Retail sales in the U.S. jumped 1.1% which was the biggest gain in five months and forex traders went haywire over the economic release. Every currency pair where the USD is the base as well as quote currency moved rather drastically right after the announcement. Unfortunately, it corrupted plenty of retail accounts as stop loss orders were triggered which caused trader’s to lose money especially on the EURUSD pair. What was the reason for the severe drop in currency pairs where the USD acts as the quote currency? The economic...
On Monday, June 25th 2012 Cyprus became the fifth member country to seek a bailout from the EU bailout fund now better known as the ESM. This request was made after the nation’s second largest bank, Cyprus Popular Bank, requested recapitalization from the Cypriot government. The reason for recapitalization was heavy restructuring in Greece which caused the bank to lose €3.65 Billion while it was bleeding capital from bad loans made to Greek as well as Cypriot consumers. The bank was in talks with China for a potential loan and...
The ECB under the helm of Super Mario has had it chance last week on Thursday to announce its bond buying super bazooka it plans to launch on the Eurozone debt contagion. Of course the failed to announce the bazooka which would have backfired and will do so should it be implemented. The ECB needs to be aware that any attempt to purchase junk bonds from sovereign members of the 17-member Eurozone equates to state financing. The Germans have been key so far in stopping idiotic actions, but Chancellor Angie has cracked under pressure and vowed...
If people and companies behave rationally, then the crisis of 2008 would not have happened. Lehman Brothers bankruptcy occurred because of too much bank debt. Economists have found the key solution for credit institutions. Since the crisis began, economists have criticized banks that are too carried away with borrowed money. The most striking example of the credit "addiction" was the actions of Lehman Brothers, which went a bankrupt in 2008. Since 2001, the management of this financial giant used accounting tricks to borrow but,...
The markets will experience a so-called "break-up" already this fall - the U.S. economy is recovering, which means that the Fed will roll a third round of quantitative easing in September. Since the end of May, when Fed Chairman Ben Bernanke hinted at the possible clotting of the QE program, the markets are in a state of constant stress. According to Bloomberg, just during a month investors-alarmists withdrew from the exchanges around the world about $ 3 trillion. Info Note: Quantitative easing (QE) is a government monetary...
