Tag Archives: Mario Monti

­­Our Two Cents – Week of 1/16/12

While we saw Tom Brady lead the New England Patriots to an outstanding playoff victory, we watched world leaders attempt to continue restoring economic confidence through consumer spending, market performance and fiscal activism.

In the U.S., economic optimism continues to rise as America displays more signs of employment and consumer confidence. The National Retail Federation has predicted that U.S. retail rates will growth 3.4 percent to $2.53 trillion in 2012. NRF President Matthew Shay said Americans should be confident about consumer spending—“Our 2012 forecast is a vote of confidence in the retail industry and our ability to succeed even in a challenging economy. Over the last 18 months, retailers have been on the forefront of the economic recovery—creating jobs, encouraging consumer spending, and investing in America.” Additionally, U.S. retail Forex capital grew by $3 million in November 2011. Though the growth is surprisingly smaller than October, which grew by 30 million, experts believe lower volatility and the year-end slowdown might have contributed to the diminished growth.

Throughout the world, last week began with booming markets. The Italian market increased more than 2 percent, and France’s CAC-40 Index posted a bump of a little more than 1 percent. Even one of the weakest world markets—the Shanghai Composite—jumped more than 2 percent. Unfortunately for Europe, market confidence reversed by week’s end. Ratings services Standard & Poor’s downgraded credit ratings of nine countries—including Italy and France—as political and financial leaders continue to devise solutions to the euro crisis. The Jan. 13 downgrade resulted from the December warning that S&P might decrease credit ratings of 17 nations because politicians had been moving too slowly with reforms for the crisis. As a result of the news, European leaders have vowed to focus on “progress” to restore economic growth. Italian Prime Minister Mario Monti and European Council President Herman Van Rompuy met in Rome Jan. 16 to discuss economic restoration. Monti said S&P applauded Italy’s fiscal acts, and Van Rompuy said he believed leaders should refocus their aims by establishing “sustained, committed” efforts. Southeast from Italy in Greece, officials and residents discussed a possible return to the drachma if the country can’t save its membership in the euro zone. According to polls, nearly 80 percent of Greeks say they want to stick with the euro and avoid reinstituting the country’s former currency. Prime Minister Lucas Papademos has vowed to do whatever it takes to keep his nation in the euro zone.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

Our Two Cents – Week of 12/27/11

As the world slipped into holiday celebrations and vacations, news about U.S. consumer spending and the euro zone continued to move faster than Santa Claus could shimmy down the chimney.

Days before Christmas, the Italian government focused on reviving economic growth after passing Prime Minister Mario Monti’s enormous austerity package. Monti said the package, which included hefty tax hikes and deep budget cuts, was essential to restoring international market confidence in the boot-shaped country.

Economic growth also took center stage thousands of miles across the Atlantic and below the equator in South America. Known for samba dancing and excellence in soccer, Brazil now has a new accolade to crow—the world’s sixth-largest economy. The country overtook Britain’s No. 6 spot after it downgraded to seventh place because of the 2008 banking crash and current recession. Brazil, which is the largest country in South America, has boomed on the backs of exports to China and the Far East.

Signs of growth, however, haven’t prevailed in some of Europe’s wealthiest nations. Economists say the Netherlands has now been hit by the euro zone crisis, falling into recession and making budget cuts similar to its neighbors. The Netherlands has been one of the most vibrant economies in the West because of its low unemployment, high savings rates and strong export bases. East of the Netherlands, Poland has been cast in the fiscal shadows, but boasting strengths such as $30 billion International Monetary Fund flexible credit line to weather the storm. As nations seek to squelch the euro zone crisis, and as readers maintain pace with headlines, misconceptions about the crisis can rise, including the notion that countries will go broke when yields rise about 7 percent and Italy is flat-out destitute.

In the U.S., green wasn’t used to just describe Christmas trees. Consumer confidence soared almost 10 points to 64.5 (up from 55.2 in November) and registered the highest level in eight months. Christmas Day online spending spiked 16.4 percent, while mobile sales increased 173 percent. There may be one final present this holiday season—numbers pointing toward record-breaking sales. While Americans shopped, housing figures rose, adding more optimism in the economy and hinting at reduced chances of a double-dipping recession. For hedge funds, December saw leveled redemption rates. According to the GlobeOp Forward Redemption Indicator, hedge fund investors sought to pull 4.58 percent of industry assets in December, compared to 4.59 percent last year. Experts say the month-on-month increase is within normal range of seasonal patterns.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

News broke Sunday night reporting the death of North Korea’s enigmatic leader, Kim Jong Il, followed swiftly by debate about the impact his successor Kim Jong Un will have on the country’s economy and society – as well as the market’s reaction to his father’s death.

Meanwhile Europe continued to dominate world headlines as it devises next steps after proposing a treaty last week designed to strength fiscal discipline for the European Union. In the United States, the economy continues showing signs of improvement as it eases some minds heading into the highly anticipated holiday week.

In Europe, Italian Prime Minister Mario Monti won a confidence vote from officials to expedite its 30-billion-euro budget crafted to restore the country’s economic confidence and revive its stagnant growth. The passage comes after a week of strikes from Italy’s three biggest labor unions because they say Monti’s package will hurt workers, pensions and the country itself. After passing the House, the measure now moves to the Senate where it’s expected to be actioned by Christmas. While Italy seeks to improve its economy, Poland has been recognized for its robust economy. Experts believe that Poland may have the last healthy economy in Europe as the country’s capital Warsaw received revitalization and the country overall experienced economic growth and increased foreign investments. The question, though, is Poland going to remain as strong as it is now? Because many of its neighbors are suffering in the euro zone, residual effects could spill over the borders to Poland—especially because the country’s main stock index is down 24 percent since April. Unfortunately, some other European countries aren’t in as great shape as Poland. France could see a downgrade of its triple-A rating by Standard & Poor’s. French officials say the speculated credit lowering would be “cataclysmic” to its economy. Germany is still trying to lead through the crisis, opposing euro bonds and lifting bailout cap. In Greece, the nation has abandoned the euro and returned to its drachma currency, and in Britain, Prime Minister David Cameron faced hecklers about vetoing the proposed European Union treaty.

There was good news in the United States last week. Retail sales rose for the sixth straight month, increasing 0.2 percent in November and showing signs that the U.S. economy is growing. Consumer prices also remained steady as the consumer price index went unchanged last month in November. Jobless claims dropped to 366,000, marking a three-year low and signal some recovery to the job market. In the hedge fund world, legendary hedge funder Julian Robertson of Tiger Management Co. is explaining why so many hedge funds are now cropping up. He says the hedge funds business is becoming tougher because more hedge funds are being created as they’re the best way to pay the experienced Wall Street guys.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

While turkey and gravy were on our minds last week, we didn’t forget about helpings of headlines that included holiday shopping, European finances and the NBA lockout. Here’s our feast of news for the week.

Black Friday’s numbers were certainly in the black. The day-after-Thanksgiving shopping extravaganza, which kicks off the holiday season, bagged a record 226 million shoppers who visited stores and websites this past weekend. According to the National Retail Federation, the number of shoppers increased from 212 million last year, and the average holiday shopper spent nearly $399, up 9.1 percent from about $365 last year. Total spending for the weekend generated an estimated $52.4 billion. That’s some good news for the U.S. economy as Americans are still spending in an economy that’s struggling to produce jobs. Across the Atlantic, the European economic crisis is still escalating. President Barack Obama is meeting with top European Union leaders to discuss how the U.S. can aid and help prevent global economic backlashes. According to Moody’s Investor Service, “all of Europe’s sovereign ratings are being threatened by the ‘rapid escalation’ of the crisis,” and the Organization for Economic Cooperation and Development is warning that the region could face further economic despairs. As the crisis engulfs other European nations, Germany refuses to bailout her other nations because it has been the go-to sibling for financial assistance. South of Germany, Italy’s newly installed Prime Minister Mario Monti is busy at work reviewing the country’s finances as he tries to steer Italy to positive financial waters by preparing new budget measures. In the hedge fund world, the GlobeOp Forward Redemption Indicator for November measured 3.44 percent, up from 2.51 percent in October. Experts forecast redemption requests will increase as year-end approaches. Rounding out this week’s news is the NBA lockout. Some lawyers representing the players and owners have charged more $1,000 per hour for services. Of course, fans, local restaurants and vendors have also faced the brunt of revenue losses from the lockout, but good news is that basketball—and hopefully some in-the-black revenues—is expected to tip off Christmas Day.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

Italian reforms, British backlash, German refusal and French strength made headlines last week. We hedged our bets on the best news in the currency market, and here’s how we made out.

All eyes were on Europe again this past week as Italy’s premier-designate Mario Monti stepped into the spotlight to help right Italy’s fiscal flounders. Monti faced a monumental task of galvanizing the country’s electorate and politicians to accept crucial reforms that would stop Italy’s sinking economy. This sparked some fears for economists because Italy’s economy is the eighth largest in the world and if not rightly handled could cause global reverberations. While Monti pushed reforms, former Prime Minister Silvio Berlusconi hit the recording studio. The once-battled politician is releasing a CD of love songs, where he croons with Mariano Apicella, a Neapolitan ballad singer he has collaborated with for previous albums. In England, Britain saw rising unemployment at 8.3 percent for September, but that didn’t stop Germany from blasting the U.K. to start helping the euro zone. Volker Kauder, parliamentary leader of the Christian Democratic Union and a senior member of Chancellor Angela Merkel’s party, blasted the British government, saying that “Britain also carries responsibility for making Europe a success. Only being after their own benefit and refusing to contribute is not the message we’re letting the British get away with.” Germany said it wasn’t planning to pay for the bulk of spending from other countries because it wants a unified continent. However, more core European nations were starting to feel the heat of the euro zone as AAA nations such as France were under pressure for their financial strength—a characteristic that’s no longer taken for granted. France’s cost of borrowing increased more than a half percentage point, and Austria’s spread between its 10-year bonds and benchmark German Bunds hit euro-era highs. Dutch and Finnish spreads have also seen their highest spreads since 2009, generating thoughts about the direction of a new Europe.

In the U.S., some good news about jobs. The number of unemployment benefits fell last week to its lowest level since early April, showing signs that hiring may be rebounding. The Occupy movements in cities such as Los Angeles, Boston and Las Vegas saw for the most part peaceful protests last week, but throngs of demonstrators in New York City took to the New York Stock Exchange and subways to raise concerns about corporate excess. In the markets themselves, hedge funds posted gains of 2.04 percent in October, marking some optimism after two difficult months. We conclude with a look at spending for Black Friday as shoppers are expected to gobble up purchases Nov. 25. According to the National Retail Federation, the average American spent $365.34 on Black Friday in 2010 with overall sales calculating $45 billion.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

Mamma mia! What a week it’s been in the currency markets. Let’s get right to it.

Italy dominated much of the ink last week as its prime minister announced his resignation because of the country’s debt crisis. Prime Minister Silvio Berlusconi stepped down Nov. 12 after Italy’s government passed crucial economic reforms demanded by the European Union. He was replaced by economist Mario Monti, who’s serving as premier-designate. Aside from Berlusconi facing scrutiny for scandals and failures during his service, Italy is in fiscal turmoil because the country’s debt is larger than the combined economies of Portugal, Ireland and Greece. Not to mention its bonds are shattering the 7-percent level, worrying financial officials as the world’s eighth largest economy could potentially spawn an unmanageable economic situation. There was some good news for Italy Nov. 14 when it sold some short-dated bonds via a sale that had been viewed as “a key test of demand for Italian debt.”

In Greece, the country named former European Central Bank Vice President Lucas Papademos as its next prime minister, hoping his experiences can help right Greece’s economic ship. Despite the turnover of Italy and Greece, nearly 80 percent of Germans believe both the euro will survive and Chancellor Angela Merkel is handling the economic crisis well.

In the U.S., hedge fund experts are already betting that 2012 will see more investors and shopping around for investments. According to the 2012 Preqin Hedge Fund Investor Review, 10 percent of investors plan to invest only with new managers in the new year while nearly 50 percent intend to seek new relationships. Unfortunately for U.S. retail foreign exchange traders, some new rules and strict enforcements are causing some trading restrictions. According to a LeapRate report, currency traders have shrunken to their lowest levels in years because new regulations and legislation such as the Dodd-Frank act that have limited trading and the amount of leverage brokerages can offer individuals. On the jobs front, September saw the most job openings in three years as employers advertised more positions during the month. Many experts are hoping that’s a sign companies may increase hiring. The U.S. Labor Department said businesses and governments posted 3.35 million job openings—a 7-percent increase from August and the most since August 2008. Some more optimism for U.S. jobs last week included the number of jobless claims dropping to 390,000—well below the 400,000 mark that analysts expected. Additionally, the U.S. trade balance deficit reported below expectations, hitting 43.1 billion—also well below the expected 46.1 billion. To finish positively, and celebrating the recent New York City marathon, successful long-term investors are being compared marathoners because “they must be well prepared, resilient, disciplined and focused” to go the distance.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.