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How Traders Are Playing Turbulent Japan Markets

Fri, 24 May 2013 12:48:14 -0400

As Japan finishes a tough week, options traders are loading on the bearish bets. Here's how traders are playing the Japan ETF.

Europe is in Recession Because ECB Wants It

Sat, 18 May 2013 15:57:17 -0400

I am traveling today, so only have time to complain about some themes I keep coming across when reading the press and speaking to people out in the real world. No links. 1. There is no reason at all for the ECB to look around for transmission mechanisms to boost the eurozone economy. Europe is [...]

View the full post at: Europe is in Recession Because ECB Wants It

Guillotine Set to Fall as French Economy Tanks

Thu, 16 May 2013 06:36:28 -0400

France's fall back into recession is likely to pile more pressure on the country's finance ministry, at a time when infighting has already led one senior politician to fuel rumors that Finance Minister Pierre Moscovici could be replaced.

New Range Emerges for Gold

Mon, 13 May 2013 08:41:08 -0400

As gold faces pressure, Rich Ilczyszyn reveals the new levels that will matter to the market.

ECB Rate Cut: How Did It Impact Euro ETFs? – ETF News And Commentary

Thu, 09 May 2013 08:00:12 -0400

The European Central Bank (ECB) took its first step in ten months to avoid falling into a deeper recession by cutting its benchmark interest rate. The interest rate, which was last changed in July 2012, has now been reduced by a quarter percentage point to a record low of 0.50%. Also, the marginal lending rate [...]

What You Absolutely Need to Know About Money (Part 6)

Thu, 09 May 2013 05:00:56 -0400

Our last chapter was about how the U.S. Federal Reserve was created and why. But it ended with an extreme example of how the universal central banking model works today.

Cyprus.

As another domino threatened the house of cards holding up European banks, more money had to be pumped into Cypriot banks so their doors didn't close and rapid contagion wouldn't implode all of Europe, and then the world.

Only this time was different.

The European Central Bank (ECB) reached straight into Cypriot bank depositors' pockets and stole about $6 billion from them. The "how" isn't important. It's a simple equation, as revealed in Part V. Governments are the backstoppers of central banks; that's where their authority ultimately comes from.

Why did the ECB steal depositors' money? So they could turn around and lend that and more to the insolvent banks to keep them alive. It's the latest twist in the old "extend and pretend" game.

The big question is, how did banks get so big and so dangerous in the first place?

Or, how did stodgy traditional banking morph into "casino banking" on a global scale?

Here's how it started...

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Eurozone Risks Don't Rule Out These Solid Income Opportunities

Thu, 09 May 2013 05:00:14 -0400

Money Morning's Chief Investment Strategist, Keith Fitz-Gerald has kept our readers on the bleeding edge of developing financial stories for nearly a decade.

Keith's broad and deep knowledge of the global financial markets - he splits his time between residences in the U.S. and Japan and sees far more than your U.S.-locked analyst - gives him a unique perspective on how the macroeconomic patterns affect the micro environment in which individual investors make their decisions.

He recently returned from Europe and was featured on Fox Business with Stuart Varney. We caught up with Keith just as he returned from the studio with our own questions about his trip, and asked him to share his insights with Money Morning readers.

Keith sat down with Private Briefing's Executive Editor Bill Patalon over the weekend.

Here's what Keith had to say...

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Sell in May, Go Away? Not This Year, Say Traders

Wed, 08 May 2013 11:19:52 -0400

Now that the Dow has cracked 15,000, the argument for "sell in May" may be getting weaker, say traders.

placebo’s doing their thing

Wed, 08 May 2013 11:04:21 -0400

As previously discussed, financial placebos like QE do cause market participants to alter behavior out of either a misunderstanding of the actual fundamentals, or in anticipation of reactions by others presumed to be misinformed. And while the effects of these activities get reversed, however sometimes the effects are more lasting. And there are also first [...]

Market Watch

Wed, 08 May 2013 08:49:53 -0400

Radical fixes needed to make the euro work Commentary: Warren Mosler has a plan but no takers By Darrell Delamaide May 8 (MarketWatch) — If youre ever tempted to think the euro zone has turned the corner and is on the right track, go have a chat with Warren Mosler and hell set you straight. [...]

European Monetary Policy

Fri, 03 May 2013 12:29:51 -0400

As the European economy continues to slump, the ECB has decided to lower interest rates. Could this put gold and silver in the spotlight again?

Jim Cramer: Shifting Winds Sweeping Over Street

Thu, 02 May 2013 18:00:35 -0400

Jim Cramer believes a major catalyst is changing in the market. If he's right, the implications are big.

DRAGHI SAYS ECB TECHNICALLY READY FOR NEGATIVE DEPOSIT RATES

Thu, 02 May 2013 11:36:56 -0400

If anyone can get a message to him, please tell him that, functionally, negative rates are just a tax on deposits that ultimately reduces spending/output/employment, much like the PSI did in Greece and whatever you want to call the ‘deposit confiscation tax’ in Cypress. > > (email exchange) > > This is a bit unexpected > *DRAGHI [...]

Mario Draghi Calls for Continued Austerity Measures

Thu, 02 May 2013 11:26:05 -0400

At a news conference Thursday, European Central Bank President Mario Draghi called on EU nations to continue austerity measures and warned against raising taxes, which he said were already very high.

Pro: Here is Gold's Line in the Sand

Wed, 01 May 2013 12:14:00 -0400

It's all up to Ben Bernanke and his merry men.

Wall Street Sees No End to QE Until At Least 2014

Tue, 30 Apr 2013 10:00:00 -0400

CNBC's latest Fed Survey of economists, strategists and money managers, shows they expect the Federal Reserve to keep its foot on the accelerator, as enthusiasm for budget cuts wanes.

Jim Cramer: Mid-Week Sell-Off Potential Ahead

Fri, 26 Apr 2013 18:00:40 -0400

Next week investors could find themselves somewhat battered and bruised. Cramer sees the potential for problems around Wednesday.

Germany’s Ifo Drops in April, Raising Odds of ECB Cut

Wed, 24 Apr 2013 08:54:13 -0400

And a rate cut only makes it worse, as per the interest income channels: Germany’s Ifo Drops in April, Raising Odds of ECB Cut April 24 (Bloomberg) — Germany’s Ifo index dropped in April, in a further sign that Europe’s largest economy is slowing. The business climate reading came in at 104.4 down from 106.7 [...]

Thaler’s Corner 04-22-2013 2013: And now?

Tue, 23 Apr 2013 10:51:13 -0400

Again, very well stated! Thaler’s Corner I must admit that I am at a loss for words these days. The analytical items at our disposal describe a situation so complex, given a myriad of contradictory influences, that I find it impossible to develop any sort of reasonable scenario. I have spent a lot of time [...]

Greece, Cyprus May Be Forced to Exit Euro: Citi

Fri, 19 Apr 2013 08:02:10 -0400

Major debt restructuring for both Cyprus and Greece will probably force the struggling euro zone countries to leave the single currency, according to Citigroup's latest economic outlook, which warned markets could again be hit by escalating fears.

Oil's Tumble Could Be Great for Europe

Fri, 19 Apr 2013 07:20:01 -0400

Lower inflation resulting from falling oil prices could allow European policymakers to adopt more expansionary monetary policies, Credit Suisse said in a new report.

EU Budget Fraud Could Top $6.5 Billion: Study

Thu, 18 Apr 2013 02:53:11 -0400

The European Union could be losing more than 5 billion euros ($6.5 billion) a year from its budget due to fraud, vastly greater than currently estimated, according to a damning new report by the U.K.'s upper house of parliament.

Pro-Austerity Study Attacked for 'Serious Errors'

Wed, 17 Apr 2013 02:31:39 -0400

Fiscal policies pursued by the U.S. and Europe could be called into question after a new study challenged previous research which said debt over a certain level was dangerous for countries.

Why Are Gold Prices Down?

Fri, 12 Apr 2013 16:10:12 -0400

Gold and to a lesser extent silver got hammered pretty hard today (Friday) - leading many of our investors to write in and ask why gold prices are down so much this week.

Gold closed Friday at its lowest level since July 2011. In the last two days, gold was off about $70 and silver off about $1.60 at their worst points.

So what's going on?

Well, in the search for answers I can see a few reasons.

It started Tuesday, when UBS cut its average gold price forecast for 2013 to $1,740 from $1,900. UBS cited risks the U.S. Federal Reserve would end its current QE sooner than expected, a move into equities, low inflation, improving economic growth, and a stronger U.S. dollar.

Then Wednesday, the leaked Federal Open Market Committee (FOMC) meeting minutes showed that several members believe the costs of the $85 billion monthly bond purchases outweigh the benefits. We're being led to believe that "many participants" think improving unemployment could justify slowing up on bond-buying "at some point over the next several meetings."

Remember that these are not minutes where members' comments are actually written down word-for-word (like they ought to), these are carefully crafted statements to influence opinion. The Fed is known to try to "manage expectations, so it wants it to look like bond-buying will end sooner than later.

But I, for one, don't buy it.

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Cyprus Confirms Gold Sale Option as Bailout Surges

Fri, 12 Apr 2013 01:24:56 -0400

Cyprus said on Thursday a sale of its gold reserves was among the options for its contribution towards an international bailout, as it confirmed that the cost has surged, putting the already teetering economy in danger of collapse.

It's Not Just Stocks: Meet 'Global Asset Reflation'

Thu, 11 Apr 2013 12:05:53 -0400

Why prices for everything from Vegas real estate to farmland in Brazil to old U.S. stamps are surging: a downpour of cash from the Federal Reserve and now the Bank of Japan.

Every Gold Coin Has Two Sides

Thu, 11 Apr 2013 06:00:18 -0400

Just as every coin has two sides, every data point that doesn't meet expectations usually has an upside somewhere.

For instance, although gold prices have fallen with the strengthening U.S. dollar, the yellow metal is appreciating in Japanese yen. So when negative news about the economy came out this week, along with the U.S. Labor Department reporting that the country added only 88,000 jobs in March, investors found reasons to be encouraged.

For one, the Federal Reserve is apt to maintain its stimulative easing course and keep interest rates low.

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Will Europe Listen to US Treasury Secretary on Growth?

Mon, 08 Apr 2013 05:42:05 -0400

As Treasury Secretary Jack Lew kicks-off his first official visit to Europe, analysts said efforts to coax euro zone leaders to pursue growth-generating policies may fall on deaf ears.

ECB's Weidmann: Lesson from Cyprus is banks can be wound down

Sun, 07 Apr 2013 02:02:56 -0400

BERLIN (Reuters) - The Cyprus bailout shows banks can be wound down despite difficulties, European Central Bank (ECB) policymaker Jens Weidmann said in an interview broadcast on Sunday, adding the situation on the island had stabilized.

Cyprus Sell-Off Sparks Fears of Crunch Time for Spain

Fri, 05 Apr 2013 06:24:12 -0400

Spain's banking bailout last year is now a distant memory. First Italy, then Cyprus refocused the market's attention away from Madrid, but according to one strategist, Spain's fragile economy now faces the possibility of tipping over into a renewed credit crunch.

France Appeals for German Leniency on Deficit

Fri, 05 Apr 2013 01:13:47 -0400

France urged Germany on Thursday to grant it more time to hit its public deficit-cutting target, but denied it was turning into the new "sick man of Europe" even as data pointed to a deepening French downturn.

Why the Gold Trade Is Getting Murdered

Thu, 04 Apr 2013 16:20:39 -0400

After gold dropped to a 10-month low on Thursday, professional traders disagreed on how to trade it, but came to a consensus on what's pushing it lower.

Why Strategists Are Bullish on the Buck

Thu, 04 Apr 2013 15:48:41 -0400

With the divergence widening between U.S. economic prospects and the outlook for Britain, Japan, and the euro zone, experts expect serious dollar strength in the weeks ahead.

Central Bank Efforts May 'End in Tears': El-Erian

Thu, 04 Apr 2013 12:19:07 -0400

Global central banks are accelerating mostly ineffective policies because they feel they have no choice but to keep trying, Pimco's Mohamed El-Erian told CNBC.

Draghi Considers Plan B

Thu, 04 Apr 2013 09:33:46 -0400

Yet more proposals that won’t work. The problem remains: Deficits are too small while they all think they are too large. Draghi Considers Plan B as Sentiment Dims After Cyprus Fumble By Jeff Black and Jana Randow and Stefan Riecher April 4 (Bloomberg) — European Central Bank President Mario Draghi is under pressure to reveal [...]

ECB Leaves Benchmark Rate Unchanged at 0.75%

Thu, 04 Apr 2013 07:45:57 -0400

Will Cyprus Force Draghi to Finally Cut Rates?

Wed, 03 Apr 2013 11:08:26 -0400

Cyprus's troubles offer Mario Draghi an "excellent justification" to cut interest rates further at Thursday's European Central Bank meeting, according to a research note by Dutch bank ING.

ECB Meeting Next Week: Cyprus Serious Trouble For Draghi

Thu, 28 Mar 2013 13:01:45 -0400

Next week, much of the action will again be outside the United States, with the European Central Bank (ECB) and the Bank of Japan (BOJ) both holding meetings.

All's Well on the Western European Front? Not Exactly.

Thu, 28 Mar 2013 12:42:05 -0400

Journalists seem to be outnumbering Cypriots standing in lines at banks in Nicosia. That's good news, right? Perhaps not.

'Cyprus Euros' Could Take on Own Value With Capital Controls

Thu, 28 Mar 2013 03:16:13 -0400

Cyprus's plan to impose capital controls threatens to test the ties that bind Europe's monetary union and could see euros on the Mediterranean island valued differently to those in the rest of the bloc.

European Banks Fall but This Time, Cyprus Isn't The Culprit

Wed, 27 Mar 2013 10:20:30 -0400

There is serious damage accumulating in European banks, with many down 2 to 3 percent again today. Yet at least for today, Cyprus isn't all to blame.

Lessons From Cyprus Bailout

Tue, 26 Mar 2013 16:37:15 -0400

Key takeaways from Cyprus bailout: bank creditors face greater risks than taxpayers, depositors are unsecured creditors, and the free movement of capital is in doubt.

After Cyprus, What's Next for the Euro

Tue, 26 Mar 2013 13:49:34 -0400

A financial meltdown in Cyprus appears to have been averted, but strategists say that doesn't mean the euro is out of the woods.

Is the Top In for Gold This Year?

Tue, 26 Mar 2013 11:53:01 -0400

Vote now in our "Futures Now" poll!

Reasons to Believe 'Sell in May' Might Turn to Buying

Tue, 26 Mar 2013 09:40:43 -0400

One firm believes there are reasons to take the other side of the "Sell in May" trade, issuing a lively treatise that makes the case against selling now.

Cyprus Jitters: How It Could Still Go Wrong

Tue, 26 Mar 2013 09:00:35 -0400

Stock indexes across the globe managed to hold firm on Tuesday despite the ongoing struggle in Cyprus over a euro zone bailout, but market watchers and analysts are warning that the flare up could once again curb investor sentiment.

Cyprus Bailout Deal Sets Stage For a Bigger Eurozone Blowup

Mon, 25 Mar 2013 16:56:58 -0400

European Union officials voiced relief following an 11th-hour Cyprus bailout deal, but in truth, they have little to celebrate.

Not only will this deal worsen the economic crisis in Cyprus, but the damage to the trust in the banking system also has created a time bomb set to go off the next time a Eurozone country - or especially its banks - get into trouble.

Early Monday morning, Cyprus agreed to consolidate its two largest banks and inflict heavy losses on uninsured depositors. In exchange, Cyprus gets $13 billion in international loans to prevent the total collapse of the island nation's banking system.

"It is a bad deal, but the extreme scenario we had to contend with was worse," Lefteris Christoforou, vice chairman of the ruling Democratic Rally party, told Reuters.

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Stocks Rebound Off Lows as Dutch Finance Minister Backtracks on Cyprus Comments

Mon, 25 Mar 2013 14:16:29 -0400

Stocks rebound off lows as Dutch Finance Minister backtracks on "Cyprus is a template for Europe" comment. April 4 is the next big date for Europe, when the ECB will meet and will no doubt try to soothe nerves over Cyprus.

Dutch Finance Minister Tanks Markets; Is Cyprus a "Template" for Europe?

Mon, 25 Mar 2013 12:50:48 -0400

Dutch Finance Minister Jeroen Dijsselbloem (leader of Eurogroup Finance Ministers) helped tank the markets midday when he said that the Cypriot plan was a "template" for Europe.

Morici: Cyprus Should Tell 'em Fahgettaboudit

Mon, 25 Mar 2013 10:48:17 -0400

Cyprus would be better off to leave the euro than accept the terms of the bailout imposed by the European Union, International Monetary Fund and European Central Bank, writes this academic.