On the heels of the Commodity Futures Trading Commisions’s (CFTC) release of the long awaited regulations that will govern the spot forex market, today we see this is a beast that seems to only grow. Earlier, the Bank of International Settlements (BIS) released the results of their triennial survey of the forex market. The study found that the average daily turnover in forex had grown by 20% in just the last three years to an astonishing $4 trillion. No other market can even come close. What’s more, that growth happened in the midst of a global recession, in case anybody forgot.
Forex can grow in a recession. Can it under regulation?
September 1st, 2010, 3:07 pm by Michael McFarlinHousing freefall, will it return?
August 26th, 2010, 8:20 pm by Dan CollinsThe economic crisis we are in started with housing so it would only make sense that a recovery in the housing sector is what is needed to bring us out of it.
Unfortunately all of the news on housing has been pretty grim. It started Tuesday with word that existing home sales for July dropped 27.2% from July of 2009. And July of 2009 wasn’t a really good month. Wednesday it was reported that new homes sales in July drop 12.4% from June and 32.4% from July 2009.
Wall Street needs a new drug
August 25th, 2010, 11:52 am by Dan CollinsThe Wall Street Journal reported on Tuesday that a review of drug-test data compiled by Sterling Infosystems, shows that cocaine is losing favor among investment professionals with marijuana and amphetamines picking up the slack.
The story compared the data compiled by Sterling Infosystems from 2009 to 2007, which showed that cocaine was present in 7% of positive tests at Wall Street firms in 2009 compared to 16% in 2007 and the prevalence of marijuana in failed tests jumped to 80% in 2009 from 64% in 2007. The percentage of amphetamines in failed tests grew to 10% in 2009 from 3% in 2007.
New regulations: Clear as mud
August 18th, 2010, 11:17 am by Christine BirknerWhen the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law last month, we ran a poll question on our website asking whether it: a) ends “too big to fail,” b) doesn’t end “too big to fail,” or c) is a full employment act for lawyers. Most of those who responded chose option c, and from the looks of things at the Futures Industry Association‘s financial reform forum in Chicago yesterday, they were right. The forum was packed with lawyers who will be very busy over the next year as new rules stemming from the legislation are put in place. Their discussion on the new rules was complicated and mind-numbing, and it seemed like the only certainty at this point is that there are many UNcertainties. Read the rest of this entry »
China: We’re #2
August 16th, 2010, 12:05 pm by Christine BirknerMarkets are reacting today to the news that China has taken over Japan as the second largest economy and will surpass the United States as the world’s largest economy within 20 years. Jon Nadler pointed out in his metals update this morning that the U.S. dollar was lower and the euro gained, while gold was up a bit. He also said that Japan and China could flip-flop for the number two spot in the economy as seasons and metrics used to calculate GDP change. Read the rest of this entry »
The Fed reinvests
August 10th, 2010, 3:10 pm by Christine BirknerIn its rate decision today, the Federal Reserve held interest rates as expected, but announced it would reinvest in mortgage-backed securities, or, as Phil Flynn predicted in his energy report this morning, “the fearful Fed may just pump that cash back out there and buy more MBS or bonds to try to inspire some economic activity and maybe even some job creation.”
Waiting on the number
August 4th, 2010, 7:27 pm by Dan CollinsWhat happens when an irresistible force meets an immovable object? I am not sure but I think we may be facing this paradox as it relates to the markets and this week’s employment situation report. Most economic reports over the last month have indicated a soft economy and we hear more and more talk of a double dip recession. While a double dip recession is not likely, the consensus seems to be that we will run out of stimulus spending before the recovery begins in earnest. Yet equity markets have skyrocketed in July. The Dow is up more than 1,000 points since it hit a nine-month low following the release of the June employment report on July 2.
When Washington’s away, investors will play
August 4th, 2010, 12:31 pm by Christine BirknerWith regulatory reform set to rock the trading universe, what’s happening in Washington is never far from the minds of investors. Political uncertainty can equal skittish markets these days. However, this phenomenon is nothing new. According to this MarketWatch story, the stock market historically has performed much better when Congress is out of session than when it’s in session (between 1897 and 2004, the Dow had annualized return of 5.3% when Congress was out of session vs. just 0.4% when it was in session). Congress is set to go on its summer recess at the end of this week, so, if history is any indication, the market could be in for a lift. Read the rest of this entry »
Bummer from Bernanke
August 2nd, 2010, 2:21 pm by Christine BirknerIn a speech in South Carolina today, Federal Reserve Chairman Ben Bernanke gave another subdued forecast for the economy. He said that while “the financial crisis appears mostly behind us…we still have a considerable way to go to achieve a full recovery in our economy” due to persistent unemployment, foreclosure and lost savings for many Americans.
Can we make tough choices?
July 29th, 2010, 7:18 pm by Dan CollinsLast week I attended an interesting forum at the University Club of Chicago. It was entitled “America’s Fiscal Futures: Making Difficult Choices.”
The forum was put on by the MacArthur Foundation and included a discussion with Dr. John Palmer and Rudolph Penner. The two speakers, who come from different sides of the political spectrum, recently co-chaired a joint National Academy of Sciences/National Academy of Public Administration committee that produced the report “Choosing the Nation’s Fiscal Future.”
