidiaries into the United States without paying the tax owed on repatriation," the statement said.
It said the court found "the transactions lacked economic substance, did not have a genuine business purpose, and were designed to avoid tax."
According to a filing with the Securities and Exchange Commission this spring, the case dates to October 2001, when Internal Revenue Service auditors asserted that the transactions were really loans from affiliated companies. In 2004, Schering-Plough paid the IRS $194 million for income tax and $279 million in interests -- the $473 million total -- but then sought a refund of that amount.
After the IRS denied the refund request, Schering-Plough sued in federal court in Newark, leading to the latest ruling.
"We disagree with the court's decision and are considering our options, including appealing the decision," Schering-Plough spokesman Fred Malley said.
Schering-Plough, based in Kenilworth, N.J., is in the process of being acquired by New Jersey neighbor Merck & Co. for $41.1 billion, in a deal that would leapfrog the new drugmaker into the No. 2 position in global sales.
In midday trading, shares of Schering-Plough fell 15 cents to $27.64.
UK presses Caymans to raise taxes to solve deficit
Britain is pressing the Cayman Islands, one of the world's major tax havens and a U.K. territory, to raise new taxes as part of a plan to bail itself out of a financial hole.
Saddled with a budget deficit and unable to pay all its bills last month, the Cayman government had negotiated bank loans of up to CI$372 million ($465 million) to see it through the financial year ending June 30, 2010.
But last week the British government refused to permit the territory to borrow unless it developed a plan to curb expenditure and widen the tax base.
The Cayman government is working on its response, officials said Wednesday.
As a British Overseas Territory, the Cayman Islands is largely self-governing, but it needs permission from Britain to borrow beyond its statutory debt limit of 80 percent of annual revenue, said Ted Bravakis, spokesman at the Cayman Ministry of Financial Services.
"I fear you will have no choice but to consider new taxes -- perhaps payroll and property taxes such as those in the British Virgin Islands," Foreign Office Minister Chris Bryant said in an Aug. 27 letter to McKeeva Bush, leader of the Cayman government.
Bryant added that it would be unwise to "expect that the Cayman Islands' prosperity can presume on an offshore tax haven status."
Tourism, which accounts for about three-fourths of the economy in the three Cayman islands, has been hit by the global recession. Visitor arrivals were down 12 percent in the first four months of the year, according to the Caribbean Tourism Organization.
Financial services, the other pillar of the islands' economy, have also suffered.
The government of the islands, which lie 150 miles (240 kilometers) south of Cuba, depends largely on indirect taxes including customs duties and stamp duties on transactions including property sales, mortgages, land leases and rents. Business licenses cost a bank up to CI$500,000.
The Cayman Islands does not directly tax any of the companies registered there, and has no income tax or capital gains tax.
According to Cayman Islands Financial Services, more than 80,000 companies were registered there. The Cayman Islands Monetary Authority lists 269 registered banks, of which six provide services on the island; more than 800 insurers and 9,000-plus mutual funds are also registered.
Bush said in a speech last week that the Cayman government logged an operating deficit of CI$81.1 million for the year ending June 30 -- equal to nearly 17 percent of the government's income for the period -- instead of the surplus of CI$13.5 million projected in the budget.
Operating revenue of CI$487 million fell short of the budget projection of CI$528 million.
In order to pay civil servants on Aug. 25, Bush said, the government postponed payment of pensions and health insurance, and put off payments to contractors and other suppliers.
"Things will need to change," Bush said, though he appeared to rule out any direct taxation on businesses or the islands' 52,000 residents.
"We will either need to make aggressive cuts in either jobs or work hours for civil servants as well as raise indirect taxes, or we will need to focus on the areas where we can secure the revenues without harming our economy and our quality of life," Bush said.
U.S. President Barack Obama has named the Cayman Islands as one of the tax havens he would like to see closed. He has referred several times to Ugland House in George Town, the Cayman capital, which is the registered office for nearly 19,000 companies.
"Either this is the largest building in the world or the largest tax scam in the world," Obama said in a May 4 speech.
"And I think the American people know which it is. It's the kind of tax scam that we need to end."
Under such pressure, the Cayman Islands this year has signed up to agreements with 12 countries to exchange information on tax issues, and the Organization for Economic Cooperation and Development added it to a "white list" of jurisdictions that cooperate in tracking tax evaders.
Bryant demanded that the Cayman government develop "a clear strategy for cutting borrowing and debt over the next three to five years and tackling expenditure."
"I doubt that the Cayman Island government can afford to take on extra debt without both getting expenditure under control and widening the tax base," Bryant wrote.
"I therefore need to be absolutely convinced that there is a sustainable medium-term plan for turning round the public finances and paying off the debt before being able to consider any extension of borrowing."
In his speech last week, Bush outlined several possible economic development projects, including relocation of the capital's cargo port, developing a channel to allow mega-yachts to berth in George Town, building new cruise ship berths, and making more effort to attract five-star hotels, golf courses and other tourist developments.
Saddled with a budget deficit and unable to pay all its bills last month, the Cayman government had negotiated bank loans of up to CI$372 million ($465 million) to see it through the financial year ending June 30, 2010.
But last week the British government refused to permit the territory to borrow unless it developed a plan to curb expenditure and widen the tax base.
The Cayman government is working on its response, officials said Wednesday.
As a British Overseas Territory, the Cayman Islands is largely self-governing, but it needs permission from Britain to borrow beyond its statutory debt limit of 80 percent of annual revenue, said Ted Bravakis, spokesman at the Cayman Ministry of Financial Services.
"I fear you will have no choice but to consider new taxes -- perhaps payroll and property taxes such as those in the British Virgin Islands," Foreign Office Minister Chris Bryant said in an Aug. 27 letter to McKeeva Bush, leader of the Cayman government.
Bryant added that it would be unwise to "expect that the Cayman Islands' prosperity can presume on an offshore tax haven status."
Tourism, which accounts for about three-fourths of the economy in the three Cayman islands, has been hit by the global recession. Visitor arrivals were down 12 percent in the first four months of the year, according to the Caribbean Tourism Organization.
Financial services, the other pillar of the islands' economy, have also suffered.
The government of the islands, which lie 150 miles (240 kilometers) south of Cuba, depends largely on indirect taxes including customs duties and stamp duties on transactions including property sales, mortgages, land leases and rents. Business licenses cost a bank up to CI$500,000.
The Cayman Islands does not directly tax any of the companies registered there, and has no income tax or capital gains tax.
According to Cayman Islands Financial Services, more than 80,000 companies were registered there. The Cayman Islands Monetary Authority lists 269 registered banks, of which six provide services on the island; more than 800 insurers and 9,000-plus mutual funds are also registered.
Bush said in a speech last week that the Cayman government logged an operating deficit of CI$81.1 million for the year ending June 30 -- equal to nearly 17 percent of the government's income for the period -- instead of the surplus of CI$13.5 million projected in the budget.
Operating revenue of CI$487 million fell short of the budget projection of CI$528 million.
In order to pay civil servants on Aug. 25, Bush said, the government postponed payment of pensions and health insurance, and put off payments to contractors and other suppliers.
"Things will need to change," Bush said, though he appeared to rule out any direct taxation on businesses or the islands' 52,000 residents.
"We will either need to make aggressive cuts in either jobs or work hours for civil servants as well as raise indirect taxes, or we will need to focus on the areas where we can secure the revenues without harming our economy and our quality of life," Bush said.
U.S. President Barack Obama has named the Cayman Islands as one of the tax havens he would like to see closed. He has referred several times to Ugland House in George Town, the Cayman capital, which is the registered office for nearly 19,000 companies.
"Either this is the largest building in the world or the largest tax scam in the world," Obama said in a May 4 speech.
"And I think the American people know which it is. It's the kind of tax scam that we need to end."
Under such pressure, the Cayman Islands this year has signed up to agreements with 12 countries to exchange information on tax issues, and the Organization for Economic Cooperation and Development added it to a "white list" of jurisdictions that cooperate in tracking tax evaders.
Bryant demanded that the Cayman government develop "a clear strategy for cutting borrowing and debt over the next three to five years and tackling expenditure."
"I doubt that the Cayman Island government can afford to take on extra debt without both getting expenditure under control and widening the tax base," Bryant wrote.
"I therefore need to be absolutely convinced that there is a sustainable medium-term plan for turning round the public finances and paying off the debt before being able to consider any extension of borrowing."
In his speech last week, Bush outlined several possible economic development projects, including relocation of the capital's cargo port, developing a channel to allow mega-yachts to berth in George Town, building new cruise ship berths, and making more effort to attract five-star hotels, golf courses and other tourist developments.
Cardtronics enters Puerto Rico ATM market
Non-bank ATM operator Cardtronics on Friday said it reached a deal to install its first cash machines in Puerto Rico.
The company said it will place 11 ATMs in To Go Stores, a San Juan, Puerto Rico, based chain of convenience stores and gas stations. Cardtronics expects to install machines at the remaining 15 To Go Stores next year.
Cardtronics operates in convenience stores, gas stations, drug store chains and other retail outlets throughout the U.S., the U.K. and Mexico.
The company said it will place 11 ATMs in To Go Stores, a San Juan, Puerto Rico, based chain of convenience stores and gas stations. Cardtronics expects to install machines at the remaining 15 To Go Stores next year.
Cardtronics operates in convenience stores, gas stations, drug store chains and other retail outlets throughout the U.S., the U.K. and Mexico.
Debit cards reward Medicaid patients for care
Managed Health Services on Monday announced a new debit card program that rewards patients for making regular trips to the doctor, taking their babies in for checkups and getting screened for several conditions.
Participants can earn between $10 and $20 on their cards for each visit or screening. They can then use the funds to buy health-related items like cough syrup or thermometers.
"What we're trying to do is promote the healthy behavior and make sure the people are getting the right things that they need," said Pat Rooney, president and CEO of Managed Health Services, a subsidiary of St. Louis-based health insurer Centene Corp.
Patients can earn $15 simply by visiting a primary care doctor within 90 days of joining the program. An annual checkup leads to another $20 deposit on the card.
Parents who take their newborn children for required checkups can receive $10 per visit. The program also serves children covered by the State Children's Health Insurance Program up to age 20.
Money also can be earned through screenings for breast and cervical cancers, diabetes and the venereal disease chlamydia.
"A lot of times when a member joins the plan they are pregnant, and we want to get that chlamydia screen done as soon as we can," Rooney said.
In some cases, patients might add more than $100 to their card over a year, Rooney said.
Managed Health Services is one of three companies that administer Medicaid coverage in Indiana. The card applies only to patients under their plan.
Rooney said Managed Health Services debuted a similar program more than a year ago in South Carolina, and patients appear to be seeing their doctors more since that program started.
"Just getting people in to see their primary care doctor is always a challenge with this population," he said. "They tend to want to go to the emergency room for care."
Arizona State professor Marjorie Baldwin said she'd like to see incentives like this for preventive care in health insurance. She notes that other forms of insurance give discounts for preventive measures like smoke alarms in a home.
Participants can earn between $10 and $20 on their cards for each visit or screening. They can then use the funds to buy health-related items like cough syrup or thermometers.
"What we're trying to do is promote the healthy behavior and make sure the people are getting the right things that they need," said Pat Rooney, president and CEO of Managed Health Services, a subsidiary of St. Louis-based health insurer Centene Corp.
Patients can earn $15 simply by visiting a primary care doctor within 90 days of joining the program. An annual checkup leads to another $20 deposit on the card.
Parents who take their newborn children for required checkups can receive $10 per visit. The program also serves children covered by the State Children's Health Insurance Program up to age 20.
Money also can be earned through screenings for breast and cervical cancers, diabetes and the venereal disease chlamydia.
"A lot of times when a member joins the plan they are pregnant, and we want to get that chlamydia screen done as soon as we can," Rooney said.
In some cases, patients might add more than $100 to their card over a year, Rooney said.
Managed Health Services is one of three companies that administer Medicaid coverage in Indiana. The card applies only to patients under their plan.
Rooney said Managed Health Services debuted a similar program more than a year ago in South Carolina, and patients appear to be seeing their doctors more since that program started.
"Just getting people in to see their primary care doctor is always a challenge with this population," he said. "They tend to want to go to the emergency room for care."
Arizona State professor Marjorie Baldwin said she'd like to see incentives like this for preventive care in health insurance. She notes that other forms of insurance give discounts for preventive measures like smoke alarms in a home.
Stocks fight for gains
Stocks struggled Wednesday afternoon, one day after a big selloff, as investors weighed the morning's mixed economic news with worries that the market rally has outpaced any recovery.
In a choppy session, the Dow Jones industrial average (INDU) and the S&P 500 (SPX) index were both little changed with about 90 minutes left in the session. The Nasdaq composite (COMP) inched higher.
In a choppy session, the Dow Jones industrial average (INDU) and the S&P 500 (SPX) index were both little changed with about 90 minutes left in the session. The Nasdaq composite (COMP) inched higher.
Stocks seesawed through the session as investors mulled a pair of better-than-expected unemployment reports ahead of Friday's big August jobs report.
Investors responded modestly to the 2:00 p.m. ET release of the minutes from the last Fed meeting. The minutes showed the central bankers thought the economy was stabilizing after weakening in 2008 and early 2009 and that construction was starting to pick up, a good sign for the housing market. The bankers also discussed the need to keep refining the Fed's so-called exit strategy after injecting billions into the financial system to help manage the meltdown.
Stocks slumped on Tuesday, with the three major gauges all losing around 2% as investors bet the six-month run has gotten ahead of the economic rebound.
Since bottoming on March 9 at a 12-year low, the S&P 500 has basically been on the rise, adding 52% through Monday. Stocks saw a minor retreat in late June and early July, with the S&P 500 losing about 7% heading into the start of the second-quarter financial reporting period. But other than that small sell off, the direction has mostly been up.
Reports on Tuesday showed housing and manufacturing are recovering, but investors remain worried about the labor market and how rising joblessness will impact consumer spending. Consumer spending fuels two-thirds of economic growth, and economists say any recovery will be mild without the consumer's participation.
Jobs: Two reports on the labor market were released Wednesday morning, leading up to Friday's bigger non-farm payrolls report.
Payroll services firm ADP said employers in the private sector cut 298,000 jobs from their payrolls last month after cutting a revised 360,000 in July. Economists were expecting 250,000 job cuts according to a Briefing.com survey.
Payroll services firm ADP said employers in the private sector cut 298,000 jobs from their payrolls last month after cutting a revised 360,000 in July. Economists were expecting 250,000 job cuts according to a Briefing.com survey.
Separately, outplacement firm Challenger, Gray & Christmas reported 76,456 job cut announcements in August, 21% fewer than in July.
Although both reports indicate the pace of job cuts has slowed, the economy is still far from creating jobs.
Although both reports indicate the pace of job cuts has slowed, the economy is still far from creating jobs.
"The reports show that the labor market is progressing toward the recovery phase ahead of schedule," said Gregory Miller, chief economists at SunTrust Banks.
He said that most economists were forecasting no improvement until the end of this year or early next year.
He said that most economists were forecasting no improvement until the end of this year or early next year.
He said that if the pace of the recovery in the jobs market continues - and business spending picks up - the recovery could be be stronger than current forecasts. But without those two factors, growth will remain sluggish.
Other economic news: A Labor Department report showed that non-farm productivity rose at a 6.6% annual rate during the second quarter versus the initially reported 6.4% pace. That was in line with forecasts.
Factory orders rose 1.3% in July, the Commerce Department reported. Orders rose a revised 0.9% in June. Economists thought orders would rise 2.2% in July.
Company news: Wells Fargo (WFC, Fortune 500) is set to repay the $25 billion in bailout funds it took from the U.S. government. The bank expects to pay it back from internal funds, rather than through issuing new shares.
Financial stocks as a sector retreated for the second session in a row, although the declines were fairly modest. The KBW Bank index lost 1.7%.
Pfizer (PFE, Fortune 500) will plead guilty to a criminal charge related to how it promoted now-defunct pain killer Bextra. The Dow component will pay $2.3 billion to settle charges it wrongly marketed 13 medicines. In January, Pfizer said it took the charge but didn't specify why.
Shares of Sepracor (SEPR) rallied 28% on published reports that Japan's Dainippon Sumitomo Pharma plans to make a $2.7 billion bid for the drugmaker.
Shares of Sepracor (SEPR) rallied 28% on published reports that Japan's Dainippon Sumitomo Pharma plans to make a $2.7 billion bid for the drugmaker.
Fellow Dow component Coca-Cola (KO, Fortune 500) rallied, while JPMorgan (JPM, Fortune 500), Merck (MRK, Fortune 500), Walt Disney (DIS, Fortune 500) and Home Depot (HD, Fortune 500) declined.
Diversified manufacturer Danaher (DHR, Fortune 500) said it is cutting more jobs as part of its restructuring plan -- and is buying two businesses that make scientific instruments for about $1.1 billion.
The company is buying the life sciences instrument business of Canadian MDS for $650 million in cash. That purchase includes a 50% stake in AB SCIEX, which makes instruments used by researchers. Danaher will also buy the rest of AB SCIEX for $450 million. Danaher shares gained 2%, while MCS (MDZ) shares gained 32%.
Oil: U.S. light crude oil for October delivery fell 33 cents to $67.72 a barrel on the New York Mercantile Exchange after a mixed weekly inventory report from the Energy Information Administration. Oil prices have been slipping since hitting a ten-month high just below $75 a barrel late last month.
In other energy sector news, BP (BP) said Wednesday that it has made a "giant" oil discovery in the Gulf of Mexico. Although the company doesn't yet know the volume of oil present, it is thought to be in excess of 3 billion barrels.
Gold: COMEX gold for December delivery rose $22 to settle at $978.50 an ounce.
That gave a boost to a variety of metal and mining companies, including Goldcorp (GG), Barrick Gold (ABX) and Yamana Gold (AUY). Yamana announced a quarterly dividend of a penny per share after the close of trade Tuesday.
That gave a boost to a variety of metal and mining companies, including Goldcorp (GG), Barrick Gold (ABX) and Yamana Gold (AUY). Yamana announced a quarterly dividend of a penny per share after the close of trade Tuesday.
World markets: The global market sell off continued, with Asian shares slumping. The Japanese Nikkei lost 2.4%. In Europe, markets tumbled as well.
Oil falls below $68 despite tightening supplies
Oil prices fell for a third straight day Wednesday, dipping below $68 a barrel despite an Energy Department report showing a drop in crude and gasoline supplies that suggests demand may be recovering.
Benchmark crude for October delivery fell 12 cents to $67.93 a barrel on the New York Mercantile Exchange. The contract lost $1.91 on Tuesday to settle at $68.05.
Oil and gasoline in storage is much greater than usual right now, partly because it has been a dismal travel season. It's one of the biggest reasons why you won't pay a lot to fill your tank if you travel this Labor Day.
The average price for a gallon of regular gasoline fell a half penny overnight to $2.602, according to auto club AAA, Wright Express and Oil Price Information Service. That's about 5 cents more than a month ago, but about $1.08 less than at this time last year.
Gasoline inventories fell by 3 million barrels to 205.1 million barrels, the Energy Department said, a steeper decline than analysts had expected.
Gasoline inventories fell by 3 million barrels to 205.1 million barrels, the Energy Department said, a steeper decline than analysts had expected.
Oil analyst and trader Stephen Schork had expected a large gasoline draw given the lateness of this year's Labor Day holiday.
Gasoline supplies have increased by 2 percent since Memorial Day, while a typical driving season at this point would show a draw of around of 4.6 percent.
"A build in gasoline supplies through the summer driving season has only occurred once (2004) over the last 20 years for which the DOE provides data," Schork wrote in his morning report.
Oil had been trading higher overnight after the American Petroleum Institute said late Tuesday that U.S. inventories fell by 3.2 million barrels last week. Refiners voluntarily report the API numbers, while the Energy Department reports mandatory supply figures.
Oil had been trading higher overnight after the American Petroleum Institute said late Tuesday that U.S. inventories fell by 3.2 million barrels last week. Refiners voluntarily report the API numbers, while the Energy Department reports mandatory supply figures.
But crude prices slipped just ahead of the Energy Department report, as new figures from the Labor Department showed companies earlier this year slashed spending on everything, including energy. The morning crude inventories report boosted prices above $68, but the rally couldn't hold.
Oil sank almost $5 a barrel in the first two days of the week on worries that a global economic recovery this year would be slow and may not justify the big rallies in stocks and commodities since March.
U.S. stock indexes fell about 2 percent Tuesday, largely on rumors of a major bank failure.
On Wednesday, both the energy and equity markets were weighing mixed signs about whether that the U.S. economy -- the biggest consumer of oil -- is improving.
On Wednesday, both the energy and equity markets were weighing mixed signs about whether that the U.S. economy -- the biggest consumer of oil -- is improving.
The ADP National Employment Report said employment fell by 298,000 in August, the smallest drop since September 2008, though ADP said employment is likely to decline for at least several more months.
The Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index rose in August, indicating an expansion for the first time since January 2008. And the National Association of Realtors said pending U.S. home sales rose to the highest level in more than two years.
In other Nymex trading, gasoline for October delivery gained 1.4 cents to $1.7966 a gallon and heating oil lost 1.2 cents to $1.7467 a gallon. Natural gas fell 5.1 cents to $2.77 per 1,000 cubic feet.
In London, Brent crude was down 17 cents at $67.56.
Associated Press Writers Alex Kennedy in Singapore and Carlo Piovano in London contributed to this report.
Associated Press Writers Alex Kennedy in Singapore and Carlo Piovano in London contributed to this report.
Pfizer to pay record $2.3B penalty over promotions
Announcing the settlement Wednesday, the Justice Department said that it included the largest criminal fine in U.S. history -- $1.2 billion. The agreement also included a criminal forfeiture of $105 million.
Authorities called Pfizer a repeat offender, noting it is the fourth such settlement of government charges in the last decade. They said the government will monitor the company's conduct for the next five years to rein in the abuses.
To promote the drugs, authorities said Pfizer invited doctors to consultant meetings at resort locations, paying their expenses and providing perks.
"They were entertained with golf, massages, and other activities," said Mike Loucks, the U.S. attorney in Massachusetts.
Loucks said that even as Pfizer was negotiating deals on past misconduct, they were continuing to violate the very same laws with other drugs.
Six corporate whisteblowers who first brought the misconduct to light will share $102 million of the settlement money.
FBI Assistant Director Kevin Perkins praised the whistleblowers who decided to "speak out against a corporate giant that was blatantly violating the law and misleading the public through false marketing claims."
Associate Attorney General Thomas Perelli said the settlement illustrates ways the department "can help the American public at a time when budgets are tight and health care costs are rising."
The overall settlement is the largest ever paid by a drug company for alleged violations of federal drug rules.
The government said the company promoted four prescription drugs, including the pain killer Bextra, as treatments for medical conditions different than those the drugs had been approved for by federal regulators.
Use of drugs for so-called "off-label" medical conditions is not uncommon, but drug manufacturers are prohibited from marketing drugs for uses that have not been approved by the Food and Drug Administration.
Bextra, one of a class of painkillers known as Cox-2 inhibitors, was pulled from the U.S. market in 2005 amid mounting evidence it raised the risk of heart attack, stroke and death.
A Pfizer subsidiary, Pharmacia and Upjohn Inc., which was acquired in 2003, has entered an agreement to plead guilty to one count of felony misbranding. The criminal case applied only to Bextra.
The $1 billion in civil penalties was related to Bextra and a number of other medicines. A portion of the civil penalty will be distributed to 49 states and the District of Columbia, according to agreements with each state's Medicaid program.
"These agreements bring final closure to significant legal matters and help to enhance our focus on what we do best -- discovering, developing and delivering innovative medicines to treat patients dealing with some of the world's most debilitating diseases," said Amy W. Schulman, senior vice president and general counsel of Pfizer.
Justice officials discussed details of the deal at a news conference with FBI, federal prosecutors, and Health and Human Services Department officials.
In financial filings in January, the company had indicated that it would pay $2.3 billion over allegations it had marketed the pain reliever Bextra and possibly other drugs for medical conditions different than their approved use. The civil settlement announced Wednesday also covered Pfizer's promotions of three other drugs: blockbuster nerve pain and epilepsy treatment Lyrica, schizophrenia medicine Geodon, antibiotic Zyvox and nine other medicines. Pfizer said the agreement with the Justice Department resolves the investigation into promotion of all those drugs, plus several related whistleblower lawsuits.
Under terms of the settlement, Pfizer must pay $1 billion to compensate Medicaid, Medicare, and other federal health care programs. Some of that money will be shared among the states: New York, for example, will receive $66 million, according to the state's attorney general, Andrew Cuomo.
"Pfizer ripped off New Yorkers and taxpayers across the country to pad its bottom line," Cuomo said. "Pfizer's corrupt practices went so far as sending physicians on exotic junkets as well as wining and dining health care professionals to persuade them to prescribe the company's drugs for patients in taxpayer-funded programs."
Pfizer spokesman Chris Loder confirmed Wednesday that the $2.3 billion charge to the company's earnings had been taken in the fourth quarter of 2008.
"No additional charge to the company's earnings will be recorded in connection with this settlement," he said.
In her statement, Schulman said: "We regret certain actions taken in the past, but are proud of the action we've taken to strengthen our internal controls and pioneer new procedures so that we not only comply with state and federal laws, but also meet the high standards that patients, physicians and the public expect from a leading worldwide company dedicated to healing and better health."
"Corporate integrity is an absolute priority for Pfizer," she said, "and we will continue to take appropriate actions to further enhance our compliance practices and strengthen public trust in our company."
When Pfizer originally disclosed the settlement figure, it also announced plans to acquire rival Wyeth for $68 billion. That deal, which would bolster Pfizer's position as the world's top drug maker by revenue, is expected to close before year's end.
Shares of Pfizer dropped 14 cents to $16.24 in midday trading.
Authorities called Pfizer a repeat offender, noting it is the fourth such settlement of government charges in the last decade. They said the government will monitor the company's conduct for the next five years to rein in the abuses.
To promote the drugs, authorities said Pfizer invited doctors to consultant meetings at resort locations, paying their expenses and providing perks.
"They were entertained with golf, massages, and other activities," said Mike Loucks, the U.S. attorney in Massachusetts.
Loucks said that even as Pfizer was negotiating deals on past misconduct, they were continuing to violate the very same laws with other drugs.
Six corporate whisteblowers who first brought the misconduct to light will share $102 million of the settlement money.
FBI Assistant Director Kevin Perkins praised the whistleblowers who decided to "speak out against a corporate giant that was blatantly violating the law and misleading the public through false marketing claims."
Associate Attorney General Thomas Perelli said the settlement illustrates ways the department "can help the American public at a time when budgets are tight and health care costs are rising."
The overall settlement is the largest ever paid by a drug company for alleged violations of federal drug rules.
The government said the company promoted four prescription drugs, including the pain killer Bextra, as treatments for medical conditions different than those the drugs had been approved for by federal regulators.
Use of drugs for so-called "off-label" medical conditions is not uncommon, but drug manufacturers are prohibited from marketing drugs for uses that have not been approved by the Food and Drug Administration.
Bextra, one of a class of painkillers known as Cox-2 inhibitors, was pulled from the U.S. market in 2005 amid mounting evidence it raised the risk of heart attack, stroke and death.
A Pfizer subsidiary, Pharmacia and Upjohn Inc., which was acquired in 2003, has entered an agreement to plead guilty to one count of felony misbranding. The criminal case applied only to Bextra.
The $1 billion in civil penalties was related to Bextra and a number of other medicines. A portion of the civil penalty will be distributed to 49 states and the District of Columbia, according to agreements with each state's Medicaid program.
"These agreements bring final closure to significant legal matters and help to enhance our focus on what we do best -- discovering, developing and delivering innovative medicines to treat patients dealing with some of the world's most debilitating diseases," said Amy W. Schulman, senior vice president and general counsel of Pfizer.
Justice officials discussed details of the deal at a news conference with FBI, federal prosecutors, and Health and Human Services Department officials.
In financial filings in January, the company had indicated that it would pay $2.3 billion over allegations it had marketed the pain reliever Bextra and possibly other drugs for medical conditions different than their approved use. The civil settlement announced Wednesday also covered Pfizer's promotions of three other drugs: blockbuster nerve pain and epilepsy treatment Lyrica, schizophrenia medicine Geodon, antibiotic Zyvox and nine other medicines. Pfizer said the agreement with the Justice Department resolves the investigation into promotion of all those drugs, plus several related whistleblower lawsuits.
Under terms of the settlement, Pfizer must pay $1 billion to compensate Medicaid, Medicare, and other federal health care programs. Some of that money will be shared among the states: New York, for example, will receive $66 million, according to the state's attorney general, Andrew Cuomo.
"Pfizer ripped off New Yorkers and taxpayers across the country to pad its bottom line," Cuomo said. "Pfizer's corrupt practices went so far as sending physicians on exotic junkets as well as wining and dining health care professionals to persuade them to prescribe the company's drugs for patients in taxpayer-funded programs."
Pfizer spokesman Chris Loder confirmed Wednesday that the $2.3 billion charge to the company's earnings had been taken in the fourth quarter of 2008.
"No additional charge to the company's earnings will be recorded in connection with this settlement," he said.
In her statement, Schulman said: "We regret certain actions taken in the past, but are proud of the action we've taken to strengthen our internal controls and pioneer new procedures so that we not only comply with state and federal laws, but also meet the high standards that patients, physicians and the public expect from a leading worldwide company dedicated to healing and better health."
"Corporate integrity is an absolute priority for Pfizer," she said, "and we will continue to take appropriate actions to further enhance our compliance practices and strengthen public trust in our company."
When Pfizer originally disclosed the settlement figure, it also announced plans to acquire rival Wyeth for $68 billion. That deal, which would bolster Pfizer's position as the world's top drug maker by revenue, is expected to close before year's end.
Shares of Pfizer dropped 14 cents to $16.24 in midday trading.
Raser shares sink after gov't denies project loan
Shares of Raser Technologies Inc. sank on Wednesday after the energy technology company disclosed a government agency denied its loan application for a future Thermo project.
Shares of Raser shed 16 cents, or 8.2 percent, to $1.79 in afternoon trading, after setting a 52-week low of $1.61. The company's stock has traded between $1.61 and $9 over the past 52 weeks.
The Provo, Utah-based company, which makes technology for electric motors, said it was notified by Energy Department that its loan guarantee application for its East Thermo project had been denied.
In its notice, the agency said "we believe that the East Thermo project possesses fundamental strengths, but would benefit from continued development," according to Raser.
East Thermo is a future phase of a Thermo-area proposed development, roughly six miles east of Raser's Thermo No. 1 plant. Raser was seeking the loan to extend its range of financing options.
The company recently announced it entered into a term sheet with the Southern California Public Power Authority for a prepaid power purchase agreement.
Shares of Raser shed 16 cents, or 8.2 percent, to $1.79 in afternoon trading, after setting a 52-week low of $1.61. The company's stock has traded between $1.61 and $9 over the past 52 weeks.
The Provo, Utah-based company, which makes technology for electric motors, said it was notified by Energy Department that its loan guarantee application for its East Thermo project had been denied.
In its notice, the agency said "we believe that the East Thermo project possesses fundamental strengths, but would benefit from continued development," according to Raser.
East Thermo is a future phase of a Thermo-area proposed development, roughly six miles east of Raser's Thermo No. 1 plant. Raser was seeking the loan to extend its range of financing options.
The company recently announced it entered into a term sheet with the Southern California Public Power Authority for a prepaid power purchase agreement.
US: agency never did competent probe of Madoff
The watchdog of the Securities and Exchange Commission has found that the agency consistently mishandled its investigations of Bernard Madoff's business, despite ample warnings of the multibillion-dollar fraud.
But SEC inspector general David Kotz's report found no evidence of any improper ties between agency officials and Madoff.
Despite speculation that senior SEC officials may have tried to influence the probes, a summary of Kotz's report released Wednesday also found no evidence of that.
The SEC enforcement staff, conducting investigations of Madoff's business, "almost immediately caught (him) in lies and misrepresentations, but failed to follow up on inconsistencies" and rejected whistleblowers' offers to provide additional evidence, the report says.
Revelations in December of the agency's failure to uncover Madoff's massive Ponzi scheme over a decade touched off one of the most painful scandals in the agency's 75-year history.
Between June 1992 and last December, when Madoff confessed, the SEC received six "substantive complaints that raised significant red flags" regarding Madoff's operations. But "a thorough and competent investigation or examination was never performed," the report says.
Many of the SEC staff who conducted the investigations were "inexperienced," according to the report.
It cites examinations of Madoff's business done in 2004 and 2005 by the agency's inspections office. In both exams, the staff "made the surprising discovery" that Madoff's mysterious investment business was making far more money than his well-known wholesale brokerage operation. "However, no one identified this revelation as a cause for concern," the report says.
Even more surprising, the two exams were being conducted at the same time in different SEC offices without either location being aware of the other's action. It was Madoff himself who told one of the inspection teams that he'd already given the information they sought to the other team, according to the report.
Madoff pleaded guilty in March. He is serving 150 years in federal prison in North Carolina for a pyramid scheme that destroyed thousands of people's life savings, wrecked charities and gave already-rattled confidence in the financial system another jolt. The legions of investors who lost money included ordinary people, Hollywood celebrities and scores of famous names in business and sports -- as well as big hedge funds, international banks and charitable foundations in the U.S., Europe and Asia.
But SEC inspector general David Kotz's report found no evidence of any improper ties between agency officials and Madoff.
Despite speculation that senior SEC officials may have tried to influence the probes, a summary of Kotz's report released Wednesday also found no evidence of that.
The SEC enforcement staff, conducting investigations of Madoff's business, "almost immediately caught (him) in lies and misrepresentations, but failed to follow up on inconsistencies" and rejected whistleblowers' offers to provide additional evidence, the report says.
Revelations in December of the agency's failure to uncover Madoff's massive Ponzi scheme over a decade touched off one of the most painful scandals in the agency's 75-year history.
Between June 1992 and last December, when Madoff confessed, the SEC received six "substantive complaints that raised significant red flags" regarding Madoff's operations. But "a thorough and competent investigation or examination was never performed," the report says.
Many of the SEC staff who conducted the investigations were "inexperienced," according to the report.
It cites examinations of Madoff's business done in 2004 and 2005 by the agency's inspections office. In both exams, the staff "made the surprising discovery" that Madoff's mysterious investment business was making far more money than his well-known wholesale brokerage operation. "However, no one identified this revelation as a cause for concern," the report says.
Even more surprising, the two exams were being conducted at the same time in different SEC offices without either location being aware of the other's action. It was Madoff himself who told one of the inspection teams that he'd already given the information they sought to the other team, according to the report.
Madoff pleaded guilty in March. He is serving 150 years in federal prison in North Carolina for a pyramid scheme that destroyed thousands of people's life savings, wrecked charities and gave already-rattled confidence in the financial system another jolt. The legions of investors who lost money included ordinary people, Hollywood celebrities and scores of famous names in business and sports -- as well as big hedge funds, international banks and charitable foundations in the U.S., Europe and Asia.
Tuesday, September 1, 2009
IMF may provide Ukraine with loans exceeding $16.5 billion stipulated in standby loan program
According to Alier, the terms of disbursement of the fourth tranche of the Standby loan are progress on the issue of improvement of the health of the Ukrainian banking industry, staying within the limit of the state budget deficit for 2009, and drafting a realistic state budget for 2010 with a deficit not exceeding 3% of GDP (4% of GDP, including the deficit of the Naftohaz Ukrainy national joint-stock company.
Alier warned the Ukrainian authorities against excessive financing of the state budget' deficit through issuance of domestic loan bonds by the National Bank of Ukraine.
"Any monetarization of the budget deficit should be conducted very carefully because the consequences could be unpredictable and negative, for example, a jump in the currency exchange rate and uncontrollable inflation," Alier said.
Alier warned the Ukrainian authorities against excessive financing of the state budget' deficit through issuance of domestic loan bonds by the National Bank of Ukraine.
"Any monetarization of the budget deficit should be conducted very carefully because the consequences could be unpredictable and negative, for example, a jump in the currency exchange rate and uncontrollable inflation," Alier said.
Business prospects
“The gas crisis in January 2009 showed that energy security is of key importance for the economic development of the region,” Alexander Duleba, the director of the Research Centre of the Slovak Foreign Policy Association (SFPA), told The Slovak Spectator. “There are no regional interconnections of infrastructure for transit of natural gas and crude oil within the V4. If the V4 arrangement is not used to bring about a change, this will cast doubt on the pure essence of regional cooperation within the V4.”
Along with energy security, Krzysztof Szczerski, an expert at the Kosciuszko Institute in Poland, sees as an important challenge for the V4 in not being left outside the core of European integration following turbulence from global crises which threaten to divide the EU into several ‘inner-circles’.
“If we fail in these areas we will become an unimportant part of the EU’s eastern periphery,” Szczerski told The Slovak Spectator.
Along with energy security, Krzysztof Szczerski, an expert at the Kosciuszko Institute in Poland, sees as an important challenge for the V4 in not being left outside the core of European integration following turbulence from global crises which threaten to divide the EU into several ‘inner-circles’.
“If we fail in these areas we will become an unimportant part of the EU’s eastern periphery,” Szczerski told The Slovak Spectator.
Something is wrong with global stimulus package
The IMF has issued SDRs of a meager $31 billion in the last 60 odd years of its existence. The voluntary arrangement with central banks of 13 member countries was adequate for this small issue. These are mostly developed countries. Their economies were doing well in the past. The British people, for example, obtained various indirect benefits through their government’s control of the IMF in lieu of the cost borne by them in buying the SDRs. The IMF, under pressure from Britain, would impose conditions on Bangladesh to open its economy to foreign investment. The benefits from such opening of Bangladesh’s economy for British companies would compensate for the loss of income from purchase of SDRs. But it will be difficult for the developed countries to buy SDRs of ten times the amount when their own economies are facing huge recession. For example, the United States has made a stimulus package of more than $ one trillion to increase purchasing power of its citizens. They have been given tax refunds. It will be difficult for the United States to buy SDRs tendered by Bangladesh in this situation. The purchasing power of the American people will decline if the Federal Reserve Bank buys these SDRs. I reckon that in times to come a crisis will arise. There will be no buyers for the SDRs. Developed countries will close their doors just as the turtle withdraws its limbs in a storm. It seems the developed countries are aware of this impending crisis. Their strategy is to push China, India and oil exporting Arab countries to buy these SDRs. The Guardian reports British Prime Minister Gordon Brown saying that China and oil-producing countries in the Gulf should "pump hundreds of billions of dollars into the International Monetary Fund to prevent the global financial ‘contagion’ from destroying vulnerable economies." A Blog on IMF says that India and China should buy the SDRs. The developed countries expect China, India and oil exporting Arab countries to buy the SDRs. If they are successful in their design, the cost of the IMF’s stimulus package will be borne by the people of these countries. Say, Bangladesh deposits SDRs of $ one billion with Reserve Bank of India and obtains rupees of this amount. Bangladesh buys cars, cement, steel and cotton of this amount in Kolkata markets and ships them to Dhaka. These goods will now be consumed by people of Bangladesh instead of people of India. We will additionally face inflation due to the infusion of $ one billion that was provided initially by RBI to Bangladesh. In this way the we will bear the cost of the stimulus package. The benefits of the stimulus package will be reaped by countries that sell their SDRs and costs will be borne by countries that buy the SDRs. The developed countries have tacitly already expressed their inability to buy the SDRs. They would rather sell their SDR allocations to India and take cotton and steel from here to their homes. Therefore, the SDRs become like Bonds issued by a bankrupt company. The developed countries who control the IMF are themselves unwilling to buy the bonds issued by IMF. There is every possibility that China, India and oil exporting Arab countries will see through this game plan and refuse to buy the SDRs. This will create a huge crisis in the world economy akin to the Reserve Bank of India becoming insolvent. The entire global financial structure may collapse.
Coastal Contacts to Release Third Quarter 2009 Financials On September 9,
All statements made in this news release, other than statements of historical fact, are forward-looking statements. Persons reading this news release are cautioned that forward-looking statements or information are only predictions, and that our actual future results or performance may be materially different due to a number of factors. These factors include, but are not limited to: changes in the market; downturns in economic conditions; consumer credit risk; our ability to implement our business strategies; competition; limited suppliers; inventory risk; disruption in our distribution facilities; mergers and acquisitions; foreign currency exchange rate fluctuations; regulatory requirements; demand for contact lenses and related vision care products; competition; and dependence on the internet and other risks detailed in our filings with the Canadian securities regulatory authorities. Reference should be made to the section entitled "Risk Factors" contained in our most recently filed Annual Information Form dated January 29, 2009, for a detailed description of the risks and uncertainties relating to our business. These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should not place undue reliance on forward-looking statements and information, which are qualified in their entirety by this cautionary statement. These forward-looking statements are made as of the date of this news release and we expressly disclaim any intent or obligation to update these forward-looking statements, unless we specifically state otherwise and except as required by applicable law.
Neither the TSX nor any other regulatory body has reviewed and therefore does not accept responsibility for the adequacy or accuracy of this release.
Neither the TSX nor any other regulatory body has reviewed and therefore does not accept responsibility for the adequacy or accuracy of this release.
Nigerian naira firms in interbank on NNPC dlr sales
Dealers said the state oil firm on Tuesday called for bids from selected banks for an unspecified amount of dollars, but estimated the figure at over $200 million.
"The market perceived that once the NNPC sells dollars, the naira rate will gain further, so everybody is adjusting their prices accordingly," one dealer said.
Dealers said NNPC usually sold dollars at around the central bank's exchange rate. The central bank sold $300 million at 150.46 naira to the dollar at its most recent auction on Monday, not far off the $338 million demanded.
"Panic buying has reduced, confidence is coming back to the market because the central bank has closed up the gap between demand and dollar supply at its auction," another dealer said.
The naira initially weakened sharply against
"The market perceived that once the NNPC sells dollars, the naira rate will gain further, so everybody is adjusting their prices accordingly," one dealer said.
Dealers said NNPC usually sold dollars at around the central bank's exchange rate. The central bank sold $300 million at 150.46 naira to the dollar at its most recent auction on Monday, not far off the $338 million demanded.
"Panic buying has reduced, confidence is coming back to the market because the central bank has closed up the gap between demand and dollar supply at its auction," another dealer said.
The naira initially weakened sharply against
Expectations Growing High for Rapid Economic
Helped by the stimulus measures and the depreciation of the local currency against the U.S. dollar, major South Korean companies have shown strong performances. Especially, IT firms and automakers were found to have outperformed their market expectations thanks to rebounding demand for their products both at home and abroad. That's why the market has been led by such large cap shares as Samsung Electronics, LG Electronics, Hyundai Motor and chip-making Hynix. Banks and other financial shares have also enjoyed solid gains as the financial system rapidly restored its stability. Most of all, the Seoul bourse is riding the wave of a global stock market rally. The latest bullish mood was created by U.S. Federal Reserve Chairman Ben Bernanke who said last week that a global recovery is in the offing. What's conspicuous is that foreign investors have rushed to buy Korean shares. This indicates that foreigners have regained their confidence in the Korean economy and the local financial market. They are re-emerging as strong buyers. Their presence in the Seoul market has risen to 31 percent with their net purchases amounting to 20.7 trillion won in the first half of this year. But now, it is not certain whether the market will continue its upward march because of lingering downside risks, including worries about a double-dip recession. Thus, it is important to get rid of destabilizing factors, further improve investor confidence and speed up economic recovery. It is also necessary to create a virtuous cycle of a stock market rebound, an increase in asset values, rising consumption, more jobs, more production and more investment. Finally, it is crucial to ensure that the market does not turn into a gambling casino as seen at the end of the 1997-98 Asian financial crisis. Let's not be overconfident.
Deutche Bank tells investors to buy lei
The dealers are saying that the Central Bank of Romania, BNR, has repeatedly taken masked action in the hard currency market, in order to bar the depreciation of the national currency, under the level of 4.25-4.3 Lei/euro, and this could put a brake to reaching the inflation target of 2.5-4.3 Lei/euros, at the end of the year.
According to the dealers, this has also frightened many foreign players, and, at the same time, has made of the currency market in Romania, a less liquid one, compared with the markets around, mainly led by commercial orders from the local banks.
The analysts and the dealers believe that the intervention of BNR in the hard currency market and the bad situation of the current account have made the Leu not to be, this summer, in the trend of regional increase.
According to the dealers, this has also frightened many foreign players, and, at the same time, has made of the currency market in Romania, a less liquid one, compared with the markets around, mainly led by commercial orders from the local banks.
The analysts and the dealers believe that the intervention of BNR in the hard currency market and the bad situation of the current account have made the Leu not to be, this summer, in the trend of regional increase.
Corporation Closes Over-Allotment Option
IMAX intends to use the net proceeds from the offering for the repayment ofdebt, including a portion of its 9 5/8% Senior Notes due December 2010. IMAXintends to refinance the remainder of its existing indebtedness through cashflow from operations and future debt financings.Roth Capital Partners, LLC acted as the underwriter for the offering.The common stock was offered pursuant to an effective registration statementfiled with the Securities and Exchange Commission. Offers and sales of thecommon stock will be made only by the related prospectus and prospectussupplement. Copies of the prospectus and prospectus supplement relating to thisoffering may be obtained from Roth Capital Partners by e-mail torothecm@roth.com, by fax to (949) 720-7227 or by mail to 24 Corporate PlazaDrive, Newport Beach, CA, 92660, Attention: Equity Capital Markets.
FOREX.com Expands Product Offering with Addition of Oil Trading
"Economic fundamentals have become a significant driver of oil prices. This factor and the inverse relationship between oil and the U.S. dollar means trading oil is a fairly natural extension and an interesting alternative to currency trading," comments Jane Foley, Director of Research for FOREX.com.
"In addition, many currency traders already closely follow the price of oil, and commodities are increasingly popular with retail traders as they look for opportunities to generate positive returns outside traditional equity markets," adds Matthew Wright, Regional Director for FOREX.com in Europe.
FOREX.com offers Brent crude oil (BCO) as a Contract for Difference (CFD) with five percent margin and the flexibility to trade small contracts from just one lot, representing 100 barrels. The FOREX.com BCO contract tracks the current price of Brent crude on the Intercontinental Exchange (ICE). In addition to premium trading tools such as real-time charts and news, clients will also receive daily market commentary and analysis from the FOREX.com research team on the latest market trends impacting the price of oil.
"In addition, many currency traders already closely follow the price of oil, and commodities are increasingly popular with retail traders as they look for opportunities to generate positive returns outside traditional equity markets," adds Matthew Wright, Regional Director for FOREX.com in Europe.
FOREX.com offers Brent crude oil (BCO) as a Contract for Difference (CFD) with five percent margin and the flexibility to trade small contracts from just one lot, representing 100 barrels. The FOREX.com BCO contract tracks the current price of Brent crude on the Intercontinental Exchange (ICE). In addition to premium trading tools such as real-time charts and news, clients will also receive daily market commentary and analysis from the FOREX.com research team on the latest market trends impacting the price of oil.
Forex reserves dip to $271 billion
The foreign currency assets (FCAs), for the week ended August 14, declined to $260.010 billion, down $209 million, from $260.219 billion in the week-ago period, RBI said in its weekly report. FCAs, expressed in US dollar terms, include the effect of appreciation or depreciation of non-US currencies (such as Euro, Sterling, Yen) held in reserves, RBI said. Gold reserves, during the week, stood unchanged at $9.671 billion, the apex bank said. India's reserve position in the International Monetary Fund (IMF) marginally fell to $1.344 billion from $1.348 billion in the previous
Commerce Digest
Albert W. Ondis, chief executive officer of Astro-Med Inc., said the West Warwick company remains on “recession watch” after reporting reduced second-quarter profits.
The company said net earnings were $585,000, or 8 cents a share, down from the $1.2 million, or 15 cents a share, earned in the year-ago period. Sales were $16.4 million, down from $19.8 million a year ago. The company (ALOT:Nasdaq) said unfavorable foreign exchange currency rates lowered second-quarter sales by approximately $446,000, or 2.7 percent.
“Although there are signs that our markets are recovering, and we expect to report continued improvements as the year progresses, we will continue our recession
The company said net earnings were $585,000, or 8 cents a share, down from the $1.2 million, or 15 cents a share, earned in the year-ago period. Sales were $16.4 million, down from $19.8 million a year ago. The company (ALOT:Nasdaq) said unfavorable foreign exchange currency rates lowered second-quarter sales by approximately $446,000, or 2.7 percent.
“Although there are signs that our markets are recovering, and we expect to report continued improvements as the year progresses, we will continue our recession
Resmed profit rises 33pc to $175m
The company said it was well placed to continue building the business.
"The market for sleep disordered breathing therapy remains highly underpenetrated", chief executive Kieran Gallahue said yesterday.
Resmed, which has a 40 per cent market share of the global business, said that only 1 per cent of the world's population was being treated for sleep apnoea when at least 20 per cent were suffering from the disorder but were undiagnosed.
The company's full-year revenue rose 10 per cent to $US920.7m for the year ended June 30.
"In the fourth quarter of fiscal 2009, we continued to show strong growth year over year," it said. "Our favourable mix of product sales and market share gains led to a 20 per cent increase in the Americas over the prior-year quarter, resulting in $US134.2m in revenue.
"Sales outside the Americas were impacted by currency movements, in particular the depreciation of the euro against the US dollar," Mr Gallahue said.
"As a result, sales outside the Americas decreased by 4 per cent to $US117.8m but were up 10 per cent in constant currency terms."
Analyst Stuart Roberts of Southern Cross said he was impressed with Resmed's robust results, cost control and increased margins. "Resmed's business is so well balanced that any foreign exchange hiccups in Europe are made up by its wide operations in the Americas," he said.
"The US federal government is also considering testing pilots, train and truck drivers for sleep apnoea disorders to prevent accidents when they fall asleep on the job. This will be a good move for Resmed's business."
Deutsche Bank said Resmed's strong result and gross margins growth reflected the company's operating efficiencies.
Market growth was expected to continue to remain resilient, with the economic downturn having a limited effect on Resmed's operations.
The company continued to invest in R&D, devoting 7 per cent of revenue, or $US17m, to R&D expenditure.
"R&D outlays reflect Resmed's continuing commitment to innovation within its product portfolio, as well as an ongoing commitment to clinical research and product development," the company said.
Resmed shares rose 15c to $5.25 yesterday.
"The market for sleep disordered breathing therapy remains highly underpenetrated", chief executive Kieran Gallahue said yesterday.
Resmed, which has a 40 per cent market share of the global business, said that only 1 per cent of the world's population was being treated for sleep apnoea when at least 20 per cent were suffering from the disorder but were undiagnosed.
The company's full-year revenue rose 10 per cent to $US920.7m for the year ended June 30.
"In the fourth quarter of fiscal 2009, we continued to show strong growth year over year," it said. "Our favourable mix of product sales and market share gains led to a 20 per cent increase in the Americas over the prior-year quarter, resulting in $US134.2m in revenue.
"Sales outside the Americas were impacted by currency movements, in particular the depreciation of the euro against the US dollar," Mr Gallahue said.
"As a result, sales outside the Americas decreased by 4 per cent to $US117.8m but were up 10 per cent in constant currency terms."
Analyst Stuart Roberts of Southern Cross said he was impressed with Resmed's robust results, cost control and increased margins. "Resmed's business is so well balanced that any foreign exchange hiccups in Europe are made up by its wide operations in the Americas," he said.
"The US federal government is also considering testing pilots, train and truck drivers for sleep apnoea disorders to prevent accidents when they fall asleep on the job. This will be a good move for Resmed's business."
Deutsche Bank said Resmed's strong result and gross margins growth reflected the company's operating efficiencies.
Market growth was expected to continue to remain resilient, with the economic downturn having a limited effect on Resmed's operations.
The company continued to invest in R&D, devoting 7 per cent of revenue, or $US17m, to R&D expenditure.
"R&D outlays reflect Resmed's continuing commitment to innovation within its product portfolio, as well as an ongoing commitment to clinical research and product development," the company said.
Resmed shares rose 15c to $5.25 yesterday.
BOJ cuts rates again - Benchmark now at 18%
The rate cut became effective Thursday, August 20, placing the new rates in a range of 13.5 per cent to 18 per cent (see insert).
"This rate adjustment comes against the background of a notable decline in inflation and continued stability in the foreign currency market," said the central bank which now projects that annual inflation has fallen to 7.0 per cent in July, compared to 8.9 per cent in June.
The bank is also anticipating a US$320 million inflow from the International Monetary Fund under the deal being brokered with Jamaica for a stand-by facility.
"Inflation expectations, measured by regular surveys of the business sector, continue to fall as input costs have also stabilised over the past six months. This trend is expected to continue and, in conjunction with weak aggregate demand, should temper underlying inflation impulses," added BOJ.
The BOJ's programme of rate cuts is not unexpected, with expectations that when the calendar year ends, central bank chief Derick Latibeaudiere, would have sliced as much as five percentage points off signal rates as the fiscal authorities struggle to bring down the cost of the national debt servicing bill - estimated at $309 billion on a stock of $1.2 trillion this fiscal year.
With the latest cut, Latibeaudiere has already reduced rates by 3.5 points since July.
The top rate is now 2.6 points lower than the benchmark six-month treasury bill which yielded 20.6 per cent in July; the three month yielded 18.46 per cent.
"This rate adjustment comes against the background of a notable decline in inflation and continued stability in the foreign currency market," said the central bank which now projects that annual inflation has fallen to 7.0 per cent in July, compared to 8.9 per cent in June.
The bank is also anticipating a US$320 million inflow from the International Monetary Fund under the deal being brokered with Jamaica for a stand-by facility.
"Inflation expectations, measured by regular surveys of the business sector, continue to fall as input costs have also stabilised over the past six months. This trend is expected to continue and, in conjunction with weak aggregate demand, should temper underlying inflation impulses," added BOJ.
The BOJ's programme of rate cuts is not unexpected, with expectations that when the calendar year ends, central bank chief Derick Latibeaudiere, would have sliced as much as five percentage points off signal rates as the fiscal authorities struggle to bring down the cost of the national debt servicing bill - estimated at $309 billion on a stock of $1.2 trillion this fiscal year.
With the latest cut, Latibeaudiere has already reduced rates by 3.5 points since July.
The top rate is now 2.6 points lower than the benchmark six-month treasury bill which yielded 20.6 per cent in July; the three month yielded 18.46 per cent.
Australian Dollar Down As RBA Hike Expectations Moderate
Capurso said he expects the local currency will hold the US$0.8370 to US$0.8420 range ahead of the employment numbers but a smaller-than-expected decline in employment could return the unit back to above the US$0.8450 level.
Earlier Friday, the RBA's monetary policy statement prompted an immediate spike in the currency up to a peak of US$0.8423, although the Aussie almost as quickly dropped to a session trough of US$0.8368.
Deutsche Bank Foreign Exchange Strategist John Horner said that the pullback in the currency likely reflected more benign upgrades in the RBA's gross domestic product and inflation forecasts than initially expected.
While the RBA is now quite explicit about the need to return the cash rate to "more normal" levels, Horner said that the statement implied "the RBA is not in any great rush to move toward those more normal settings."
Interbank cash rate futures show market participants now expect 23 basis points of rate hikes by November, down from 25.5 basis points late Thursday.
Australian bond futures were modestly stronger as investors maintained their positions ahead of the U.S. labor data and were helped slightly by a paring back of rate hike expectations.
September three-year bond futures were four ticks higher at 94.89 while 10-year futures were up three ticks at 94.37.
Earlier Friday, the RBA's monetary policy statement prompted an immediate spike in the currency up to a peak of US$0.8423, although the Aussie almost as quickly dropped to a session trough of US$0.8368.
Deutsche Bank Foreign Exchange Strategist John Horner said that the pullback in the currency likely reflected more benign upgrades in the RBA's gross domestic product and inflation forecasts than initially expected.
While the RBA is now quite explicit about the need to return the cash rate to "more normal" levels, Horner said that the statement implied "the RBA is not in any great rush to move toward those more normal settings."
Interbank cash rate futures show market participants now expect 23 basis points of rate hikes by November, down from 25.5 basis points late Thursday.
Australian bond futures were modestly stronger as investors maintained their positions ahead of the U.S. labor data and were helped slightly by a paring back of rate hike expectations.
September three-year bond futures were four ticks higher at 94.89 while 10-year futures were up three ticks at 94.37.
European stocks lose ground
"We have lower volumes today and investors have been a little muted with trading choppy," he noted, adding that London trade was expected to wind down this week ahead of a public holiday next Monday.
Wall Street forged 2009 highs on Tuesday, lifted by strong consumer confidence and home prices data, and US Federal Reserve chief Ben Bernanke's nomination to serve a second term.
The Dow Jones Industrial Average climbed 0.32 percent to 9,539.29 points, its highest level of the year so far.
The Tokyo stock market rallied Wednesday to its highest level in almost 11 months as a rebound in US consumer confidence and Chinese share prices cheered investors.
Japan's benchmark Nikkei-225 index jumped 1.36 percent to 10,639.71 points, the best finish since October 3.
But European shares pulled lower, with London also dampened by news of tumbling profits at WPP, the world's second-biggest advertising group.
WPP announced that first-half net profit sank 47.9 percent as companies slashed their advertising budgets in the face of a "severe" worldwide recession that was sparked by the international financial crisis.
Wall Street forged 2009 highs on Tuesday, lifted by strong consumer confidence and home prices data, and US Federal Reserve chief Ben Bernanke's nomination to serve a second term.
The Dow Jones Industrial Average climbed 0.32 percent to 9,539.29 points, its highest level of the year so far.
The Tokyo stock market rallied Wednesday to its highest level in almost 11 months as a rebound in US consumer confidence and Chinese share prices cheered investors.
Japan's benchmark Nikkei-225 index jumped 1.36 percent to 10,639.71 points, the best finish since October 3.
But European shares pulled lower, with London also dampened by news of tumbling profits at WPP, the world's second-biggest advertising group.
WPP announced that first-half net profit sank 47.9 percent as companies slashed their advertising budgets in the face of a "severe" worldwide recession that was sparked by the international financial crisis.
Sentiment Beginning To Line Up Behind Dollar
"We think Friday was a bit of a watershed moment, if we can call it that," said Greg Salvaggio, vice president at Tempus Consulting in Washington.
Salvaggio said news on Friday the U.S. economy lost only 247,000 jobs in July, below the 275,000 expected by economists, was a continuation of a narrative that first surfaced in July, the narrative about the U.S. economy emerging from recession more quickly than its counterparts in the G7 group of major advanced economies.
Other recent data points have been consistent with that narrative, he added.
The Fed's policy meeting this week marks another key chapter in the unfolding story of U.S. recovery, and the focus is now moving to the Fed to see if it provides more support for it.
"While no one thinks that the Fed is going to shift interest rates higher, what a lot of people are looking for is some indication in the language of their statement of an ending of the program of quantitative easing and excessive stimulus in the economy," Salvaggio said.
If the Fed doesn't provide such an indication, it won't undermine the narrative of U.S. recovery, but it will slow the pace of the dollar's acceleration, he said.
"Should that wording emerge, I think you're going to see people quickly run for the exits on short dollar positions," he said.
Salvaggio said news on Friday the U.S. economy lost only 247,000 jobs in July, below the 275,000 expected by economists, was a continuation of a narrative that first surfaced in July, the narrative about the U.S. economy emerging from recession more quickly than its counterparts in the G7 group of major advanced economies.
Other recent data points have been consistent with that narrative, he added.
The Fed's policy meeting this week marks another key chapter in the unfolding story of U.S. recovery, and the focus is now moving to the Fed to see if it provides more support for it.
"While no one thinks that the Fed is going to shift interest rates higher, what a lot of people are looking for is some indication in the language of their statement of an ending of the program of quantitative easing and excessive stimulus in the economy," Salvaggio said.
If the Fed doesn't provide such an indication, it won't undermine the narrative of U.S. recovery, but it will slow the pace of the dollar's acceleration, he said.
"Should that wording emerge, I think you're going to see people quickly run for the exits on short dollar positions," he said.
HK dollar little changed, range trading expected
The following is a snapshot of the Hong Kong foreign exchange and money market in late trade on Tuesday. Close Morning Previous Close
Asian shares fall, wary of buying fatigue
Shares in China's benchmark stock index fell 0.7 percent after a big share offer announced by the country's second-biggest listed property developer China Vanke kept the focus on a hefty supply of new shares in the near future.
On Wednesday, orders for long-lasting U.S. manufactured goods registered the biggest advance since July 2007, but orders excluding transport goods were slightly below expectations. New home sales jumped in July by their fastest pace in 10 months.
Investors on Wall Street were cautious, with shares bouncing after the favourable data but then fizzling out.
The Dow Jones industrial average gained just 0.04 percent while the Standard & Poor's 500 Index and the Nasdaq Composite Index ended up just 0.01 percent.
On Wednesday, orders for long-lasting U.S. manufactured goods registered the biggest advance since July 2007, but orders excluding transport goods were slightly below expectations. New home sales jumped in July by their fastest pace in 10 months.
Investors on Wall Street were cautious, with shares bouncing after the favourable data but then fizzling out.
The Dow Jones industrial average gained just 0.04 percent while the Standard & Poor's 500 Index and the Nasdaq Composite Index ended up just 0.01 percent.
Asian Shares Fall; Concerns On China Bank Lending
Australia's S&P/ASX 200 was down 2.5% with Japan's Nikkei 225 down 2.1% and South Korea's Kospi Composite off 0.4%. Hong Kong's Hang Seng Index was down 1.3%, with Taiwan shares off 0.1%.
The Shanghai Composite Index was 0.7% higher by the market interval there, though off its morning highs.
Traders cited a report by Bloomberg which quoted people familiar with the matter as saying China planned to tighten capital requirements for banks. It said the China Banking Regulatory Commission had sent a draft of rule changes to banks on Aug. 19, requiring them to deduct all existing holdings of subordinated and hybrid debt sold by other lenders from supplementary capital.
There's little in the way of concrete data, but many China-watchers believe a large amount of bank lending has found its way into the stock market in recent months.
Concerns that China might slow this lending flood, at a time doubts are starting to come in about the strength of the economic recovery, were felt also in currency trade, with the U.S. dollar falling against the Japanese yen to its lowest level in more than a month.
The yield on the U.S. 10-year Treasury note fell to 3.38% in Tokyo, from 3.43% earlier, another indication of risk aversion. U.S. stock futures were down in screen trade, with Dow Jones Industrial Average futures falling 58 points.
Investors were likely to take their cue from where Shanghai shares headed in the afternoon session, given offshore market players tend to view that bourse as a bellwether for sentiment on the Chinese economy.
"In the last two weeks the index has lost more than 20% of its value - and needless to say investors are wondering if this is once again a harbinger of a sharp turn in China's real economic fortunes," said UBS economist Jonathan Anderson.
In Hong Kong, China Mobile was down 3.6% and responsible for a fair bit of the HSI's fall. That was after the company's first half results late Thursday showed a slowdown in profit growth.
The Shanghai Composite Index was 0.7% higher by the market interval there, though off its morning highs.
Traders cited a report by Bloomberg which quoted people familiar with the matter as saying China planned to tighten capital requirements for banks. It said the China Banking Regulatory Commission had sent a draft of rule changes to banks on Aug. 19, requiring them to deduct all existing holdings of subordinated and hybrid debt sold by other lenders from supplementary capital.
There's little in the way of concrete data, but many China-watchers believe a large amount of bank lending has found its way into the stock market in recent months.
Concerns that China might slow this lending flood, at a time doubts are starting to come in about the strength of the economic recovery, were felt also in currency trade, with the U.S. dollar falling against the Japanese yen to its lowest level in more than a month.
The yield on the U.S. 10-year Treasury note fell to 3.38% in Tokyo, from 3.43% earlier, another indication of risk aversion. U.S. stock futures were down in screen trade, with Dow Jones Industrial Average futures falling 58 points.
Investors were likely to take their cue from where Shanghai shares headed in the afternoon session, given offshore market players tend to view that bourse as a bellwether for sentiment on the Chinese economy.
"In the last two weeks the index has lost more than 20% of its value - and needless to say investors are wondering if this is once again a harbinger of a sharp turn in China's real economic fortunes," said UBS economist Jonathan Anderson.
In Hong Kong, China Mobile was down 3.6% and responsible for a fair bit of the HSI's fall. That was after the company's first half results late Thursday showed a slowdown in profit growth.
Comprehensive FX and Futures Research
The EUR/USD is heading south towards the lower end of its weekly trading range after U.S. Core Durable Goods Orders came in two basis points below analyst expectations. The durable goods number is outweighing a better than expected German Ifo Business Climate release. Referring to yesterday’s post, we explained that U.S. demand for durable goods has a strong influence on the EU economy since EU GDP is highly reliant on exports and manufacturing. Hence, investors are sending the EUR/USD lower since the Core DGO release takes a bite out of the optimism surrounding the concept of an economic recovery. However, the Euro is holding up a lot better than the Pound since Germany’s Ifo Business Climate release continues the theme of stronger than expected economic data from the EU over the past couple weeks. One needs to look no further than the high flying EUR/GBP for confirmation of a strong Euro. The Euro will be tested tomorrow since the EU will print Germany’s Prelim CPI and the EU region’s M3 Money Supply. Weak CPI growth and a large contraction in the EU’s money supply has been a thorn in the EUR/USD’s side. Declining prices and the dwindling supply of Euros gives the EU little room to tighten its monetary policy. Hence, the EU’s commitment to keep liquidity in control comes at a cost. Meanwhile, the Core DGO number is not the best way to set the table for tomorrow’s key releases, most notably America’s Prelim GDP and Unemployment Claims data. If these two data releases also disappoint, the S&P futures could experience a brisk selloff and result in a broad-based appreciation of the Dollar. However, the continuation of the theme of stronger than expected data from the EU could help the Euro maintain its relative strength. As for today, we could witness continued preference for the Dollar as investors head for safety. However, if New Home Sales come in better than expected later this morning, the EUR/USD can regain its footing and consolidate ahead of tomorrow’s wave of key economic data. On the other hand, weak New Home Sales would only perpetuate the EUR/USD’s present pullback. The key for the EUR/USD will be staying above our 1st tier uptrend line. If not, the currency pair could head for its next technical cushion, 8/20 lows or 1.42. Meanwhile, the EUR/USD is experiencing multiple trend line inflection points, indicating today’s session could turn out to be a volatile one. Since the session has started off on a sour note, this combination of events may not bode well for the bulls. As for the topside, our 2nd-4th tier downtrend lines continue to serve as important technical barriers preventing a large breakout in the EUR/USD. Since data is already mixed today, positive New Home Sales data may not be enough to send the EUR/USD to a break out to the topside.
Cash dollar purchase rate at exchange offices of Ukrainian commercial banks goes up to 8.20-8.25 UAH/USD
In experts' opinion,the main reason of a sharp drop of the hryvnia on the Interbank Foreign Exchange Market is absence of interventions on the part of the National Bank.Participants in the currency market suppose that exporters try to hoard currency receipts with the aim of their more profitable sale in the future. At the same time, weak activities of the NBU regarding the hryvnia support can be caused by a pressure on the part of the International Monetary Fund, the expert believes
Hot money inflow eyes China
According to a report released by the Guangdong branch of the academy - on the issue of underground money flow - the hot money inflow to Hong Kong was at a faster pace in July when compared with a month ago.
That indicates overseas investors are becoming more optimistic on the Chinese economy and want to use Hong Kong as the platform to get in for the short term.
"There is limited cost for overseas money to park in Hong Kong as the city is an open market," Zhang said. "Those investors at the same time can benefit from China's economic growth with the city's close ties with the mainland."
According to the academy, China witnessed a similar situation in the first six months as more than US$170 billion in foreign exchange reserves was added during the second quarter - almost 23 times what was added in the first quarter. When excluding money inflows from trade surplus and foreign direct investment, there was as much as several hundred billion US dollars unaccounted for.
Sun Lijian, a Fudan University economics professor, estimates it would amount to up to US$122 billion.
That indicates overseas investors are becoming more optimistic on the Chinese economy and want to use Hong Kong as the platform to get in for the short term.
"There is limited cost for overseas money to park in Hong Kong as the city is an open market," Zhang said. "Those investors at the same time can benefit from China's economic growth with the city's close ties with the mainland."
According to the academy, China witnessed a similar situation in the first six months as more than US$170 billion in foreign exchange reserves was added during the second quarter - almost 23 times what was added in the first quarter. When excluding money inflows from trade surplus and foreign direct investment, there was as much as several hundred billion US dollars unaccounted for.
Sun Lijian, a Fudan University economics professor, estimates it would amount to up to US$122 billion.
Is gold any good as a currency?
With governments across the world producing paper currencies at a rapid rate, some investors have voiced a desire to return to some kind of gold standard. The early 20th century gold standard essentially fixed the ratio of bank notes in circulation to the stock of gold held by the issuing central bank. If gold were once again to form the basis of the world's money, then governments would not produce money at will.
The amount of money in circulation in an economy would only be able to increase if the amount of gold owned by the relevant central bank increased, and thus (so the argument goes) the value of money is preserved. So is there any validity to a gold standard as a currency benchmark? There is a critical problem with the idea of gold forming some kind of central role in the modern foreign exchange system: There is not enough of it.
More accurately, the supply of gold is not growing fast enough. A gold based currency system would condemn the world to global deflation. Gold would be an absolutely terrible reserve currency.
A reserve currency is demanded primarily to facilitate global trade. The more economies trade, the more reserve currency they will need to effect their transactions. Therefore the growth in the supply of a reserve currency needs to be approximately the same as the growth in global trade. This is the fatal flaw for those seeking a return to a gold standard.
Let us assume that globalization holds steady, with global trade averaging around 20 percent of the world's GDP. Under these circumstances, the value of global trade will rise in step with the rise in the value of global GDP. If the world economy has a trend nominal rate of growth of around 6 percent to 6.5 percent (perfectly realistic in the current climate), then the supply of reserve currency to the world economy needs in order to conduct international trade has to rise by around 6 percent to 6.5 percent.
The problem that the world faces is that the supply of gold is rising at around 1.5 percent per year, thus there is too little gold to facilitate the trade in international goods and services. There are only two possible outcomes that can be generated by this situation.
The first is that globalization goes into reverse (so that trade becomes a declining share of the world economy, and trade grows at around 1.5 percent while the economy growth at around 6.5 percent). Reducing the role of international trade in the world economy would make the world economy less efficient. That means that people would have a lower standard of living than they could otherwise achieve.
Alternatively, the world could experience deflationary pressures. If the world economy is experiencing deflation, with prices falling at 2 percent every year, it would grow at around 1.5 percent per year in nominal terms. That could give a nominal trend rate of growth for exports of around 1.5 percent per year, in line with the growth in gold supply.
However, a world economy with repeated bouts of deflation is hardly healthy - as Japan in recent years or the US in the 1930s demonstrated. Deflation imposes a heavy burden on borrowers. That can serve as a disincentive to investment and entrepreneurship.
As if the lack of supply were not a big enough problem, we also have to recognize that gold is demanded for other reasons. Jewellery demand, even industrial demand for gold will absorb some supply.
These are not necessarily stable sources of demand. A good monsoon season in India could lead to an increase in income for Indian farmers, who chose to purchase gold jewellery, absorbing an increased proportion of the world's gold supply.
Under a gold standard, the money supply of America, the inflation rate of China or the growth of German trade could be affected by how much rain falls in Mumbai. This is hardly desirable for the modern world economy.
If gold is so unsuitable as a currency, how did the gold standard work in the past? The first point is that the gold standard in the late 19th and early 20th century did not in fact last very long. The US only adopted the gold standard in 1900, for instance, and the system collapsed under the strain of international conflict in 1914.
Second, the supply of gold under the gold standard benefited from new gold discoveries and (to some extent) more efficient mining techniques. This meant that gold supply could grow more rapidly than it can today, and mitigate the deflationary impacts. Even with this, the late 19th century still experienced some notable deflation episodes.
The fundamental fact is that gold supply today can not keep up with the growth in the world economy. Unless someone can successfully unlock the secrets of alchemy and find a way of turning base metal into gold, gold has no serious role as a currency.
The amount of money in circulation in an economy would only be able to increase if the amount of gold owned by the relevant central bank increased, and thus (so the argument goes) the value of money is preserved. So is there any validity to a gold standard as a currency benchmark? There is a critical problem with the idea of gold forming some kind of central role in the modern foreign exchange system: There is not enough of it.
More accurately, the supply of gold is not growing fast enough. A gold based currency system would condemn the world to global deflation. Gold would be an absolutely terrible reserve currency.
A reserve currency is demanded primarily to facilitate global trade. The more economies trade, the more reserve currency they will need to effect their transactions. Therefore the growth in the supply of a reserve currency needs to be approximately the same as the growth in global trade. This is the fatal flaw for those seeking a return to a gold standard.
Let us assume that globalization holds steady, with global trade averaging around 20 percent of the world's GDP. Under these circumstances, the value of global trade will rise in step with the rise in the value of global GDP. If the world economy has a trend nominal rate of growth of around 6 percent to 6.5 percent (perfectly realistic in the current climate), then the supply of reserve currency to the world economy needs in order to conduct international trade has to rise by around 6 percent to 6.5 percent.
The problem that the world faces is that the supply of gold is rising at around 1.5 percent per year, thus there is too little gold to facilitate the trade in international goods and services. There are only two possible outcomes that can be generated by this situation.
The first is that globalization goes into reverse (so that trade becomes a declining share of the world economy, and trade grows at around 1.5 percent while the economy growth at around 6.5 percent). Reducing the role of international trade in the world economy would make the world economy less efficient. That means that people would have a lower standard of living than they could otherwise achieve.
Alternatively, the world could experience deflationary pressures. If the world economy is experiencing deflation, with prices falling at 2 percent every year, it would grow at around 1.5 percent per year in nominal terms. That could give a nominal trend rate of growth for exports of around 1.5 percent per year, in line with the growth in gold supply.
However, a world economy with repeated bouts of deflation is hardly healthy - as Japan in recent years or the US in the 1930s demonstrated. Deflation imposes a heavy burden on borrowers. That can serve as a disincentive to investment and entrepreneurship.
As if the lack of supply were not a big enough problem, we also have to recognize that gold is demanded for other reasons. Jewellery demand, even industrial demand for gold will absorb some supply.
These are not necessarily stable sources of demand. A good monsoon season in India could lead to an increase in income for Indian farmers, who chose to purchase gold jewellery, absorbing an increased proportion of the world's gold supply.
Under a gold standard, the money supply of America, the inflation rate of China or the growth of German trade could be affected by how much rain falls in Mumbai. This is hardly desirable for the modern world economy.
If gold is so unsuitable as a currency, how did the gold standard work in the past? The first point is that the gold standard in the late 19th and early 20th century did not in fact last very long. The US only adopted the gold standard in 1900, for instance, and the system collapsed under the strain of international conflict in 1914.
Second, the supply of gold under the gold standard benefited from new gold discoveries and (to some extent) more efficient mining techniques. This meant that gold supply could grow more rapidly than it can today, and mitigate the deflationary impacts. Even with this, the late 19th century still experienced some notable deflation episodes.
The fundamental fact is that gold supply today can not keep up with the growth in the world economy. Unless someone can successfully unlock the secrets of alchemy and find a way of turning base metal into gold, gold has no serious role as a currency.
Foreign Exchange market Summary
The US dollar tumbled on optimism the global economy will recover soon, reducing the greenback as a safe haven. The Dow, Nasdaq and S& P 500 all reached new 2009 highs after existing home sales rose 7.2 percent in July, the fourth straight month indicating that homes are selling fast. Meanwhile, Federal Reserve Chairman Ben Bernanke said there is a good chance the overall economy could grow soon, but warned that unemployment in the United States would remain at high levels. Thus, recovery will come slowly. The markets fear that rising unemployment will dent consumer spending and America needs consumers to spend to help prop up the ailing economy.
The euro rallied after German services and French manufacturing unexpectedly jumped in August, the first time in a year, providing evidence the global recession is easing. Eurozone service sector and manufacturing activity also jumped. Positive data is benefiting the euro despite some worries about the impact of a potential economic slowdown in China.
The British pound stormed higher, benefiting from positive news elsewhere in the world. The sterling took a beating earlier this week after Bank of England minutes revealed some policymakers had wanted to increase quantitative easing as early as this month. The news raised worries that the British economy may take longer to recover.
The Japanese yen is trading lower on global recovery hopes. This optimism contrasts with Japan's economy. Bank of Japan board member Atsushi Mizuno recently said the recovery in the country's export sector could slow during the fall and that a sustained recovery would call for support from governments and central banks.
The euro rallied after German services and French manufacturing unexpectedly jumped in August, the first time in a year, providing evidence the global recession is easing. Eurozone service sector and manufacturing activity also jumped. Positive data is benefiting the euro despite some worries about the impact of a potential economic slowdown in China.
The British pound stormed higher, benefiting from positive news elsewhere in the world. The sterling took a beating earlier this week after Bank of England minutes revealed some policymakers had wanted to increase quantitative easing as early as this month. The news raised worries that the British economy may take longer to recover.
The Japanese yen is trading lower on global recovery hopes. This optimism contrasts with Japan's economy. Bank of Japan board member Atsushi Mizuno recently said the recovery in the country's export sector could slow during the fall and that a sustained recovery would call for support from governments and central banks.
Rupee falls by 32 paise in early trade
The Indian rupee today depreciated by 32 paise against the dollar in early trade on expectations of capital outflows from the stock markets following weak global cues and strong demand for the US currency from importers.At the Interbank Foreign Exchange (forex) market, the domestic currency fell by 32 paise to 48.56 a dollar. The rupee closed 14 paise lower at 48.24/25 against the US currency in the previous session.Dealers said hopes of more capital inflows by foreign funds as stock markets may open lower in line with other Asian bourses mainly put pressure on the rupee.Notable demand for the greenback from the importers and the US currency's gain against other major currencies also weighed on the rupee sentiments, they added.
China’s current-account surplus falls for first time in 5 years
The surplus in the broadest measure of trade shrank 32% to 130 billion, according to preliminary figures posted today on the Web site of the State Administration of Foreign Exchange, the nation’s top currency regulator. China’s capital and financial account, which tracks investment flows, showed a surplus of 33.1 billion, down 54% from last year.
A narrowing balance of payments surplus may ease pressure on the nation’s currency to gain. China has capped appreciation in the yuan for more than a year after allowing it to strengthen 21% since a peg against the dollar was scrapped in July 2005. A government report showed on Aug. 11 that overseas sales declined 23% in July, dropping for a ninth month.
The government has expanded the sources of capital Chinese companies can use to finance outbound investment after foreign exchange reserves topped 2 trillion in the second quarter.
Foreign direct investment into China slid for a 10th straight month, decreasing 36% in July from a year earlier, the commerce ministry said on Aug. 17.
The capital account surplus is likely to rebound because foreign investors will return to China as risk aversion in the global marketplace moderates, said Sherman Chan, an economist with Moody’s Economy.com in Sydney. The regulator will announce final first-half data between September and October.
A narrowing balance of payments surplus may ease pressure on the nation’s currency to gain. China has capped appreciation in the yuan for more than a year after allowing it to strengthen 21% since a peg against the dollar was scrapped in July 2005. A government report showed on Aug. 11 that overseas sales declined 23% in July, dropping for a ninth month.
The government has expanded the sources of capital Chinese companies can use to finance outbound investment after foreign exchange reserves topped 2 trillion in the second quarter.
Foreign direct investment into China slid for a 10th straight month, decreasing 36% in July from a year earlier, the commerce ministry said on Aug. 17.
The capital account surplus is likely to rebound because foreign investors will return to China as risk aversion in the global marketplace moderates, said Sherman Chan, an economist with Moody’s Economy.com in Sydney. The regulator will announce final first-half data between September and October.
Gono’s Zim Dollar Push: A Journey Into the Past
“Given the country’s proven resources of gold, platinum and diamonds, among several other minerals, a fully backed currency which can freely convert back to the real underlying assets at the instance of the currency holders wishes will be having the desirable character of being a legitimate store of value. In other words, the currency will have a stable value of time given the direct link to the volume of tangible assets from the real sector.”
But economists say Gono’s plan to bring back the unit without boosting output in all sectors of the economy will end in ignominy for the discredited central bank chief yet again after failing to institute economic reforms and slowing inflation.
They say Gono will only do more harm to the economy with his latest experiment.
Harare economist John Robertson said: “If we try to bring the Zim dollar back, it will lose value in a week. You need credibility in your currency which is not there.”
Another economist Daniel Ndlela says: “People lost confidence in the financial system and if you talk of the Zimbabwean dollar what comes to people’s minds is whether they are going to sleep in queues again.”
Ndlela expressed reservations on the plan to support the currency on the amount of resources available. He said this was not a wise one given the country’s depleted mineral reserves.
But economists say Gono’s plan to bring back the unit without boosting output in all sectors of the economy will end in ignominy for the discredited central bank chief yet again after failing to institute economic reforms and slowing inflation.
They say Gono will only do more harm to the economy with his latest experiment.
Harare economist John Robertson said: “If we try to bring the Zim dollar back, it will lose value in a week. You need credibility in your currency which is not there.”
Another economist Daniel Ndlela says: “People lost confidence in the financial system and if you talk of the Zimbabwean dollar what comes to people’s minds is whether they are going to sleep in queues again.”
Ndlela expressed reservations on the plan to support the currency on the amount of resources available. He said this was not a wise one given the country’s depleted mineral reserves.
London's G20 pre-meet is a test of progress
In the UK, much importance has been placed on the relative weakness of the pound and the hope that it will give Britain a competitive edge once growth returns to its export markets. As Stephen Lewis, economist at Monument Securities, says: "However significant a competitive advantage a weak exchange rate confers, exporters will be hard-pressed to make headway if the markets into which they are trying to sell are shrinking."
So the reliance on a global recovery, rather than country-specific, is clear.
Regulation of the financial services industry will be back on the table. This has proved a slow-burning issue, again not least because of the complexity involved in formulating a co-ordinated system which is relevant and applicable to all countries.
Mervyn King has emphasised that it is essential not to rush into some "half-baked" agreement that has not been thought through properly. Expect more debate, rather than answers. Much importance will be placed on the divisive and potentially explosive issue of bankers' pay and bonuses. While the G20 has already promised "tough new principles on pay and compensation", countries are divided on just how tough action should be.
So the reliance on a global recovery, rather than country-specific, is clear.
Regulation of the financial services industry will be back on the table. This has proved a slow-burning issue, again not least because of the complexity involved in formulating a co-ordinated system which is relevant and applicable to all countries.
Mervyn King has emphasised that it is essential not to rush into some "half-baked" agreement that has not been thought through properly. Expect more debate, rather than answers. Much importance will be placed on the divisive and potentially explosive issue of bankers' pay and bonuses. While the G20 has already promised "tough new principles on pay and compensation", countries are divided on just how tough action should be.
Likely Shape of Venezuela's Bolivar-Dollar Exchange Regime
This complicated system, if implemented, would satisfy the requirements of the Government of pretending not to have a formal devaluation of the exchange rate, while attempting to contain inflation by moving items that were being purchased at the swap rate, to a lower rate.But it fails to address the issue of the distortions in the economy and the transparency of the foreign exchange system. In fact, just establishing this new tax will not necessarily speed up the processes within CADIVI and if the Government continues to restrict foreign currency flows, importers will have to go to the auctions and/or continue to purchase foreign currency in the swap market.The auction of securities in the Caracas Stock Exchange, with or without a tax on top of the Bolívar price, will give the market more transparency in terms of how much comes to market daily and should lead to less volatility. However, we continue to believe that establishing a formal auction in which the Government supplies limited dollar denominated securities to the market entails some risks for the Government.While the Government acknowledges the legality and existence of the swap market, not all companies have embraced it for all their operations. There are a number of reasons for this.First of all, buying in the swap market implies taking a loss on the difference between the official and the parallel swap rate. This will not change with the new system, but the type of tax established may even make it attractive to participate in these auctions, as then the difference can be written off/explained. Second, a formal auction supplied by the Government would attract those companies that have been hesitant to participate actively in the swap market, except for their most basic and urgent needs, accumulating local currency over the last few years. Finally, if the size sold daily by the Government is too small, the purchase of the securities may be dominated by banks and brokers that have seats in the exchange, who will turn around and sell the securities in order to sell the the dollars in the swap market. Thus the auction could become a market for intermediaries unless the Government regulates it in some fashion.
Asian Shares Fall; Japan Erases Rise,China Mkt Drops
Hyundai Steel was up 4.0% after news it had hiked prices of its main steel products, and sold 12.85 million shares of Hyundai Motor to Hyundai Mobis.
In foreign exchange markets, the U.S. dollar was at Y92.63, from Y93.61 in New York on Friday, going below Y93.00 for the first time since July as exporters sold the dollar.
Hideki Amikura, deputy general manager at Nomura Trust and Banking, said the election result was "behind some of the yen-buying this morning, since the DPJ seems more tolerant of a stronger yen as the party is more focused on expanding domestic demand."
He also cited statements on the benefits of a strong yen from "the brain of the DPJ" - key party advisor Eisuke Sakakibara, who was a possible candidate for a government post. Sakakibara is a former top finance ministry currency bureaucrat, and was known as "Mr. Yen" for his ability to move the markets.
Although the landslide win was a watershed event, Brown Brothers Harriman said: "One cannot expect the Mandarins of the bureaucracy to simply roll over for the incoming government, so important drivers for the yen in the period ahead will likely be the generalized risk-appetite of global investors and the machinations around the fiscal half year end for Japanese companies."
In foreign exchange markets, the U.S. dollar was at Y92.63, from Y93.61 in New York on Friday, going below Y93.00 for the first time since July as exporters sold the dollar.
Hideki Amikura, deputy general manager at Nomura Trust and Banking, said the election result was "behind some of the yen-buying this morning, since the DPJ seems more tolerant of a stronger yen as the party is more focused on expanding domestic demand."
He also cited statements on the benefits of a strong yen from "the brain of the DPJ" - key party advisor Eisuke Sakakibara, who was a possible candidate for a government post. Sakakibara is a former top finance ministry currency bureaucrat, and was known as "Mr. Yen" for his ability to move the markets.
Although the landslide win was a watershed event, Brown Brothers Harriman said: "One cannot expect the Mandarins of the bureaucracy to simply roll over for the incoming government, so important drivers for the yen in the period ahead will likely be the generalized risk-appetite of global investors and the machinations around the fiscal half year end for Japanese companies."
Bank of America
Bank of America Corporation (NYSE: BAC), based in Charlotte, North Carolina is one of the largest financial services companies, largest bank by assets, largest commercial bank by deposits and is the second largest by market capitalization in the United States.The company holds 12.2% of all U.S. deposits.Also, Bank of America is the number one underwriter of global high yield debt, the third largest underwriter of global equity and the ninth largest adviser on global mergers and acquisitions.
Monday, August 31, 2009
Software Review: Gallant VPS for Metatrader 4
Innovation is the key to advancing technologies. Practical innovation is the engine of economic growth. Necessary innovation is the lifeblood of markets. If markets are not innovative, products and services become stale and lack attraction. In today’s world of trading platforms, innovation is lacking, but with the release of Gallant VPS for Metatrader 4, Gallant FX has stepped forward and provided the necessary innovation to jumpstart a new generation of products and services in the trading platform arena. Gallant FX has taken one of the more popular trading platforms on the market and improved it to such a degree that a new standard now guides those that will follow.
The Gallant VPS for Metatrader 4 is robust, efficient, and effective. The difference in this version of Metatrader from others on the market is how Gallant FX improved the “Expert Advisor” (EA) feature. The EA has been the developers’ doorway to innovation in trading platforms. This is still the case, but now, developers have new opportunities to create efficiencies in the software because Gallant FX has moved Metatrader 4 to a UNIX-based Virtual Private Server (VPS), which eliminates many dysfunctions inherent in a Windows-based operating environment. The UNIX environment and the VPS together provide new possibilities for module development that will enhance future versions of Metatrader as well as other trading platforms.
Security and reliability are also improved with Metatrader 4 because the VPS resides on the Rackspace Network. Rackspace, itself an innovator in the hosting arena, has partnered with Cisco, and nine other network providers, to put together a service that gives “100% Network Uptime Guarantee.” Because of the inter-operability methodology utilized, and the “Proactive Network Management,” Rackspace maximizes bandwidth through routing efficiency, enhancing end-user, real-time performance. And because Rackspace does not share its network with telecom services or Cable television, and all the fiber carriers must enter data centers at different points, security, along with reliability, is improved.
Product Overview
The EA feature of Metatrader 4 now allows for automated trading. A trader can now close out all positions at once, and with a grab and hold cursor movement, a trader can move all stops on a chart. This enhanced EA feature lifts this version to the top of the chart in terms of efficiency and effective trade management.
Sometimes more is less, but not in this case. Along with better trade management, trading strategy development is enhanced because the “Custom Indicators” feature gives the opportunity to create new and different technical indicators. Combine this with the already strong features of Metatrader 4, and you have a platform that really delivers.
Platform Features
Expert Advisors (EA) Automated Scripting
Market and pending orders
E-mail alerts
Supports various timeframes (from minutes up to months)
Provides a large variety of standard technical indicators and line studies
Multi-language program interface
Signals of systems and trading history
Real-time news from the financial markets
Printing charts and completed trading transaction statements
Pros
Over 100 FX brokerage firms offer this advanced software to their clients
Scriptwriters have more opportunity to advance the platform to higher levels
The VPS helps protect the intellectual property of the scriptwriters
End-users trade with more efficiency, effectiveness, and security
Reasonable price
The Gallant VPS for Metatrader 4 is robust, efficient, and effective. The difference in this version of Metatrader from others on the market is how Gallant FX improved the “Expert Advisor” (EA) feature. The EA has been the developers’ doorway to innovation in trading platforms. This is still the case, but now, developers have new opportunities to create efficiencies in the software because Gallant FX has moved Metatrader 4 to a UNIX-based Virtual Private Server (VPS), which eliminates many dysfunctions inherent in a Windows-based operating environment. The UNIX environment and the VPS together provide new possibilities for module development that will enhance future versions of Metatrader as well as other trading platforms.
Security and reliability are also improved with Metatrader 4 because the VPS resides on the Rackspace Network. Rackspace, itself an innovator in the hosting arena, has partnered with Cisco, and nine other network providers, to put together a service that gives “100% Network Uptime Guarantee.” Because of the inter-operability methodology utilized, and the “Proactive Network Management,” Rackspace maximizes bandwidth through routing efficiency, enhancing end-user, real-time performance. And because Rackspace does not share its network with telecom services or Cable television, and all the fiber carriers must enter data centers at different points, security, along with reliability, is improved.
Product Overview
The EA feature of Metatrader 4 now allows for automated trading. A trader can now close out all positions at once, and with a grab and hold cursor movement, a trader can move all stops on a chart. This enhanced EA feature lifts this version to the top of the chart in terms of efficiency and effective trade management.
Sometimes more is less, but not in this case. Along with better trade management, trading strategy development is enhanced because the “Custom Indicators” feature gives the opportunity to create new and different technical indicators. Combine this with the already strong features of Metatrader 4, and you have a platform that really delivers.
Platform Features
Expert Advisors (EA) Automated Scripting
Market and pending orders
E-mail alerts
Supports various timeframes (from minutes up to months)
Provides a large variety of standard technical indicators and line studies
Multi-language program interface
Signals of systems and trading history
Real-time news from the financial markets
Printing charts and completed trading transaction statements
Pros
Over 100 FX brokerage firms offer this advanced software to their clients
Scriptwriters have more opportunity to advance the platform to higher levels
The VPS helps protect the intellectual property of the scriptwriters
End-users trade with more efficiency, effectiveness, and security
Reasonable price
Daily Forex Technicals
The Greenback ended the past week mixed against major currencies trading in a range bound, lower against the Aussie, Kiwi and Yen but higher against Lonnie and Cable which was the weakest currency versus majors loosing 1.4% against the dollar, while Euro & Swiss franc was almost unchanged , falling 0.1% and 0.2% respectively. Crude Oil remained trading above $70 per barrel after reaching $75 earlier in the week, meanwhile U.S. stocks closed at its highest levels in 2009 with Standard and Poor’s 500 Index advancing 0.3% to 1,028.93. The Dow Jones Industrial Average added 0.4% to 9,544.20, and Nasdaq increased by 0.4% to 2,028.77.
Economic data released last week is giving more evidence of economic recovery. From the Euro Zone, Confidence rose in economic, consumer, services and industrial sectors. In Germany the biggest economy in the Euro Zone IFO business climate rose to 90.5, Gfk consumer confidence rose to 3.7. Meanwhile UK second quarter GDP was revised slightly upwards QoQ to shrink by 0.7%. Japanese unemployment rose more the expected to 5.7%. The better news came from the U.S. with second quarter GDP left unrevised at -1.0% where expectations were to contract further by 1.4%. Durable goods rose 4.9% in July which was much higher than expected, and new home sales rose to 433,000 in July.
This week is expected to be more exiting and probably a break out from the recent ranges could be seen. The main event risk for the US Dollar is on Wednesday, where the Fed’s last meeting minutes will be released. On Thursday the ISM non-manufacturing is expected to rise to 11 months high of 48.0 in Aug and Friday could be volatile with the release of the Non Farm Payrolls which is expected to have its smallest drop in a year.
Away from the US, we have two central banks meetings, the ECB and RBA. Both banks are expected to keep rates unchanged at 1% and 3%. From ECB focus will be on Trichet’s comments on recent economic data and ECB’s covered bond purchase program. RBA Focus will be on any affirmation on markets view that the easing cycle is already over and RBA could be the first to remove policy accommodations.
Economic data released last week is giving more evidence of economic recovery. From the Euro Zone, Confidence rose in economic, consumer, services and industrial sectors. In Germany the biggest economy in the Euro Zone IFO business climate rose to 90.5, Gfk consumer confidence rose to 3.7. Meanwhile UK second quarter GDP was revised slightly upwards QoQ to shrink by 0.7%. Japanese unemployment rose more the expected to 5.7%. The better news came from the U.S. with second quarter GDP left unrevised at -1.0% where expectations were to contract further by 1.4%. Durable goods rose 4.9% in July which was much higher than expected, and new home sales rose to 433,000 in July.
This week is expected to be more exiting and probably a break out from the recent ranges could be seen. The main event risk for the US Dollar is on Wednesday, where the Fed’s last meeting minutes will be released. On Thursday the ISM non-manufacturing is expected to rise to 11 months high of 48.0 in Aug and Friday could be volatile with the release of the Non Farm Payrolls which is expected to have its smallest drop in a year.
Away from the US, we have two central banks meetings, the ECB and RBA. Both banks are expected to keep rates unchanged at 1% and 3%. From ECB focus will be on Trichet’s comments on recent economic data and ECB’s covered bond purchase program. RBA Focus will be on any affirmation on markets view that the easing cycle is already over and RBA could be the first to remove policy accommodations.
Saturday, August 29, 2009
Your Trader “Training Wheels
As I mentioned yesterday, there are really only a handful of rules you need to learn so you can use charts in your Forex trading. Or in other words, start “technical trading.”
Why do you want to trade technically? Well, in my opinion, studying a currency’s fundamentals will only get you so far. Once you narrow down the 60 or so tradable currency pairs by evaluating their fundamentals, then you have to start looking at these currencies from a technical perspective.
In other words, you need to compare their charts to see emerging trends. Otherwise, you may never be able to narrow down the choices far enough to choose the absolute best currency pair to trade.
1. The trend’s direction is THE most important indicator out there.
As such, you want to follow the trend until it ends (with the simple-day moving average). Today, I want to introduce you to the second rule…
2. EVERY indicator that you use needs to be interpreted in light of that trend’s direction. This means you only ever enter a trade that’s going in the direction of the trend, and ignore counter signals altogether.
How to Use These Two Rules to Your Advantage
As I said yesterday, to use rule number 1, you should always follow a currency’s trend with the 50-day moving average.
So today, let’s look at how to interpret one other indicator in light of the trend’s direction (rule #2 from above).
Pay attention to the moving average’s direction/slope FIRST and only act on signals that are going in the favor of that trend (sell signals in a downtrend and buy signals in an uptrend).
Check out the chart below. I’ve added in the Slow Stochastics indicator to the chart so you can tell when it may be a better time to sell short (overbought signals) and when may be the best time to buy (oversold signals).
Sharks trade with Canucks adds fuel to Heatley fire
The Dany Heatley to San Jose Sharks speculation picked up steam in a hurry yesterday.
After Sharks general manager Doug Wilson dumped US$4.66-million in salary by trading defencemen Christian Erhoff and Brad Lukowich to the Vancouver Canucks for prospects Patrick White and Daniel Rahimi, he suggested the door was open for more trades.
"It also creates some flexibility in our team payroll for potential future transactions as the season progresses," Wilson said.
Heatley has been linked to the Sharks in trade talks all summer, but they could not take on his salary because they were too close to the salary cap of US$56.7-million.
After yesterday's trade, the Sharks have committed about US$51.5-million in cap space for next season. Heatley's hit of US$7.5-million would still put San Jose over the limit, but it would be easier to send the difference of US$2.3-million in salary back to Ottawa in a trade.
The Sharks are also believed to have an interest in forward Phil Kessel, who has yet to resign with the Boston Bruins after becoming a restricted free agent.
After the trade was announced, the Canucks then signed veteran free-agent defenceman Mathieu Schneider.
"We are pleased to be adding Christian and Brad to our defensive group," Canucks general manager Mike Gillis said in a statement. "Defence has been an area we wanted to add skill and depth to and this trade has strengthened our group considerably."
After Sharks general manager Doug Wilson dumped US$4.66-million in salary by trading defencemen Christian Erhoff and Brad Lukowich to the Vancouver Canucks for prospects Patrick White and Daniel Rahimi, he suggested the door was open for more trades.
"It also creates some flexibility in our team payroll for potential future transactions as the season progresses," Wilson said.
Heatley has been linked to the Sharks in trade talks all summer, but they could not take on his salary because they were too close to the salary cap of US$56.7-million.
After yesterday's trade, the Sharks have committed about US$51.5-million in cap space for next season. Heatley's hit of US$7.5-million would still put San Jose over the limit, but it would be easier to send the difference of US$2.3-million in salary back to Ottawa in a trade.
The Sharks are also believed to have an interest in forward Phil Kessel, who has yet to resign with the Boston Bruins after becoming a restricted free agent.
After the trade was announced, the Canucks then signed veteran free-agent defenceman Mathieu Schneider.
"We are pleased to be adding Christian and Brad to our defensive group," Canucks general manager Mike Gillis said in a statement. "Defence has been an area we wanted to add skill and depth to and this trade has strengthened our group considerably."
Can money buy you happiness?
A conversation I recently had with a brilliant professor of a certain business school gave me an impression that he believed money cannot buy happiness.
Economists have always argued on these lines. But there seems more to happiness than what the classical economists argue. It is called consuming memories. What is it?
Two professors in the US coined the term “conceptual consumption” to refer to the fact that we buy concepts, not just the physical goods.
Take the new car that was launched last week. You may have bought it as a mode of transport. Or, perhaps, more as a status symbol — a concept. It is the same reason why people buy a Rolex and not just another cheap watch.Enduring happiness
Economists may be right about these physical objects not getting us enduring happiness. After a while, even the designer car that you bought becomes another piece of steel transporting you across the city.
But that cannot be said of consuming memories. Suppose you take your friend out for an exotic lunch or treat your spouse to a memorable evening. The memory lingers on, for two reasons.
One, you can talk about it when you meet your friend the next time. Or you can re-live the moments with your spouse. You cannot always do that with your physical objects — even your prized car.
And, two, physical objects can be compared. Experiences cannot be. If your neighbour buys a costlier vehicle, your car may not be a status symbol anymore. Your neighbour’s exotic vacation at Aruba, however, does not make your experience of having lunch with your friend or an evening with your spouse any less memorable.
Indeed, behavioural economists argue that they could be linkages between money and happiness.
Their research shows that we are happier when we donate to charity, spend on our friends or loved ones.
Our happiness is, however, short-lived when we splurge on physical objects for ourselves. Can we then say that money used for consuming memories buys us happiness?(The author is founder of Navera Consulting.)
Economists have always argued on these lines. But there seems more to happiness than what the classical economists argue. It is called consuming memories. What is it?
Two professors in the US coined the term “conceptual consumption” to refer to the fact that we buy concepts, not just the physical goods.
Take the new car that was launched last week. You may have bought it as a mode of transport. Or, perhaps, more as a status symbol — a concept. It is the same reason why people buy a Rolex and not just another cheap watch.Enduring happiness
Economists may be right about these physical objects not getting us enduring happiness. After a while, even the designer car that you bought becomes another piece of steel transporting you across the city.
But that cannot be said of consuming memories. Suppose you take your friend out for an exotic lunch or treat your spouse to a memorable evening. The memory lingers on, for two reasons.
One, you can talk about it when you meet your friend the next time. Or you can re-live the moments with your spouse. You cannot always do that with your physical objects — even your prized car.
And, two, physical objects can be compared. Experiences cannot be. If your neighbour buys a costlier vehicle, your car may not be a status symbol anymore. Your neighbour’s exotic vacation at Aruba, however, does not make your experience of having lunch with your friend or an evening with your spouse any less memorable.
Indeed, behavioural economists argue that they could be linkages between money and happiness.
Their research shows that we are happier when we donate to charity, spend on our friends or loved ones.
Our happiness is, however, short-lived when we splurge on physical objects for ourselves. Can we then say that money used for consuming memories buys us happiness?(The author is founder of Navera Consulting.)
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