Month: July 2011

By Elliott Wave International

The European Banking Authority announced Friday that 8 banks had failed their stress tests and 16 more had narrowly passed. But the results drew much criticism from analysts, who said that the stress test is not strict enough.

Indeed, this is something that European Financial Forecast readers have known since the first stress test last summer.

For a unique perspective on Europe’s sovereign debt crisis, we invite you to read a free 6-page report by Elliott Wave International’s European Financial Forecast editor Brian Whitmer, “Credit Crisis in Europe.” Brian has been anticipating and tracking the credit contagion across Greece, Ireland, Spain, Portugal and other EU nations for months.

Below is a quick excerpt from this report, written just after the first stress test. For details on how to read it in full now, look below.
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Credit Crisis in Europe: How the Stability of an Entire Region is Teetering on the Edge of a Major Collapse

By EWI’s European Financial Forecast editor Brian Whitmer (excerpt)

Panic Now and Avoid the Rush — July 30, 2010
The market’s collective sigh of relief is also reflected in authorities’ stress testing of 91 European banks. In case you missed last Friday’s results, their message is clear: relax. The Committee of European Banking Supervisors (CEBS) gave passing grades to nearly every bank on its list. The group, for example, passed both Irish banks and all four UK banks that it evaluated. The CEBS gave clean bills of health to all four Portuguese banks, all five Italian banks, and five out of six Greek banks that it analyzed. Even with share prices that sit 29%-66% beneath their 2009 countertrend highs, the CEBS says that the Bank of Ireland, Piraeus Bank, Banco Popolare, and Banco Santander are all in good shape. In fact, just seven of the 91 banks failed to make the grade. Five were in Spain, one in Greece, and one, Germany’s Hypo Real Estate, is entirely owned by the German government anyway. Everyone else — 84 institutions in all — are supposed to be strong enough to withstand another economic shock.

It’s not so much the stellar results that expose the optimism of a Primary degree rally, but rather the Banking Committee’s stress tests themselves. They are notable primarily because they failed to test for any real stress in the first place. As the chart shows, the Committee’s “adverse scenario” regarding economic performance assumed a mere 3% deviation from the European Commission’s GDP forecast. Another test looked at banks’ resilience to a sovereign risk shock, yet the analysis merely used conditions similar to those of May 2010. In other words, just like the UK budget office, the CEBS is utilizing a woefully diluted version of the economic deterioration that is about to grip the continent.
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FREE REPORT: Discover what Europe’s debt crisis means for the future of the continent and your investments. Get your FREE 6-page report filled with unique analysis on Europe, the PIIGS and the sovereign debt crisis.EWI’s European Financial Forecast editor Brian Whitmer gives you the context for what’s happening in Europe and gets you up to speed on the reality of the situation. Download your free report now.

As the deadline to lift America’s debt ceiling approaches, a group of six US senators have stepped forward with a last-ditch plan to tackle the country’s budget crisis. The behavior of financial and capital markets over the past few weeks have been roiled by massive shifts into safe-haven assets as investors fled risk. Recent market behavior, however, indicates a shift back to normalcy.

The bipartisan “Gang of Six” plan is to reduce the budget deficit by $4 trillion over the next ten years, including a tax increase that would raise $1 trillion in new revenues over the same period by closing several loopholes in the American tax system. The passage of such a deal depends largely on whether the GOP will accept the tax hikes included.

It has long been assumed that Congress would not allow the US government to default on its loan payments, but as the deadline inched near both parties became piqued at the other’s unwillingness to compromise. The resultant deadlock has riddled global markets with added uncertainty.

This week, however, what we see is the price of oil moving higher while gold and silver enter a price decline; the US dollar is paring gains as investors opt for the euro; and Asian, American and European stocks are edging higher. These are all signs that investors are expanding their economic outlook and adjusting their portfolios to take on more risk following the economic data surrounding the US housing market, high earnings reports from several large companies, as well as optimism that the “Gang of Six” proposal stands the best chance yet of being accepted and passed.

This in no way guarantees that the “Gang of Six” proposal will pass, only that investors view it as a solid starting point for resolving the budget crisis. A recent Republican plan to amend the US Constitution in a way that would have required the government to have a balanced budget failed to pass by the needed majority, and it will be interesting to see how the backlash from that failed initiative plays into the negotiations over this latest proposal.

A report from Statistics Canada this morning highlighted a growth in wholesale sales across the northern giant. The Canadian dollar (CAD) has been experiencing wide swings in value from shifts in risk aversion and spasmodic commodity price action these past few trading days.

News of high growth in Canada’s housing market has helped lift the value of the Loonie in recent trading, and this bullish sales figure should lend more weight to a region bereft of market optimism. Expectations were for mild growth of 0.2%, but today’s 1.9% reading has, and should, push the CAD a smidge higher in today’s afternoon session, particularly is US housing data can remain as bullish as it has been this week.

Read more forex trading news on our forex blog.

By Early To Rise

At least once a week, I get an e-mail from a newbie Internet marketer presenting the same problem…

The marketer has created his first product, along with a landing page on which to sell it.

Now, how does he drive traffic to that landing page to generate clicks and sales?

The most effective method is to send an e-mail marketing message advertising the product to your opt-in e-list.

But if you’re like most beginning Internet marketers, you have either no list or a list so small that no significant sales will result from e-mailing to it.

The only way for you to access large, responsive e-lists is to do joint ventures with the big Internet marketers who own those lists.

Unfortunately, the successful Internet marketers with the big, profitable e-lists (a) don’t know who you are and (b) are bombarded by people asking them to promote products every day.

Therefore, they have little or no inclination to promote yours.

So what are the do’s and don’ts of asking medium-size (like me) and big Internet marketers (like Early to Rise) to joint venture with you?

To begin with, never send your product unsolicited, without getting permission first – especially a physical product like a book or DVD set.

The recipients have neither the time nor the interest to read your book or watch your DVD, and your expensive materials will go straight into the trash.

And don’t ask the big Internet marketers to look at your e-book and offer advice and suggestions.

That is presumptuous and potentially insulting. My clients pay me hundreds or thousands of dollars for my critiques and editing. So why I should interrupt my paying work to review your e-book for free?

That said, here’s a 5-step process that can lead to success in establishing joint ventures with other Internet marketers, even those much bigger than you.

1. If there is any connection between you and the marketer, even a tenuous one, mention it in your first communication with them.

The connection could be as solid as having a common friend or colleague, or as negligible as you being a fan of their work.

One online marketer I know got a major guru to endorse his e-book because they live in the same city and swim in the same lake.

2. Briefly describe the product for which you are proposing a joint venture.

Give its title and a one-paragraph summary of the contents, purpose, and intended audience.

3. Explain why you think your product would appeal to the marketer’s list, and also how it offers them unique content they cannot get elsewhere.

For instance, an aspiring Internet entrepreneur put together a guide on how to write copy and suggested I offer it to my list. He was shocked when I turned him down. Why did I do it? Because I ALREADY have several of my own products that cover the same territory. Since I’d have to split the profits with him in a joint venture, why wouldn’t I just sell my own products and keep all the money?

More recently, I was offered the opportunity to joint venture on an e-book about how copywriters and graphic designers can work together. It’s a topic with great appeal to my list, and I don’t cover it in any of my own products. This combination makes it ideal for a joint venture.

4. Make sure the price of your product is high enough that it allows the marketer to make a profit when he promotes it to his list.

I have been approached by marketers about doing joint ventures on small special reports that cost seven dollars. I tell them there is not enough money per sale in it to pay off for me.

5. Offer a generous commission.

For most information products – e-books, audio CD albums, DVDs, multimedia programs – I give as well as get a 50% commission on each sale. Anything less than 50% is usually not enough to interest me.

There are exceptions. On high-priced items, such as seminars and conferences, a 25% commission is sufficient compensation. One colleague, CM, asked me to present his $5,000 bootcamp to my list and offered $1,000 commission on each sale. I was more than happy to oblige.

Some Internet marketers add extra compensation for joint venture partners – prizes for the partners who generate the most sales for a product. This is typically offered for product launches.

I would never promote a product I don’t like to my list just to win a prize, even if it is substantial. (And the prizes can be anything from an iPod up to an automobile!) But if I would promote the product to my list anyway, I certainly don’t mind getting a modest prize. (I won an iPod a few months ago and gave it to my son.)

[Ed. Note: Setting up successful and effective joint ventures should be a priority in your Internet business. But there is plenty of other stuff to learn and take care of: search engine optimization, copywriting, landing pages, e-mail list building, social media… you’ll learn it all in Bob’s Internet Cash Generator program. Find out more about it here.

Bob Bly is a freelance copywriter and the author of more than 70 books. To subscribe to his free e-zine, The Direct Response Letter, and claim your free gift worth $116, click here now.]

This article appears courtesy of Early To Rise, a free newsletter dedicated to creating wealth and success through inspiration and practical, proven advice. For a complimentary subscription, visit http://www.earlytorise.com.

The Melbourne Institute’s (MI) measurement of Australia’s Leading Index, a composite index of nine economic indicators, revealed a contraction of approximately 0.1% occurred in the month of May. The indicator tends to have little impact on currency values given the delay of the data release – the report is published about 50 days after the month ends.

Nevertheless, news that a composite collection of major indicators have declined does not bode well for a global market rife with economic pessimism that appears to be growing by the day. So far traders have seen the Australian dollar (AUD) sell off a bit in today’s trading on the news of this contraction.

Read more forex trading news on our forex blog.

Sterling was up versus the dollar but weaker in the crosses as the BOE meeting minutes showed a reluctance to tighten interest rates given weakness in UK growth prospects and headwinds in the global economy. Rising expectations for solutions to debt issues on both sides of the pond are spurring equity gains and dollar weakness, though the major currencies remain in their weekly ranges prior to tomorrow’s EU summit.

The dollar is weaker as market sentiment is improving. Prospects of a deal in the US debt talks are making headway as the Gang of six proposal may be enough to stitch together a short term solution while pushing the larger budgetary debates further down the road until after the 2012 election. Equities have continued to perform well after yesterday’s 1.6% rally in the Dow. European equities have followed US indices higher with the FTSE up 1% while gold is off of its all-time high.

A day before the European summit Sarozky and Merkel are meeting in Berlin to hash out their differences. Tomorrow’s meeting will likely address an additional Greek bailout package with involvement from the private sector, something Merkel has been adamant about. This is in stark contrast with the ECB which insists on any private sector participation avoiding a credit event as defined by the rating agencies. A substantial new package released following the EU summit would likely be supportive of the euro. One such package is rumored to allow the EFSF begin purchasing sovereign debt or loaning funds to Greece to buy back their own bonds. Any solution will need to be scalable to other EU nations to prevent further contagion as was seen the previous week with yields on Spanish and Italian debt climbing. Initial resistance for the EUR/USD remains last week’s high/100-day moving average near 1.4300.

Sterling is up versus the dollar but lower in the crosses as the BOE signaled the current economic weakness is expected to be prolonged and will prevent the central bank from raising UK interest rates in the near term. Despite expectations of increased headline inflation, wages are not putting upward pressure on prices and thus will allow the BOE to maintain its loose monetary policy going forward. This will likely keep sterling pressured versus the euro but dollar weakness could temper any losses in cable. EUR/GBP resistance is found at 0.8850 followed by the July 1st high of 0.9080. Cable has resistance at 1.6220 from the pattern forming since late April and support at last week’s lows of 1.5780, a level that coincides with a 38.2% Fib retracement of the April 2010 to April 2011 move.

Read more forex trading news on our forex blog.

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

By ForexYard

Recent losses on Wall Street were mostly offset yesterday as investors sought out riskier assets from positive data on the American housing market. Optimistic earnings reports from large companies like IBM have also helped turn several larger investors into a risk-seeking posture in this week’s marketplace. Should today’s housing report out of the American economy prove positive, this sentiment could continue, driving the value of the US dollar (USD) lower while the EUR makes gains.

Economic News

USD – USD Weakly Bearish as Stocks Climb

The US dollar was seen trading with mildly bearish results at the start of Wednesday’s trading sessions as traders began to view the improved housing sector a sign of positive growth in capital markets and stabilization, albeit weakly, on Wall Street. The dollar has been primarily gaining from the recent shift into safer assets, but yesterday’s rising stock values helped push some traders into riskier positions.

Though news has been both positive and negative, traders have been predisposed to short the higher yielding assets in general as the US and European economies falter. Moreover, as the August 2 deadline for lifting the US debt limit rapidly approaches, we are beginning to see some hedging behavior with the Swiss franc (CHF) and Japanese yen (JPY) acting as alternate stores of value should the US default on its loans.

As for today, the US economy will be publishing another installment of the optimistic housing data released yesterday. On today’s docket is a report on existing home sales, with expectations for additional growth in the US housing sector. With the latest direction of the housing market looking positive, this report could either reverse yesterday’s appetite for risk or feed it. Trader should expect heavier than normal volatility as this report approaches.

EUR – EUR Paring Some Losses as Traders Test Risk Sentiment

The euro (EUR) was seen trading somewhat higher yesterday following news of optimistic growth in the US housing sector. Against the US dollar (USD) the euro was trading above 1.42 briefly before settling near 1.4150 at day’s close. The EUR/CHF was also finally experiencing some bullishness with a strong upward move coming by mid-Tuesday, followed by a flattening towards the day’s conclusion. The pair opened this week at a record low of 1.1414 after closing last Friday at 1.1539, but so far it has seen a retracement back towards 1.1650.

It appears the EUR also moved mildly higher versus the Japanese yen as safe-haven assets across the board experienced a small downtick due to increased market optimism from the bump in American housing data. With only minor news expected out of the euro zone today, much of this sentiment is not likely to be reversed today unless US Existing Home Sales disappoints.

Sentiment across the euro zone remains mostly negative, with many analysts and economists expecting further moves towards safety by traders this week unless the housing market gives cause for seeking out physical assets. Any more bearishly-leaning news out of either economy will likely pull down on the EUR even further as investors again tuck tail and flee risk.

AUD – AUD Trading Higher as Oil Demand Rises and Traders Seek Risk

The Australian dollar (AUD) was seen trading moderately higher versus most other currencies last Tuesday after news began to shift many traders back into riskier assets. The Aussie has been experiencing several wide swings lately from the various shifts into and away from riskier assets. A vote on China’s economic confidence after its latest rate hike also impacted the AUD heavily, causing movements away from the soaring Aussie. However, China’s latest increase in demand for oil has helped the commodity-linked currencies, like the AUD, Norwegian krone (NOK) and Russian ruble (RUS), experience a strong uptick.

As traders witnessed a turn towards safety after last Friday’s economic reports from the United States. The resultant move into safe-haven assets has helped to push down on the AUD throughout the early hours of this week as traders shied away from its high interest rates in order to store value in lower yielding assets like the Japanese yen (JPY) and US dollar (USD). A sudden return of risk appetite due to positive earnings reports on global stock markets from companies like IBM, and from the growing stability of the US housing market, has so far helped to prop up the Aussie in mid-week trades. This sentiment could continue if the US publishes further optimistic data regarding existing home sales later this afternoon.

Oil – Oil Prices Advance on Heightened Chinese Demand

The price of Crude Oil found support this week as large oil consumer China increased its demand for the black gold. A barrel of Light, sweet crude traded above $98 for a short while yesterday afternoon and evening as investors viewed China’s sudden binge as a sign that further growth in the global market place would return shortly. Stock market gains have also pushed the value of the US dollar (USD), which oil is valued in, slightly lower, helping to bolster the upward movement of crude.

As investors seek out risk, the value of crude oil, which has been seen trading with mixed results, jumped to a weekly high of $98.94 per barrel. A sudden stagnation in dollar values due to this week’s somewhat riskier trading environment has so far assisted this price movement. Should risk sentiment hold steady this week, the prices for commodities could continue to gain.

Technical News

EUR/USD

After a gapping lower to start last week the pair moved below the 200-day moving average and on the subsequent rebound the EUR/USD found resistance at its 100-day moving average, a previous level the pair struggled to close below between the months of April and July. While the rebound higher was sharp the failure of the pair to move above the 100-day moving average and to close above the opening gap signals weakness in the pair. Initial support is found at last week’s low at 1.3870 followed by the rising trend line from the June 2010 low which comes in at 1.3750. A break here is significant as it would compromise the long term uptrend for the euro, exposing the 50% retracement level at 1.3410. To the upside last week’s high at 1.4290 is the first resistance followed by the falling resistance line from the May and July highs at 1.4490.

GBP/USD

The GBP/USD price collapsed only to find support at the 38% retracement level of the May to April move at 1.5780 while the rebound higher was capped at the neckline from the head and shoulders reversal pattern. Positive divergence is found on the RSI-14 as the price made a new low but the RSI did not. This signals a potential warning sign for sterling bears. Resistance is located at 1.6230 off of the falling trend line from the April high. Above this level the previously broken trend line from the May to April move at 1.6330 will come into play. To the downside a break of 1.5780 would signal a resumption of the downtrend and would target 1.5650 which has served as both support and resistance in October and in December of last year.

USD/JPY

The USD/JPY downtrend resumed with a vengeance last week as the pair broke below the 80 yen “line in the sand” and the support from May 5th at 79.55. This level has now turned into resistance as often happens to previously broken support levels. Only last week’s low at 78.46 and the bottom of the long term wedge from Sept 2004 at 77.60 stands in the way of the all-time low at 76.11.

USD/CHF

The Swissie has moved in one direction and one direction only. The pair made a halfhearted attempt close above its 50-day moving average and moved sharply lower from there setting a new all-time low at 0.8082 which serves as the initial support level. Any move higher may find resistance at 0.8275, the falling trend line from the February high which comes in at 0.8450, and 0.8550.

The Wild Card

NZD/USD

The kiwi has jumped out to a 30-year high versus the USD. The New Zealand dollar has performed particularly well as a rising trade surplus and increasing GDP has boosted the commodity currency. Rising inflationary forces may also force the RBNZ to raise interest rates sooner than expected. As such, forex traders may prefer to be long on this pair.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Article by White Digital Media

Once upon a time there lived a Rupee, the Indian currency with a hope to be looked upon as a symbol of powerful and exponential India. Rupee’s wishes became reality on 15th July 2010 when the Indian government introduced the new Rupee symbol to the 1.15 billion Indians making them feel proud and dignified. This symbol that blends India with Bharat is created by D Uday Kumar, an IIT post-graduate from India.

The new Rupee is not just a currency anymore; it has become a symbol of a country that determines to be the next potential superpower. On the back of the growing economy, India dreams to grow big and make big despite facing socio-economic complications that pose a direct challenge to the growth of the country. India is also the world’s largest democracy where industrial development is happening at a rapid pace pushing the country to become one of the world’s most developed countries.

The new symbol developed to represent the Rupee indicates the process of evolution. The Indian economy remained resilient during the economic crisis showing the spirit of credence and solidity. Hence, it was essential to develop a symbol with an international appeal to convey this message to the rest of the world that India is a brand that is backed by strong cultural roots and stable economy.

The new Rupee will now join the currency group of privileged nations such as the US, UK, Europe and Japan distinguishing itself from the countries using the same currency like Sri Lanka, Pakistan, Indonesia and Nepal. The new symbol would also be a part of the ‘Unicode Standard’ script family to make it easy for the channels of new media to utilize it when necessary.

The journey of a traditional Rupee
The historical way of writing Rs. for the Indian currency has a traditional backdrop. Derived from the Sanskrit word ‘Rupaya’, which means silver, the rupee was used as a silver coin in the old India. In the nineteenth century, silver in vast quantities was discovered in the US and Europe creating a negative impact on the white metal’s value. The standard of the precious yellow metal – gold surpassed that of silver’s smashing down the relative value of the rupee that eventually gave birth to an pessimistic event called ‘the fall of the rupee’.

The British government brought the first paper currency to India during 1860s embossed with an image of the King. Nonetheless, the silver rupee coin continued to live as the unit of their currency during and after the British Raj. Since then the abbreviation Rs. came into the practice while India losing its uniqueness and standard on the global front.

The picture changed dramatically after India became an Independent country in 1947. New designs for coins and banknotes with Asoka’s Lion Capital and Mahatma Gandhi’s portrait were introduced to the natives. Moreover, the banknotes minted by the RBI (Reserve Bank of India) carried the money amount written in 17 official Indian languages in the alphabetical order.

However, the value of the Rupee declined after the nation faced two major economic crises post Independence. In 1966, India was hit adversely by the inflation blues pushing down the value of the currency. Lack of balance in the payment procedures in 1991 led India to another state of vexation with the rupee declining to a major level.

Rupee: The shining star
Beginning of the 20th century brought bright opportunities for the rupee to gain back its value on the back of the robust foreign investments. In June 2008, the rupee touched a 10-year high against the US dollar attracting flows of foreign funds. Despite seeing the 2008-09 slowdown, the rupee managed to keep up its position due to RBI’s intervention in reducing volatility of the Indian share market.

The rupee has seen some issues over the convertibility aspect of it. The currency was made convertible in 1993; however, it will be considered as a fully convertible currency at the end of 2010-11. The current exchange rate between the rupee to the dollar is 46.78. The recent BIS (The Bank for International Settlements) survey report states that the average daily turnover in the dollar/rupee pair stood at $36 billion in mid 2010.

The current condition of the global economy indicates a possibility of a slump and poor economic recovery in the coming future. Fear of double-dip recession is growing day by day. However, the Indian economy has once again maintained its stability by showing incredible GDP growth in FY2010. This means that the country has the potential to sail through difficult times and still mark its presence on the global front.

Hence, the Indian Rupee is set to march ahead with a spark that converts an underdog into a roaring lion.

About the Author

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