tag:blogger.com,1999:blog-85246170711549557822023-11-16T05:44:33.248-08:00Amir S JohanDr A S Johan is a special adviser to the board of directors of Rocks Asia Capital Group. In addition he serves as a Corporate, Family Office and Sovereign Wealth Fund Adviser. Dr Johan Writes and Speaks on Sovereign Funds, Hedge Funds, Private Equity and Venture Capital at major International ConferencesDr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comBlogger74125tag:blogger.com,1999:blog-8524617071154955782.post-17820744368376812972012-11-30T17:50:00.001-08:002012-11-30T17:50:05.103-08:00Study Finds That Investment Banks Should Get Smaller!<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="MsoNormal" style="background: white; line-height: 14.4pt;">
<span style="background-position: initial initial; background-repeat: initial initial; font-family: Arial;">Overcapacity and new
rules will require much further shrinkage of the investment banking industry,
says consultants Roland Berger. <o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt;">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt;">
<span style="background-position: initial initial; background-repeat: initial initial; font-family: Arial;">Read the full story from
<a href="http://www.institutionalinvestor.com/Article/3125180/Investment-Banks-Must-Get-Smaller-Still-Study-Finds.html?LS=EMS755559" target="_blank">Institutional Investor.</a><o:p></o:p></span></div>
</div>
<div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-46037216504006318432012-11-14T21:16:00.004-08:002012-11-15T05:56:19.196-08:00Congratulations to Mr. Xi Jinping<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFmo600aY6MGYIoguB69sRCKBDeKALirZI1CczU0xQpcyRY1sX8x6TWWJ-wD0tx46_tUSJr66qysO6rc4VMdh1-F9jxpKbPWbmMgbUjEWiCmu5jSxuDDRO1NZ9lffam1436Mn3rLlsYDJc/s1600/Xi+Jinping.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="149" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFmo600aY6MGYIoguB69sRCKBDeKALirZI1CczU0xQpcyRY1sX8x6TWWJ-wD0tx46_tUSJr66qysO6rc4VMdh1-F9jxpKbPWbmMgbUjEWiCmu5jSxuDDRO1NZ9lffam1436Mn3rLlsYDJc/s200/Xi+Jinping.jpg" width="200" /></a></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt;">
<span style="background-position: initial initial; background-repeat: initial initial; font-family: Arial;">On my own behalf and on
behalf of the various companies I advise I extend my warmest congratulations to
Mr. Xi Jingping on his assumption of the Presidency of China, Chairmanship of China's Central Military Commission and Supreme Leadership of China’s Communist Party.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt;">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt;">
<span style="background-position: initial initial; background-repeat: initial initial; font-family: Arial;">Under Mr. Xt’s able leadership,
I believe that </span><st1:country-region><st1:place><span style="background-position: initial initial; background-repeat: initial initial; font-family: Arial;">China</span></st1:place></st1:country-region><span style="background-position: initial initial; background-repeat: initial initial; font-family: Arial;"> will continue to
prosper and further extend its role in world affairs.<o:p></o:p></span></div>
</div>
<div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-32678211559616936672012-11-05T19:15:00.001-08:002012-11-05T19:15:27.451-08:00Malaysian Income Tax Filing Dilemma <div dir="ltr" style="text-align: left;" trbidi="on">
Here's a funny picture of the dilemma faced by a radical income tax filer in Malaysia...<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjyKDx2sxp0A4J001P6QgmzWxJsB1NN9UQTRfZVKHREzD2aVSfdQoNqRuIGEtNPBYM40N9Af-9y5vmUM-rjzmGxMqGY8H1cgMrQ7dUd_rHUCG-zXU6cNTySvZS_xa2PR1LvsYS8focfPdv9/s1600/Mal_Incometax.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="230" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjyKDx2sxp0A4J001P6QgmzWxJsB1NN9UQTRfZVKHREzD2aVSfdQoNqRuIGEtNPBYM40N9Af-9y5vmUM-rjzmGxMqGY8H1cgMrQ7dUd_rHUCG-zXU6cNTySvZS_xa2PR1LvsYS8focfPdv9/s400/Mal_Incometax.jpg" width="400" /></a></div>
<br /></div>
<div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-79084631167411996312012-09-10T17:21:00.001-07:002012-09-10T17:21:20.629-07:00KSA may have only 18 years left as net exporter | ArabianOilandGas.com<a href="http://www.arabianoilandgas.com/article-10593-ksa-may-have-only-18-years-left-as-net-exporter/">KSA may have only 18 years left as net exporter | ArabianOilandGas.com</a>: <br />
<br />
<a href="https://chrome.google.com/webstore/detail/pengoopmcjnbflcjbmoeodbmoflcgjlk" style="font-size: 13px;">'via Blog this'</a><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-78071708630078815252012-08-10T00:31:00.000-07:002012-08-10T00:32:12.615-07:00Trading Markets with a Cycle Indicator<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqXVmRGDhcvWGaia1gbDckRyIKyPCkErXNmShxMHT9WHJ0WeNU0_fTak4phT3sy4Tikhj376GRzAPIOZJQdjWLBnoW68SmL6fYp05gsNXPgVtKmLko6yHCg95Uz8RCj_D2DZWzPOA18Yd-/s1600/Cycles_BookCover.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqXVmRGDhcvWGaia1gbDckRyIKyPCkErXNmShxMHT9WHJ0WeNU0_fTak4phT3sy4Tikhj376GRzAPIOZJQdjWLBnoW68SmL6fYp05gsNXPgVtKmLko6yHCg95Uz8RCj_D2DZWzPOA18Yd-/s200/Cycles_BookCover.jpg" width="150" /></a></div>
<span style="font-family: inherit;">GAIIN, short for the <a href="https://sites.google.com/site/gaiinsweb/" target="_blank">Global Alliance of Institutional Investors</a>, has developed a Markets Cycle Indicator called </span><b style="color: #333333; font-family: verdana, sans-serif; font-size: 13px;">GAiiN Cycle Indicator</b><b style="color: #333333; font-family: verdana, sans-serif; font-size: 13px;"><span style="color: red;">™ </span></b><span style="font-family: inherit;">that </span><span style="background-color: white; color: #333333; font-family: inherit; text-align: justify;">provides traders and investors with an definitive edge with which to trade the markets profitably.</span><br />
<span style="font-family: inherit;"><br /></span>
<span style="font-family: inherit;">The indicator will soon be available to users - but only through their preferred professional </span><span style="background-color: white; color: #333333;"><span style="font-family: inherit;">data, charting and trade execution service providers.</span></span><br />
<span style="background-color: white; color: #333333;"><span style="font-family: inherit;"><br /></span></span>
<span style="background-color: white;"><span style="color: #333333;"><span style="font-family: inherit;">The</span></span><b style="color: #333333; font-family: verdana, sans-serif; font-size: 13px;"> GAiiN Cycle Indicator</b><b style="color: #333333; font-family: verdana, sans-serif; font-size: 13px;"><span style="color: red;">™ </span></b><span style="font-family: inherit;"><span style="color: #333333;">calculates and plots a selected securities' current cycle using volatility adjusted, adaptive lengths to determines cycle driven, high probability price trend change points.</span></span></span><br />
<span style="background-color: white;"><span style="font-family: inherit;"><b style="color: #333333;"><br /></b></span></span>
<span style="background-color: white;"><span style="color: #333333;"><span style="font-family: inherit;">GAIIN has commissioned the production of a book called "Cycles" to demonstrate how the<b> </b></span></span></span><b style="color: #333333; font-family: verdana, sans-serif; font-size: 13px;">GAiiN Cycle Indicator</b><span style="color: red; font-family: verdana, sans-serif; font-size: 13px; font-weight: bold;">™</span><span style="color: red; font-family: verdana, sans-serif; font-size: 13px; font-weight: bold;"> </span><span style="font-family: inherit;">works over different securities and markets. </span><br />
<span style="font-family: inherit;"><br /></span>
<span style="font-family: inherit;">Only very limited copies of this book will be available. </span><span style="font-family: inherit;">To reserve you copy, please contact <a href="mailto:contactgaiin@gmail.com" target="_blank">GAIIN.</a></span><br />
<span style="background-color: white;"><span style="font-family: inherit;"><b style="color: #333333;"><br /></b></span></span>
<span style="background-color: white;"><span style="font-family: inherit;"><b style="color: #333333;"><br /></b></span></span></div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-38161711769946022452012-08-05T20:32:00.001-07:002012-08-05T20:32:28.223-07:00Europe to Support Entrepreneurs<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: left;">
<span style="font-family: inherit;">According to an article by Kate Burgess published in the Financial Times website, a<span style="background-color: white; line-height: 14.4pt;"> new pan-European stock
exchange for entrepreneurs is being planned by NYSE Euronext to plug
the gap in funding for small companies and help them raise money from investors
more easily.</span></span></div>
<div style="text-align: left;">
<span style="background-color: white; line-height: 14.4pt;"><span style="font-family: inherit;"><br /></span></span></div>
<div style="text-align: left;">
<span style="background-color: white;"><span style="font-family: inherit;">The exchange – dubbed
the “Entrepreneurs’ Exchange” by NYSE Euronext – will facilitate fundraising
via issues of bonds as well as equity. Please go to the <a href="http://www.ft.com/intl/cms/s/0/a2bfa2d2-df06-11e1-97ea-00144feab49a.html?ftcamp=crm/email/201285/nbe/ExclusiveComment/product#axzz22jLeSD3x" target="_blank">FT Site</a> for the full story.</span></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt;">
<span style="background-color: white; background-position: initial initial; background-repeat: initial initial; font-family: Arial;"><o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt;">
<b><span style="background-color: white; background-position: initial initial; background-repeat: initial initial; font-family: Arial;"><o:p></o:p></span></b></div>
</div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-48668841640347784612012-08-01T20:00:00.002-07:002012-08-01T20:21:13.924-07:00Scientists Prove DNA Can Be Reprogrammed by Words and Frequencies<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="MsoNormal" style="background: white; line-height: 14.4pt;">
<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
</div>
<span style="background-color: white; background-position: initial initial; background-repeat: initial initial; font-family: Arial;"><span style="color: #cc0000;"><i><b>A very interesting story
contributed by<span class="apple-converted-space"> </span></b></i></span></span><strong><span style="font-family: Arial;"><span style="color: #cc0000;"><i>Zen Gardner
and published in “Before it’s News”. </i></span></span></strong></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt;">
<strong><span style="font-family: Arial;"><span style="color: #cc0000;"><i><br /></i></span></span></strong></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt;">
<strong><span style="font-family: Arial;"><span style="color: #cc0000;"><i>After you've read it, you'll appreciate why good advertising still works!</i></span></span></strong></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt;">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<div class="separator" style="clear: both; text-align: center;">
</div>
<span style="font-family: Arial;">THE HUMAN
DNA IS A BIOLOGICAL INTERNET and superior in many aspects to the artificial
one. Russian scientific research directly or indirectly explains phenomena such
as clairvoyance, intuition, spontaneous and remote acts of healing, self
healing, affirmation techniques, unusual light/auras around people (namely
spiritual masters), mind’s influence on weather patterns and much more. In
addition, there is evidence for a whole new type of medicine in which DNA can
be influenced and reprogrammed by words and frequencies WITHOUT cutting out and
replacing single genes.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: Arial;">Only 10%
of our DNA is being used for building proteins. It is this subset of DNA that
is of interest to western researchers and is being examined and categorized.
The other 90% are considered “junk DNA.” The Russian researchers, however,
convinced that nature was not dumb, joined linguists and geneticists in a
venture to explore those 90% of “junk DNA.” Their results, findings and
conclusions are simply revolutionary! According to them, our DNA is not only
responsible for the construction of our body but also serves as data storage
and in communication. <o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: Arial;">The
Russian linguists found that the genetic code, especially in the apparently
useless 90%, follows the same rules as all our human languages. To this end
they compared the rules of syntax (the way in which words are put together to
form phrases and sentences), semantics (the study of meaning in language forms)
and the basic rules of grammar. They found that the alkalines of our DNA follow
a regular grammar and do have set rules just like our languages. So human
languages did not appear coincidentally but are a reflection of our inherent
DNA.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: Arial;">The
Russian biophysicist and molecular biologist Pjotr Garjajev and his colleagues
also explored the vibrational behavior of the DNA. [For the sake of brevity I
will give only a summary here. For further exploration please refer to the
appendix at the end of this article.] The bottom line was: “Living chromosomes
function just like solitonic/holographic computers using the endogenous DNA
laser radiation.” This means that they managed for example to modulate certain
frequency patterns onto a laser ray and with it influenced the DNA frequency
and thus the genetic information itself. <o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: Arial;">Since the
basic structure of DNA-alkaline pairs and of language (as explained earlier)
are of the same structure, no DNA decoding is necessary. One can simply use
words and sentences of the human language! This, too, was experimentally proven!
Living DNA substance (in living tissue, not in vitro) will always react to
language-modulated laser rays and even to radio waves, if the proper
frequencies are being used.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: Arial;">This
finally and scientifically explains why affirmations, autogenous training,
hypnosis and the like can have such strong effects on humans and their bodies.
It is entirely normal and natural for our DNA to react to language. While
western researchers cut single genes from the DNA strands and insert them
elsewhere, the Russians enthusiastically worked on devices that can influence
the cellular metabolism through suitable modulated radio and light frequencies
and thus repair genetic defects.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: Arial;">Garjajev’s
research group succeeded in proving that with this method chromosomes damaged
by x-rays for example can be repaired. They even captured information patterns
of a particular DNA and transmitted it onto another, thus reprogramming cells
to another genome. ?So they successfully transformed, for example, frog embryos
to salamander embryos simply by transmitting the DNA information patterns! This
way the entire information was transmitted without any of the side effects or
disharmonies encountered when cutting out and re-introducing single genes from
the DNA. This represents an unbelievable, world-transforming revolution and
sensation! All this by simply applying vibration and language instead of the
archaic cutting-out procedure! This experiment points to the immense power of
wave genetics, which obviously has a greater influence on the formation of
organisms than the biochemical processes of alkaline sequences.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: Arial;">Esoteric
and spiritual teachers have known for ages that our body is programmable by
language, words and thought. This has now been scientifically proven and
explained. Of course the frequency has to be correct. And this is why not
everybody is equally successful or can do it with always the same strength. The
individual person must work on the inner processes and maturity in order to
establish a conscious communication with the DNA. The Russian researchers work
on a method that is not dependent on these factors but will ALWAYS work,
provided one uses the correct frequency.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: Arial;">But the
higher developed an individual’s consciousness is, the less need is there for
any type of device! One can achieve these results by oneself, and science will
finally stop to laugh at such ideas and will confirm and explain the results.
And it doesn’t end there.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: Arial;">The
Russian scientists also found out that our DNA can cause disturbing patterns in
the vacuum, thus producing magnetized wormholes! Wormholes are the microscopic
equivalents of the so-called Einstein-Rosen bridges in the vicinity of black
holes (left by burned-out stars).? These are tunnel connections
between entirely different areas in the universe through which information can
be transmitted outside of space and time. The DNA attracts these bits of
information and passes them on to our consciousness<i>.</i> <o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: Arial;">This
process of hyper communication is most effective in a state of relaxation.
Stress, worries or a hyperactive intellect prevent successful hyper
communication or the information will be totally distorted and useless. <b>END</b><o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="background: white; mso-line-height-alt: 14.4pt; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
</div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-28902100238998875342012-07-24T20:25:00.003-07:002012-07-31T22:06:25.302-07:00Bearish Reversal or Bullish Godsend?<div dir="ltr" style="text-align: left;" trbidi="on">
<i style="background-color: white; font-family: Arial;"><span style="color: #cc0000;">Here is an
interesting article I’d like to share. It’s from By Chris Rowe - Editor, The
Tycoon Report, Co-Founder, <a href="http://www.ifii.com/">Institute for Individual Investors</a>, Creator, Technical Analysis Millionaire and
Chief Investment Officer, The Trend Rider.</span></i><br />
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="background-position: initial initial; background-repeat: initial initial; line-height: 14.25pt;">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEie3Z5a1pjeNq1M0gRgpk96cRx1CFFCO8NQAWFC2BKAzoYybdoD8qf8BwRoZi7VbGrC_rm9vSCpWOujTVoczT8QTImxRpq_Pu9tT9hqRMK3zqD6wOrx4QmfMzejwZgx3i2jcza3Q-Rc77_X/s1600/GAiiN_FinalLogo.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img alt="" border="0" height="45" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEie3Z5a1pjeNq1M0gRgpk96cRx1CFFCO8NQAWFC2BKAzoYybdoD8qf8BwRoZi7VbGrC_rm9vSCpWOujTVoczT8QTImxRpq_Pu9tT9hqRMK3zqD6wOrx4QmfMzejwZgx3i2jcza3Q-Rc77_X/s200/GAiiN_FinalLogo.png" title="This post is sponsored by:-" width="200" /></a></div>
<br />
<div style="text-align: left;">
has sponsored this post</div>
<span style="color: #333333; font-family: Arial;"><span style="background-color: white;"><br /></span></span><br />
<span style="color: #333333; font-family: Arial;"><span style="background-color: white;"><br /></span></span><br />
<span style="color: #333333; font-family: Arial;"><span style="background-color: white;">An old Wall Street saying: </span><span style="background-color: yellow;">"<em>If you don't buy it when it looks like crap, you'll
never buy a bargain.</em>"</span><br />
<br /><span style="background-color: white;">
Prices look awful here, if you're a bull. But the</span><span class="apple-converted-space" style="background-color: white;"> </span><em style="background-color: white;">biggest
</em><span style="background-color: white;">bullish reversals happen when the bullish trend is right on the
brink of breaking down. </span><span class="apple-converted-space" style="background-color: white;"> </span><br />
<br /><span style="background-color: white;">
That's because people and computers have already started taking bearish
positions; they see the same ugly picture that's bothering the bullish
investors. The way they do this is by selling short stock. </span><span class="apple-converted-space" style="background-color: white;"> </span><br />
<br /><span style="background-color: white;">
If the market turns around and continues the bullish trend it's been in since
June 4th, those short sellers will have to exit their bearish positions by
buying back their stock, thus adding upwards pressure to prices. </span><span class="apple-converted-space" style="background-color: white;"> </span><br />
<br /><span style="background-color: white;">
I'm sure most of the people reading this already understand this phenomenon,
but it helps to repeatedly think about it in order to program your mind to
think this way. This is the way the most successful traders think.</span><span class="apple-converted-space" style="background-color: white;"> </span><br />
<br /><span style="background-color: white;">
I'm not saying that the odds</span><span class="apple-converted-space" style="background-color: white;"> </span><em style="background-color: white;">strongly</em><span class="apple-converted-space" style="background-color: white;"> </span><span style="background-color: white;">favor the bullish intermediate-term
trend continuing. I am saying that the odds still favor that it will
continue, BUT with certain technical breakdowns happening, those odds have been
declining. </span><span class="apple-converted-space" style="background-color: white;"> </span><br />
<br /><span style="background-color: white;">
Imagine a numerical reading of 0 - 100 where odds favor a down trend when the
reading is below 50, and odds favor an up trend when it's above 50.
(Don't ask what 50 means, sticklers!)</span><br />
<br /><span style="background-color: white;">
With that in mind, what I'm saying is that right now the reading would be close
to 50 -- still be above 50 somewhere (in my book), but moving lower and lower
lately. And the lower that number moves, while odds of a continued bull
trend decline, the larger the advance would be if the bullish trend resumes.</span><span class="apple-converted-space" style="background-color: white;"> </span><br />
<br /><span style="background-color: white;">
Today is UGLY. No question. I'm sitting here wondering if this is
the bearish reversal that will cause me to reverse my stock market stance from
bullish to bearish. But what makes this a great bullish play is the
following:</span><br />
<br /><span style="background-color: white;">
When you enter a position, you should also decide what you would need to see to
convince you you're on the wrong side of the trade and it's time to take the
loss. We call that your "stop-loss". If you enter a
bullish position and your stop-loss is very close to today's price, then your
reward to risk ratio should be very high, and that makes the trade very
appealing. </span><span class="apple-converted-space" style="background-color: white;"> </span><br />
<br /><span style="background-color: white;">
In other words, if the bullish trend looked very likely today, then you would
be looking at a stock market that recently (already) advanced off of its
trend line and is well on its way up again. But in exchange for that
peace of mind, you would be buying the market far away from (at a significantly
higher price than) the support level (the up trend line). </span></span><br />
<span style="color: #333333; font-family: Arial;"><br /><span style="background-color: white;">
Therefore, you might say, hypothetically, that for every $1,000.00 you have at
risk, you are likely to make $3,000.00 when the market reaches your target
price. </span><span class="apple-converted-space" style="background-color: white;"> </span><br />
<br /><span style="background-color: white;">
You'd be able to calculate the $1,000.00 risk because you would know exactly
where you would sell your bullish position at a loss. You have already
defined your stop-loss. </span><span class="apple-converted-space" style="background-color: white;"> </span><br />
<br /><span style="background-color: white;">
But if you buy very close to that stop loss point, you might say,
hypothetically, that for every $1,000.00 you have at risk, you are likely to
make $7,000.00 when the market reaches your target price. And that's the
position we are in today.</span><span class="apple-converted-space" style="background-color: white;"> </span><br />
<br /><span style="background-color: white;">
The key is to properly manage your risk by deciding what percentage of your
account you are willing to risk on each trade. If you are willing to risk
1% of your account, then that's it -- you're willing to risk 1%. If,
for example, you have $100,000.00 sitting in a cash account, and you wanted to
take a bullish position in the stock market, you would risk $1,000.00.</span><br />
<br /><span style="background-color: white;">
Considering the stock market appears to be standing on the edge of a cliff,
with its toes hanging off of that cliff, your typical 1% risk can yield you a
very large gain if we stay bullish here.</span><br />
<br /><span style="background-color: white;">
For the</span><span class="apple-converted-space" style="background-color: white;"> </span><strong style="background-color: white;"><span style="font-weight: normal;">intermediate-term</span></strong><span class="apple-converted-space" style="background-color: white;"> </span><span style="background-color: white;">trader (time horizon being weeks to
months), the demand side is still seen as being in control. Thus, the intermediate-term
trader would want to take a bullish position here. If that trader ends up
taking that typical 1% loss (the amount the trader already decided is
acceptable as part of the trading business), then so be it. </span><span class="apple-converted-space" style="background-color: white;"> </span><br />
<br /><span style="background-color: white;">
This time, the 1% loss would probably mean the very beginning of the new
bearish trend, which is good news for those who are able to see it and play
it. And that information will almost certainly reveal itself within the
next 24-48 hours. </span><span class="apple-converted-space" style="background-color: white;"> </span><br />
<br /><span style="background-color: white;">
Either way, we are happy campers because we use proper risk management. END.</span><span class="apple-converted-space" style="background-color: white;"> </span></span><span style="background-color: white; color: #333333; font-family: Arial; font-size: 12pt;"><o:p></o:p></span></div>
</div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-67650155544761442582012-07-24T18:41:00.001-07:002012-07-24T18:43:14.551-07:00GARP - Story<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="background-color: white; color: #424242; font-family: Georgia; font-size: 16px; font-weight: bold; text-align: -webkit-auto;"><a href="http://www.garp.org/risk-news-and-resources/risk-headlines/story.aspx?newsid=50063">Break up the banks Value seen in Spinoffs</a></span><br />
<br />
<a href="http://www.garp.org/risk-news-and-resources/risk-headlines/story.aspx?newsid=50063">GARP - Story</a>: <a href="https://chrome.google.com/webstore/detail/pengoopmcjnbflcjbmoeodbmoflcgjlk" style="background-color: white; font-size: 13px;">'via Blog this'</a></div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-13619843985405309762012-07-22T20:17:00.001-07:002012-07-22T20:17:54.756-07:00What the Libor Scandal Really Means | Institutional Investor<a href="http://www.institutionalinvestor.com/Article/3063818/What-the-Libor-Scandal-Really-Means.html?LS=EMS688545">What the Libor Scandal Really Means | Institutional Investor</a>: <br />
<br />
<a href="https://chrome.google.com/webstore/detail/pengoopmcjnbflcjbmoeodbmoflcgjlk" style="font-size: 13px;">'via Blog this'</a><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-25768889743380530382012-05-24T20:27:00.000-07:002012-05-24T20:27:01.092-07:00The Greatest Threat to Markets Since Lehman Brothers<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGL15cPtsaIwYr1cCJjEHwJOCYWFLhoSnXlGcu_bu7JUiH9ZV93A3CkfsKbUq2sImKG_vknj50Ny_zaJCdfZ8xdnACyhiMTqTVNUKWoexJEbg35GYSXdwsdiLgE_uD6SgbRejuKirhY4EX/s1600/Euro+-+USD.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="123" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGL15cPtsaIwYr1cCJjEHwJOCYWFLhoSnXlGcu_bu7JUiH9ZV93A3CkfsKbUq2sImKG_vknj50Ny_zaJCdfZ8xdnACyhiMTqTVNUKWoexJEbg35GYSXdwsdiLgE_uD6SgbRejuKirhY4EX/s320/Euro+-+USD.jpg" width="320" /></a></div>
<div class="MsoNormal">
<span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"><span style="font-family: inherit;">Here’s an
interesting article from Costas Bocelli, Editor of the Tycoon Report that I
found well written on the subject. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<br /></div>
<span style="font-family: inherit;"><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">When </span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Japan</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> suffered a devastating natural disaster in March of last year, it
wasn’t the powerful 9.0 magnitude earthquake just off the coast that was
responsible for the carnage -- it was the massive tsunami wave created by that
large tremor that wreaked havoc and caused so much destruction.</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">Today the ground is shaking throughout the
Eurozone with even greater intensity, and the epicenter is </span></span><st1:country-region><st1:place><span style="background-color: white;">Greece</span></st1:place></st1:country-region><span style="background-color: white;">. <span class="apple-converted-space"> </span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background-color: white;"><span style="text-align: -webkit-auto;"><b>And here's the question:</b></span></span></span><br />
<br />
<br />
<div class="MsoNormal">
<span style="font-family: inherit;"><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">If </span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Greece</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> does trigger a full blown financial
earthquake by an abrupt and disorderly exit from the European Monetary Union,
will a massive tsunami overwhelm the entire Eurozone and spark a global
meltdown?<span class="apple-converted-space"> </span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">The European sovereign debt crisis has been
rearing its ugly head for over two years now. They’ve tried to tame it
with bailouts, fiscal austerity, long-term liquidity operations and sovereign
bond purchases. But the patchwork and masking tape used to paper over the
problems just doesn’t seem to stick very long.</span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">Now, faced with the real possibility that one of
its members may actually leave, it brings a whole new set of variables into the
equation that could pose a bona fide systemic threat to the entire European
banking system.</span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">The real systemic threat is not the financial
shock of </span></span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Greece</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> defaulting on its debt and parting
ways. No, it’s the potential financial tidal wave that their departure
could trigger.</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">If </span></span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Greece</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> does exit, the Eurozone can absorb
the messy divorce and eat a 500 billion euro loss or so. It wouldn’t
taste too good, but the $15 trillion economy could pinch their nose and swallow
it.</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">But the ramifications and reverberations will
likely be profound, especially along the debt-strapped periphery, including the
beleaguered countries of </span></span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Portugal</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">, </span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Ireland</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">, </span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Spain</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> and </span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Italy</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">.</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">We’re already starting to get a glimpse of what
may yet be to come, and could in fact turn into a full blown financial crisis.</span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;"><b>Let me explain...</b></span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">The actual makeup of </span></span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Greece</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">’s coalition government has yet to
be determined, which is creating a great deal of uncertainty and speculation,
not only for global markets, but for the Greek people. Upcoming elections
slated for June 17 should hopefully bring clarity as to what type of government
will materialize and the likely fate of its EU membership status.</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">But the Greek people aren’t taking any chances.
With the potential threat of an exit and a forced conversion back to a national
currency that will significantly devalue overnight, the citizens are
withdrawing their Euros from Greek banks in waves.</span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">Just last week, after a failed last ditch effort
to form a coalition government, 700 million euros were withdrawn in one day --
a mini bank run, so to speak.</span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">The primary reason why you get a run on the bank
is simply because of a lack of confidence... when people simply feel that their
money isn't safe and secure.</span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">The effect was also felt last week in </span></span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Spain</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> as reports indicated that 1 billion
euros were withdrawn from Bankia, the troubled Spanish bank that was
essentially nationalized earlier this month.</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">While the amount of withdrawals are still relatively
small to the aggregate, the thing about a bank run is that it can escalate very
quickly and easily get out of control.</span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">Like I mentioned earlier, the Eurozone and the
European Central Bank are continuing to provide the needed liquidity to the
Greek banking system, which is suppressing an all out bank run.</span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">But if </span></span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Greece</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> is allowed or forced to exit and
converts back to a national currency, it will set an awful precedent and signal
to the other beleaguered members that if this budget austerity thing gets old,
we’re going to follow Greek playbook and find the nearest exit.</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">The mere speculation of this option will only
amplify the mini bank run we’ve seen this past week.</span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">This is the scenario that could send the markets
reeling and into a Lehman style tailspin. It’s also the challenge that
the Eurozone leaders must address -- and soon. Losing the confidence of
the people will not so easily be overcome by how much additional liquidity they
can throw into the system.</span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">One recent idea floated around was for the
European Central Bank to simply guarantee deposits in all Eurozone banks.
After all, it worked in the </span></span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">U.S.</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> during the height of the credit
crisis by raising deposit insurance guarantees to $250,000 and preventing money
market accounts to break below par value ($1.00).</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">But the major contrast is that the </span></span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">US</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> is one sovereign country, while the
Eurozone is comprised of seventeen. While the </span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">US</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> is carved into 50 separate states,
one cannot pick up and leave and set up another currency. (Though it was
attempted back in the 1800’s, but that's another story.)</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">The Eurozone deposit guarantee would work in a
sense if the people knew that an exit was not possible. But if </span></span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Greece</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> is shown the door, that sense of
security loses all credibility.</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">They could still choose to guarantee the deposits
even if a departure was permitted, but </span></span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Germany</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> would never go for that. In
the event of another exit with a Euro deposit guarantee, the newly converted
currency would quickly devalue, and the insurance claims would explode.
Having to write a massive check to depositors in a country that just left would
not sit very well in </span><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Frankfurt</span></st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">.</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<st1:country-region><st1:place><span style="background: white;"><span style="text-align: -webkit-auto;">Greece</span></span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> is indeed a small cog in the wheel,
with current deposits around 170 billion Euros, a number that poses no real
threat in a vacuum. But<span class="apple-converted-space"> </span></span><u style="text-align: -webkit-auto;">if<span class="apple-converted-space"> </span>contagion and a break down in
confidence spread</u><span class="apple-converted-space"><span style="text-align: -webkit-auto;"> </span>to </span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Italy</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> and </span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Spain</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">, this is where the Lehman style
systemic threat truly lies.</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">Deposits in </span></span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Spain</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> and </span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Italy</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> total just over 3 trillion euros --
a massive amount, and a sum that must be protected from a bank run at all costs.</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<strong style="text-align: -webkit-auto;"><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">What’s the Solution?</span></strong><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">I’m no Eurocrat or a European central banker, but
to me the solution is quite simple.</span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">The message at this week’s EU summit in </span></span><st1:city><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Brussels</span></st1:place></st1:city><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> should be pretty clear: The
Eurozone is the roach motel -- you can check in, but you can’t check out!</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">Don’t let </span></span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Greece</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> leave! Like the </span><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Union</span></st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> did not allow the Confederate South
to willingly secede.</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">That is probably the best option and, in my
opinion, the way it should play out. It will no doubt come with another
program for </span></span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Greece</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> that should roll back some of the
fiscal austerity and appease the newly elected coalition government and its
citizens.</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">Markets should rally if this scenario indeed plays
out, especially as global markets are oversold. Most of all, the bank run
threat should subside and if they choose to implement a Eurozone-wide deposit
guarantee, it would hold a tremendous amount of credibility and work very well.</span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">However, if </span></span><st1:country-region><st1:place><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;">Greece</span></st1:place></st1:country-region><span style="background-color: white; background-position: initial initial; background-repeat: initial initial;"> does have a disorderly exit or is
allowed to leave, then you must consider a Eurozone bank run as a potential
threat and have a plan to protect your portfolio if the price action continues
to deteriorate and breaks very key levels of broad support.</span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">I’m following this story very closely, and besides
watching the AP wires on deposit withdrawals throughout the Eurozone, I’m
watching the Euro/USD currency pair.</span></span><br style="text-align: -webkit-auto;" />
<br style="text-align: -webkit-auto;" />
<span style="background: white;"><span style="text-align: -webkit-auto;">The Euro just touched a fresh July 2010 low,
breaking below 1.26 yesterday. <span class="apple-converted-space"> </span></span><u style="text-align: -webkit-auto;">If withdrawals happen to
escalate and the Euro breaks the 1.19 low made in June 2010</u><span style="text-align: -webkit-auto;">, the tremors may
very well send a financial wave on shore. <b>END</b></span><o:p></o:p></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<h3 style="text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: inherit; font-size: small;"> </span></h3>
<h3 style="text-align: justify; text-justify: inter-ideograph;">
<span style="font-size: 10.0pt;"> </span></h3>
<h3 style="text-align: justify; text-justify: inter-ideograph;">
<span style="font-size: 10.0pt;"> </span></h3>
<!--[if !supportLineBreakNewLine]--><br />
<!--[endif]--></div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-17724402943455618892012-01-13T18:41:00.000-08:002012-01-13T18:41:50.552-08:00Quotes & Investor Information for OTCQX, OTCQB, OTC Pink & other OTC Securities - OTCMarkets.com<a href="http://www.otcmarkets.com/home">Quotes & Investor Information for OTCQX, OTCQB, OTC Pink & other OTC Securities - OTCMarkets.com</a>:<br /><br /><a style="font-size:13px" href="https://chrome.google.com/webstore/detail/pengoopmcjnbflcjbmoeodbmoflcgjlk">'via Blog this'</a><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-81169016497700471222012-01-09T17:14:00.000-08:002012-01-09T17:14:44.535-08:00Broad Air Conditioning, BROAD Central Air Conditioning, BROAD Non-electric Chiller, BROAD Air Purifier,Electrostatic Cleaner, indoor air pollution , Energy Saving Building, Global Partner of Expo 2010 Shanghai China<div>33 Story Hotel Built in 30 days?</div><div><br /></div><a href="http://www.broad.com:8089/english/">Broad Air Conditioning, BROAD Central Air Conditioning, BROAD Non-electric Chiller, BROAD Air Purifier,Electrostatic Cleaner, indoor air pollution , Energy Saving Building, Global Partner of Expo 2010 Shanghai China</a>:<br /><br /><a style="font-size:13px" href="https://chrome.google.com/webstore/detail/pengoopmcjnbflcjbmoeodbmoflcgjlk">'via Blog this'</a><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-32248547519996483632011-12-19T19:27:00.000-08:002011-12-19T19:27:29.232-08:00<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<h3 style="text-align: justify; text-justify: inter-ideograph;">
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">Is there a run on <st1:place>Europe</st1:place>'s
banks?</span><span class="Apple-style-span" style="font-size: x-small;"><o:p></o:p></span></h3>
<div>
<div class="MsoNormal">
<i><span style="font-family: Arial;"><span class="Apple-style-span" style="color: red;">Well, Keith Fitz-Gerald –
an Investment Director for Money Map Press (www.moneymappress.com), as well as
Money Morning and one of the world’s leading experts on global investing, seems
to think so. <o:p></o:p></span></span></i></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<i><span style="font-family: Arial;"><span class="Apple-style-span" style="color: red;">A weekly feature in
Investor Alley’s MARKET CAP authored by
Keith says as follows:-</span><o:p></o:p></span></i></div>
<div class="MsoNormal">
<i><span style="font-family: Arial;"><br /></span></i></div>
<div class="MsoNormal">
</div>
<div class="MsoNormal">
<span style="font-family: Arial;">Fitch Ratings Inc. recently downgraded
its credit ratings on five of </span><st1:place><span style="font-family: Arial;">Europe</span></st1:place><span style="font-family: Arial;">'s biggest banks, and while that decision made
headlines, it's not the most important story to come out of </span><st1:place><span style="font-family: Arial;">Europe</span></st1:place><span style="font-family: Arial;"> this week.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">The real story, which the
mainstream media is neglecting, is that there are signs of an underground run
on </span><st1:place><span style="font-family: Arial;">Europe</span></st1:place><span style="font-family: Arial;">'s banks. Almost nobody's talking about it, but there
are indications money is already moving out of the European Union (EU) faster
than rats abandoning a sinking ship.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">Not through the front door,
mind you. There are no lines, no distraught customers and no teller windows
being boarded up - not yet, anyway.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">For now the run is through
the back door, and there are four things that make me think so:<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<ul style="margin-top: 0in;" type="disc">
<li class="MsoNormal"><st1:country-region><st1:place><span style="font-family: Arial;">Italy</span></st1:place></st1:country-region><span style="font-family: Arial;">'s planned ban on cash transactions over 1,000
euros, or about $1,300.<o:p></o:p></span></li>
<li class="MsoNormal"><span style="font-family: Arial;">French, Spanish, and Italian banks have run out
of collateral and are now pledging real assets.<o:p></o:p></span></li>
<li class="MsoNormal"><span style="font-family: Arial;">Swiss officials are preparing for the end of the
euro with capital control measures.<o:p></o:p></span></li>
<li class="MsoNormal"><st1:place><span style="font-family: Arial;">Europe</span></st1:place><span style="font-family: Arial;">'s CEOs are actively preparing for the end of
the euro despite governmental reassurances.</span><span class="Apple-style-span" style="font-family: Arial;"> </span></li>
</ul>
<div class="MsoNormal">
<b><span style="font-family: Arial;">Signs of a Run<o:p></o:p></span></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">Let's start with </span><st1:country-region><st1:place><span style="font-family: Arial;">Italy</span></st1:place></st1:country-region><span style="font-family: Arial;"> and Prime Minister Mario Monti's plans to restrict
cash transactions over 1,000 euros (down from the current limit of 2,500 euros,
or about $3,200). Ostensibly the move is about reducing tax evasion by
prohibiting the movement of large sums of cash outside the official
transactional system, but I think it speaks to something far more sinister -
namely that the Italian government knows things are going to get far worse than
they're publicly admitting.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span style="font-family: Arial;">Consider:</span></b><span style="font-family: Arial;"> Cash is a stored value mechanism. There's not a lot
of it because at any given point in time, most of it is on deposit with banks
in any country. That's as true in </span><st1:country-region><st1:place><span style="font-family: Arial;">Italy</span></st1:place></st1:country-region><span style="font-family: Arial;"> as it is in the </span><st1:country-region><st1:place><span style="font-family: Arial;">United States</span></st1:place></st1:country-region><span style="font-family: Arial;"> when real interest rates are positive during
"healthy" times.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">But when real interest rates
turn negative, people are likely to withdraw cash and stuff it quite literally
under mattresses or in coffee tins. (Real interest rates are the official lending
interest rates, adjusted for inflation.) In such an environment, holding cash
in a bank becomes nothing more than an imputed tax and a disincentive for
deposits. It's also a significant thorn in the side of central bankers who want
to control their country's money supply, because cash can operate outside the
system and, specifically, logjam reform efforts.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">The reason is really pretty
simple. If you have negative real interest rates, and cash transactions are
largely restricted or removed altogether, then the only way to effectively use
cash is to withdraw it and spend it... immediately.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">In other words, by limiting
cash transactions to 1,000 euros or less, </span><st1:country-region><st1:place><span style="font-family: Arial;">Italy</span></st1:place></st1:country-region><span style="font-family: Arial;"> is putting into place a punitive financial control
fully intended to keep money moving in a system lest it become worthless or
worse - hoarded and worthless. Now let's move on to banks.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span style="font-family: Arial;">Banking Breakdown<o:p></o:p></span></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">Many investors have never
thought about it before, but there are really only three sources of funding for
a bank:<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<ol start="1" style="margin-top: 0in;" type="1">
<li class="MsoNormal"><span style="font-family: Arial;">Money that's effectively "lent" to the
bank by customers placing their assets on deposit;<o:p></o:p></span></li>
<li class="MsoNormal"><span style="font-family: Arial;">Short-term money market funds;<o:p></o:p></span></li>
<li class="MsoNormal"><span style="font-family: Arial;">And long-term bonds or securitized products
based on long-term paper sold to bond investors.</span><span class="Apple-style-span" style="font-family: Arial;"> </span></li>
</ol>
<div class="MsoNormal">
<span style="font-family: Arial;">Together, the three funding
sources are like the legs on a stool - lose any one of them and the stool will
topple over because it is no longer balanced. Cut the legs down and the stool
collapses - that's what is happening now.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">Individuals, pension funds
and institutions alike are withdrawing funds from Italian, Spanish and French
banks. Money has long since left </span><st1:country-region><st1:place><span style="font-family: Arial;">Greece</span></st1:place></st1:country-region><span style="font-family: Arial;">, </span><st1:country-region><st1:place><span style="font-family: Arial;">Ireland</span></st1:place></st1:country-region><span style="font-family: Arial;">, and </span><st1:country-region><st1:place><span style="font-family: Arial;">Portugal</span></st1:place></st1:country-region><span style="font-family: Arial;">.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">Thing is, though, it's not
just European money that's fleeing. Various reports from The Economist,
Bloomberg, CNBC and others suggest that American financials may have pulled
more than 40% of their funds from all European banks and nearly two-thirds of
their total deposits away from French banks. This is drying up short-term
lending capacity and driving up inter-bank lending costs.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">At the same time, money
managers the world over are selling their European bonds. This is driving
prices lower and yields higher to the point where the cost of debt is now
prohibitive (bond prices and yields move in opposite directions). As a result,
new bank bond issuance may be down as much as 85% over the past two years,
which further hobbles cash hungry European banks.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">Finally, facing a near total
loss of short-term financing alternatives and having run out of short-term
liquidity needed to operate, a number of EU banks are reportedly having to
pledge real assets as collateral for badly needed loans.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">Normally, banks would use
loans, leases or receivables to accomplish the same thing. The fact that
they're now having to throw in real estate, their own property, and other
assets into the mix signals extreme levels of financial stress that are far
worse than what's been disclosed publicly.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span style="font-family: Arial;">Bracing for the
Inevitable<o:p></o:p></span></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">Swiss Finance Minister
Eveline Widmer-Schlumpf noted to the Swiss Parliament that she's got a working
group examining capital controls and negative interest rates as a means of
preventing an economy-crushing Swiss franc appreciation when the euro fails.
That's not <b><u>if </u></b>the euro fails, but <b><u>when </u></b>the Euro
fails.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">This is an especially dire
sign because capital control measures like those the Swiss officials are
considering are inevitably the end of any failed monetary system. European CEOs
and their companies are taking matters into their own hands by actively
preparing for the destruction of the euro.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Arial;">Some, like German machinery
maker GEA Group AG (PINK: GEAGY) are limiting the maximum funds on deposit with
any single bank. Others, like Grupo Gowex, are moving cash and deposits to </span><st1:country-region><st1:place><span style="font-family: Arial;">Germany</span></st1:place></st1:country-region><span style="font-family: Arial;"> away from Spanish banks (and Grupo Gowex is a
Spanish company based in </span><st1:state><st1:place><span style="font-family: Arial;">Madrid</span></st1:place></st1:state><span style="font-family: Arial;">,
so this is especially telling). <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">BMW plans to cut production
by 30% while also tapping into central bank reserves. According to Chief
Financial Officer Friedrich Eichiner, the company is already reducing its
leasing portfolio to cope with the potential decrease in car values that would
impact its borrowing capacity.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;">As for what all this means
for our money, that's pretty clear - think SAFETY FIRST. The return of your
capital is far more important than the return on your capital at the moment.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial;"><b>Here's what I suggest.</b><o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<ul style="margin-top: 0in;" type="disc">
<li class="MsoNormal"><span style="font-family: Arial;">Buy dollars - I know they're a bad long-term
bet, but short-term, they're the best looking horse in the global glue
factory as long as the euro is under pressure.<o:p></o:p></span></li>
<li class="MsoNormal"><span style="font-family: Arial;">Stick with what you have in place now and manage
risk with trailing stops. Confine new stock purchases to high-growth,
low-debt emerging markets rather than low-growth, high-debt developed
markets.<o:p></o:p></span></li>
<li class="MsoNormal"><span style="font-family: Arial;">Short gold and oil in the short-term. Both are
priced in dollars, which means both will fall as the dollar rises in
conjunction with panic in the EU.<o:p></o:p></span></li>
<li class="MsoNormal"><span style="font-family: Arial;">Purchase inverse funds that track the broader
markets. If the euro fails, it will tank the broader markets. Then, once
it becomes clear that the world will live on, the markets will disconnect
from </span><st1:place><span style="font-family: Arial;">Europe</span></st1:place><span style="font-family: Arial;"> and begin to rise again in earnest.<o:p></o:p></span></li>
<li class="MsoNormal"><span style="font-family: Arial;">Run the other way if people tell you that banks
are a great investment. They are speculative at best given the number of
skeletons still in the closet.<o:p></o:p></span></li>
</ul>
</div>
</div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-24905710347343234532011-12-13T00:02:00.000-08:002011-12-13T00:02:49.147-08:00Billionaire Lawyer Offers Investment Advice: Cocaine Is Less Dangerous than Hedge Funds - News - ABA Journal<a href="http://www.abajournal.com/news/article/billionaire_lawyer_offers_investment_advice_cocaine_is_less_dangerous_than_/">Billionaire Lawyer Offers Investment Advice: Cocaine Is Less Dangerous than Hedge Funds - News - ABA Journal</a>:<br /><br /><a style="font-size:13px" href="https://chrome.google.com/webstore/detail/pengoopmcjnbflcjbmoeodbmoflcgjlk">'via Blog this'</a><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-36560371203504126232011-09-28T22:55:00.000-07:002011-09-28T22:55:05.833-07:00Dim Sum Market an Unlikely Victim of Global Volatility - WSJ.com<a href="http://online.wsj.com/article/SB10001424052970204010604576596413715652994.html?KEYWORDS=dim+sum+bond">Dim Sum Market an Unlikely Victim of Global Volatility - WSJ.com</a>:<br /><br /><a style="font-size:13px" href="https://chrome.google.com/webstore/detail/pengoopmcjnbflcjbmoeodbmoflcgjlk">'via Blog this'</a><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-16401458953166639432011-08-10T20:10:00.000-07:002011-08-10T20:10:17.139-07:00How Markets Don’t Work!<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">It's funny how the markets work. Everyone expects one thing, and the market does the exact opposite. <o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><span class="Apple-style-span" style="font-size: small;">Case in point: The US gets its national credit rating cut, and every US Dollar bond and US Dollar bear in the world figures that this is it... this is the big one... finally, interest rates are going to spike higher!<o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">WRONG!</span><o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">Since getting the credit rating cut from AAA to AA, we have seen the US Dollar remain fairly steady, and US Government bonds have rallied huge!<span> </span>In fact, intraday on <st1:date day="9" month="8" year="2011">Tuesday 9<sup>th</sup> August, 2011</st1:date> we saw 10 year bond yields go below the 2008 low, all the way down to 2.036% - resulting in higher prices. WOW!<o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">You have to think about this now -- why would bond yields go lower than the 2008 low? What could possibly be looming on the horizon that is so awful that bond yields would pierce the low set during the greatest market meltdown since 1929?<o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">In a word, RECESSION.</span><o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">The Fed pretty much came out and confirmed this thesis when they said that they would keep rates at ultra low levels until at least mid 2013!!<span> </span>That’s almost two years away. WOW AGAIN!<span> </span>Do you know how bad the internal data must be if the Fed is publicly acknowledging that they will not raise rates for 24 months?<o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">So How Low Can Rates Go?</span><o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">The irony was not lost when, after S&P announced that it was cutting <st1:country-region><st1:place>US</st1:place></st1:country-region> credit rating, <st1:country-region><st1:place>China</st1:place></st1:country-region> publicly blasted the <st1:country-region><st1:place>US</st1:place></st1:country-region> over its "bloated welfare costs". <o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;"><i>Imagine that -- a communist country putting </i><st1:country-region><st1:place><i>America</i></st1:place></st1:country-region></span><i><span class="Apple-style-span" style="color: red;"> down for being too socialist! </span><o:p></o:p></i></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">The funny thing is that, since the <st1:country-region><st1:place>USA</st1:place></st1:country-region> lost its AAA rating, bond prices have soared in value. In fact, over the last three days the Chinese have seen their Treasury holdings appreciate by tens of billions of dollars. (bond prices rise when relevant market interest rates drop)<o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">For all their tough talk about how reckless the Fed was being when it announced QE2, they must have been secretly high-five-ing each other as their 1.16 trillion dollars worth of Treasuries appreciated in value by an estimated $100+ billion!! <o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">Since QE2 was announced, we've seen 10 year yields drop from 4% to 2%, and we've seen much steeper declines in the 2-5 year duration, which is where <st1:country-region><st1:place>China</st1:place></st1:country-region> has MASSIVE exposure.<span> </span>So that $100 billion gain guesstimate could be very conservative indeed. <o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">Did QE2 Work?</span><o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">It sure did!<span> </span>Just not for you and I.<o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">In fact, I know you have been asking yourself who benefited the most from QE2? After all, equity investors certainly didn't win... the average <st1:country-region><st1:place>US</st1:place></st1:country-region> worker didn't win.<o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">You want to know who the winners were?<o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">The only winners were Government and other bond holders.<span> </span>And by the way, want to know who the two largest holders of <st1:country-region><st1:place>US</st1:place></st1:country-region> government bonds are?<o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">YEP! It’s <st1:country-region><st1:place>China</st1:place></st1:country-region> and the Federal Reserve! </span><o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">Want to know what's going on?<span> </span>Just look around at who’s got the biggest slice of the pie. <o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">It's no surprise that it was the Fed, and the <st1:country-region><st1:place>US</st1:place></st1:country-region>’s next single most important banker - the Chinese Government.<span> </span>The <st1:country-region><st1:place>US</st1:place></st1:country-region> didn't break the 2008 yield lows on a fluke -- the market is telling us something.<span> </span>It is shouting from the roof tops that we will almost certainly experience a recession in 2012. <o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">While equity prices rebounded, after getting pounded so relentlessly again, I'll be looking to fade the rally and get short some more stock because unless we see a miraculous turn around in the employment and GDP figures we are going lower as far as equities are concerned anyway.<o:p></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">But we may go to 1,250 on the S&P 500 first before we see 1,050.<span> </span>So, nimble traders: have fun.<span> </span>Longer term traders: wait for the roll over, at which point you'll be able to short 'em all.<o:p></o:p></span></h3><div class="MsoNormal"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="color: red; font-family: Arial, Helvetica, sans-serif;"><b>In the meanwhile, I’m getting longer on secured corporate bonds from entrepreneurial corporations in </b><st1:place><b>Asia</b></st1:place></span><b><span class="Apple-style-span" style="color: red; font-family: Arial, Helvetica, sans-serif;">. </span><span class="Apple-style-span" style="font-family: Arial;"><o:p></o:p></span></b></div></div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-58951006510747463732011-08-09T20:00:00.000-07:002011-08-09T20:11:14.478-07:00The US Debt Downgrade – A look behind the scene? « Jaykeumarezz’s Blog<div dir="ltr" style="text-align: left;" trbidi="on"><a href="http://jaykeumarezz.wordpress.com/2011/08/10/the-us-debt-downgrade-%E2%80%93-a-look-behind-the-scene/">The US Debt Downgrade – A look behind the scene? « Jaykeumarezz’s Blog</a><br />
<br />
Ahhh Sooo! Always suspected there was more to the downgrade.</div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-48482942106277031462011-08-06T20:36:00.000-07:002011-08-06T20:42:27.295-07:00Volatility Trading Myths!<div dir="ltr" style="text-align: left;" trbidi="on"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;">The VIX volatility index is supposed to be a proxy for volatility. However, when it comes to the VIX, nothing trades quite like you think it should. </span><br />
<h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="font-weight: normal;">Don’t Believe All the So-Called VIX Experts. According to an article by Adam Warner in Investor’s Place - "</span><i><span class="Apple-style-span" style="color: red;">Ten years ago, most people hadn’t even heard of the CBOE Volatility Index, or VIX. These days, the “fear index” is covered by the mainstream financial media, and you can’t throw a stick without hitting someone who fancies themselves a VIX expert</span></i><span class="Apple-style-span" style="font-weight: normal;">."<o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span style="font-weight: normal;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">The problem is that half of these people don’t have any clue what they’re talking about. So there is a lot of misinformation out there surrounding the VIX and VIX trading products, including futures and ETNs. When it comes to trading the VIX, nothing moves quite like you think it should.<o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span style="font-weight: normal;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">To clear things up a bit, here are eight VIX trading myths you don’t want to fall for.<o:p></o:p></span></span></h3><div><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"></span><br />
<h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">VIX Myth #1 – You Can Buy and Sell the VIX</span><span class="Apple-style-span" style="font-weight: normal;"><o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">Reality:</span><span style="font-weight: normal;"> You <i><u>cannot </u></i>buy and sell the actual VIX. You can buy and sell VIX futures, but that is a very different thing. VIX futures can trade at premiums or discounts to the VIX. In fact, they almost always trade at premiums to the VIX.<o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">VIX Myth #2 – You Can Own the VIX Via Futures</span><span class="Apple-style-span" style="font-weight: normal;"><o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">Reality:</span><span class="Apple-style-span" style="font-weight: normal;"> VIX futures cash out when they expire based on a VIX settlement price. So unless you roll out, your position will vanish.<o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">VIX Myth #3 – A Rolled Position Will Track VIX Moves</span><span class="Apple-style-span" style="font-weight: normal;"><o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">Reality: </span><span class="Apple-style-span" style="font-weight: normal;">VIX futures price based on where the market expects to see the VIX on a given date in the future, i.e, the day the VIX expires. That estimate may or may not move on a given day with a move in the VIX. The further out in time the future is, the less it will track VIX moves.<o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">VIX Myth #4 – VXX Tracks the VIX Better Than Futures</span><span class="Apple-style-span" style="font-weight: normal;"><o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">Reality: </span><span class="Apple-style-span" style="font-weight: normal;">The iPath S&P 500 VIX Short-Term Futures ETN (NYSE:</span><a href="http://studio-5.financialcontent.com/investplace/quote?Symbol=VXX" style="font-weight: normal;">VXX</a><span class="Apple-style-span" style="font-weight: normal;">) is an exchange-traded note that is based on a hypothetical rolling 30-day VIX future and trades like a regular stock. However, it does not track VIX moves particularly well. In fact, it underperforms over time so long as VIX futures trade in an upwardly sloped term structure. And VIX futures virtually always trade that way.<o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">VIX Myth #5 – You Can Chart VXX Like a Stock</span><span class="Apple-style-span" style="font-weight: normal;"><o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">Reality: </span><span class="Apple-style-span" style="font-weight: normal;">Since VXX trades like a stock, you may think you can chart it like a stock. Wrong. Run, don’t walk, from anyone who tells you about a key chart point on VXX. The VIX is a statistic, and VIX futures trade based on estimates on a forward price for that statistic. VXX creates a hypothetical constant duration 30-day VIX future and, therefore, loses money each day simply rolling from the nearest month future to the next month out if the next month out trades at a premium. Hence VXX is really just a number relative to itself the day before. It’s the tail of a tail of a tail of a dog.<o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">VIX Myth #6 – Holding VXX Can Protect a Portfolio</span><span class="Apple-style-span" style="font-weight: normal;"><o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">Reality: <span class="Apple-style-span" style="font-weight: normal;">VXX works fine as a short-term trading vehicle. On a day-to-day basis, it will track about 50% of the VIX move. However, it is terrible as a portfolio hedge for the reasons listed before, namely that it loses money over time in an upward sloping VIX term structure. Owning and rolling two- to three-month VIX futures works better.<o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">VIX Myth #7 – VXZ is a Good Portfolio Hedge</span><span class="Apple-style-span" style="font-weight: normal;"><o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">Reality:</span> <span class="Apple-style-span" style="font-weight: normal;">The iPath S&P 500 VIX Mid-Term Futures ETN (NYSE:</span><a href="http://studio-5.financialcontent.com/investplace/quote?Symbol=VXZ" style="font-weight: normal;">VXZ</a><span class="Apple-style-span" style="font-weight: normal;">) is similar to VXX, but it tracks four- to seven-month VIX futures instead of 30-day VIX futures. VXZ has done relatively well since its inception and has outperformed VXX by a wide margin. But while it doesn’t have the contango trouble of VXX, the VIX curve gets pretty flat out that far. I would also caution that VXX and VXZ only listed in January 2009, and thus, neither has had to show its mettle through a VIX storm. Four- to seven-month VIX futures almost always hold their premium to the VIX, but would move to a significant discount in a serious VIX explosion. In 2008, they lagged by 20-30 points. So I suspect VXZ would not provide great protection when you wanted it most. It’s a fine volatility proxy in a quiet market, but if the goal is insurance, it may disappoint.<o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">VIX Myth #8 – High VIX, VIX Call Buying is a Signal to Get Out or Get Short</span><span class="Apple-style-span" style="font-weight: normal;"><o:p></o:p></span></span></span></h3><h3 style="text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span class="Apple-style-span" style="color: red;">Reality:</span> <span class="Apple-style-span" style="font-weight: normal;">I don’t agree with the above, but I can’t actually prove it wrong. I will say this though, the VIX is a mean-reverting statistic. A high VIX and excessive VIX call buying (and actual SPX put buying) represent extreme nervousness and/or bearish sentiment. In theory, that’s a time you want to buy, not sell. But take that with a grain of salt, because trends do take on a life of their own, like the VIX explosion and market implosion of 2008.<o:p></o:p></span></span></span></h3><h3 style="font-weight: normal; text-align: justify;"><span class="Apple-style-span" style="font-size: small;"><span style="font-weight: normal;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">If you really want to trade volatility you’ve got to trade VIX products. <a href="mailto:asjohangms@gmail.com">Email me</a> for details.</span><span class="Apple-style-span" style="font-size: x-small;"><o:p></o:p></span></span></span></h3></div></div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-61224737340789523492011-08-05T17:40:00.000-07:002011-08-05T17:50:11.478-07:00S&P downgrades US debt to AA+ - FT.com<div dir="ltr" style="text-align: left;" trbidi="on"><a href="http://www.ft.com/intl/cms/s/0/06999f9a-bf84-11e0-90d5-00144feabdc0.html#axzz1UCl9jLQf">S&P downgrades US debt to AA+ - FT.com</a><br />
<br />
Wow!!! This has to be the most stupid decision made by any Rating Agency.<br />
<br />
Reminds me of the time when rating agencies gave a country with a population of more than a billion, an army of more than two million, the world's largest producer of gold, the world's factory with one of the most entrepreneurial societies in the world - <i><b>a risk rating significantly lower</b></i> than for a country with a population of around 300,000 and whose only export was fish.... I'm sure we all remember <b>Iceland!</b></div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-67736417792289823232011-06-20T21:03:00.000-07:002011-06-20T21:07:03.527-07:00China may dampen growth of offshore bonds market<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal"><span style="font-family: Arial;">According to an article in STV, </span><st1:country-region><st1:place><span class="apple-style-span"><span style="color: #333333; font-family: Arial;">China</span></span></st1:place></st1:country-region><span class="apple-style-span"><span style="color: #333333; font-family: Arial;"> is working quietly behind the scenes to tighten its control of the rapidly growing offshore RMB market, and risks turning off some investors from participating in the growing market and slowing use of the RMB in global trade. <a href="http://news.stv.tv/uk/258652-exclusivechina-quietly-tightening-grip-on-offshore-yuan-market/">Click here for the full story.</a></span></span><span style="font-family: Arial;"><o:p></o:p></span></div></div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-64841703997425173382011-06-15T20:30:00.000-07:002011-06-15T20:30:04.294-07:00Is it time to buy the US Dollar?<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgw9slIhW3EA9N2bpB8jrAUverT9-lP7MlButDcFCo4Yp-dg4vLUMAhOpFc1m4AOadBq8k4ucMQAJ8xB9dctalzloSipPSPmBtlDkwoENVihJVSB88UdL-c1lBKes-ul5pJoAWzXrnd_eot/s1600/NewUS_Note.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="139" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgw9slIhW3EA9N2bpB8jrAUverT9-lP7MlButDcFCo4Yp-dg4vLUMAhOpFc1m4AOadBq8k4ucMQAJ8xB9dctalzloSipPSPmBtlDkwoENVihJVSB88UdL-c1lBKes-ul5pJoAWzXrnd_eot/s320/NewUS_Note.jpg" width="320" /></a></div><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span style="font-weight: normal;">There are riots in the streets of </span><st1:country-region><st1:place><span style="font-weight: normal;">Greece</span></st1:place></st1:country-region><span style="font-weight: normal;">, which now has the lowest credit rating of any sovereign nation on earth. Remarkably, the Euro Zone has managed to weather the storm quite well.<span style="mso-spacerun: yes;"> </span>Whether it can continue is another matter.<o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">The European Facade maybe Crumbling<span class="Apple-style-span" style="font-weight: normal;"><o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span style="font-weight: normal;">A look at the US Dollar Index and the US dollar / euro exchange rate certainly points in that direction. As bad as things appear to be in the </span><st1:country-region><st1:place><span style="font-weight: normal;">USA</span></st1:place></st1:country-region><span style="font-weight: normal;">, </span><st1:place><span style="font-weight: normal;">Europe</span></st1:place><span style="font-weight: normal;"> seems to be more worse off.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span style="font-weight: normal;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">The European Union is made up of 17 countries who speak different languages, have different customs and have varying degrees of work ethics and national productivity levels.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span style="font-weight: normal;">As split as the </span><st1:country-region><st1:place><span style="font-weight: normal;">US</span></st1:place></st1:country-region><span style="font-weight: normal;"> is between liberal and conservative views, the people are still all Americans - even if they come in all shades and shapes.<span style="mso-spacerun: yes;"> </span>As such <i>Americans</i> have far more in common with one another than the 17 nation Europeans do.<span style="mso-spacerun: yes;"> </span>If one of the states in the<span style="mso-spacerun: yes;"> </span></span><st1:country-region><st1:place><span style="font-weight: normal;">USA</span></st1:place></st1:country-region><span style="font-weight: normal;"> gets into trouble, people won't be rioting in the streets if the Federal government decides to bail them out.<o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span style="font-weight: normal;">Now let’s consider it from the European point of view: If you are the German Chancellor, how do you defend the diverting of your national wealth to support a country such as </span><st1:country-region><st1:place><span style="font-weight: normal;">Greece</span></st1:place></st1:country-region><span style="font-weight: normal;">, when your electorate holds the firm view that the Greeks are neither as hard working nor as fiscally responsible as the average German? Correctly or not this appears to be the view reportedly held by much of the German public.<o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span style="font-weight: normal;">This puts Angela Merkel in quite a political situation. If the so-called PIIGS (</span><st1:country-region><st1:place><span style="font-weight: normal;">Portugal</span></st1:place></st1:country-region><span style="font-weight: normal;">, </span><st1:country-region><st1:place><span style="font-weight: normal;">Ireland</span></st1:place></st1:country-region><span style="font-weight: normal;">, </span><st1:country-region><st1:place><span style="font-weight: normal;">Italy</span></st1:place></st1:country-region><span style="font-weight: normal;">, </span><st1:country-region><st1:place><span style="font-weight: normal;">Greece</span></st1:place></st1:country-region><span style="font-weight: normal;"> and </span><st1:country-region><st1:place><span style="font-weight: normal;">Spain</span></st1:place></st1:country-region><span style="font-weight: normal;">) follow </span><st1:country-region><st1:place><span style="font-weight: normal;">Greece</span></st1:place></st1:country-region><span style="font-weight: normal;">, it would be a miracle if the European Union survived intact. This fear is what has been behind the bull market we have seen in US bonds over the last six or so weeks, because, on a relative basis, US Treasuries still look like a much safer bet than EU Sovereign debt.<o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">So, how can we benefit?<span class="Apple-style-span" style="font-weight: normal;"><o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span style="font-weight: normal;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">I know it's in vogue or even cool to be totally negative on the dollar, but to me, the dollar looks like it wants to rally. The US Dollar Index (DXY) is a basket of 6 currencies measured against the US dollar.<span style="mso-spacerun: yes;"> </span>The biggest component by far is the euro, which makes up 58.6% of the index. Any drop in the euro will push up the value of the dollar, which in turn will drive the US Dollar Index higher. <o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span style="font-weight: normal;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">If we get a real increase in Euro-related fear, we could easily see the US Dollar Index hit 80 - 81. Those looking to go long the dollar could do so by either buying the front month US Dollar Index futures contract (DXU11), or via the Bullish Dollar ETF, symbol UUP.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span style="font-weight: normal;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">So if I’m going long, I would use a break below 74.50 on the US Dollar Index as my stop point. In fact, if the US Dollar Index breaks that level, I'd be inclined to switch my entire strategy and look to going short for a<span style="mso-spacerun: yes;"> </span>bit.<span style="mso-spacerun: yes;"> </span>Anybody who tells you that they know with 100% conviction what the future will be is either fooling themselves or attempting to con you into something nasty.<o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span style="font-weight: normal;">Another way of playing a rising dollar is to take some bets directly against other currencies. One such currency is the Australian Dollar. I doubt if there is another developed country (except maybe </span><st1:country-region><st1:place><span style="font-weight: normal;">Canada</span></st1:place></st1:country-region><span style="font-weight: normal;">) that is more leveraged to the price of commodities. Remember, global commodities are priced in US Dollars -- if the value of the Dollar goes up, commodities typically go down. As commodities go down, the value of the Australian Dollar will typically decline as well. I would go short the Australian dollar in the futures market. The symbol on the front month contract is ADU11.<span style="mso-spacerun: yes;"> </span>I'd use a move above 1.0730 as my stop if I’m short, with a price target of say 1.0275.<span style="mso-spacerun: yes;"> </span>Alternatively, I could use the Australian Dollar currency ETF, symbol FXA.<span style="mso-spacerun: yes;"> </span>If I’m using FXA to go short, I’d be sure to track the movement of the front month futures contract. I’d use the levels in the actual futures contract to trigger any profit taking and stop loss decisions in the ETF.<o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span style="font-weight: normal;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;">Remember, the whole world is looking for the US dollar to collapse into oblivion. I don’t consider it likely that everyone will be right. May the trend be with you always...<o:p></o:p></span></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span style="font-weight: normal;"><o:p><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"> </span></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span style="font-weight: normal;"><o:p><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"> </span></o:p></span></h3><h3 style="text-align: justify; text-justify: inter-ideograph;"><span style="font-size: 10.0pt; font-weight: normal;"><o:p> </o:p></span></h3></div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-24259989853175610932011-03-22T23:01:00.000-07:002011-03-22T23:01:20.752-07:00Middle East and North African Socio-political Unrests. What Lies Ahead?<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<h3 style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><span style="font-weight: normal;">Here is a live link to an interview by Jayke Umarezz, the popular lifestyle commentator. The interview is titled </span><st1:place><span style="font-weight: normal;">Middle East</span></st1:place><span style="font-weight: normal;"> and North African Socio-political Unrests. What Lies Ahead?<o:p></o:p></span></span></h3><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;">The interview covers some of the reasons behind the current unrest in the <st1:place>Middle East</st1:place> and North Africa (MENA) and explores how it may evolve over time.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;">Also covered in the interview is the important issue of how local and international companies who have prospered in the past will fare in the newly evolving MENA.<o:p></o:p></span></div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><br />
</div><div class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;">Please click here for the full text of the interview. <a href="http://jaykeumarezz.wordpress.com/2011/03/22/middle-east-and-north-african-mena-socio-political-unrests-%E2%80%93-what-lies-ahead/">LINK to Full Article</a></span><span class="Apple-style-span" style="font-family: Arial;"><o:p></o:p></span></div></div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-51560437992276305982011-03-08T19:30:00.000-08:002011-03-22T22:57:55.019-07:00Offshore Renminbi Bonds Here to Stay<div dir="ltr" style="text-align: left;" trbidi="on"><span style="color: red; font-family: Arial, Helvetica, sans-serif;"><em>The following article entitled “Asia credit investors scramble for offshore Renminbi bonds” appeared in Risk.Net and was authored by Chris Wright.</em></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">The expansion of the Hong Kong Renminbi bond market continues to gather pace, with recent firsts including an unrated deal, a debut from a Russian borrower and even a synthetic offering. Importantly, the transactions are even beginning to attract interest from buyers outside of Asia. </span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Rarely has a new market evolved so quickly as the offshore renminbi bond market. Even its nickname has been a swift affair: the term ‘dim sum bond’ only started appearing in October, competing with the somewhat dry predecessor ‘CNH bond’, and has since become ubiquitous. And less than a year after liberalisation measures that dramatically broadened the pool of potential issuers, the market has transformed in tenor, the credit curve, size and distribution. </span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">“The development of the market has been phenomenal,” says Sean Henderson, head of debt syndicate, Asia-Pacific at HSBC. </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">One could argue the offshore RMB market has its roots in 2004, when the People’s Bank of China first allowed retail clients in Hong Kong to accumulate renminbi; or in 2007, when a handful of Chinese banks, chiefly policy institutions, were allowed to issue RMB bonds in Hong Kong to mop up the retail liquidity that had accrued in the meantime. But the landmark change came in February 2010 when the Hong Kong Monetary Authority, with China’s backing, said it would allow RMB bond business to be carried out in Hong Kong “in accordance with prevailing banking practices”. This, among other things, meant that anyone who was permitted to launch bonds in Hong Kong – that is, pretty much anyone – could do so in offshore RMB.</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Numerous landmarks have since followed: Hopewell Highway Infrastructure, a RMB1.38 billion two-year deal in July, was the first corporate bond, while in the same month Citic Bank issued the first certificate of deposit deal. McDonald’s came to market with a RMB200 million deal in August, the first from a truly multinational corporate issuer; then October saw Asian Development Bank launch the first 10-year deal, a corporate bond from state-owned truck manufacturer Sinotruk and an issue from Export-Import Bank of Korea, which showed the willingness of Asian agency borrowers to tap the market. Deutsche and UBS have borrowed for themselves; and Caterpillar followed McDonald’s as another major US-based multinational keen to borrow in RMB.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Yet it was really at the end of last year that the sharpest illustration of maturity (or, if you take the opposite view, overheating) came, with several deals that all demonstrate different things about the market’s evolution.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><strong>Down the curve</strong></span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Two came in consecutive days in December. First, Galaxy Entertainment Group raised RMB1.38 billion in a Regulation S deal on December 9. The following day, VTB Bank, the Russian financial institution, raised RMB1 billion through HSBC and VTB Capital. Both were three-year deals.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Galaxy, in particular, was an important trade. Although, strictly speaking, the issuer is unrated, the market considered it a high yield name. As such, it effectively represented the first appearance of high yield in the new market – and thus an expansion of investor appetite further down the curve. </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">“The Galaxy deal set a reference point for lower-rated credits,” says Paul Au, head of Asian debt syndication at UBS. “As a result, you will continue to see companies from different industries and with different credit standards accessing the market.”</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">“It probably came as a bit of a surprise to many people, because in any new debt capital market, high yield products usually take a longer time to develop,” says Tee Choon Hong, regional head of capital markets for North Asia at Standard Chartered. “Usually the more established credits form the market foundations before you see the emergence of high yield. But in the CNH bond market we have seen this develop quickly – in the same year.”</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">The other noteworthy point about the Galaxy issue was the price. Having been marketed around the 5% level, the bonds eventually came at 4.625%. Now, for investors who had become used to yields as low as 1% on deals from higher-rated borrowers like the Ministry of Finance (which launched a four-tranche deal at the end of November including a three-year tranche with a 1% coupon), 4.625% is a decent return. But in comparison to what an issuer like Galaxy would pay elsewhere, the return looks modest for the risk being taken. Galaxy does have an affiliate with a rating – Galaxy Casinos, which is rated B by S&P. Another B rated credit, Yuzhou Properties, went to the dollar high yield market the same week for roughly the same amount, yet paid 13.5%, albeit for a five-year, non-call three-year deal. That’s a mighty contrast, and Galaxy had plenty of demand, receiving RMB13.5 billion in orders with more than 80 institutional investors (mainly real-money) participating.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Similarly, the VTB issue offered further clues about pricing. It seems striking that a triple-B rated Russian bank with no presence in China, nor any stated intention to build one, can come to a market like this at all, but it did so at a cost of just 2.95%. Earlier in the year it had gone to the Singapore dollar markets and paid 4.2% for a shorter, two-year deal. </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">“One main reason the high yield market has progressed so swiftly is the yield differential,” says Tee. “When the Ministry of Finance is only paying 1% for a three-year bond, and bonds are then trading down substantially in terms of yield, there is a lot of attraction to a coupon of 4% or 5%. I think there is more to come.”</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Underpinning price, though, is the fact investors are seeing the headline yield as only part of the investment case. Instead, they are also factoring in appreciation in the renminbi. “In the back of everyone’s mind is the potential currency appreciation,” says Henderson. “Some investors are starting with the dollar curve, then asking where the potential upside is in terms of appreciation before determining the levels at which they are prepared to purchase.” </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Another deal that marked a significant step came via Shui On Land, which raised RMB3 billion in December. The deal would have been noteworthy for the level of investor appetite alone – the order book hit RMB32 billion, 21 times oversubscription for what had originally been pitched as a RMB1.5–2 billion deal, in just seven hours of book-building. But of even greater relevance, the issue was the first synthetic transaction in the dim sum market, with settlement in US dollars.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">From an investor perspective, the 6.875% yield looked very attractive for this market (though probably about 2% less than the borrower would have to pay for a vanilla dollar bond); but in addition, investors get to enjoy any appreciation in the value of the RMB. Additionally, with settlement in dollars, they don’t necessarily need to have a use for the Chinese currency, nor navigate the swap markets. Consequently, the previously Hong Kong-dominated market for these deals was broadened to a global audience. </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Deutsche, Standard Chartered and UBS, who led the deal, had planned to launch it early in 2011 but brought it forward after seeing the momentum demonstrated by Galaxy. Although the bulk of demand came from Asia – particularly private banks – the buying constituency is thought to have been far broader. “Those sitting on a lot of CNH are not the sort of private investors who bought this,” says Tee, one of the bookrunners on the deal. “By and large, it was bought by holders of US dollar accounts who don’t mind participating in the appreciation of the RMB.”</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Going down the synthetic route addresses one of the natural bottlenecks to further development of this sector: the swap market. This is a new market, expensive and somewhat illiquid. Shui On, for example, might have had to pay a further 3% through the swap market had it raised funds in RMB and switched them into Hong Kong or US dollars. </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">It is already clear the synthetic route will be an attractive option for many borrowers. Within a week of the start of the year, Fujian-based residential property group China SCE Property Holdings had raised RMB2 billion, once again with US dollar settlement. But this trade, led by Deutsche and HSBC, took a Regulation S/Rule 144a format, allowing US investors to participate in the market for the first time. This deal had to pay a much higher yield than others in the market – 10.5% – partly reflecting its longer five-year tenor. Yet once again, relative to the cost of funding in dollars, it was almost certainly several percentage points cheaper. It is understood European accounts took 12% of the bonds and US investors 10%. </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">“Single-B rated Chinese property sector names have seen quite heavy supply in US dollar,” says Henderson. “However, we still saw some very good interest out of the US in their dim sum offerings from some high quality investors. That bodes well for other borrowers looking at CNH with 144A docs. I think we will see a broadening of interest going forward.” </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">One other deal is worthy of further examination. On December 1, Export-Import Bank of China, known as Chexim, priced a dual-tranche RMB5 billion bond. The headlines on this talked mainly about oversubscription – its RMB1 billion institutional tranche was covered 53 times over, thought to be a record – but in fact the more interesting trend may have been buried a little deeper. Although 88% of the institutional deal went into Asian accounts, chiefly in Hong Kong, some 12% of the bonds placed in Europe.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">This is a striking development, because it shows that even in non-synthetic deals there is an order book available outside Asia if one goes looking for it (and generally bookrunners haven’t had to so far, such has been the demand within Asia). “Increasingly in Europe very large fund managers are seeing appetite among their clients to get access to this story,” says a banker who worked on the deal. “It’s going to develop quite quickly: there are plenty of people active now who didn’t even have accounts a month ago, let alone six months ago.” </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Au at UBS notes a similar trend. “At the moment, not every account is set up or mandated to buy RMB products, whereas Asian accounts are at the advanced stage of internal approvals,” he says. “But over time, once people are more familiar with the product, you will see more participation outside Asia from the current 10%–15% in a Reg S-only transaction.”</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Tee, while noting an increase in non-Hong Kong investors, particularly in Singapore, says that non-Asian investors are still very much a minority. “Although the market has developed significantly, new issue volume is still small. For some of the larger accounts, there is always a consideration of efficiency; the size of the deal, how much they can put their hands on given that most of the deals have been heavily oversubscribed and the allocations are usually quite small. That makes it less attractive to some of the larger offshore accounts.” </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">But he adds: “Based on the seminars we have held, both regionally and in US and Europe, the interest is immense. It’s only a matter of time.”</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">And the diversification of the investor base is not just geographical. “Retail deposits in RMB have obviously continued to grow in the last year or two, but the majority of the recent growth has been from the fund management side,” says Henderson. “There are a number of new entrants looking to buy RMB assets in order to create a product offering in the currency for their clients. This new investor base means instead of just having 20 or 40 investors, we’re now seeing much more diverse order books, which has in turn broadened the list of potential issuers across the full credit spectrum.” </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><strong>A growing appetite</strong></span></div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Underpinning the whole market is a supply/demand imbalance that seems to become more stark with every deal. When the Ministry of Finance set out to raise RMB5 billion via an institutional tranche in December, it attracted a RMB50 billion book. Data from the Hong Kong Monetary Authority shows that at the end of November, renminbi deposits stood at RMB279.6 billion – up from RMB217 billion the previous month, RMB150 billion the month before that and barely RMB70 billion in the first quarter of 2009. That’s a truly extraordinary rate of growth. The money needs somewhere to go and that, fundamentally, is what is driving tight pricing. </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">“The pool of RMB is still far from what you would call significant in the grand scheme of things: it’s about 3% of total bank deposits in Hong Kong,” says Tee. “But it has quadrupled within less than a year. It is enough to allow the formation of basic debt capital markets to recycle the money, and there currently isn’t any other viable instrument in town.” </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">In addition to retail buyers wanting a decent return on their money, the Hong Kong banks that hold those deposits create an institutional market with an equally ardent thirst for some decent yield; particularly since, with the funds being held among so few banks, there’s not much of an interbank market and no equivalent of Libor through which to pass on liquidity.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">The only things that can change this imbalance are, logically, a vast increase in supply (which is where the opportunistic financings in December came in); a tapering off of demand (unlikely, since there’s no reason for the growth of deposits to halt); or an increasing range of alternatives for that money to be invested in. </span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">“There are rumours about potential equity products that could be done in CNH, but the bond market has moved quite far ahead and will continue to see interest,” says Tee. “At the end of the day the free market will find its own balance.” But he notes that the many eccentricities on the supply and demand side – bank liquidity reserves, the lack of an interbank market, likely interest rate movements in China and Hong Kong – make it hard to draw conclusions from the way other markets have evolved. </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">“I like to compare the differences between the CNH bond market and the domestic bond market with the differences we have seen in stock markets between H shares and A shares,” he says. “It is two different patterns of price behaviour.”</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Still, some feel that the balance is already on its way. “You will see an equilibrium over time between supply and demand,” says Au. “At the moment it’s all about product with a little less focus on price, but once we get more supply you will start to see people differentiate between credits and assign different valuations to them. As the market grows over time, the pricing reference points will fall into place naturally. We just need more deals.”</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><strong>Yuan some, you lose some</strong></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><strong><br />
</strong></span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">It is evident the market faces some headwinds. One is repatriation of capital to the mainland. For those businesses raising funds in renminbi because they actually need the currency, moving the funds from Hong Kong to where they are needed has not always proved straightforward. This was most clearly in evidence with the McDonald’s bond, where repatriation issues took weeks to resolve and took the shine off what had otherwise been seen as a landmark success. “If you don’t have a use for the funds or approval to remit them, the swap back to other currencies can be quite painful,” says one banker. </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">That raises another problem. For borrowers who do not want the renminbi, they need to swap it out, and there is not much liquidity in this fledgling market. At best, it is going to cost 2–3% of the proceeds, which in some cases can wipe out the funding advantage versus dollars. Sources say there is liquidity for swaps at one year, but not far beyond. Until there is a natural flow of business to drive it, that will not change. </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">“The general expectation is that the currency is going to go up, so it is going to be harder to develop a deep enough market for a counterparty to take the other side of the swap – that is, for the RMB to depreciate,” says Au. “The market has to grow further – not just the bond market but trade finance and other forms of liabilities – in order for it to become deep enough for sizable [swap] transactions.”</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Although it doesn’t matter so much, it is also notable there is barely a secondary market in these bonds. Their scarcity value means few who buy them have any interest in selling them on. “Our challenge is being unable to get the allocation in the secondary market,” says one banker. “Almost nobody is selling. The minute anyone comes out with a small clip, it’s snapped up.”</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">For the future, there are some developments we should expect to bed in as with any new market: more deals at longer tenors, to accompany the Ministry of Finance and Asian Development Bank’s 10-year deals; further development of the credit curve, with more high yield deals like Galaxy; and eventually the development of a secondary market. No doubt, like everything else in this improbably vibrant sector, change will happen fast.</span></div><span style="font-family: Arial, Helvetica, sans-serif;"></span><span style="font-family: Arial, Helvetica, sans-serif;"></span><span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div><br />
<div style="text-align: justify;"><br />
</div></div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.comtag:blogger.com,1999:blog-8524617071154955782.post-23488454311116779132011-01-11T20:29:00.000-08:002011-01-11T20:29:57.904-08:00Expectations for the stock market in 2011<div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><strong>Happy New Year! </strong></span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"></span></div><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">2011 kicked off with a bang as the Dow rallied 93 points and the S&P 500 up more than 1%. Most financial analysts and economists are predicting we are going to see more days like this in the next 12 months and that the stock market will continue to move higher; upwards of 10%. </span></div><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><strong>At this point, I too am bullish for global markets in 2011. </strong></span></div><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">With that said, I have been in this business long enough to know that the stock market will not move higher each and every week. We will see dips and sell-offs occur in 2011, just as we did in 2010. The sovereign debt issues in Europe, the sluggish real estate market, unemployment, disappointing earnings seasons, and China's raising of interest rates are just some of the challenges that will cause these down moves. In addition, the world economy will probably be forced to deal with issues no one has been able to predict at this point. </span></div><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">However, even with all these headwinds in 2011, I still believe the markets are headed higher on an annual basis. The stock market has been battling these headwinds for 2 years now, and still it continues to to rally. I learned early on that the trend is your friend... until it stops being so. From my vantage point, it's hard to see this rally stopping in the near term as the Federal Reserve is doing everything in its power to keep interest rates at all time lows and buying $600 million of Treasuries. Also, we can't discount the robust growth we are seeing from emerging markets, like India and China. </span></div><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><strong>So what exactly am I saying? 2011 will be similar to 2010; we will see rallies, we will see sell-offs, but we will end the year higher than it is now. </strong></span></div><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">In the interim I am looking forward to trading the increased volatility that will ensue over the next 12 months. Though everyone knows they should have an investment account to build for their financial future, too many people shy away actively trading a portion of their accounts. Unfortunately, most investors have sat in mutual funds for 10 years and have little to show for it except the fees they paid to their financial planners and the funds themselves. </span></div><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">If you are one of those people, I encourage you to take action in 2011 and diversify into actively trading a portion of your portfolio. I expect the volatility to begin increasing this month and whether you are a novice at trading or a seasoned veteran, now is an opportune time to take advantage of the market's swings. </span></div><span style="font-family: Arial, Helvetica, sans-serif;"><div style="text-align: justify;"><br />
</div></span><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">I<strong> wish you and your families a healthy, happy, and prosperous 2011. </strong></span></div><div style="text-align: justify;"><br />
</div><div class="blogger-post-footer">For more information on Dr A S Johan, please search Google or Yahoo using keywords A S Johan GMS.</div>Dr AS Johanhttp://www.blogger.com/profile/01960267258905033156noreply@blogger.com