Share on Google Plus Share on Twitter Share on Facebook Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend

Printer Friendly Page Save As Favorite View Favorites (# of views)   No comments
Exclusive to OpEdNews:
General News

Wall St. Bail Out comments

By       Message Joe Gelet     Permalink
      (Page 1 of 1 pages)
Related Topic(s): ; , Add Tags Add to My Group(s)

View Ratings | Rate It

opednews.com

- Advertisement -
Wall St. Bail out

Opinions of the current market are very simple to see where they have origins:  do you have a vested interest in promoting it?  Do you have a large equity portfolio, a large share of Goldman Sachs, or other financials, making you a big promoter of the bail out?  In other words, those for the bailout have long equity positions they can’t sell, and those against are not in the market. 

Elite E Services primary agenda is the development of automated systems so the regulatory structure of capital markets is really none of our concern, assuming they are functioning.  We see however liquidity problems even in the FX markets, the most liquid market in the world.  Last Sunday before this bailout was announced, we saw 100 – pip wide spreads in multiple bank feeds (not retail brokers) which were, according to our sources, REAL market spreads.  This is very concerning and has no valid explanation.  Since then, other retail brokers have been plagued with liquidity issues that have been explained by liquidity providers dropping out of the pool.  EES has a theory about this, starting with Lehman.  Lehman was one of the top 10 FX liquidity providers, and while not as big as DB or UBS, they were the Prime Broker of many smaller retail FX brokers and other relatively small CTAs and Hedge Funds.  Therefore, just the removal of Lehman from the provider pool has created a void.  Secondly, the more obvious reason is that traders do not want to take fresh positions.  In either case, EES concern is that we are headed into a period of protracted liquidity, and can expect widened spreads and thinly traded markets, even in FX.  FX is not a credit market directly but any financial transactions cross-border are supported by FX transactions, thus, any lack of liquidity in any market will also affect FX.  Traders should focus on medium and long term positions, and scalpers can consider themselves out of a job for now.  There are also rumors the reason the USD is up is due to position closing and redemptions of funds into USD and USD cash.  What does it all mean, where to go from here?

What we can expect:

·         Treasuries to be downgraded to junk status, due to the absorption of F&F debt and now the toxic debt included in the new package

·         A complete restructuring of regulation in US with the Fed and the remaining families at the helm (Goldman, ML, etc.)

·         USD to get ‘crushed’ according to London based sources and other FX analysts

- Advertisement -

·         Massive, widespread regulation

·         Foreign Exchange controls, particularly those involving USD-short positions 

Many manual traders are having a hard time in these markets.  EES automated systems are doing fine, if not better than normal in these market conditions.  From a fundamental and technical sense, the markets don’t make any sense.  For example why is the USD up considering the calamity unfolding on Wall St.  A bail out, would print 700 Billion in fresh USD making the dollar lower (in theory).  Any action by the Fed would be to lower rates, once again, indicating a lower dollar.  Yet the USD rises.  Until things settle down, EES recommends being long Swiss Francs and finding good performing CTAs and staying in cash and cash equivalents (not tbills).  Stay away from Hedge Funds trading in complex financials.  Find banks with high credit ratings and low leverage ratios.  In other words, use the common sense you should have been using had Wall St. not tricked you into investing in high grade junk and housing. 

At the United Nations, an Australian reporter accosted the actor Michael Douglas during a press conference and demanded to know - with a straight face, mind you - whether he felt any responsibility for the crisis because he delivered the line 'greed is good' as the character Gordon Gekko in the film Wall Street. 'Are you now saying, Gordon, that greed is not good?' the reporter asked. 'I'm not saying that,' a bemused Douglas replied. 'And my name is not Gordon. He's a character I played 20 years ago.'

[ http://www.guardian.co.uk/business/2008/sep/28/wallstreet.useconomy/print ]

 var addthis_pub = 'eliteeservices';addthis_pub = 'eliteeservices';

URL of this page:

click here
- Advertisement -

 

- Advertisement -

View Ratings | Rate It

http://www.eliteeservices.net
Elite E Services, a registered CTA with the CFTC and NFA Member (#373609), is a Nevada registered Corporation that offers FX Managed Accounts, Automated black box FX Trading Systems, FX System Custom Programming, and Market Analysis. Joe Gelet, (more...)
 

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon



Go To Commenting
/* The Petition Site */
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Related Topic(s): ; , Add Tags
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Massive Dollar Short Opportunity

Wall St. Bail Out comments