World economy talk

[tidus1203]

Yeah cause BDO has a very wide spread. Online brokers like Oanda have 2.5 pip spread over AUD/USD. So the AUD at this point is still weaker than the USD.

But not for long I suppose. But if it ever breaks it I don't believe its sustainable so shorting the AUD/USD might be even make sense...

[uls]

I just checked BDO's foreign currency exchange rates.

AU$ is now over US$.

Shocking...

mahal pumunta Australia ngayon hehe

[tidus1203]

*uls

Lalo na sa Japan hahaha. Sa Canada naman dati we go to Birmingham (a small town near the border of Canada, near Washington State) and use Canadian $0.25 to play arcades in the US. Same size and shape lang kasi ang CAS $0.25 and USD $0.25...

Can't do that now hahaha!

[uls]

imagine kung taga States ka at pupunta ka Japan ngayon hehe

[badsekktor]

China sells more stuff than it buys

the US buys more stuff than it sells

the US wants rebalancing

the US wants China to let the yuan rise

China cannot just let the yuan rise

it will destroy its economy

Hmmm.... may similarities sa current situation ng pinas.... appreciating peso against dollar... which is bad for a country with a lot of OFWs earning dollars..

question lang, can the phil gov't intervene para hindi masyadong mag-appreciate ang peso against the dollar?

[tidus1203]

RP gov't WANTS A STRONG PESO. Yes the OFW's are the scapegoat. STrong peso reduced our foreign debt.

[badsekktor]

RP gov't WANTS A STRONG PESO. Yes the OFW's are the scapegoat. STrong peso reduced our foreign debt.

does that mean that our government is really paying our debt? all the while eh akala ko kinukurakot lang nila ang majority ng taxes...

[uls]

Hmmm.... may similarities sa current situation ng pinas.... appreciating peso against dollar... which is bad for a country with a lot of OFWs earning dollars..

question lang, can the phil gov't intervene para hindi masyadong mag-appreciate ang peso against the dollar?

actually, like other Asian central banks, the Bangko Sentral was reported to have been intervening by buying dollars to prevent the peso from rising too much

[Monseratto]

Mura ngayon bumili sa Amazon...hehehe.

http://finance.yahoo.com/news/Dollar...&asset=&ccode=

Dollar hits fresh 15-year-low against yen
Shino Yuasa, Associated Press Writer,
On Thursday October 14, 2010, 6:36 am EDT

TOKYO (AP) -- The dollar fell to a fresh 15-year-low against the yen in Tokyo on Thursday amid growing speculation that the U.S. Federal Reserve will ease monetary policy next month.

The U.S. currency was quoted at 81.07 yen briefly in late Thursday trading in Tokyo and was trading around 81.10 yen around 7:30 p.m. (1030 GMT; 6:30 a.m. EST).

Dollar-selling accelerated in Asia following Singapore's surprise move to widen the trading band of the Singapore dollar. The island nation's central bank, known as the Monetary Authority of Singapore, said Thursday that it will continue with a "modest and gradual" appreciation of the Singapore dollar.

The dollar's continuing decline against the yen -- nearing a post-World War II low of 79.75 yen set in 1995 -- led the Bank of Japan to act last month to stem the yen's rise by buying dollars -- it's first intervention in the currency market in six years.

The Japanese central bank has also said it will, like the U.S. Federal Reserve, buy government bonds and other assets to lower Japanese interest rates, another way to lower the yen's value.

Prime Minister Naoto Kan told reporters later Thursday that "big currency fluctuations are not desirable," adding that "We'll take a decisive step when we have to."

The dollar has been under intense pressure as investors bet that the Fed will enact a bond-buying program in early November. Buying bonds would drive interest rates and yields even lower, and tends to encourage dollar-selling.

Japan's finance minister has repeatedly warned Tokyo would take action to stem a rise in the yen. A strong yen hurts Japanese exporters like Toyota Motor Corp. and Sony Corp. as it cuts the value of their repatriated profits.

Yunosuke Ikeda, senior currency strategist at Nomura Securities Co. Ltd., said the dollar's slide may stall due to lingering concern over Japan's dollar-buying interventions.

"We may see small-scale interventions" to prop up the dollar and weaken the yen, Ikeda said. "But overall, the dollar remains under pressure due to expectations of Fed action."

Japan's Sept. 15 move to intervene in the currency market worked initially, weakening the yen, but the impact was short-lived. Figures show that the central bank spent 2.12 trillion yen ($26.1 billion) on currency intervention in the month through Sept. 28.

Associated Press writer Mari Yamaguchi in Tokyo contributed to this report.

[Monseratto]

GOLD

http://www.youtube.com/watch?v=iXm8bmeL82I

[uls]

some posts back, i said the foreclosure crisis is gonna cost the banks

i guess the market realized it na

[uls]

a lot mortgages contained in residential mortgage backed securities (RMBS) created in 2005-2007 are really, really bad

but that's nothing new

we know that already

that's why they're called toxic assets

but now, it's emerging that FRAUD was committed somewhere in the process of mortgage origination, pooling of mortgages, creation of RMBS, and selling of RMBS to investors

the creators of the RMBS (the TBTF banks) could get sued

RMBS investors could also demand the banks buy back the securities

imagine what will happen if the banks put the toxic assets back on their balance sheets

can you say WRITEDOWN?

this is gonna be big

[ame="http://www.youtube.com/watch?v=1j2esw2B8TI"]YouTube - How Wall Street Shafted Main Street[/ame]

[uls]

so what happened last night?

everyone waited for Bernanke's speech at 8:15 last night (our time)

his speech: http://www.federalreserve.gov/newsev...e20101015a.htm

basically, he said unemployment is too high and inflation is too low so there has to be further easing

market reaction was instant

the dollar fell against major rivals

AUD/USD hit parity


EUR/USD went over 1.41


USD/JPY fell below 81


but the dollar looked totally oversold and reversed direction

[tidus1203]

Yeah saw that AUD/USD at 1.00, ang bilis tap;os bagsak agad...

[tidus1203]

SACRAMENTO, Calif. (AP)—NBA player Kevin Martin(notes) has defaulted on mortgage payments on a house in California.
The Sacramento Bee reports that Martin owes about $44,000 in late payments and received a notice of default—the first step in a possible foreclosure. He bought the 5,000-square-foot home in Rocklin for $1.9 million in July 2007.

His attorney says Martin has no intention of walking away from what he owes but is in a legal dispute with the lender as he pursues a short sale on the property.
The home is currently listed for $1.1 million. A short sale means if someone buys the home at that price, the lender could take a loss.

http://sports.yahoo.com/nba/news;_yl...player-default


From $1.9M naging $1.1M na lang? 50% haircut...

[silverrain]

does that mean that our government is really paying our debt? all the while eh akala ko kinukurakot lang nila ang majority ng taxes...

actually 70% of our 2011 budget hike will go to debt servicing.

it was estimated in 2009 that almost 58.7% of our GDP goes to debt servicing.

[uls]

Phil. govt 2011 budget

P1.645-Trillion Budget OK'd
http://www.mb.com.ph/articles/282554...ion-budget-okd

debt servicing

NG Debt Payments to Reach P794 B in 2011
http://www.mb.com.ph/articles/281459...ch-p794-b-2011

[uls]

let's see how US treasury futures are doing

2 yr


5 yr


10 yr


30 yr


long duration treasuries were dumped last week

[uls]

David Rosenberg (http://www.gluskinsheff.com/)

the Fed's intent --> to drive up stock prices

The Fed’s intent is not to create consumer inflation, but rather asset inflation — primarily in the equity market. By pulling longer-term bond yields lower, the Fed hopes that this will alter how investors value equities relative to the fixed-income market. Moreover, the Fed will be actively pushing up the value of bonds that exist in investor portfolios, and as such the intent is to induce these investors to rebalance their asset mix towards equities in order to maintain their current allocation. The Fed is also trying to incentivize fund flows into the equity market. This in turn would theoretically boost household wealth and as such make consumers, who now feel richer, to go out and spend more. So the theory goes — we shall see how it works in practice.

the Fed's lowering of borrowing cost will encourage businesses to expand and hire people

The Fed’s intent is also to lower both the debt and equity cost of capital so that companies will, at the margin, compare that to expected returns on newly invested capital and begin to spend more on new plant and equipment. The hope here is that the investment spending multiplier will kick in and that stepped-up job creation would occur in tandem with the renewed capex growth.

in theory

[uls]

China rate hike

risk off

USDX