Stress-testing Europe's banks won't stave off a deflationary vortex
Euroland's authorities are inflicting a triple shock of fiscal, monetary, and currency tightening on a broken economy. They are doing so in a region where industrial output is still 14pc below its peak, where growth barely scraped above zero over the winter "recovery", and where youth unemployment is at 40pc in Spain, 35pc in Slovakia, 29pc in Italy, and 26pc in Ireland.
They seem unaware that China is slowing and the US is tipping into a second leg of the Long Slump. Last week's collapse in America's ECRI leading indicator to -9.8 marks the end of the V-shaped rebound. If this means what it normally means - recession within three months - Europe must take immediate action to prevent being drawn into a deflationary vortex. Spiralling public debt precludes further Keynesian spending, so this must come from central bank stimulus. Tight fiscal policy offset by ultra-loose money is the only option for Europe, the US, and Japan. http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7897304/Stress-testing-Europes-banks-wont-stave-off-a-deflationary-vortex.html
Financial speculators have come under renewed fire from anti-poverty campaigners for their bets on food prices, blamed for raising the costs of goods such as coffee and chocolate and threatening the livelihoods of farmers in developing countries.
The World Development Movement (WDM) will issue a damning report today on the growing role of hedge funds and banks in the commodities markets in recent years, during which time cocoa prices have more than doubled, energy prices have soared and coffee has fluctuated dramatically.
The charity's demands for the British financial watchdog to follow the US in cracking down on such speculation comes against a backdrop of cocoa prices jumping to a 33-year high as it emerged that a London hedge fund had snapped up a large part of the world's stock of beans. On Friday, traders say, Armajaro took delivery of 240,100 tonnes of cocoa the biggest from London's Liffe exchange in 14 years and equal to about 7% of annual global production, according to the Financial Times. http://www.guardian.co.uk/business/2010/jul/19/speculators-commodities-food-price-rises
I could see no reason other than trader's fears of missing out on rising prices once some momentum got going, and then it indeed stalled out, it had no legs and slowly drifted down. CL is something I am going to be watching every pre-market for usable moves.
Traders will face new rules aimed at making it easier for regulators to prove manipulation in markets for commodities such as oil, wheat and natural gas under the financial overhaul awaiting President Barack Obamas signature.
The legislation also targets any activity that shows a reckless disregard for orderly trading in the closing period, during which the days settlement prices are determined. The provision targets a practice known as smashing or banging the close, where traders attempt to bully the days settlement price by buying or selling large volumes just before the close.
I should have continued watching cocoa for a major short op, today in london now down 4.5 % and US 6%, so much for cornering the market who ever it was!
Interesting how this Yen topic heading evolved! Since the early 90's I have observed the markets and all kinds of extremely strong opinions about them, reminiscent of some of what I have read on this thread. What I have seen is that the market tends to behave in ways that make the largest possible number of people look foolish You must have decisive opinions, but recognize that you are dealing with continually shifting energies and moods, sentiment can shift in a minute and there are only PROBABILITIES, not certainties. I have also observed that some of the worst traders are former lawyers, who have been trained their whole lives to argue, argue, and insist on being right, even while the market runs strongly in the other direction . . . One reason most traders lose money. It is much more about risk and money management than being right.
Wasn't sure where to put this article, but since it is about a commodity here it is. I follow other commodities as opportunities arise, and this is a very interesting development:
Mystery trader buys all Europe's cocoa Even Willy Wonka might struggle to use this much chocolate. Yesterday, somebody bought 241,000 tonnes of cocoa beans.
It is unclear which person, or group of traders, was behind the deal, but it was the largest single cocoa trade for 14 years.
The cocoa beans, which are sitting in warehouses either in The Netherlands, Hamburg, or closer to home in London, Liverpool or Humberside is equivalent to the entire supply of the commodity in Europe, and would fill more than five Titanics. They are worth 658 million.
Analysts said it was very unlikely that a chocolate company, such as Nestle or Kraft, or even their suppliers, would buy such a huge order in one go and that is was probable that one or a number of speculators, possibly hedge funds, had attempted to corner the market. By doing this, they would have control of the entire supply in Europe, forcing the price yet higher http://www.telegraph.co.uk/finance/markets/7895242/Mystery-trader-buys-all-Europes-cocoa.html
According to CME Group Inc., traders cut bets down to a 13 percent probability that the U.S. central bank will increase its benchmark rate by its December meeting, down from a 27 percent probability a month earlier. And some here now think, with good reason, that the probability is about zero in light of the latest deflationary indications.
@ stationdealer, thanks for your interesting and entertaining thoughts, looking forward to hearing more specifics regarding some of your short term targets if you find the time!
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ما وراء هبوط الدولار مع الذهب و من منهما يتمكن الارتداد؟
موعدنا الآن في غرفة شركة إكس أم لجلسة الأسواق
https://t.co/Y7tD0RxCS2
@XM_COM (10 months ago)
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How to improve your decision--makingh between Nasdaq100 and SPX by watching technicals in bond yields -Details in video description.
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Euroland's authorities are inflicting a triple shock of fiscal, monetary, and currency tightening on a broken economy. They are doing so in a region where industrial output is still 14pc below its peak, where growth barely scraped above zero over the winter "recovery", and where youth unemployment is at 40pc in Spain, 35pc in Slovakia, 29pc in Italy, and 26pc in Ireland.
They seem unaware that China is slowing and the US is tipping into a second leg of the Long Slump. Last week's collapse in America's ECRI leading indicator to -9.8 marks the end of the V-shaped rebound. If this means what it normally means - recession within three months - Europe must take immediate action to prevent being drawn into a deflationary vortex. Spiralling public debt precludes further Keynesian spending, so this must come from central bank stimulus. Tight fiscal policy offset by ultra-loose money is the only option for Europe, the US, and Japan.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7897304/Stress-testing-Europes-banks-wont-stave-off-a-deflationary-vortex.html
The World Development Movement (WDM) will issue a damning report today on the growing role of hedge funds and banks in the commodities markets in recent years, during which time cocoa prices have more than doubled, energy prices have soared and coffee has fluctuated dramatically.
The charity's demands for the British financial watchdog to follow the US in cracking down on such speculation comes against a backdrop of cocoa prices jumping to a 33-year high as it emerged that a London hedge fund had snapped up a large part of the world's stock of beans. On Friday, traders say, Armajaro took delivery of 240,100 tonnes of cocoa the biggest from London's Liffe exchange in 14 years and equal to about 7% of annual global production, according to the Financial Times.
http://www.guardian.co.uk/business/2010/jul/19/speculators-commodities-food-price-rises
The legislation also targets any activity that shows a reckless disregard for orderly trading in the closing period, during which the days settlement prices are determined. The provision targets a practice known as smashing or banging the close, where traders attempt to bully the days settlement price by buying or selling large volumes just before the close.
Its going to be very much like the standard for pornography, said Gary DeWaal, general counsel for Newedge USA LLC, the worlds largest futures broker. The CFTC is going to say, we know orderly when we see it. And thats going to be a bone of contention.
http://www.bloomberg.com/news/2010-07-19/commodity-manipulation-may-be-easier-to-prove-with-u-s-financial-overhaul.html
http://www.bloomberg.com/news/2010-07-19/germany-s-hypo-real-estate-is-said-to-fail-eu-stress-test-on-bank-capital.html
Mystery trader buys all Europe's cocoa
Even Willy Wonka might struggle to use this much chocolate. Yesterday, somebody bought 241,000 tonnes of cocoa beans.
It is unclear which person, or group of traders, was behind the deal, but it was the largest single cocoa trade for 14 years.
The cocoa beans, which are sitting in warehouses either in The Netherlands, Hamburg, or closer to home in London, Liverpool or Humberside is equivalent to the entire supply of the commodity in Europe, and would fill more than five Titanics. They are worth 658 million.
Analysts said it was very unlikely that a chocolate company, such as Nestle or Kraft, or even their suppliers, would buy such a huge order in one go and that is was probable that one or a number of speculators, possibly hedge funds, had attempted to corner the market. By doing this, they would have control of the entire supply in Europe, forcing the price yet higher
http://www.telegraph.co.uk/finance/markets/7895242/Mystery-trader-buys-all-Europes-cocoa.html