Global Economic Intersection
Advertisement
  • Home
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
  • Home
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
Global Economic Intersection
No Result
View All Result

New, Old News Align: Risk Off Holds Sway

admin by admin
November 11, 2012
in Uncategorized
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

4 Prior Week’s Market Movers: Lessons and Ramifications for This Week and Beyond

by Cliff Wachtel, Global Markets and The Sensible Guide to Forex

Here’s a summary of last week’s prime market movers, their lessons for the coming week, what to do about them, and why any savvy investor needs to watch forex markets

Prior Week’s Market Movers

  1. US Elections: Before the results were known, there was both caution and speculation. Afterwards, there was concern that the Democrats, the more anti-business/investor party, had retained the Senate and Presidency. The end of the elections also allows markets to focus back on two bearish concerns, the fiscal cliff and the EU.
  2. Fiscal Cliff Anxiety: There were no specific updates about it but concerns regarding the potential growth hit from the sudden imposition of higher taxes and reduced spending were widely cited last week. Optimists hold a deal will get done because otherwise the consequences will be devastating for the US economy and so common sense will prevail. Pessimists point out that the same argument failed to apply to US debt ceiling negotiations in the summer of 2011. These demonstrated Washington’s inability to face hard choices due to political gridlock. Risk assets got smacked and the US lost its S&P AAA credit rating. So much for depending on Washington’s sense of responsibility.
  3. Greece:  The parliament approved new austerity measures, but there was concern that they might not and so invite a cash cutoff from the EU, evoking insolvency and contagion risk. Afterwards, the same contagion concerns remain because all know Greece can neither pay its debts nor meet austerity commitments.  But at least the denial can continue.
  4. Weak EU Data and EU Official Comments: Markets fell following bleak forecasts from the European Commission and ECB President Draghi.

Observations, Lessons, Coping Techniques

The odd thing regarding number 3 is that what they said was old news. In accordance with what we’ve warned for the past weeks, we suspect the real reason for the rise in EU angst is that with the US elections over, the Washington-imposed lid is now officially lifted on public discussion of:

  • Greece’s ultimate insolvency: Of course, the real risk from a Greece insolvency and EZ exit is that it would exacerbate fears about Spain, which in turn raises Spanish (and probably Italian) bond rates. That would lead to a hastily conceived plan for…
  • Spain’s coming bailout and insolvency risk

Investors understand that along with ongoing deterioration in Europe, these two putrefying corpses have been locked away in the closet for the past month. As we reopen it, they expect a stink.

Did you notice the uptick in news reports about Greece in after the elections? They didn’t mention anything new, just stuff that had “somehow” been left unmentioned for the past month. Hmmm.

Lessons

This would explain the late week strength in the USD and stock market weakness. In theory, the dollar should have weakened now that the way is clear for four more years of Washington’s dollar-dilutive policies.

The fact that it didn’t strongly suggests markets are in risk aversion mode – that the USD’s safe haven appeal outweighed its longer term risks of depreciation. Indeed the only currency against which the USD really fell was the even more safe-haven JPY, which further confirms how nervous markets are.

By the way, here we see another example of how useful forex markets can be for understanding the big picture, even for those that don’t directly deal with them. I discuss in depth how anyone can easily use and interpret forex trends to be a more effective investor or trader in my book.

Regardless of whether you believe these policies are right for the economy, there’s no question they’re terrible for anyone holding dollars.

Don’t believe me, just look at what the Chinese government has been doing in recent years. They’ve been striking a balance between doing all they can to diversify their forex reserves out of the USD and minimize further need for it, while not doing anything too drastic (or public) that would hurt their prime export customer and their trillions of US dollars that they still must continue to hold and renew with new US debt purchases.

wachtel-book-sensible-forex-150x200

Coping Techniques

For the rest of us US dollar based investors who lack the resources and expertise of a sovereign wealth fund, see here for the best guide to a variety of ways to hedge USD risk and protect your savings from the “Obamanable” US dollar.

It’s also useful for those based in Euros, Yen, or other currencies being mercilessly sacrificed on the altar of questionable policies by their central banks.

DISCLOSURE /DISCLAIMER: THE ABOVE IS FOR INFORMATIONAL PURPOSES ONLY, RESPONSIBILITY FOR ALL TRADING OR INVESTING DECISIONS LIES SOLELY WITH THE READER.

Related Articles

More by Cliff Wachtel


About the Author

wachtel-125x139Cliff Wachtel, CPA, is currently the Chief Analyst of anyoption.com, a leading binary options broker, and Director of Market Research, New Media and Training for Caesartrade.com, a fast growing forex and CFD broker.

He is also the author of The Sensible Guide To Forex, and publisher of thesensibleguidetoforex.com. Both the book and website are uniquely dedicated to providing safer, simpler ways for active traders and passive long term income investors to use forex markets to diversify out of currencies like the USD, EUR, JPY, and others that are being debased by excessive money printing. Since the Great Financial Crisis began in 2007, Cliff was among the first financial writers to focus on stocks that provide steady, high yields currency diversification for insurance against …More currencies being steadily devalued. Articles focus on both top income stocks for exposure to multiple quality currencies, and safer, simpler less demanding types of longer term forex trades than commonly covered on other forex sites.

Cliff can also be found at leading financial websites such as Seeking Alpha, Business Insider and forex sites like Forex Factory. He has appeared in a variety of offline publications including Forex Journal, and John Nyaradi’s book, Super Sectors, in which he was interviewed along with other market experts like Jim Rodgers, Dr.Marc Faber, John Mauldin, Robert Prechter, and Tom Lydon.


Previous Post

Sunday Economic Comedy: Iceland’s Press Conference

Next Post

It’s the Interest, Stupid! Why Bankers Rule the World

Related Posts

Hong Kong Securities Watchdog Hires Crypto Personnel For Sector Supervision
Business

Hong Kong Securities Watchdog Hires Crypto Personnel For Sector Supervision

by John Wanguba
February 6, 2023
Hindenburg Bet Against India's Adani Baffled Rival U.S. Short Sellers
Business

Hindenburg Bet Against India’s Adani Baffled Rival U.S. Short Sellers

by John Wanguba
February 6, 2023
Volvo Prepares EV Blitz In Biggest Product Revamp Under Geely
Business

Volvo Prepares EV Blitz In Biggest Product Revamp Under Geely

by John Wanguba
February 6, 2023
Luxury Rehab Center Comes Up Offering ‘Crypto Addiction’ Therapy
Business

Luxury Rehab Center Comes Up Offering ‘Crypto Addiction’ Therapy

by John Wanguba
February 6, 2023
Alphabet Disappointed On Sales As Ad Revenue Plunged After Pandemic Run-Up
Business

Alphabet Disappointed On Sales As Ad Revenue Plunged After Pandemic Run-Up

by John Wanguba
February 6, 2023
Next Post

It’s the Interest, Stupid! Why Bankers Rule the World

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Browse by Category

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Browse by Tags

adoption altcoins banking banks Binance Bitcoin Bitcoin adoption Bitcoin market Bitcoin mining blockchain BTC business China crypto crypto adoption cryptocurrency crypto exchange crypto market crypto regulation decentralized finance DeFi Elon Musk ETH Ethereum Europe finance FTX inflation investment market analysis markets Metaverse mining NFT nonfungible tokens oil market price analysis recession regulation Russia technology Tesla the UK the US Twitter

Archives

  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • August 2010
  • August 2009

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized
Global Economic Intersection

After nearly 11 years of 24/7/365 operation, Global Economic Intersection co-founders Steven Hansen and John Lounsbury are retiring. The new owner, a global media company in London, is in the process of completing the set-up of Global Economic Intersection files in their system and publishing platform. The official website ownership transfer took place on 24 August.

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Recent Posts

  • Hong Kong Securities Watchdog Hires Crypto Personnel For Sector Supervision
  • Hindenburg Bet Against India’s Adani Baffled Rival U.S. Short Sellers
  • Volvo Prepares EV Blitz In Biggest Product Revamp Under Geely

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

No Result
View All Result
  • Home
  • Contact Us
  • Bitcoin Robot
    • Bitcoin Profit
    • Bitcoin Code
    • Quantum AI
    • eKrona Cryptocurrency
    • Bitcoin Up
    • Bitcoin Prime
    • Yuan Pay Group
    • Immediate Profit
    • BitIQ
    • Bitcoin Loophole
    • Crypto Boom
    • Bitcoin Era
    • Bitcoin Treasure
    • Bitcoin Lucro
    • Bitcoin System
    • Oil Profit
    • The News Spy
    • British Bitcoin Profit
    • Bitcoin Trader
  • Bitcoin Reddit

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

en English
ar Arabicbg Bulgarianda Danishnl Dutchen Englishfi Finnishfr Frenchde Germanel Greekit Italianja Japaneselv Latvianno Norwegianpl Polishpt Portuguesero Romanianes Spanishsv Swedish