Archive for September, 2011

Bear Market Blues

September 27, 2011 by · 2 Comments
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(As written for My Paper on 27 September 2011. Click here to enlarge)

We are officially in a bear market.

The bloodshed in the markets last week was breath-taking, with more than US$3.4 trillion (s$4.4 trillion) erased from equity values and over US $1 trillion in the US equity market alone.

Here’s a snapshot of some of the carnage:

1. The Dow Jones Industrial Average suffered its biggest loss since 2008

2. Gold had its biggest one day drop in almost three years, shedding 5per cent

3. Asian currencies had their biggest weekly drop since 1998

Even the MSCI All-Country World Index sank 7.6per cent, entering a bear market for the first time in more than two years. Read more…

Will the Fed announce QE3 this week

September 20, 2011 by · 4 Comments
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(As written for My Paper on 20 September 2011. Click here to enlarge)

Two news have taken centre-stage in the currency world – the trading loss of UBS, Switzerland’s biggest bank, and the announcement of a possible QE3 by the Fed this week.

UBS said that its loss came from unauthorized trading over the past three months. The trader responsible for the loss was Kweku Adoboli, has since been arrested for fraud and false accounting. Read more…

Euro Under Pressure

September 13, 2011 by · Leave a Comment
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(As written for My Paper on 13 September 2011. Click here to enlarge)

When Lehman Brothers fell in 2008, the bankruptcy filing of USD640 billion was the largest ever filed in the history of the United States, far exceeding that of Enron and WorldCom.

3 years on, the ghost of Lehman has returned, and the memories of a painful credit crunch are starting to surface yet again.

The 600-pip fall by the EUR/USD has centred around one sentence – “Will Greece default on its payments and exit the Euro?”

As concerns over Greece and contagion fears escalate, European banks have been dealt another blow. A Bloomberg index shows that 46 banks are trading at just 0.58 times book value, the lowest since the post-Lehman lows of March 2009.

This simply means that investors are estimating their assets to be worth just over half what the companies claim. Read more…

QE3 will work, but not for long

September 6, 2011 by · Leave a Comment
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(As written for My Paper on 6 September 2011. Click here to enlarge)

The Non-Farm Payrolls (NFP) report on Friday was ugly and totally unexpected.

The median forecast of 86 economists called for an addition of 68,000 jobs. However, after the announcement by the US Labour Department, everyone was caught off-guard when the result showed a big fat zero.

This was the weakest reading since September 2010, and meant that that the US economy failed to add any jobs in the month of August. The unemployment rate stayed at 9.1 percent.

To make matters worse, July payrolls were revised down from 117K to 85K, which meant that the hiring was smaller than initially reported.

As I read more into the report, I came across another interesting point. Read more…

Money Matters

September 1, 2011 by · 2 Comments
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(As featured in The Sun, Malaysia’s national newspaper, on 26 Aug 2011. Click here to enlarge)

Education alone won’t ensure a successful venture into online Forex trading

It is hard not to be in awe in the presence of Mario Singh, a Forex trading guru and founder of FX1 Academy Pte Ltd. Decisive in his words and pragmatic in his views, Mario has created a set of philosophies that is said to have been successful in guiding 20,000 people financially. Or so he says.

“FX1 is currently providing education on online Forex trading to approximately 20,000 people the world over,” says Mario.

“The largest transfer to wealth is happening now. Over the last year, nine Asian countries have raised interest rates. The list included Malaysia, Singapore, India, China, Taiwan, South Korea, and Indonesia,” he says, adding that he hopes to help some one million people become millionaires through Forex trading over the next 10 years. Read more…