Forex Days

Retail sales data helps dollar

2008-05-14T22:20:00.000-03:00

The US dollar strengthened in relation to the euro and the yen on Tuesday on new retail sales data that showed sales excluding automobiles were up in April.

Without auto sales, retail sales in the US added 0.5 percent, more than had been expected.

Still, with auto sales included retail sales were down 0.2 percent in the month as purchases at auto dealerships and auto parts stores were down 2.8 percent.

Gas station sales were also down in April, falling 0.4 percent despite the increases in gas prices.

At around 11:15 a.m. in New York, the dollar had given back some of the gains versus the euro to trade at $1.5475 to the shared currency while it took ¥104.4750 to buy a dollar.

The greenback also gained on the Australian dollar and the Swiss franc, with the dollar trading at 94.12 cents US to the Aussie while the franc traded at SFr1.0514 to the dollar.

The yen was also lower versus several higher-yielding currencies as investors continued to return to risky carry trades.

In late morning trade in New York, the yen traded at ¥13.790 to the South African rand while it was at ¥9.9661 to the Mexican peso and at ¥62.829 to the Brazilian real.

The pound weakened on declines in property prices and higher inflation in April.

Consumer inflation was up an annualized 3 percent in April, a gain of 0.8 percent since the previous month, on food and fuel prices.

Meanwhile, house price declines were becoming more widespread according to a new survey from the Royal Institution of Chartered Surveyors which found that 82 percent of surveyors reported seeing house price declines in the three months ending in April, the most widespread declines in 30 years.

In March, 66 percent of those surveyed said they had seen prices decline.

It took $1.9461 to buy a pound in late morning trade in New York, while at the same time the pound traded at 79.52p to the euro.

Forex Technical Analysis for 05/05—05/09 Week

2008-05-08T22:18:00.000-03:00

EUR/USD trend: sell.
GBP/USD trend: hold.
USD/JPY trend: buy.
EUR/JPY trend: buy.

Floor Pivot Points
Pair	3rd Sup	2nd Sup	1st Sup	Pivot	1st Res	2nd Res	3rd Res
EUR/USD	1.4957	1.5159	1.5290	1.5492	1.5623	1.5825	1.5956
GBP/USD	1.9229	1.9426	1.9571	1.9768	1.9913	2.0110	2.0255
USD/JPY	101.35	102.29	103.83	104.77	106.31	107.25	108.79
EUR/JPY	157.52	159.06	160.79	162.33	164.06	165.60	167.33

Woodie’s Pivot Points
Pair	2nd Sup	1st Sup	Pivot	1st Res	2nd Res
EUR/USD	1.5141	1.5256	1.5474	1.5589	1.5807
GBP/USD	1.9426	1.9571	1.9768	1.9913	2.0110
USD/JPY	102.29	103.83	104.77	106.31	107.25
EUR/JPY	159.06	160.79	162.33	164.06	165.60

Camarilla Pivot Points
Pair	4th Sup	3rd Sup	2nd Sup	1st Sup	1st Res	2nd Res	3rd Res	4th Res
EUR/USD	1.5239	1.5330	1.5361	1.5391	1.5453	1.5483	1.5514	1.5605
GBP/USD	1.9528	1.9622	1.9653	1.9685	1.9747	1.9779	1.9810	1.9904
USD/JPY	104.02	104.70	104.93	105.15	105.61	105.83	106.06	106.74
EUR/JPY	160.72	161.62	161.92	162.22	162.82	163.12	163.42	164.32

Tom DeMark’s Pivot Points
Pair	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
Resistance	1.5558	1.9841	106.78	164.83
Support	1.5225	1.9499	104.30	161.56

Fibonacci Retracement Levels
Pairs	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
100.0%	1.5693	1.9965	105.70	163.87
61.8%	1.5566	1.9834	104.75	162.62
50.0%	1.5526	1.9794	104.46	162.24
38.2%	1.5487	1.9754	104.17	161.85
23.6%	1.5439	1.9704	103.81	161.37
0.0%	1.5360	1.9623	103.22	160.60

USD gains on euro in April

2008-04-30T23:20:00.000-03:00

The US dollar gained slightly on the euro Wednesday morning in New York, putting it on track to its first monthly gain versus the euro this year.

The greenback was helped by the possibility that an expected rate cut from the Federal Reserve today will be the last cut for the time being.

At just past 11 a.m. in New York, the dollar traded at $1.5563 to the euro while it had also gained in relation to the yen, to ¥104.4950.

The yen was weaker on the session as the Bank of Japan held interest rates at 0.5 percent and gains in US equities markets increased investor interest in carry trades financed by the low-yielding yen.

The yen traded at ¥162.6255 to the euro, while its biggest declines were in relation to the Brazilian real and the Canadian dollar, to ¥61.598 and ¥103.3683 respectively.

The South African rand gained in relation to all major currencies on the session and had its biggest monthly gain in four years in April on speculation that the reserve bank there will hike interest rates when it meets next, up from a five-year high of 11.5 percent currently.

Also helping the rand was a reduction in South Africa’s trade deficit, which dropped from R5.8 billion in February to R5 billion in March on high prices for gold and platinum.

In late morning trade in New York, the rand traded at $7.5775 to the US dollar and at R11.794 versus the euro, while a rand was worth ¥13.808.

The Canadian dollar also strengthened in relation to all major currencies, mainly on the chance that US interest rate cuts are about to end.

It took 98.92 cents US to buy a Canadian dollar at late morning in New York.

Scalping - When Is The Best Time Of The Day To Scalp The Forex Markets?

2008-04-29T20:25:00.000-03:00

Scalping can mean different things to different traders, but I personally take scalping to mean very short-term trading, ie trades generally last just a few minutes and no longer than about an hour at most.

Most of my trades last longer than this, but saying that I do still dabble in very short-term trades occasionally and generally do okay, although it is slightly more stressful and you do need quick fingers at times.

However, what I've noticed is that there is definitely one period of the day that is a lot more predictable, and therefore profitable, and that is the start of the London trading session between 8.00 and 9.00 UK time.

I first noticed this when trading the FTSE because having always made pretty good profits trading this index between 8.00 and 9.00, I also noticed that the major European currency pairs like the GBP/USD and the EUR/USD also behaved in a similar way.

This opening hour usually tends to set the trend for the day and as a result you often see strong sustained moves during this hour. Traders start off the day by following the initial direction of the trend and you get decent sized moves without the whipsaws you often get during the rest of the day.

To demonstrate this point, take a look at the 5 minute chart of the EUR/USD for the last two days. I would add charts here but they use up a lot of bandwidth, so to do it yourself add the following indicators: MACD, TRIX, Stochastic (8,3,3), RSI and CCI.

On Tuesday (22/4), you will see that all of these indicators went into oversold territory just before 8.00. Then between 8.05 and 8.10 the CCI crossed upwards through the -100 level and the other indicators followed suit with the MACD and TRIX crossing upwards to mark the start of an upwards trend. This strong opening trend yielded around 30 points, depending on your exact entry and exact points.

It was a similar story on Wednesday (23/4) when the EUR/USD was oversold on the 5 minute chart from about 6.25 onwards. However during the profitable 8.00-9.00 opening hour, the price rose and the indicators emerged out of oversold territory with CCI and Stochastic rising and MACD crossing upwards around 8.30. This could have yielded anything up to 40 points, and even if you'd joined the party late at around 8.35, you still could have netted around 15 points.

These strong moves during the busy opening hour are extremely common, and while you don't get good set-ups like these on the same pair every single day, there is nearly always one major pair that you can take advantage of during this hour.

There are of course times when the opening hour is uneventful or a trade goes against you as no trading method's perfect but the period between 8.00 and 9.00 UK time is definitely the best time to scalp the markets in my experience, particularly if you only ever trade high probability positions like the two examples mentioned previously.

An Endgame for the Euro?

2008-04-28T22:14:00.000-03:00

Days after the dollar touched a new nadir against the euro -– indeed, one euro briefly fetched $1.60, a symbolic milestone -– the beleaguered buck is enjoying a bounce.

Some even saw a parallel to politics. “Just like Hillary Clinton, when all seemed bleak, USD staged an almost improbable recovery,” wrote David Watt, a currency strategist at RBC Capital Markets late Thursday.

By this morning, one euro bought about $1.56.

Of course, the dollar has had many such minor rebounds, and they always turn out to be short-lived. Several currency experts, however, see a hint that something different might be happening this time around.

Much of the euro’s recent invincibility stems from two factors. One, economic growth in the euro zone has been remarkably impervious to events in the U.S. Two, the U.S. Federal Reserve has embarked on a dramatic campaign to cut interest rates, undermining the appeal of short-term investments in dollars, while the European Central Bank has held its rates firm.

Now two small cracks have appeared in that armor. On Thursday, Germany’s IFO survey of business sentiment came in lower than expected, indicating deteriorating conditions in Europe’s largest economy. At the same time, some investors believe that the Fed will cut its key rate next week but then take an extended pause, stabilizing the gap between U.S. and European interest rates.

If bad news out of Europe starts to accumulate and the Fed stands pat, the dollar’s slide could taper off. However, that’s probably not the end of the dollar’s travails.

“What’s the endgame?” says Art Steinmetz, a bond portfolio manager at OppenheimerFunds. “The ECB goes into an easing cycle at about the time the Fed is going into a hiking cycle.”

That’s still months away (if not more). But some are keeping a very close eye on the horizon.

Source: http://blogs.wsj.com/marketbeat

Scalping - When Is The Best Time Of The Day To Scalp The Forex Markets?

2008-04-27T20:34:00.001-03:00

Ron Paul Slams Federal Reserve For Destabilizing The World By Printing Money

2008-04-19T17:21:00.000-03:00

US congressman Ron Paul has launched a scathing attack against the US Federal Reserve, which the Congressman claims is printing money in order to manipulate interest rates and undermine workers wages and old people’s savings.

Paul, one of the few politicians with an insight into fiat money wrote "The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation."

The Texan congressman went on to write in his column that the Federal Reserve “is the strangest, most dangerous advantage ever placed in the hands of a special privileged class by any Government that ever existed."

Source: www.lankabusinessonline.com

Euro supported by rate comments

2008-04-12T11:14:00.000-03:00

The euro gained on the US dollar and the pound on Friday after an official of the European Central Bank assured that interest rates would not drop in the Eurozone in comments ahead of a meeting to G7 finance ministers and central bankers in Washington, D. C.

In late morning trade in New York, the euro was worth $1.5823 while the pound traded at 80.23p to the euro after hitting a new low at 80.33p to the shared currency.

Consumer confidence that hit its lowest level in 26 years in the United States hurt the dollar, while the pound suffered from the assumption that the Bank of England will likely continue to cut interest rates while the ECB seems determined to hold Eurozone rates steady.

The South African rand was higher versus the greenback after yesterday’s move by the central bank there to raise interest rates to 11.5 percent, a half-percentage-point increase.

The rand traded as high as R7.7487 to the greenback before trading at R7.8055 to the dollar in late morning trade in New York.

Only the yen and the Swiss franc gained in relation to the rand on the session, with a rand buying ¥12.943 and trading at R7,8051 to the Swiss franc, as investors avoided carry trades.

The reluctance to enter into risky deals such as carry trades helped the yen and Swiss franc to gains against all major currencies.

At late morning in New York, the yen traded at ¥101.0800 to the dollar and at ¥159.9339 to the euro, while the Swiss franc was at SFr1.0002 to the greenback and at SFr1.5826 to the euro.

Pound weaker on house price report

2008-04-08T22:02:00.000-03:00

The pound was weaker on Tuesday after a new report from mortgage lender Halifax showed that house prices fell by 2.5 percent in March.

The price declines made it more likely that the Bank of England will cut interest rates soon.

At around 11 a.m. in New York, the pound traded at 79.81p to the euro and at 50.81p to the US dollar, while it took ¥201.8488 or SFr1.9953 to buy a pound.

The US dollar was slightly weaker versus the euro and the yen ahead of the release of the minutes from the most recent meeting of the Federal Reserve, due to be released later on Tuesday afternoon.

The greenback was trading at $1.5696 to the euro and was worth ¥102.6450 in late morning trade in New York.

Speculation that the South African Reserve Bank will hike interest rates to 11.25 percent later this week send the rand higher in relation to the US dollar.

After strengthening to R7.76475 to the greenback, the rand traded at R7.7865 at close to noon in New York.

Meanwhile, the Australian dollar saw gains on a return to carry trades as investors worried less about credit market problems and on higher prices for commodities.

The Australian dollar was worth 92.77 cents US or ¥95.1445, while it took A$1.6932 to buy a euro.

Yen, Swiss franc decline on risk appetite

2008-04-07T22:35:00.000-03:00

The yen and the Swiss franc both saw declines Monday as global equities markets rallied, encouraging investors to enter into risky carry trades in which they borrow money where interest rates are low in order to buy high-yield currencies.

At nearly noon in New York, the yen traded at ¥102.7200 to the US dollar, at ¥161.4757 to the euro, at ¥13.215 to the South African rand and at ¥81.855 to the New Zealand dollar.

The Swiss franc was at SFr1.0148 to the greenback,a t SFr1.5925 to the euro, and at SFr2.0159 to the pound.

Meanwhile, the pound was lower versus the US dollar on the possibility that the Bank of England will cut interest rates this month at the same time as both the European Central Bank and the Bank of Japan are expected to hold rates steady.

In late morning trade in New York, the pound traded at 50.34p to the dollar and at 79.13p to the euro.

The Australian dollar was generally lower on sentiment that economic growth there will slow and the Reserve Bank of Australia will cut interest rates.

While the aussie declined versus the US dollar to 92.81 US cents to the aussie, it still gained versus the yen to ¥95.3293 to the aussie.

USD weakens on jobs data

2008-04-06T21:51:00.000-03:00

The US dollar was weaker versus the euro and the yen on Friday after the Labor Department reported that 80,000 jobs were lost in the United States in March, more than had been expected by analysts.

At just before noon in New York the dollar was trading at $1.5730 to the euro while it was at ¥101.7450 in relation to the yen.

The yen was helped by a retreat from carry trades as investor sentiment was hurt by the US jobs report.

The yen traded at ¥160.0398 to the euro.

The pound was down in relation to the euro and the greenback on worries that recession in the US could hurt economic growth in the UK.

In late morning trade in New York the pound traded at 78.82p to the euro and at 50.11p to the dollar.

Meanwhile, the South African rand declined versus major currencies on the avoidance of carry trades.

Earlier in the week the rand was stronger on signs that Zimbabwe President Robert Mugabe could be on his way out of power after elections there.

Mugabe has presided over a weakening of the Zimbabwe economy that has left the inflation rate there at 164,000 percent.

In New York around noon the rand traded at R7.8035 to the dollar and at R12.275 to the euro.

Yen, pound strengthen versus US dollar

2008-03-04T22:23:00.000-03:00

The US dollar weakened versus the yen on Tuesday for the sixth session in a row on increasing sentiment that the Federal Reserve will cut US interest rates by three-quarters of a percentage point this month, to 2.25 percent.

Declines for the dollar also came after Fed chairman Ben Bernanke urged banks to write down more mortgage debt and forgive those debts to homeowners at risk of defaulting on their home loans.

The yen also gained on the euro during the day’s session, trading at ¥156.5302 to the euro and at ¥102.8350 to the dollar in late morning trade in New York.

The pound also gained on the greenback as analysts cut back on their estimates of how much the Bank of England will cut interest rates this year, going as high as $1.9891 to the pound before slipping back to $1.9859 to the pound just after 11 a.m. in New York.

The pound was weaker, however, versus the euro, trading at 76.65p to the shared currency in New York.

The Australian dollar declined versus its US counterpart as the Reserve Bank of Australia raised interest rates there to 7.25 percent but some analysts said that they believe rates will not go up again for awhile.

In addition, the Bank’s governor said that consumer spending in Australia seems to be moderating.

In late afternoon trade in New York, it cost 92.81 cents US to buy an Australian dollar.

More declines for USD versus euro

2008-03-03T22:52:00.000-03:00

The US dollar hit another record low versus the euro on Monday on fears that there will be more losses for banks due to US economic declines.

After going as low as $1.5275 to the euro, the dollar traded at $1.5173 to the euro in late morning trade in New York.

A report from Goldman Sachs indicates that the euro could strengthen to as much as $1.57, based on the analysis of trading patterns and prices.

The dollar was also lower versus the yen, dropping as low as ¥102.62 before trading at ¥103.7000 at around 11:30 a.m. in New York as equities markets declined and investors fled risk.

The dollar was hurt by new data showing that manufacturing activity contracted in the US in February, with the Institute for Supply Management’s manufacturing index dropping to 48.3 in February after being at 50.7 in January.

Any reading below 50 in the ISM’s index indicates a contraction rather than growth.

Despite the gains for the yen, other Asian currencies were weaker versus the US dollar on concerns that the slowing US economy will hurt demand for products from Asia.

Oil Hits All-Time High: $103 Per Barrel

2008-03-01T09:22:00.000-03:00

The weakness of the U.S. dollar and the possibility of lower interest rates have drawn fresh investment to the oil market, driving the price of oil to over $103 per barrel for the first time.

An energy analyst said such conditions tend to drive investment away from currency and toward commodities, such as oil, which retain an intrinsic value while currency markets fluctuate. He said, however, that a bubble is emerging.

The analyst, Victor Shum of Purvin & Gertz, said investors are ignoring market fundamentals that indicate steady increases in U.S. crude oil supply, while forecasters predict slower growth in oil demand due to the stagnant economy.

Source: news.yahoo.com

Dollar at new lows versus euro, Swiss franc

2008-03-01T09:19:00.000-03:00

The US dollar weakened Thursday to new lows versus the euro and the Swiss franc and to near a two-and-a-half-year low versus the Japanese yen, while Federal Reserve chairman Ben Bernanke made more comments which have analysts expecting more interest rate cuts soon.

Meanwhile, in a press conference, US President George W. Bush insisted that while the US economy has slowed, it is not headed into a recession and that his administration does not support any further steps to stimulate the economy.

The dollar touched $1.5196 to the euro in morning trade, a new record low, before recovering slightly to $1.5182 to the shared currency and traded at $1.9884 to the pound while a dollar was worth ¥105.5600 and SFr1.0524, also a record low.

The South African rand was weaker versus the yen, the Swiss franc and other currencies as investors backed away from carry trades, eroding demand for high-yielding currencies such as the rand.

The yen traded at ¥13.971 to the rand and while a Swiss franc bought R7.1905 and the rand traded at R7.5605 to the dollar.

The Canadian dollar saw gains on the rising value of exported commodities as oil and gold prices hovered near record highs, with a loonie being worth $1.0291 just before noon in New York.

USD falls on Bernanke comments

2008-02-27T21:58:00.000-03:00

The US dollar was lower versus the euro on Wednesday on comments from US Federal Reserve chairman Ben Bernanke, who said in testimony before the House Financial Services Committee that the Fed is “ready” to do what is necessary to protect the US economy.

Many analysts took this to meant that more interest rate cuts are coming in the US, and some traders expect the cuts to amount to 2 more percent by the middle of the year.

The main US interest rate now stands at 3 percent.

The dollar also declined on new Commerce Department data which showed that durable goods orders in the US fell 5.3 percent in January, more of a decline than had been expected.

At around 11:30 a.m. in New York, the dollar was trading at $1.5122 to the euro and at $1.9910 to the pound, while it took ¥106.4100 or SFr1.0640 to buy a dollar.

The Canadian dollar was higher on gains in commodities prices, with one loonie worth $1.0193.

The Australian dollar saw gains on the possibility that interest rates there will go up in March in an attempt to control inflation.

The expectation that the Reserve Bank of Australia will hike interest rates by a quarter of a percentage point to 7.25 percent sent the US dollar to 94.09 cents to the Australian dollar by late morning trade in New York.

Euro breaches 1.50-dollar mark for first time on US recession fears

2008-02-26T21:48:00.000-03:00

WASHINGTON (Thomson Financial) - The euro broke the 1.50-dollar mark for the first time ever Tuesday following US economic reports that renewed fears the American economy could be falling into a recession.

The European currency reached 1.5047 dollars at 2230 GMT Tuesday before falling back to 1.5017 dollars.

Analysts say the euro was given a sudden boost from a better-than-expected German business indicator, which stood out amid a series of lackluster macroeconomic indicators in the United States.

The greenback has come under pressure as traders believe sluggish economic reports could pressure the Federal Reserve to keep cutting US interest rates.

Speculators generally prefer to invest or hold currencies in countries where interest rates are rising or expected to increase in they hopes they can increase their potential returns.

The dollar fell to a record low against the single European currency in electronic trading in New York as traders continued assessing the latest economic readings.

An influential survey, released earlier Tuesday, on US consumer sentiment during February delivered fresh ammunition to market forecasters who are predicting a recession.

The Conference Board private research group said its consumer confidence index dived to a reading of 75.0 in February, compared with 87.3 in January. The index had also fallen in January.

The survey showed the confidence of American consumers had slumped to its lowest level since November 1993, with the exception of polling conducted as US forces toppled the government of former Iraqi dictator Saddam Hussein five years ago.

'With so few consumers expecting conditions to turnaround in the months ahead, the outlook for the economy continues to worsen and the risk of a recession continues to increase,' said Lynn Franco, a director of the Conference Board's consumer research center.

The euro's new record run saw it smash a prior record high of 1.4967 dollars struck on Nov 23.

A separate report on wholesale inflation also weighed on the dollar's fortunes, market participants said.

The Labor Department said inflation at the wholesale level surged a stronger-than-expected 1.0 percent in January due to rising food and energy prices.

The accelerating costs of food and energy -- especially crude oil prices -- have caused producer prices to rocket 7.4 percent in the United States in the past twelve months to January.

'Inflation data is clearly not good. The 1.7 percent increase in food prices and the 1.5 percent increase in energy prices will further fuel the recently heightened inflationary concerns,' said Dick Green, president of Briefing.com.

The dollar has lost considerable ground against the euro and other currencies in the past year amid a two-year long housing slump and a credit crunch sweeping financial markets.

The economic turmoil has encouraged the Fed to slash borrowing costs, which has further weighed on the American currency.

Traders said US budget and trade deficits were also undermining the dollar, although recent reports have shown the weak dollar giving a boost to American-produced exports.

Market participants said a better-than-expected report on German business conditions had also helped buoy the euro.

'The German Ifo survey for business confidence unexpectedly rose for the second consecutive month in February, rallying the euro,' said Boris Schlossberg, a senior currency analyst at Forex Capital Markets.

An index of how managers assess the current business climate compiled by Germany's Ifo institute rose in February for the second month running to 104.1 from 103.4 in January.

British Gas Break Into Couple's House Over Non-Existant Debt

2008-02-25T22:28:00.000-03:00

British energy giant, British Gas, have broken into the wrong house. Couple David Houghton and Abby Simpson came home from holiday to find their locks picked by the company, a perfectly legal thing for British Gas to do if the couple had owed money.

Houghton has been fighting British Gas since he cancelled the contract his flat had with the company, and switched to EDF. British Gas continued to bill him from then on, but Houghton received an apology from the CEO, and thought the matter resolved.

British Gas switched the couple's metre to a pay-as-you-go unit, and left a note. The couple nextdoor were actually the one to owe British Gas money. The company has apologised, reimbursed the couple and blamed the mix up on Royal Mail.

Source: www.dailymail.co.uk

British Gas Profits 600% Higher Than Last Year

2008-02-24T11:28:00.000-03:00

British Gas, having recently come under fire for raising gas and electricity priced by 15%, has reported annual profits of £571m up from the previous year's £95m. It's parent company, Centrica, also reported a 40% rise in it's profits to £1.95bn.

Chairman Roger Carr said: "Centrica delivered very strong financial results during another challenging year for UK energy retailers."

The average gas bill for British Gas customers has risen by 76.7% since 2003 - bringing them up to an average of £653. Electricity bills have risen by 74.3% to £413.

Source: news.bbc.com

Understanding Forex Quotes

2008-02-17T11:28:00.000-03:00

Reading a foreign exchange quote may seem a bit confusing at first. However, it's really quite simple if you remember two things:

1. The first currency listed first is the base currency and

2. The value of the base currency is always 1.

The US dollar is the centerpiece of the Forex market and is normally considered the 'base' currency for quotes. In the "Majors," this includes USD/JPY, USD/CHF and USD/CAD.

For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. For example, a quote of USD/JPY 120.01 means that one U.S. dollar is equal to 120.01 Japanese yen.

When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened.

If the USD/JPY quote we previously mentioned increases to 123.01, the dollar is stronger because it will now buy more yen than before.

The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as GBP/USD 1.4366, meaning that one British pound equals 1.4366 U.S. dollars.

In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar.

In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.

Currency pairs that do not involve the U.S. dollar are called cross currencies, but the premise is the same. For example, a quote of EUR/JPY 127.95 signifies that one Euro is equal to 127.95 Japanese yen.

When trading forex you will often see a two-sided quote, consisting of a "bid" and an "offer."

The "bid" is the price at which you can sell the base currency -- at the same time buying the counter currency.

The "ask" is the price at which you can buy the base currency -- at the same time selling the counter currency.

Weak US Data Drags USD

2008-02-16T20:04:00.000-02:00

The dollar eased further versus the euro and sterling following another round of weak US economic data, falling to 1.4708 and 1.9722, respectively. A key indicator of consumer confidence fell to its lowest level in 16-years with the University of Michigan preliminary sentiment survey dropping to 69.6, versus 78.4 from January. Industrial output in January crept up marginally to 0.1% versus a flat reading in December. Meanwhile, capacity utilization also increased slightly to 81.5% from 81.4% a month earlier. Also released was the December net capital flows (TIC), which more than halved to $60.4 billion, versus a revised $150.8 billion a month prior.

The string of soft US data reinforces fears that the economy is headed toward a recession, thereby prompting the Fed to aggressively ease rates over the coming months. Fed funds futures contracts reflected a 60% probability for the FOMC to cut rates by 50-basis points to 2.50% at the next policy setting meeting in March.

Sony, Nokia, Nike, Hewlett Packard, Others Will Fight Global Warming

2008-02-16T20:03:00.001-02:00

Leaders of some of the world's largest corporations made an urgent call for companies around the globe to reduce their impact on human-induced climate change and embrace a "low carbon lifestyle." A dozen corporations were represented in the call.

"There is no doubt that climate change is one of the most important issues of our time," said Sony CEO Howard Stringer. Sony hosted the event, along with the environmental group WWF. Business leaders said governments aren't doing enough.

The companies, which have already pledged themselves to their own environmental goals, will push business partners and other firms to do the same. WWF official James Leape said, "We are moving into a carbon constrained world ... a new economy."

Source: news.yahoo.com

Flash GDP in the euro area: 0.4% in the forth quarter

2008-02-14T14:52:00.001-02:00

According to flash estimates of Eurostat, the Statistical Office of the European Communities, euro area GDP rose by 0.4% in the forth quarter 2007. The data was below GDP index in the third quarter, when euro area economy rose by 0.8%, but slightly above analysts’ estimates as they expected increase by 0.3%.

Compared with the same quarter of the previous year, euro area GDP increased by 2.3%, after 2.7% in the third quarter. The analysts expected increase by 2.2%.

Eurostat also reported of GDP growth of its major partners, USA and Japan. US GDP was 0.2% in the forth quarter, after increase by 1.3% in the third quarter. GDP in Japan increased by 0.9% in the forth quarter, after 0.3% in the third quarter. Compared with the same quarter of the previous year, GDP grew in the forth quarter by 2.5% in US and 1.8% in Japan, after 2.8% and 1.9% in the third quarter respectively.

U.S. weekly initial jobless claims fall 9,000

2008-02-14T14:48:00.001-02:00

Initial U.S. jobless claims dropped for the second consecutive week, after a large jump last month, the Labor Department reported Thursday.

Claims for the week ended Feb. 9 fell 9,000 to 348,000. The prior weekly claims level was revised to 357,000.

The four-week moving average of new claims gained 12,000 to 347,250.

U.S. continuing jobless claims fell 9,000 to 2.76 million.

Exxon Mobil Seeks Compensation from Chavez

2008-02-12T19:23:00.000-02:00

The recent move by Venezuela's socialist leader Hugo Chavez to nationalize the energy sector has prompted some of the companies to seek compensation, Exxon Mobil in a stunning move took the battle to court.

The state run company PDVSA is barred from selling assets and Venezuela cannot withdraw $300 million from a US bank account, such a move could prevent Chavez from spending money of his so called 'social projects'.

An energy expert named Dino Barajas said "It makes the actions you took a year ago fairly pricey," referring to Chavez.

Casinos win up despite economy

2008-02-12T19:13:00.000-02:00

Nevada casinos posted a 1.8 percent gain in winnings during 2007 despite a soft economy, hanging onto $12.85 billion of the nearly $170 billion bet by gamblers during the year, according to a state report released Tuesday.
While the win was the lowest since 2002 and down from the 8 percent gain in 2006, Gaming Control Board analyst Frank Streshley said an increase during tough economic times shows the gambling industry's resiliency.

'It says something about the industry when you are able to market the casino properties and increase revenues during these slow times,' Streshley said.

The win is what was left in casino coffers from the nearly $170 billion bet during calendar 2007. That means the clubs held onto 7.6 percent of all money wagered.

'Win' is a gross figure, with no operating costs or other expenses deducted. And it's casino revenue only -- separate from hotel, restaurant or bar revenues generated by the resorts.

A breakdown of the win shows that the Las Vegas Strip accounted for $6.83 billion of the total. That's also a record -- but it's well behind the more than $10.3 billion in gambling revenue in the booming Chinese territory of Macau during 2007. Macau eclipsed the Strip for the first time in 2006.

The Las Vegas Strip win of $6.83 billion was up 2.1 percent over the 2006 win. For all of Clark County, encompassing the Strip, downtown Las Vegas and other southern Nevada cities, the total was $10.87 billion, also up 2.1 percent.

Downtown Las Vegas won $632.9 million, up 0.4 percent. While slight, that's the first gain for clubs in that area in three years.

Resorts in the Reno-Sparks-North Tahoe areas in northern Nevada took in $1.05 billion, down 1.5 percent. That included $755 million for Reno, down 1.5 percent. The area-wide drop was the first in four years.

Clubs in Elko County, on the state's border with Utah, won a record $303.7 million. The 11.6 percent gain over 2006 was the largest for major markets tracked by the state.

Resorts on Lake Tahoe's south shore won $326.8 million, down 2.1 percent. The Minden-Gardnerville-Carson City win of $119.3 million was down 4 percent.

The $12.85 billion statewide win included a record $8.45 billion from slot machines, up 1.8 percent from 2006, and a record $4.23 billion from table games, up 1.9 percent.

A breakdown of games that produced the most revenue in 2007 shows the clubs won a record $1.4 billion on blackjack, a record $908 million on baccarat, and $478 million on craps.

In slots, multidenomination devices won $3.6 billion of the total. Penny slots won $1.6 billion, while quarter slots won $1.1 billion and dollar slots won $994.3 million.

Sports betting produced another $168.4 million in winnings, down 12.1 percent. Poker winnings for the clubs totaled $168 million, up 4.4 percent.

For the current fiscal year to date, the state's revenues from gambling total about $436.4 million, 6.7 percent below forecast amounts. That included $46.4 million in taxes based on the December casino win, which was down 14 percent from forecast amounts.

The club's win for December was $1.1 billion, up 3.1 percent. Streshley said factors that helped to produce the December win included a four-day New Year's holiday period and the Ricky Hatton-Floyd Mayweather fight in Las Vegas.

Forex Fundamental Analysis

2008-02-11T23:23:00.000-02:00

Forex fundamental analysis involves examining the intrinsic value of a nation’s currency based on economic news releases that reflect the strength, or weakness, of a country’s economy.

Fundamental traders follow these news announcements, known as “fundamental indicators,” because they paint a picture of a currency's strength in relation to other countries.

Fundamental indicators are reports that include statistical data on things such as employment, gross domestic product (GDP), international trade, retail sales, housing, manufacturing, and interest rates.

The stability, growth, or decline in any of these sectors may have an effect – direct or indirect – on the value of a country’s currency.

Central banks play a key role in the Forex market because they have the responsibility of changing the country’s "base" interest rate. A central bank has to find a fine balance when setting interest rates as it wants to maintain growth in the economy, but at the same time it has to be careful to curtail inflation.

The bank’s decisions on whether to raise, cut, or hold the interest rate fuels speculation in the Forex market, where the value of a currency, or group of currencies, changes in real time.

In addition to information about a country’s economy, the value of a currency is connected to national and international political events, elections, and changes in government trade policies.

The prices of sensitive commodities like oil and gasoline are an important fundamental indicator as high prices can hurt consumer spending and confidence, and curtail the activities of certain businesses and government services.

Natural disasters, terrorist attacks, and militarily actions in a sensitive region cause instability in the world and have a significant impact on the Forex market as they develop. These types of evens can be hard to predict in advance.

The ability to identify trends in macroeconomic indicators and reading central bank’s current and future actions is a valuable tool that comes from following financial news, watching the markets, and trading Forex.

History of the Forex Market

2008-02-10T10:22:00.000-02:00

The Foreign Exchange market, also referred to as the "Forex" or "FX" market is the largest financial market in the world, with a daily average turnover of well over US$1 trillion -- 30 times larger than the combined volume of all U.S. equity markets.

"Foreign Exchange" is the simultaneous buying of one currency and selling of another. Currencies are traded in pairs, for example Euro/US Dollar (EUR/USD) or US Dollar/Japanese Yen (USD/JPY).

There are two reasons to buy and sell currencies. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency.

The other 95% is trading for profit, or speculation.

For speculators, the best trading opportunities are with the most commonly traded (and therefore most liquid) currencies, called "the Majors."

Today, more than 85% of all daily transactions involve trading of the Majors, which include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar.

A true 24-hour market, Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, London, and New York.

Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night.

The FX market is considered an Over The Counter (OTC) or 'interbank' market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network.

Trading is not centralized on an exchange, as with the stock and futures markets.

Cashing In On Discounted Loans

2008-02-09T19:58:00.000-02:00

When looking for sources of credit in this tight credit market, you might want to take a look at discount payday loans. These types of loans are set up for people who may not be able to get credit under other conventional means either due to bad credit or other factors. You do want to read the loan information provided by the lender that you choose, as the terms can differ across lenders.

Generally, the cash advance (as it is sometimes called) is provided upon verifying employment. Initial loans, for new borrowers, can be discounted payday loans in that they waive the $30 fee associated with the loan. Your credit history will not be checked. The initial loans are sometimes limited to smaller amounts like $300. After you understand the process, you can take out loans for a greater amount, however, it will still be a small loan of up to $600. These types of loans are perfect for emergencies like broken refrigerators and unforeseen medical expenses. They are not recommended for continuous use and there are even limits to how many loans you can withdraw in a year, in some cases.

The loan information given in your agreement will specify repayment terms. Ideally, you should repay the payday loan on the first paycheck cycle after you're taken the loan. This will keep fees down to a minimum. You can then get another loan later, after you're repaid the first. There may be limits on the number of loans you can withdraw in one year. If you want to get another free cash advance (no fee), then some programs will allow you to refer other people to the service and offer you a free loan for the referral. This is another way you can tap discounted loans for future use.

Hedging

2008-02-08T23:31:00.000-02:00

Hedging is a way of reducing some of the risk involved in holding an investment.

There are many different risks against which one can hedge and many different methods of hedging.

When someone mentions hedging, think of insurance. A hedge is just a way of insuring an investment against risk.

Consider a simple case. Much of the risk in holding any particular stock is market risk; i.e. if the market falls sharply, chances are that any particular stock will fall too.

So if you own a stock with good prospects but you think the stock market in general is overpriced, you may be well advised to hedge your position.

There are many ways of hedging against market risk. The simplest, but most expensive method, is to buy a put option for the stock you own.

It's most expensive because you're buying insurance not only against market risk but against the risk of the specific security as well.

You can buy a put option on the market which will cover general market declines and/or you can hedge by selling financial futures.

The best (and cheapest) hedge is to sell short the stock of a competitor to the company whose stock you hold.

For example, if you like X company and think they will eat Y's lunch, buy X and short Y.No matter which way the market as a whole goes, the offsetting positions hedge away the market risk.

You make money as long as you're right about the relative competitive positions of the two companies, and it doesn't matter whether the market zooms or crashes.

If you're trying to hedge an entire portfolio, futures are probably the cheapest way to do so. But keep in mind the following points.

The efficiency of the hedge is strongly dependent on your estimate of the correlation between your high-beta portfolio and the broad market index.

If the market goes up, you may need to advance more margin to cover your short position, and will not be able to use your stocks to cover the margin calls.

If the market moves up, you will not participate in the rally, because by intention, you"ve set up your futures position as a complete hedge.

Another technique would be to sell covered calls on your stocks.

You won't be completely covered against major market drops, but will have some protection and ...

Some possibility of participating in a rally!

Retail Giant Calls for Action on Global Warming

2008-02-07T23:31:00.000-02:00

The chief executive of Australian supermarket giant Woolworths wants his nation's business community to stop "navel gazing" about global warming and start fighting to curb greenhouse gas emissions. Michael Luscombe spoke at a business panel talk.

The panel of large Australian company executives agreed that cutting their output of greenhouse gases would save money and reduce waste. They also said that "the business opportunities" of the green movement "far outweigh the negative side."

"My advice to companies is just get out there and do it," Luscombe said. "You might not get it all right, but you will learn a hell of a lot along the way." Woolworths has been "going green" for about a year and a half, aiming for stringent goals.

US to resume military aid to Thailand

2008-02-06T23:04:00.000-02:00

The United States said Wednesday it would resume military aid to Thailand suspended in the wake of the 2006 coup, after a democratically elected government was unveiled in Bangkok.

Deputy US Secretary of State John Negroponte "has determined and certified to Congress that a democratically elected government has taken office in Thailand, removing legal restrictions on assistance to the Government of Thailand imposed following the September 2006 coup," said Tom Casey, a State Department spokesman.

Thailand's newly elected Prime Minister Samak Sundaravej on Wednesday unveiled his cabinet, sworn in by King Bhumibol Adulyadej during a brief ceremony inside his Bangkok palace.

"We congratulate Thailand's new cabinet on its inauguration, and the Thai people on their success in re-establishing an elected government," Casey said.

The United States suspended about 24 million dollars in military aid in protest at the ouster of prime minister Thaksin Shinawatra in a bloodless coup in September 2006.

The aid cut-off involved foreign military financing, international military education and training, and peacekeeping operations.

The sanctions were imposed automatically under a US law which forbids assistance to the government of a country where an elected leader has been deposed in a coup.

Washington maintained aid for counter-terrorism, combating weapons of mass destruction and fighting communicable diseases.

Casey said the United States looked forward to "engaging across a range of issues" with Prime Minister Samak's government, "in keeping with the proud history of our warm friendship and strong alliance."

The new Thai cabinet brought close aides to Thaksin back to government.

Samak claimed the defence ministry for himself, only the third civilian ever to hold the job in Thailand.

The foreign ministry is headed by Thaksin's Oxford-educated lawyer, Noppadon Pattama, who is defending the ex-premier and his family against corruption charges filed by the previous military-backed government.

www.afxnews.com

Stock Markets and Estimates of the Future

2008-02-05T17:22:00.000-02:00

In stock markets there are three main types of estimates of the future:

A. The Naive

This forecast is based on linear trend extrapolations.

B. The Gullible

This forecast is based on analysts estimates, and

C. The Expert

This prediction is based on rigorous systematic study.

Forecasts, predictions, prophesies, expectations and anticipations concern the future. Man has always had an inordinate desire to know the future, and this is exploited just as fully as any other human passion.

Aristotle (384 - 322 BC) in his "Rhetoric" made a distinction between hortatory statements about the future and expository statements about the present time.

John Maynard N.Keynes (1883 - 1946) in his "Scope and Method" originated the use of the term "positive" to refer to "what is" and the term "normative" to refer to "what should be."

These terms make the distinction between facts about the present, on one hand and opinions about either the speculative future or an ideal state on the other hand, respectively.

The important point here is that statements about future earnings and growth rates are normative, not positive.

They are opinions, not facts!

No one's "crystal ball" is any more reliable than any one else's! Therefore, if not self-reliant, then one must rely on the expert opinion of others who have different agendas and conflicting interests.

Similarly, statements about efficient and rational markets where all prices instantly converge to intrinsic value are normative, not positive.

They are not reality, but rather utopian ideals approached by stock markets as complex aggregates but not by individual stocks.

Perfectly efficient markets are necessary as a fixed standard for comparison, and thus serve a useful methodological function.

The Worrisome Aspects of Investing

2008-02-05T17:20:00.000-02:00

If you are going to be successful as an investor, you must take the time to identify companies with adequate financing, great management, realistic market capitalization, solid properties and etc.

It is the worrisome aspects of the current market -- when all of us are feeling on edge about the risks -- that makes this a good time to invest.

People do dumb things when they are scared:

Like selling great companies, or sit on the sidelines, keeping their "Powder Dry for the Brighter Days!"

And when the brighter days come ...

They will do even dumber things, like spend twice, or ten times, the current ask for the same shares.

They'll be buying those shares from ...

“The Experts!”

The key is to buy when everyone is afraid (like right now), and sell when everyone is confident (in the coming mania).

If you don't have a tolerance for risk, or a willingness to do enough homework to reduce the risk, you really shouldn't be investing -- any more than you should invest with money you can't afford to lose!

By definition, any investment that can turn dimes into dollars can also turn dollars into dimes if you aren't attentive.

This isn't an arena for amateurs ...

Although I do expect millions of complete amateurs will be in it over the next few months.

But if you can handle the risk, there is a very serious opportunity for you to get well positioned ...

Try not to miss it!

Never Invest on Tips!

2008-02-05T17:18:00.000-02:00

Haramis - Stock Brokers - Athens, Greece

Betting on information from people who supposedly have the inside story on a company is extremely dangerous!

Everyone has an opinion and chances are they do not have all the facts. In my experience, trading on tips from these "reliable" sources have always given me the same results:

I lose money!

There is also "Your Brother-In-Law" theory, not highly recommended by anyone ... but followed all too often by many investors!

Your brother-in-law, or "some guy at work," tells you about a stock that is "really going to make you a lot of money." You know nothing about the stock but you rush out and buy a hundred shares nevertheless.

I think the right word for this group is "losers."

Would you buy a stock because an "expert" on TV or a paper says it is a great investment?

Chances are, they or their company own too much of this stock and need to get rid of it.

It is called "Pump and Dump."

Pump up how great the stock is, then dump it when unwitting investors buy it because they think it is a great investment and it is really not.

I am not saying that every "great" stock that is mentioned on TV or in the papers is actually a dud; sometimes they really are high flyers, but I would not put money on them just because some "expert" recommended them!

Would you invest in a stock because of a friend's tip?

It depends ...

But before you decide, check out what he "really" knows about it, and do a thorough research of your own!

Parrot - Stockbroker

Would you place your trust and invest your hard earned money on rumors and street talk?

No!

While we do actually say "buy the rumor" and "sell the fact," on the other hand, how many times didn't the rumor just remained a worthless rumor?

Always try to get unbiased opinion. Ask yourself about the motive behind the "tip." This might save you from a lot of trouble. Besides, you don't need the "tip!"

All it takes to "beat the market" is commonsense thinking, plain good old time dealing and ...

Patience!

The 1987 Stock Market Crash Black Monday!

2008-02-05T17:17:00.000-02:00

On Monday, October 19, 1987, the Dow Jones Industrial Average declined 22.6% in the largest single-day drop in history.

This one day decline was not confined to the United States, but mirrored all over the world. By the end of October, Australia had fallen 41.8%, Canada 22.5%, Hong Kong 45.8%, and the United Kingdom 26.4%.

Black Monday, as it has become known, was almost twice as bad as the stock market crash of October 29, 1929. The 1929 decline approximated 11.7% and started the Great Depression.

The Securities Exchange Commission, academic professors, financial writers and every financial security firm has analyzed the stock market crash of 1987 in about every way possible.

Some believe the market crash was caused by an irrational behavior on the part of investors. Some analysts believe that excessive stock prices and computerized trading were the cause.

The key finding is that no single news event occurred that could account for the crash!

The stock market was doing quite well for the first nine months of 1987. It was up more than 30%, reaching unprecedented heights. That was after two consecutive years of gains exceeding 20%.

By 1987, interest rates began to climb. Three days before Black Monday, the stock market gains for the year dropped by 11.6%, including the effects of a 9.5% drop on October 16, 1987.

The three day drop was caused by several macroeconomic factors. Long-term bond yields that has started 1987 at 7.6% climbed to approximately 10%. This offered a lucrative alternative to stocks for investors looking for yield.

The merchandise trade deficit soared and the value of the U.S. dollar began to decline. After a speech by Treasury Secretary Jim Baker, investors began to fear that the weak US dollar would cause further inflation.

On Monday, the Dow dropped about 200 points or 9% in the first hour and half. During the day, most institutional investors implemented various computer-based portfolio insurance programs.

Portfolio insurance was destabilizing because it required selling stock as prices declined. The more stocks fell, the more stocks were sold. As the market did not have the liquidity to support the sales, the stock market fell even further.

Buyers waited, knowing the more the market dropped, the more selling would have to take place. By the end of the day, the Dow had lost 508 points.

One important lesson came out of this 1987 stock market crash:

Investors who sold, were taken to the cleaners. Those who held and continued a disciplined and systemic approach received rewards!

In fact, by the end of 1987, total return for the year, including dividends, approximated 5%.

-----------------------------------

Buy the Dips!

"The best time to buy stock is when blood is running in the streets."

Nathan Mayer Rothschild (1776 - 1836)

I hope that you have enough courage to enjoy the market's severe ups and downs!

But for most of you these are unsettling times, and you start sweating when you see your holdings decline by double-digit percentages!

But take courage, those movements may actually be good for you!

What should a careful investor do in a market downturn?

How can you avoid panic and make the best use of panic selling by others?

Dramatic dives in the stock market allow you to "Buy the Dips!" And the dips are so frequent these days, you don't even need to know when they will occur!

With stock prices flying up and down, chances are that on your next payday prices will be down, so you'll get more shares for your money.

You'll be enjoying cost averaging!

The more volatile the market and the more extreme the price fluctuations, the better off you'll be in the long run.

It may sound crazy at first, but it makes sense:

When prices swing wildly up and down, you will frequently have the opportunity to buy low.

As the stock market inches up over time, you'll enjoy greater gains than those who plunked all their money into the market when it was high, or who invested in a market that was slowly rising rather than wildly fluctuating!

So when prices dip, open up the champagne ...

You'll be buying stocks on sale!

Stock Market and Securities Fraud

2008-02-05T17:15:00.000-02:00

"The market is a place set apart where men may deceive each other!"

Diogenes Laertius (Circa 200)

How many ways are there to be cheated?

Shall I count the ways? Well ...

No one can!

There can be as many ways to cheat investors as there are swindlers, con artists, and unscrupulous brokers and ...

There are quite a few of those out there!

When you invest your hard earned money with a stockbroker, you do so with a level of trust, and this trust is backed up with strong legal protections to protect your interests. Nevertheless, investment and broker fraud is all too common.

Brokers take advantage of the fact that they are entrusted with large sums of money and sometimes can create scams to defraud the investors.

If you have experienced large losses to your account, sometimes the responsibility may lay with your broker.

Securities litigation is a very complex and specialized area of the law. If you feel your rights have been violated, your best recourse is to seek an experienced professional to assist you.

Have you been the victim of bad investment advice?

Did your stockbroker recommend risky investments without explaining the risks?

Did your stockbroker make trades without your understanding or authorization?

Did your stockbroker excessively trade your account?

Securities investing and trading is carefully regulated by rules and laws for the protection of public investors. The violation of these rules, particularly through various deceptive actions and schemes to cheat or take advantage of investors, is commonly known as securities fraud.

If you believe that you may have been a victim of securities fraud, you have certain rights, which you should be aware of, rights which may provide you an opportunity to recover your losses from your stockbroker or brokerage firm.

Haramis Stock Brokers - Athens, Greece - Protect Yourself!

Most investors who have been defrauded do not know what happened to their investments until it is too late.

But even after the losses have occurred, the law provides mechanisms for investors to recover their losses, which were caused by a stockbroker's misrepresentations or abuse of the account.

Stock brokers and brokerage firms have certain obligations and duties to their customers. And investors have a right of recourse if their account has been abused or if they have been defrauded by an investment advisor.

An investor who believes that he or she may have been the victim of an unscrupulous stockbroker should consult with an attorney to learn more about their rights under the circumstances.

Most investment advisors and stock brokers are honest, decent individuals who follow the rules of the securities industry and provide a valuable service to the public.

Unfortunately there are some unethical and dishonest investment advisors, and there are some brokerage firms that do not supervise their brokers and accounts as carefully as they are required.

Hopefully, a better informed investor will be better able to protect himself, evaluate what has happened in an account, and have some idea what might be done about it!

All investors should be aware of their rights in order to better protect themselves and to have a higher level of awareness of the standards to be expected in an investment relationship.

Many stock brokers' and customers' disputes might be avoided by better informed investors going into their relationships with their eyes open and knowing their rights!

Pyramids and Multilevel Marketing Plans

2008-02-05T17:13:00.000-02:00

Multilevel or "network" marketing plans are a way of selling goods or services through distributors.

These plans typically promise that if you sign up as a distributor, you'll receive commissions - for your sales and those of the people you recruit to become distributors. These recruits sometimes are referred to as your "downline."

Some multilevel marketing plans are legitimate. However, others are illegal pyramid schemes.

In pyramids, commissions are based on the number of distributors recruited. Most of the product sales are made to these distributors - not to consumers in general.

The underlying goods and services, which vary from stocks to car leases, serve only to make the schemes look legitimate.

Joining a pyramid is risky because the vast majority of participants lose money to pay for the rewards of a lucky few.

Most people end up with nothing to show for their money except the expensive products or marketing materials they're pressured to buy.

If you're thinking about joining what appears to be a legitimate multilevel marketing plan, take time to learn about the plan.

What's the company's track record?

What products does it sell?

Does it sell products to the public-at-large?

Does it have the evidence to back up the claims it makes about its product?

Is the product competitively priced?

Is it likely to appeal to a large customer base?

How much is the investment to join the plan?

Is there a minimum monthly sales commitment to earn a commission?

Will you be required to recruit new distributors to earn your commission?

Be skeptical if a distributor tells you that for the price of a "start-up kit" of inventory and sales literature - and sometimes a commitment to sell a specific amount of the product or service each month - you'll be on the road to riches!

Often consumers spend a lot of money to "build their business" by participating in training programs, buying sales leads or purchasing the products themselves.

Too often, these purchases are all they ever see for their investments!

If you decide to become a distributor, you are legally responsible for the claims you make about the company, its product and the business opportunities it offers.

That applies even if you're repeating claims you read in a company brochure or advertising flyer. You have to verify the research behind any claims about a product's performance before repeating those claims to a potential customer.

In addition, if you solicit new distributors, you are responsible for the claims you make about a distributor's earnings potential.

Be sure to represent the opportunity honestly and avoid making unrealistic promises. If those promises fall through, remember that you could be held liable.

Use common sense when evaluating a multilevel marketing opportunity and consider the following tips as you make your decision:

Avoid any plan that includes commissions for recruiting additional distributors. It may be an illegal pyramid!

Beware of plans that ask new distributors to purchase expensive products and marketing materials. These plans may be pyramids in disguise!

Be cautious of plans that claim you will make money through continued growth of your downline, that is, the number of distributors you recruit.

Beware of plans that claim to sell miracle products or promise enormous earnings. Ask the promoter to substantiate his claims. Beware of shills - "decoy" references paid by a plan's promoter to lie about their earnings through the plan.

Don't pay or sign any contracts in an "opportunity meeting" or any other pressure-filled situation. Insist on taking your time to think over your decision. Talk it over with a family member, friend, accountant or lawyer.

Do your homework ... Check it out!

Especially when the claims about the product or your potential earnings seem too good to be true!

Remember that no matter how good a product and how solid a multilevel marketing plan may be ...

You will need to invest "sweat equity" as well as good money for your investment to pay off!

Do You Know Your Investing and Stock Market Limits?

2008-02-05T17:12:00.000-02:00

Do you accept that you won't be the next Warren Buffett?

Professional investors spend their whole day researching companies, have analysts to help them, and can also visit companies.

By all means, that doesn't mean you can't stock-pick successfully as an amateur. The very trick here is to keep it simple and stick with what you do know.

Warren Buffett, for example, spoke about investing within your "circle of competence," an approach also favoured by Peter Lynch.

In his book "One up on Wall Street," Peter Lynch wrote:

"If you stay half alert, you can pick the spectacular performers right from your place of business or out of the neighbourhood shopping mall, and long before Wall Street discovers them."

Lynch sought his fortune in "hum drum" companies, with "mediocre management," operating in "simple-minded" industries with no competition -- certainly not the sort of firms you need to be a professional to understand.

As Lynch says:

"I continue to think like an amateur as frequently as possible. Any normal person using the customary 3% of the brain can pick stocks just as well, if not better, than the average Wall Street expert."

Taxes, Real Estate and Loans

2008-02-05T17:11:00.000-02:00

The other day I was listening to a young man extol the virtues of owning real estate.

Much of what he said was true. However, two things made me sit up and take notice and I couldn't help but comment:

First, he said the interest on his home loan was tax deductible, so the government was underwriting his house payment.

I asked how much the government was giving him. He said they were not giving him anything but allowed the interest on his home loan to be deducted from his taxable income.

Assuring him I didn't want to be nosey, I asked what that deduction meant to him. 28% of the interest paid he saved on taxes was the reply. "So, you get to keep 28 cents for every dollar in interest you pay?" Eagerly he responded, "YES."

He didn't see the problem with the math, so I decided to help him out.

I took some change from my pocket and placed 28 cents on the table. I asked him if he would give me a dollar for the coins. Before he could answer I sweetened the pot.

I doubled the amount and put a total of 56 cents on the table right in front of him.

I said, "I'll give you double what the government is giving you. I'll give you 56 cents for every dollar you have or can scrape together."

He didn't seem too excited about my idea as he understood the demonstration. "Pay off the mortgage." I told him.

But he wasn't through. He was looking to redeem himself. He mentioned that at least the property was going up in value.

I asked him his age, he told me 35. I asked him how well he remembered the early 1980's. He didn't.

I told him real estate doesn't go up in a straight line, and on occasion it goes down. I told him I bought a home in the spring of 1980.

Almost immediately the real estate market went flat. Five years later my wife and I were certain if we wanted to sell our house we would OWE money to the bank at closing. It was 10 years before the market started to move up again.

Just recently it hit another bump in the road.

In my area prices have dipped 3% in the past year. With easy money and low down payments, many new buyers are finding themselves upside down in their mortgages.

Many people, who have taken a home equity loan up to or even exceeding the value of the property, find themselves in the same boat.

Did he understand the moral?

Yes, he did!

Borrow as little as possible, pay it off as quickly as you can and take care of it before It takes care of you!

The goal is living debt free ...

Unless you are ready and willing to give me one dollar for my 56 cents!

Investing, Fear of Regret and Greed

2008-02-05T17:08:00.000-02:00

People tend to feel sorrow and grief after having made an error in judgement.

Investors deciding whether to sell or buy a security are typically emotionally affected by whether the security was bought or sold for more or less than the current price.

One theory is that investors avoid selling stocks that are going down, in order to avoid the fear, pain and regret of having made a bad investment.

On the other hand, they also avoid selling when prices are going up, because they are very greedy and are afraid that the price will keep on going up.

Many people are wondering why they didn't take their i.e. 50% or 200% gains when they had the chance. Most investors will rationalize they ran these high gains down because they were afraid they would lose even higher profits.

In my opinion, for many of these investors, it was just plain greed that prevented them from selling their stocks.

Every experienced trader knows that fear and greed are two emotions that can dramatically affect your success in the market.

You have to deal with controlling greed and fear every single day. Although there are no easy answers when it comes to the stock market, of one thing I am certain:

If you are a greedy trader and always try to squeeze every last point out of every trade, it's only a matter of time before you end up with a lot less than you actually started with!

Oliver Velez of www.Pristine.com says that greed is "that little monster that resides in every single individual." Part of our success in the market, he says, is learning when to give this little monster a little bit more room to operate and when to curtail its actions.

"Every single event has two ultimate outcomes -- either a win or a loss," says Velez. "Greed can make you gaze at the stars without having any consideration of the rocks below. It can prevent you from considering the fact that there is a downside and establishing a stop loss, or developing a systematic way of exiting or aborting a trade if in fact things don't work out."

The embarrassment of having to report the loss to others may also contribute to the tendency not to sell losing or gaining investments.

Some researchers theorize that investors follow the crowd and conventional wisdom to avoid the possibility of feeling regret in the event that their decisions prove to be incorrect.

Many investors find it easier to buy a popular stock and rationalize it going down since everyone else owned it and thought so highly of it.

Investing, Stock Markets and the Earnings Season

2008-02-05T16:54:00.000-02:00

It is this time of the year ...

The time of the earnings season again.

The part of each yearly quarter where investors always believe that it doesn't really matter whether a company does well or bad!

It is this time of the year that the only thing that really counts is whether a company did better or worse than actually expected or "forecasted."

In plain words, it is fine for a company to get heavy losses, as long as the extent of the predicted, forecasted or expected decline is at least a little less than the analysts had been expecting.

At the same time, a company that does really well deserves to be hardly punished -- punishment = declining stock price -- if its ascent is even marginally slower than what analysts had actually been expecting!

If this sounds stupid to you ...

It does definitely mean that you 100% get it!

IT IS 100% STUPID!

Measuring actual performance against expectations is OK within the context of a feedback process -- a normal and healthy aspect of intellectual activity, which ...

Is NOT OK when it becomes a real psychosis!