Video: Nouriel Roubini on Nationalizing Banks and Global Economies

Very good insights shown by Nouriel Roubini on why nationalizing banks is a great idea and a view of where the current state of global economies may be.

From the series of few videos that were posted the last few days, may it be from Jim Rogers, Soros or Roubini, everyone seems to have one common opinion, that is growth for the next decade will not be as strong as the past few recoveries that we had experienced from the last 6 decades of recoveries.

With the U.S continuing to work to repair their economy, both on budget and trade, over the next few years, the world may have to go through a paradigm shift, as the largest consumer of goods and services globally, goes through a major overhaul. The recent economic and trade figures could tell very clearly, as specified by Roubini in this.

Enjoy this video..

Video: George Soros on The New Paradigm for Financial Markets

Billionaire George Soros was on the newswire lately as he made a commented that the current economic crisis may spark the end of a free-market model that has since dominated capitalist countries, at a private dinner at Columbia University on Feb 20 2009. For a detailed report on his view, click here.

If you have an hour and a half to spare this weekend, the video below may be of interest to you where George Soros discusses some background and views of today's markets. Hope you like it..

Video: Simplified Explanation on the Credit Crisis

This video really explains the credit crisis in a very simple way. Hope you like it.

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Video: Possible Euro Selloff?

Hi guys,

I think this should be an interesting video from Karl Otto Pohl on the Euro. He is the ex-bundesbank's boss. Please do take his comment with a pinch of salt. For a write up on his comment, click here

Video: Jim Rogers 24th Feb

Here's one of Jim Roger's latest video. Enjoy...

Video and Transcript of Semi Annual Monetary Policy Report

Hi all,

After watching the full meeting yesterday, here is my short conclusion:

Economy
Necessary counter-cyclical monetary policies has already been used to stabilize the US economy, and with the recent corrections in property prices, goods and services, most products in general, has already been adjusted to norm, where it is more affordable to common citizens in the US. Banks are also given credits for every good loans made to any credible borrower.

Seems like measures of increasing additional money supply to the economy, and measures to prime the banks to lend has taken place. But what may seem worrying for the moment, is only if other countries may not find the returns on treasuries and the USD is no longer attractive.

Future
With a little more to be done still, that means after 2 Trillion USD, the FED will allow market forces to adjust itself to these new changes, and hope that consumer's confidence could be restored over the next few months. FED will continue to monitor the progress of their capital injections, and will be looking at withdrawing out their investments in banks gradually.

I believe the twin deficits should soon be an important topic for next year, as the US government may have to deal with enhancing their credibility, and repayment of debts. At this moment, the smoke may seem to have cleared a little for the 'real' US economy, and many steps that has to be taken to revive the economy is already better defined. I begin to see some light from this financial turmoil.

Additional Notes
If you are a technical trader, 7,100 of DJIA will be a tough psychological level to break, as it is the 50% mark of the index. DJIA's closing low on 27 June 1932, was 42.93... and it's high on 9 Oct 2007 was at 14,164.53.. We have thus effectively retraced 50% within 1.1/2 years, from the entire 75 year move. Interesting isn't it?

If you have missed yesterday's semi annual monetary policy report by Fed Chairman Ben Bernanke, here are some links for you to watch the full video, and the report's transcript.

If you have views and comments that you would like to share, drop me a comment, or post in my forum

Cheers..

Video: Hitler Slams Temasek

First and foremost, I wish to state clearly that this is only meant for entertainment value only and is NOT meant to be taken seriously, as there are no real/true fact that supports the content of this video. The video also, does not advocate anything politically.

If you live, or happen to understand affairs of Singapore, you will likely find this video to be an interesting one. Hope you enjoy this controversial video.

Video: Jim Rogers 13 Feb 2009

Jim Rogers talks to Sir David about the rescue package and talks about the cause of the current systemic risk faced by the economy. Hope you like it..

Video: Jim Rogers Feb 11 2009

Another interesting argument from Jim Rogers on the economy and Timothy Geithner. Hope you like it.

Elliott Wave FreeWeek Feb 11-18

Greetings,

Our friends at Elliott Wave International have just announced the beginning of their wildly popular FreeWeek event, where they throw open the doors to some of their most popular paid services to non-subscribers for one week only.

If you’re not taking part right now, you’re already missing the valuable opportunities your peers are getting for free.

This unique opportunity only comes along once or twice a year.

Learn more about EWI’s FreeWeek here

Cheers

10 Things You Should and Should Not Do During Deflation

Hi all,

Very interesting facts that Mr Robert Prechter presented there. Hope you can enjoy it... Cheers


This article is part of a syndicated series about deflation from market analyst Robert Prechter, the world’s foremost expert on and proponent of the deflationary scenario. For more on deflation and how you can survive it, download Prechter’s FREE 60-page Deflation Survival eBook, part of Prechter’s NEW Deflation Survival Guide.

The following article was adapted from Robert Prechter’s NEW Deflation Survival eBook, a free 60-page compilation of Prechter’s most important teachings and warnings about deflation.

By Robert Prechter, CMT

1) Should you invest in real estate?

Short Answer: NO

Long Answer: The worst thing about real estate is its lack of liquidity during a bear market. At least in the stock market, when your stock is down 60 percent and you realize you’ve made a horrendous mistake, you can call your broker and get out (unless you’re a mutual fund, insurance company or other institution with millions of shares, in which case, you’re stuck). With real estate, you can’t pick up the phone and sell. You need to find a buyer for your house in order to sell it. In a depression, buyers just go away. Mom and Pop move in with the kids, or the kids move in with Mom and Pop. People start living in their offices or moving their offices into their living quarters. Businesses close down. In time, there is a massive glut of real estate.

– Conquer the Crash, Chapter 16

2) Should you prepare for a change in politics?

Short Answer: YES

Long Answer: At some point during a financial crisis, money flows typically become a political issue. You should keep a sharp eye on political trends in your home country. In severe economic times, governments have been known to ban foreign investment, demand capital repatriation, outlaw money transfers abroad, close banks, freeze bank accounts, restrict or seize private pensions, raise taxes, fix prices and impose currency exchange values. They have been known to use force to change the course of who gets hurt and who is spared, which means that the prudent are punished and the thriftless are rewarded, reversing the result from what it would be according to who deserves to be spared or get hurt. In extreme cases, such as when authoritarians assume power, they simply appropriate or take de facto control of your property.
You cannot anticipate every possible law, regulation or political event that will be implemented to thwart your attempt at safety, liquidity and solvency. This is why you must plan ahead and pay attention. As you do, think about these issues so that when political forces troll for victims, you are legally outside the scope of the dragnet.

– Conquer the Crash, Chapter 27

3) Should you invest in commercial bonds?

Short Answer: NO

Long Answer: If there is one bit of conventional wisdom that we hear repeatedly with respect to investing for a deflationary depression, it is that long-term bonds are the best possible investment. This assertion is wrong. Any bond issued by a borrower who cannot pay goes to zero in a depression. In the Great Depression, bonds of many companies, municipalities and foreign governments were crushed. They became wallpaper as their issuers went bankrupt and defaulted. Bonds of suspect issuers also went way down, at least for a time. Understand that in a crash, no one knows its depth, and almost everyone becomes afraid. That makes investors sell bonds of any issuers that they fear could default. Even when people trust the bonds they own, they are sometimes forced to sell them to raise cash to live on. For this reason, even the safest bonds can go down, at least temporarily, as AAA bonds did in 1931 and 1932.

– Conquer the Crash, Chapter 15

4) Should you take precautions if you run a business?

Short Answer: YES

Long Answer: Avoid long-term employment contracts with employees. Try to locate in a state with “at-will” employment laws. Red tape and legal impediments to firing could bankrupt your company in a financial crunch, thus putting everyone in your company out of work.

If you run a business that normally carries a large business inventory (such as an auto or boat dealership), try to reduce it. If your business requires certain manufactured specialty items that may be hard to obtain in a depression, stock up.

If you are an employer, start making plans for what you will do if the company’s cash flow declines and you have to cut expenditures. Would it be best to fire certain people? Would it be better to adjust all salaries downward an equal percentage so that you can keep everyone employed?

Finally, plan how you will take advantage of the next major bottom in the economy. Positioning your company properly at that time could ensure success for decades to come.

– Conquer the Crash, Chapter 30

5) Should you invest in collectibles?

Short Answer: NO

Long Answer: Collecting for investment purposes is almost always foolish. Never buy anything marketed as a collectible. The chances of losing money when collectibility is priced into an item are huge. Usually, collecting trends are fads. They might be short-run or long-run fads, but they eventually dissolve.

– Conquer the Crash, Chapter 17

6) Should you do anything with respect to your employment?

Short Answer: YES

Long Answer: If you have no special reason to believe that the company you work for will prosper so much in a contracting economy that its stock will rise in a bear market, then cash out any stock or stock options that your company has issued to you (or that you bought on your own).

If your remuneration is tied to the same company’s fortunes in the form of stock or stock options, try to convert it to a liquid income stream. Make sure you get paid actual money for your labor.

If you have a choice of employment, try to think about which job will best weather the coming financial and economic storm. Then go get it.

– Conquer the Crash, Chapter 31

7) Should you speculate in stocks?

Short Answer: NO

Long Answer: Perhaps the number one precaution to take at the start of a deflationary crash is to make sure that your investment capital is not invested “long” in stocks, stock mutual funds, stock index futures, stock options or any other equity-based investment or speculation. That advice alone should be worth the time you [spend to read Conquer the Crash].

In 2000 and 2001, countless Internet stocks fell from $50 or $100 a share to near zero in a matter of months. In 2001, Enron went from $85 to pennies a share in less than a year. These are the early casualties of debt, leverage and incautious speculation.

– Conquer the Crash, Chapter 20

8) Should you call in loans and pay off your debt?

Short Answer: YES

Long Answer: Have you lent money to friends, relatives or co-workers? The odds of collecting any of these debts are usually slim to none, but if you can prod your personal debtors into paying you back before they get further strapped for cash, it will not only help you but it will also give you some additional wherewithal to help those very same people if they become destitute later.

If at all possible, remain or become debt-free. Being debt-free means that you are freer, period. You don’t have to sweat credit card payments. You don’t have to sweat home or auto repossession or loss of your business. You don’t have to work 6 percent more, or 10 percent more, or 18 percent more just to stay even.

– Conquer the Crash, Chapter 29

9) Should you invest in commodities, such as crude oil?

Short Answer: Mostly NO

Long Answer: Pay particular attention to what happened in 1929-1932, the three years of intense deflation in which the stock market crashed. As you can see, commodities crashed, too.

You can get rich being short commodity futures in a deflationary crash. This is a player’s game, though, and I am not about to urge a typical investor to follow that course. If you are a seasoned commodity trader, avoid the long side and use rallies to sell short. Make sure that your broker keeps your liquid funds in T-bills or an equally safe medium.

There can be exceptions to the broad trend. A commodity can rise against the trend on a war, a war scare, a shortage or a disruption of transport. Oil is an example of a commodity with that type of risk. This commodity should have nowhere to go but down during a depression.

– Conquer the Crash, Chapter 21

10) Should you invest in cash?

Short Answer: YES

Long Answer: For those among the public who have recently become concerned that being fully invested in one stock or stock fund is not risk-free, the analysts’ battle cry is “diversification.” They recommend having your assets spread out in numerous different stocks, numerous different stock funds and/or numerous different (foreign) stock markets. Advocates of junk bonds likewise counsel prospective investors that having lots of different issues will reduce risk.

This “strategy” is bogus. Why invest in anything unless you have a strong opinion about where it’s going and a game plan for when to get out? Diversification is gospel today because investment assets of so many kinds have gone up for so long, but the future is another matter. Owning an array of investments is financial suicide during deflation. They all go down, and the logistics of getting out of them can be a nightmare. There can be weird exceptions to this rule, such as gold in the early 1930s when the government fixed the price, or perhaps some commodity that is crucial in a war, but otherwise, all assets go down in price during deflation except one: cash.

– Conquer the Crash, Chapter 18
……….

For more on deflation, download Prechter’s FREE 60-page Deflation Survival eBook or browse various deflation topics like those below at www.elliottwave.com/deflation.

What happens during deflation?
Why is deflation bad?
Effects of deflation
Deflationary spiral
And much more in Prechter’s FREE Deflation Survival Guide.
Robert Prechter, Chartered Market Technician, is the world's foremost expert on and proponent of the deflationary scenario. Prechter is the founder and CEO of Elliott Wave International, author of Wall Street best-sellers Conquer the Crash and Elliott Wave Principle and editor of The Elliott Wave Theorist monthly market letter since 1979.

Video Link: Handling Exaggerated Trading Emotions: Issues and Answers

Hi all,

If you can spare about 30min of your time today, this link below is an interesting discussion, where in my opinion, is a useful video for both experienced and beginner traders, and I am sure it is useful for everyone from all levels.

The video was taken from a webinar by the CME Group (A Chicago Mercantile Exchange/ Chicago Board of Trade Company). To access the video, click here

Weekend Read: The Debt-Deflation Theory of Great Depressions

Spent some time over the weekend to read on Mr Irving Fisher's landmark paper on The Debt-Deflation Theory of Great Depressions. Hope you guys will like this. Click here to read the article.

Have a great weekend.

Exposing Three Myths of Deflation and Recession

Hi all,

The article below is a short introduction to Robert Prechter's work. In my opinion, he is one of those passionate market people that you cannot come across for years. His work has really been useful to my trading for the past decade, and I urge you to take a good look at their freebies, either events held annually or distributed as ebooks.

Have a good read below..


February 4, 2009

This article is part of a syndicated series about deflation from market analyst Robert Prechter, the world’s foremost expert on and proponent of the deflationary scenario. For more on deflation and how you can survive it, download Prechter’s FREE 60-page Deflation Survival eBook, part of Prechter’s NEW Deflation Survival Guide.

The following article was adapted from Robert Prechter’s NEW Deflation Survival eBook, a 60-page compilation of Prechter’s most important teachings and warnings about deflation.

By Robert Prechter, CMT

Myth 1: “War Will Bail Out the Economy”

Many people argue that war will bring both inflation and economic boom. Wars have not been fought in order to inflate money supplies. You might recall that Germany went utterly broke in 1923 via hyperinflation yet managed to start a world war 16 years later, which was surely not engaged in order to inflate the country’s money supply. Nor are wars and inflated money supplies guarantors of economic boom. The American colonies and the Confederate states each hyperinflated their currencies during wartime, but doing so did not help their economies; quite the opposite. With respect to war, the standard procedure today would be for the government to borrow to finance a war, which would not necessarily guarantee inflation. If new credit at current prices were unavailable, either the new debt could not be sold or it would “crowd out” other new debt. The U.S. could decide to inflate its currency as opposed to the credit supply. As explained in Conquer the Crash, doing so would be seen today as a highly imprudent course, so it is unlikely, to say the least. If it were to occur anyway, the collapse of bond prices in response would neutralize the currency inflation until the credit markets were wiped out. Despite these arguments, I concede that war can be so disruptive, involving the destruction of goods and the curtailment of commercial services, that the environment from the standpoint of prices could end up appearing inflationary. To summarize my view, the monetary result may not be certain, but an inflationary result is hardly inevitable.

There is in fact a reliable relationship between monetary trends and war. A downturn in social mood towards defensiveness, anger and fear causes people to (1) withdraw credit from the marketplace, which reduces the credit supply and (2) get angry with one another, which eventually leads to a fight. That’s why The Elliott Wave Theorist has been predicting both deflation and war. You cannot cure one with the other; they are results of the same cause.

Myth 2: “Deflation Will Cause a Run on the Dollar, Which Will Make Prices Rise”

This is an argument that deflation will cause inflation, which is untenable. In terms of domestic purchasing power, the dollar’s value should rise in deflation. You will then be able to buy more of most goods and services.

It is unknown how the dollar will fare against other currencies, and there is no way to answer that question other than following Elliott wave patterns as they develop. From the standpoint of predicting deflation, the dollar’s convertibility ratios are irrelevant. There may well be a “run on the dollar” against foreign currencies, but it would not be because of deflation. I think the impulse to predict a run on the dollar comes from people who own a lot of gold, silver or Swiss francs. They feel the ’70s returning, and so they envision the dollar falling against all of these alternatives. If deflation occurs, a concurrent drop in the dollar relative to other currencies would be for other reasons. Perhaps the dollar is overvalued because it has enjoyed reserve status for so long, which might make it fall relative to other currencies. If this is what you expect, what are you going to buy in the currency arena? The yen? Japan has been leading the way into the abyss. The Euro? Depression will wrack the European Union. Maybe the Swiss franc or the Singapore dollar. But these are technical questions, not challenges to deflation or domestic price behavior.

Myth 3: “Consumers Remain the Engine Driving the U.S. Economy”

Only producers can afford to buy things. A consumer qua consumer has no economic value or power.

The only way that consumers who are not (adequate) producers can buy things is to borrow the money. So when economists tell you that the consumer is holding up the economy, they mean that expanding credit is holding up the economy. This is a description of the problem, not the solution! The more the consumer goes into hock, the worse the problem gets, which is precisely the opposite of what economists are telling us. The more you hear that the consumer is propping up the economy, the more you know that the debt bubble is growing, and with it the risk of deflation.

……….

For more on deflation, download Prechter’s FREE 60-page Deflation Survival eBook or browse various deflation topics like those below at www.elliottwave.com/deflation.

What happens during deflation?
Why is deflation bad?
Effects of deflation
Deflationary spiral
And much more in Prechter’s FREE Deflation Survival Guide.
Robert Prechter, Chartered Market Technician, is the world's foremost expert on and proponent of the deflationary scenario. Prechter is the founder and CEO of Elliott Wave International, author of Wall Street best-sellers Conquer the Crash and Elliott Wave Principle and editor of The Elliott Wave Theorist monthly market letter since 1979.

A New Chapter: About Me

Hi all,

Wishing everyone a happy lunar 2009, and may you prosper in the year of the Ox.

In the first place, I would like to thank many readers here who have shown their care and concern by sending me greeting messages and emails over the past 2 months. I am greatly encouraged by the support I am receiving from readers here, and you are all wonderful people.

So what really happened to me lately?

I was really procrastinating initially as to whether this should be posted, but I just thought, what the heck, let's all be very honest with each other.

In October 2008, the hedge fund that I was working for, got wound up, and so, in October and November, I felt a little lost and worried because of the job loss. So I started hunting around for another trading job, and probably as expected by many, this was a bad time. I realized that the financial sector, in general, is going through a challenging time.

So what's my plans?

So in November, I believe I finally calmed down and gave it some thought as to whether I should 'retire early'.. Ha ha.. Fat hope for me, I have to work for at least a couple more years before I can consider this option, and in addition, I love to work as a fund trader, or proprietary trader.

After much thought, I decided to trade from home 'again'. To be honest, if I am given a choice, I would prefer to trade in an environment where there are companions to chat with, and people who can share your market views with. Although I gained lots of knowledge on the markets between 2002 to 2004 while trading from home, those 3 years working at home shrunk my social life considerably.

Between the end of February and the start of March 2009, I will begin to focus on developing and at the same time to provide better content through 2 channels, mainly through the blog (http://www.grentone.com) and the forum (http://www.marketasiahub.com).

My primary intention for the blog is to use it as a resume for my prospective employer, and at the same time, to seek opportunities. If you like what I am doing, and sees my competence, drop me an email.

So what has been learnt throughout this ordeal?

I am very glad to have chosen trading fx and futures as my life skill, and I am not claiming anything like I am the world's richest man, but trading has really given me a lifeline to live without being paid by someone called 'your boss'. It is a form of self employment, but the road to perfect this business is not easy. It took me 7 to 8 years to be good at it (where I am like attaining break even after a year's trading), and another 8 years to be able to make a living on it.

If you are serious about trading and would like to share your views on the market, feel free to post your comments, whether you agree or do not agree with what I argue about on the markets.

Cheers :)