Posts Tagged ‘Tom Strignano’

Talk In The Street~ US Bond Auctions Fail!!

Since talk of new money-printing first surfaced a few weeks ago, 30-year bond yields have jumped sharply higher — from 3.46% to 4.32%. That’s a 25% surge in borrowing costs!  I would  Look to TBTs as a measure and buy them !  http://finance.yahoo.com/q?s=tbt

(Not saying that you should,  this is not any financial advice, speak to your financial adviser.But that’s what I am doing!)

It’s the biggest interest rate rise in a year — and it’s showing no signs of slowing. Yields surged yesterday after a lousy auction of 10-year Treasury Notes. Then they surged AGAIN today after the sale of $16 billion in 30-year Treasury bonds bombed.

Ironically, this is exactly what Bernanke said would NOT happen:

In fact, the Fed chief’s main excuse for printing $600 billion over the next eight months was that the money was needed to buy up bonds and LOWER long-term interest rates! It is not happening. All bets are off for Euro $$ weakness, but expect the market to be risk adverse and look to buy CHF against the majors. Gold (metals) needs to be bought on dips.

Good Trading!

The PIIGS Are Back and Dont Fly !!!

The problem with the PIIGS was never really resolved and is now taking center stage once again in the FOREX market. Lets be clear the ugly acronym stands for Portugal, Ireland, Italy, Greece and Spain. These countries face many of the same economic challenges as well as the ability to cause headaches in Brussels (and Berlin). Each of these countries have lost competitiveness since they have joined the Euro, and the problems financing they debts are become increasingly more apparent. The package that the EMU had put together had bought those countries a bit more time, buy have not fixed the underlying problems of under productivity and high labor costs. Ireland has created a bubble based on  exports and  low interest rates.  In the past the weaker PIIGS such as Italy, Spain, Portugal, Greece and Spain we able to devalue there currency as need to increase exports. Today they cannot and have to adhere to German and to a lesser extent French monetary standards (lets not forget France would devalue as well just not as often as Italy and the others.)

These countries are now faced with what I feel is an insurmountable task. They need to cut fiscal budgets and get exports increased.  A task they were used to doing by devaluing there respective currencies. In each of these countries there is a labor problem worse then in the USA. People are so used to being paid high wages for very little work!  It is definably an entitlement society, and a very hard habit to break. Just look at the last riots in France for instance when the government had to raise the Retirement age to 62 from 60. It was a war zone to say the least. The Germans do not share the same work ethic as the other PIIGs. They have a very high standard and are very proud people. I am not saying the others are not proud or are inferior by any means just that they are not used to the standard.

This whole concept in economics can be seen in the  European banking problems, the spread on the 10-year bonds of Portugal over German debt is out to 444 basis points. This is the widest this spread has been in nearly fifteen years and it is moving out as the Portuguese government hopes to sell as €1.25 billion ($1.74 billion) of debt this week. The “spread” for Irish bonds over that of Germany has also widened to a record: 550 basis points. This is interesting in light of the fact that the EC’s Economic and Monetary Affairs Commissioner, Mr. Olli Rehn, has said Ireland hasn’t asked for aid. The market does not care and at the moment it wishes only to punish Ireland and Portugal for sins of the past. This idea lends to another of mine, the only country that will be left standing is going to be the USA. It has one government, one currency and could, if need be self sustaining. This is why perhaps the dollar will once again be sought after. However they shall be much blood in the streets when all this trading and repositioning is over. On the Gold Front just buy dips its going to get much worse before better!!!

Talk In The Street 11-09-10

Euro Zone Debit Spreads

On the trading platform EBS (Electronic Brokering System) the euro initially fell to its lowest in more than a week against the dollar, to $1.3823 .

Traders were also talking about a double no touch option at 1.3800 and 1.4800. Ok.. Ok.. whats a Double No Touch Option?

Its a  type of exotic option that gives an investor an agreed upon payout if the price of the underlying asset (currency) does not reach or surpass one of two predetermined barrier levels. An investor using this type of option pays a premium to his or her broker and in turn receives the right to choose the position of the barriers, the time to expiration, and the payout to be received if the price fails to breach either barrier. With this type of option, the maximum possible loss is just the cost of setting up the option. The premiums for these types of options are large.

There was talk about the Stop-loss orders around $1.3950/60 also helped push it up further to the day’s high of $1.3973, up around 0.3 percent on the day EURO.    More stops are seen above 1.4015 level. However most traders agree that many other players were caught off guard with the Break of 1.4035 level in the Euro (we were not because we had a Trend Reactionary Number(TRN) slightly above.  In a side note the Euro actually turned up again on another TRN of 1.3834. I mention this as to not blow my own horn but to get you guys to pay attention to these numbers)  but the sentiment of the Euro Currency  has not changed, because the sovereign risks have not changed, in fact they are getting a bit worse. As long as yield spreads keep widening in the peripheral euro zone the Euro Currency will be put under pressure. I would expect the Euro to attempt to Break 1.40 30 a failure there  would turn the Euro Down to the 1.3650 level.

Talk In The Street~Euro Under Pressure Now?!

“Nowhere does history indulge in repetitions so
often or so uniformly as in Wall Street. When
you read contemporary accounts of booms or
panics the one thing that strikes you most
forcibly is how little either stock speculation or
stock speculators today differ from yesterday.
The game does not change and neither does
human nature.” Jesse Livermore

Yes  the market is flip flopping once again:

Concerns about Ireland’s ability to fund its budget caused the cost of protecting government debt against default in Ireland to rise, while the equivalent debt insurance for Spain also rose. This was another crack in the Euro Zone debt mug!  With the Fed’s decision to launch more QE out of the way, euro zone debt worries have reappeared on traders’ radars, while weak German industrial output data triggered more euro selling. The US Unemployment numbers  were better  then expected and that caused traders to feel that the Fed may not do another round of QE, and to focus on the Euros Inherent problems.

With the G20 meeting in meeting in Seoul later this week, I expect The Euro to estiblish a Trading range, until the the market becomes more clear.

Expected Range 1.3790   1.4165

Talk In The Street ~My Rant

THE BIG FED PONZI SCHEME!!

The FOMC decided this week that, with unemployment high and inflation very low,
further support to the economy is needed. With short-term interest rates already about as low as they can go, the FOMC agreed to deliver that support by purchasing additional longer term securities, as it did in 2008 and 2009. The FOMC intends to buy an additional $600 billion of longer-term Treasury securities by mid-2011
and will continue to reinvest repayments of principal on its holdings of securities, as it has been doing since August.
This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to
anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.

There in Lies the problem and the scam itself, You can not artificially make the equity market rise, with Fake money!! Lets not forget what QE is all about, the Fed Prints money we don t have and buys back its own bonds!!! And who pays the interest on the Treasuries, the American public, the very same people they want to make FEEL richer!! It reminds me of the 3 world countries that would add a zero on the end of there money so every one was a millionaire, yet the currency was worth shit!
Yes my friends this is the worst scenario that could happen from this Keynesian Creep Bernanke. We are at the precipice of the USD destruction and the end of American Influence around the world!! The second part of the Bernake Scam is to lure the Little guy into the Stock Market, remember it has only been the big institutional s in the market as of late. Most retail investors have (and rightfully so) been on the side lines. I implore any one that is going to join in on this false rally, to hold no long term positions, go in and out scalping if I may use a FOREX Term in the equity market. The reason is the institutions need the little guy to sell to, you will be left holding the bag of shit at the end, so be wary of Benanke bearing gifts!! Remember what Thomas Jefferson said he opposed the creation of a central bank as unconstitutional. He said: “ A private central bank issuing the public currency is a greater menace to the liberties of the people than a standing army”.
One More final Chilling quote:

“Whoever controls the volume of money in any country is
the master of all its legislation and commerce.”
President James A. Garfield

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