World economy talk

[uls]

SHORT THE BRITISH POUND!!!! Best shorted against the Japanese Yen for maximum effect When the government now admits quantitative easing (for the lay man its printing money out of thin air) all is doom for the currency. The US is heading to the same direction as well.

yep

like you said Tidus, UK is US Jr.

The Fed will eventually do what BOE will do

[uls]

Their biggest problem even during Paulson's time and now Geithner is VALUATION. Even the banks don't have a clue what those garbage is worth. I suspect they are worth nothing...

yep, that's why Paulson didnt use the TARP to buy assets... which was the original intention

Paulson instead used TARP to buy preferred shares in banks

Geithner is also facing the same problem

the toxic assets are either worth zero or pennies per dollar

the banks still won't face reality that their assets are now worth less than their liabilities --- which makes them INSOLVENT

the US govt is still trying to fix a liquidity problem

but the problem is not liquidity

it's insolvency

[tidus1203]

yep

like you said Tidus, UK is US Jr.

The Fed will eventually do what BOE will do

Naunahan pa ng anak yung ama!

Grabe its actually quite easy to trade the FX markets these days. Basta immune ka lang sa swings. Buy Yen lang tapos short the western currencies against it instant cash na agad The Western governments have no tools left but to do quantitative easing and monetizing their debt. Maybe good for the government bad for the population and the holders of their currencies and debt.

[uls]

haha

kayo ang dahilan kaya malakas parin ang yen kahit bagsak ang Japan economy

kayo mga currency trader

hehe

Tidus, GBP JPY Xrate 130

how far do you think it will go?

125? 120? 115?

[tidus1203]

115 is not unrealistic for the GBP/JPY. Umabot na ng 120 yan dati during the Yen panick buying late last year before it rallied back up but its just that a RALLY not a TREND REVERSAL. Pero favorite ko is yung EUR/JPY perfect balance of volatility and profitability kasi yung USD/JPY naman mabagal eh maliit lang kita.

Its not our fault. Its the fault of the carry traders who were shorting the Yen during the haydays we traders are just lurkers ready to strike on opportunities in the market. A trader should have no emotional attachment basta sunod lang sa market trends. Pag bumaligtad na dapat bumaligtad ka na din hindi ka pwede ma-in-love sa Yen or for any other currency for that matter. Pero for now ayos pa ang Yen and maybe for the rest of the year it will be the currency of choice to BUY and short western currencies against it especially the Sterling.

[uls]

115 is not unrealistic for the GBP/JPY. Umabot na ng 120 yan dati during the Yen panick buying late last year before it rallied back up but its just that a RALLY not a TREND REVERSAL. Pero favorite ko is yung EUR/JPY perfect balance of volatility and profitability kasi yung USD/JPY naman mabagal eh maliit lang kita.

Its not our fault. Its the fault of the carry traders who were shorting the Yen during the haydays we traders are just lurkers ready to strike on opportunities in the market. A trader should have no emotional attachment basta sunod lang sa market trends. Pag bumaligtad na dapat bumaligtad ka na din hindi ka pwede ma-in-love sa Yen or for any other currency for that matter. Pero for now ayos pa ang Yen and maybe for the rest of the year it will be the currency of choice to BUY and short western currencies against it especially the Sterling.

hehe joke only



risk aversion is the cause of yen strength

[tidus1203]

Natatwa na lang ako sa mga hardcore fundametalists and econmists na nagtataka bakit daw umaakyat yung Yen eh ang sagwa daw ng Japanese economy even worse than Europe for example. Kaya ako nga technician na ako eh. Basta charts na anng basis ko for trades cause I believe that PRICE DISCOUNTS EVERYTHING. Meaning lahat ng bagay na ala ng market, even insider trading is already factore in the price so PRICE lang talaga dapat tignan and by studying its movement.

[uls]

Economist:

[tidus1203]

Hahaha read my signature. The problem is most modern day economist try to quantify things which in reality is qualitative. Human emotions can't be calculated using math. The markets is just the balance of the two human emotions of greed and fear in play. The price charts is just a beautiful picture of human greed and human fear in motion. I reckon psychologists would make better traders than economists.

[uls]

haha

ya, it's a match to your sig

speaking of economists...

here's a quote from Greenspan back in 2005

“Innovation has brought about a multitude of new products, such as subprime loans and niche credit programs for immigrants. With these advances in technology, lenders have taken advantage of credit-scoring models and other techniques for efficiently extending credit to a broader spectrum of consumers. These improvements have led to rapid growth in subprime mortgage lending . . . fostering constructive innovation that is both responsive to market demand and beneficial to consumers.”

-Alan Greenspan (At the Federal Reserve System’s Fourth Annual Community Affairs Research Conference, Wash D.C. April 8, 2005)

[tidus1203]

Beneficial? Yeah right... More like extending money to people who can't pay it back and their only recourse is too hope that the asset in mortgage will continue to rise in value. We all know nothings goes up forever!

[uls]

nakakatawa ang article na ito:

http://www.ft.com/cms/s/0/ba857be6-f...nclick_check=1

China says it has no choice but to invest in US govt debt paper...
China to stick with US bonds
By Henny Sender in New York
Published: February 11 2009 23:33 | Last updated: February 11 2009 23:33

China will continue to buy US Treasury bonds even though it knows the dollar will depreciate because such investments remain its “only option” in a perilous world, a senior Chinese banking regulator said on Wednesday.

China has used the dollars it accumulates selling manufactured goods to US consumers to accumulate the world’s largest holding of Treasuries.

However, the increasing US budget deficit and its potential impact on the dollar have raised questions about the future Chinese appetite for US debt.

Luo Ping, a director-general at the China Banking Regulatory Commission, said after a speech in New York on Wednesday that China would continue to buy Treasuries in spite of its misgivings about US finances.

“Except for US Treasuries, what can you hold?” he asked. “Gold? You don’t hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the only option.”

Mr Luo, whose English tends toward the colloquial, added: “We hate you guys. Once you start issuing $1 trillion-$2 trillion [$1,000bn-$2,000bn] . . .we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.”

[uls]

China says it has no choice daw

http://www.ft.com/cms/s/0/ba857be6-f...nclick_check=1

China to stick with US bonds
By Henny Sender in New York
Published: February 11 2009 23:33 | Last updated: February 11 2009 23:33

China will continue to buy US Treasury bonds even though it knows the dollar will depreciate because such investments remain its “only option” in a perilous world, a senior Chinese banking regulator said on Wednesday.

China has used the dollars it accumulates selling manufactured goods to US consumers to accumulate the world’s largest holding of Treasuries.

However, the increasing US budget deficit and its potential impact on the dollar have raised questions about the future Chinese appetite for US debt.

Luo Ping, a director-general at the China Banking Regulatory Commission, said after a speech in New York on Wednesday that China would continue to buy Treasuries in spite of its misgivings about US finances.

“Except for US Treasuries, what can you hold?” he asked. “Gold? You don’t hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the only option.”

Mr Luo, whose English tends toward the colloquial, added: “We hate you guys. Once you start issuing $1 trillion-$2 trillion [$1,000bn-$2,000bn] . . .we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.”

haha

"we hate you guys"

[tidus1203]

Its good that we are not China. We can dump our US Dollars with pleasure! Pero I am quite intrigued as to why China can't hold Japanese JGB's or German Bunds?? Better hold debt of countries with a positive trade surplus... As for Gold mahirap na kasi supply is dwindling. And most Gold is being held tight their in Zurich there is no market for Gold for big players such as China.

[Gumusut_Amige]

Its good that we are not China. We can dump our US Dollars with pleasure! Pero I am quite intrigued as to why China can't hold Japanese JGB's or German Bunds?? Better hold debt of countries with a positive trade surplus... As for Gold mahirap na kasi supply is dwindling. And most Gold is being held tight their in Zurich there is no market for Gold for big players such as China.

just curious lang mga gurus... may query ako para dun sa mga malalaking gold jewellry stores.
pag tumaas ba ang world gold prices ang sistema ba ay sunod din sila? maybe at some point yung dating unsold inventory at xx price ay naging 2xx price at prevailing rate.
hhmmm.. although hindi naman tonelada siguro ang pinaguusapan pero maganda rin pala ang negosyong ito. please correct if im wrong.

[uls]

funny video but totoo ang sinasabi

http://www.thedailyshow.com/video/in...conomic-crisis

[tidus1203]

just curious lang mga gurus... may query ako para dun sa mga malalaking gold jewellry stores.
pag tumaas ba ang world gold prices ang sistema ba ay sunod din sila? maybe at some point yung dating unsold inventory at xx price ay naging 2xx price at prevailing rate.
hhmmm.. although hindi naman tonelada siguro ang pinaguusapan pero maganda rin pala ang negosyong ito. please correct if im wrong.

Just be careful when dealing with Gold daming fake dyan.

[uls]

the biggest US banks are INSOLVENT

Ailing Banks May Require More Aid to Keep Solvent
http://www.nytimes.com/2009/02/13/bu...1&ref=business

Some of the nation’s large banks, according to economists and other finance experts, are like dead men walking.

A sober assessment of the growing mountain of losses from bad bets, measured in today’s marketplace, would overwhelm the value of the banks’ assets, they say. The banks, in their view, are insolvent.

Roubini's scary estimate of banks' losses

Nouriel Roubini, a professor of economics at the Stern School of Business at New York University, has been both pessimistic and prescient about the gathering credit problems. In a new report, Mr. Roubini estimates that total losses on loans by American financial firms and the fall in the market value of the assets they hold will reach $3.6 trillion, up from his previous estimate of $2 trillion.

Of the total, he calculates that American banks face half that risk, or $1.8 trillion, with the rest borne by other financial institutions in the United States and abroad.

“The United States banking system is effectively insolvent,” Mr. Roubini said.

Roubini's estimate may be too high, more conservative estimates are still scary

Mr. Roubini’s numbers may be the highest, but many others share his rising sense of alarm. Simon Johnson, a former chief economist at the International Monetary Fund, estimates that the United States banks have a capital shortage of $500 billion. “In a more severe recession, it will take $1 trillion or so to properly capitalize the banks,” said Mr. Johnson, an economist at the Massachusetts Institute of Technology.

At the end of January, the I.M.F. raised its estimate of the potential losses from loans and other credit securities originated in the United States to $2.2 trillion, up from $1.4 trillion last October. Over the next two years, the I.M.F. estimated, United States and European banks would need at least $500 billion in new capital, a figure more conservative than those of many economists.

Last September, Paulson and Bernanke asked the US congress to pass the $700B bank bailout plan

it seemed like an enormous amount that time

doesnt seem so enormous now huh?

that's why they couldnt get the banks to lend even after injecting them with hundreds of billions of dollars

it's a drop in the bucket

Still, these numbers are all based on estimates of the value of complex mortgage-backed securities in a very uncertain economy. “At this moment, the liabilities they have far exceed their assets,” said Mr. Posen of the Peterson institute. “They are insolvent.”

The problem is the bad assets

The asset-backed securities the banks are holding are worth almost zero if based on current mark-to-market prices

the banks will only sell the assets at mark-to-fantasy prices

who the hell is gonna buy those assets at prices the banks want?

sino pa ba? the US govt using taxpayer money

but the taxpayers will absorb the losses

which is terribly unpopular politically

which is why they still can't go forward with the idea of buying the bad assets

“If they had to sell these securities today, the losses would be far beyond their capital at this point,” he said. “But if the prices of these assets will recover over the next year or so, if they don’t have to sell at distress prices, the banks could have a new lease on life by giving them some time.”

In the current crisis, experts warn, banks need to get rid of bad assets quickly. The Treasury’s public-private investment fund is an effort to do that.

But many economists and other finance experts say that the government may soon have to take on troubled assets itself to resolve the credit crisis. Then, they say, the government could wait for the economy to improve.

[Monseratto]

The only way the US got out of the Great Depression was WW2, the rest of the world's economy was devastated compared to the US. Hmmm...malapit na yung 2012.

[tidus1203]

Hmmm... I remember the conspiracy theory that WWII was the cure for the Great Depression. Or baka hindi na conspiracy theory yan?