By Gareth Soloway on October 22nd, 2010 11:32am Eastern Time
The much anticipated G20 meeting will be held this weekend. The main topics will be trade and currencies. The U.S. has been hammering China on letting the Yuan float against the U.S. Dollar. They have called China and other countries currency manipulators. This term used by the U.S. has now become somewhat of a joke to the rest of the world. The pot calling the kettle black would be a solid analogy to what the U.S. is doing to China. China may manipulate their currency to keep it in line with the U.S. Dollar, but the U.S. has become the biggest currency manipulator now with their weak Dollar policy. The Dollar has taken a nose dive since mid year and calls by the U.S. for other countries to stop manipulating their currencies are now laughed at.
With the big G20 meeting this weekend, the markets are in hover mode. The SPDR S&P 500 ETF (NYSE:SPY) are trading at $118.27, +0.14 (+0.12%). The markets will most likely continue to trade flat to positive today on extremely light volume ahead of this meeting. The Dollar is also holding around the flat line. Chances are, the manipulating kings, the Federal Reserve would not crush the Dollar ahead of the G20 meeting. That would only throw fuel on the fire of other countries in regards to the U.S. and their Dollar policy. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is trading at $22.49, +0.02 (+0.09%).
The G20 meeting is expected to have little results other than arguing. However, traders are sitting on the sidelines until after the meeting to be safe. To gain more insight, analysis, guidance and swing trades, join the Research Center.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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I find oddest of all, the expressions on people’s faces, when I inform them that I sincerely believe that the knowledge I gained through formal institutions of academia was detrimental to my understanding of how capital markets operate. In fact, I explain to those that inquire of my educational background that I had to rewire my brain and purge it of nearly all of the false business concepts and stupidity I learned in school because I later found the great majority of what I had learned in school to be not only downright deceptive, but also in my opinion, deliberately erroneous. Many people express genuine shock when I tell them that my formal education was, as was my education on Wall Street, almost entirely useless to any of the investment research and analysis I perform today and that my understanding of how capital markets move is entirely the result of self-education.http://www.lewrockwell.com/spl2/failure-us-educational-system.htmlRead more…
By Nicholas Santiago on October 21st, 2010 5:12pm Eastern Time
We all know that this recent stock market rally that began on August 25th, 2010 has been manufactured by the Federal Reserve Bank and the prospect of QE2 (quantitative easing). Since that time the stock market has rallied higher by nearly 13 percent. However, the U.S. Dollar Index has declined by nearly 13.0 percent since its June 7th, 2010 high. This tell us that quantitative easing has already been going on. If the U.S. Dollar has lost 13 percent and the stock indexes have rallied 13.0 percent what have investors really gained as stocks are denominated in dollar terms? It has really been a zero sum game and many people are hopefully realizing that.
There are several negatives to the 'kill the dollar' policy that the Fed has adopted. The first is that all goods and products that people need will become more expensive. Just look at the price of gasoline, or food? These prices have increased and will continue to increase. Most commodities besides gold and silver are now at all time highs. How can this be a positive for society? What about the retirees or those that are living on fixed incomes? What happens to these people as they see their purchasing power evaporate before their eyes?
Most investors are under the impression that quantitative easing is coming soon. They believe that it has not occurred yet. Are you kidding me? How many bubbles can the United States handle? The last time we saw quantitative easing of this magnitude was in 2001-2007 which caused the greatest credit bubble since the great depression. What is this more powerful artificial prop job going to cause this time? The Fed funds rate (overnight lending rate to the large major banks) has been at zero percent since 2008 and the banks still can't get out of their own way. Bank of America Corporation (NYSE:BAC) just hit a new 52 week low today for crying out loud.
Don't people see the damage that is going on? Where did all of the toxic assets go that the banks had on their books? The phony accounting can only work so long before the real problems emerge. Lets not even talk about the government debt and spending that is going on. Who is going to lend a nickel to this country at this rate. America talks about the European debt, meanwhile, we have fifty Greek states of our own. This Fed better come to their senses soon.
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Nicholas Santiago
Chief Market Strategist
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Published: Thursday, 21 Oct 2010 | 5:30 PM ET Text Size
By: Reuters
St. Louis Federal Reserve President James Bullard said Thursday he would back Fed purchases of Treasury securities in $100 billion increments meeting-by-meeting if the U.S. central bank decides monetary easing is necessary, but stressed no decision has been made.
http://www.cnbc.com/id/39786076Read more…
A drop in claims for new unemployment benefits, as well as a Federal Reserve report that the economy grew at "modest pace" between September and early October, may be giving investors reason to halt the rally in stocks, said Todd M. Schoenberger, managing director, LandColt Trading.
That's because the somewhat brighter economic news evident in these reports could mean the Fed elects to either not buy assets to boost the economy, or buys fewer than the market has been anticipating, Schoenberger said.
"That would explain why stocks are selling off: people are looking at the data, and saying, this just doesn’t make sense," he said.
http://www.cnbc.com/id/39784531Read more…
