Monthly Archives: October 2012

Wooly Mammoth

Seasons of the French

Wooly MammothWith Europe in the spotlight here in Europe, and on the back-burner there in the US, I’ve been thinking about how differently Europe confronts its economic problems. There’s another lovely summit taking place in Brussels today and tomorrow.

It has a broad agenda:

  • How is Europe going to manage banking supervision? Lets talk.
  • How are France and Germany going to deal with those dicey issues of national sovereignty?

As most things European, what’s NOT on the agenda, is what’s being most talked about. In this case Greece, though sidelined for a few more months, it’s the elephant in the room, and standing next to the elephant is Spain, the wooly mammoth. Every effort is being made to portray a sense of calm or a lack of urgency. My favorite headline: Pour la première fois depuis trois ans ce n’est plus le sommet de la dernière chance. (For the first time in 3 years it’s not a last-chance summit.)

Knowing the French and their inborn ability to say everything while saying nothing, this pre-summit – summit is an opportunity to shine. Why? Because it’s Holland’s chance to sit down next to Merkle and say, “‘The wine is good isn’t it? It came from a vineyard in Bordeaux. The owner is a friend of mine and the guy who financed the business is an old school chum running our biggest bank. I’ll ask him to send you a few cases, but lets keep that between us.” Translation. “Don’t even think of putting rules around who my friends can (or can’t) finance.”

While the two of them are discussing high finance and the merits of a good Bordeaux an elephant and wooly mammoth are wandering aimlessly around the room.

Meanwhile back at the French Ranch (Dressing) – where did they come up with that? – some interesting laws are getting debated, ultimately the fundamental question socialist lawmakers are asking themselves, how do we take away any and all tax/fiscal advantage we’ve given in the past, starting with anything Sarkozy touched, and where can we oblige others?

Some examples:

  • 75% tax on the rich – you’ve all heard about this. Think luxury Parisian apartments, this is funny. (here)
  • The Pigeons, don’t touch my capital gains. (here) Think Grass Roots.
  • Doctors won’t be able to practice where they want to. (here) Think Teachers. Imagine Brain Drain.
  • Tightening of the reductions for home workers, and tutors. (here) Lets shoot ourselves in the foot.
  • And Google which is at this very minute undergoing some pain… Might be obliged to block french media sites. (here)

The French have always been special, an elite family of good eaters, but seeing them fight for power in Europe while ignoring the elephant and the wooly mammoth while sacrificing the talented, and entrepreneurial talent at home is embarrassing.

Changes?

Keeping up a routine has been good for my sanity and my Pre-Market Indicators (PMI’s), have been one way to do that.

I’m going to stop publishing them by hand and work on something a bit more automated, like the Put/Call ratios. My morning indicators are available everywhere and were little interest to readers of Brandnet, yet good for my routine.

I’ll cease boring you with PMI’s and continue to bore you with my random ramblings.

Pre-Market Indicators October 12th, 2012

Good Morning NY.

The CBOE Equity and Index put-call ratios are updated, here. The ratios are strikingly balanced, Equity at .65. It has been lower 39.69% of the time, and Index at 1.14 which only has been lower 29.54% of the time since June 2011.

The markets look green, and feel flat.

On tap: PPI, Core PPI, Michigan Sentiment, Treasury Budget.

  • EURUSD (1.2914) + 0.31%
  • Gold (GC)  + 0.41%
  • Oil (CL) + 1.00%
  • S&P (ES)  + 0.37%
  • CAC40 + 0.65% 
  • FTSE + 0.53%
  • Asia (NKD) + 0.47%
  • Copper (HG) + 0.73%
  • Silver (SI) + 0.48%
  • VIX: Close 16.29
Pre-Market Indicators - PMI111012

Pre-Market Indicators October 11th, 2012

Good Morning NY.

The CBOE Equity and Index put-call ratios are updated, here. The ratios are still interestingly divergent, Equity at .71. It has been lower 63.89% of the time, and Index at 1.02 which only has been lower 14.51% of the time since June 2011.

The markets look green, and feel green.

On tap: Initial Claims, Continuing Claims, Trade Balance, Export Prices ex-ag, Import Prices ex-oil and Crude Inventories.

  • EURUSD (1.2914) + 0.31%
  • Gold (GC)  + 0.41%
  • Oil (CL) + 1.00%
  • S&P (ES)  + 0.37%
  • CAC40 + 0.65% 
  • FTSE + 0.53%
  • Asia (NKD) + 0.47%
  • Copper (HG) + 0.73%
  • Silver (SI) + 0.48%
  • VIX: Close 16.29

Continue reading

Pre-Market Indicators - PMI101012

Pre-Market Indicators October 10th, 2012

Good Morning NY.

The CBOE Equity and Index put-call ratios are updated, here. The ratios are interestingly divergent, Equity at .73. It has been lower 70.59% of the time, and Index at 1.07 which only has been lower 18.58% of the time since June 2011.

The markets look red, and feels weak.

On tap: MBA Mortgage Index, Wholesale Inventories, Treasury Budget and the Fed’s Beige Book.

  • EURUSD (1.2868) + 0.01%
  • Gold (GC)  – 0.19%
  • Oil (CL)  0.01%
  • S&P (ES)   0.02%
  • CAC40 – 0.07% 
  • FTSE  0.34%
  • Asia (NKD)  1.09%
  • Copper (HG) + 0.03%
  • Silver (SI) – 0.19%
  • VIX: Close 16.37

Continue reading

Pre-Market Indicators - PMI091012

Pre-Market Indicators October 9th, 2012

Good Morning NY.

The CBOE Equity and Index put-call ratios are updated, here. The ratios are new-normal, Equity at .55. It has been lower 8.39% of the time, and Index at 1.28 which has been lower 44.72% of the time since June 2011.

The markets look flat, and feel flat to green, with earnings season kicking off and Angela in Greece.

On tap: nada

  • EURUSD (1.2951) – 0.13%
  • Gold (GC)  + 0.10%
  • Oil (CL) + 0.95%
  • S&P (ES)  + 0.17%
  • CAC40 + 0.28% 
  • FTSE  0.22%
  • Asia (NKD)  0.85%
  • Copper (HG) + 0.36%
  • Silver (SI) + 0.13%
  • VIX: Close 15.11

Continue reading

Random Scale In Paris

Forex Trading

Two curious things happened today. The first, was when I received an email requesting commentary (or a link) for a fast growing forex broker and the second, when I passed a lonely broken scale on a side street in Paris. The connections between these random events usually only amuse me, but in this case the humility with which I received the request, motivated me to do a little thinking.

The simultaneous discovery of a broken street-scale made me laugh. A new social program? Shouldn’t it be in NY? Galaxy is asking why there’s only 2 paws, how do I explain? It’s true, that’s her WC not mine.Random Scale In Paris

I’m not a forex trader but follow closely the EURUSD pair and lately the EURAUD pair. I trade with Interactive Brokers which, once you manage the platform, works for my trading style. It’s scalable. So it struck me as odd to receive this email, at first I thought it was spam. I trade futures and options, but it landed in my personal email, and appeared to have been generated by a human. That itself is odd, sadly.

Forex Trading has exploded in recent years, particularly in the UK where any google search will turn up literally hundred’s of brokers. Apparently, US regulations have handicapped the US-based forex broker and the UK has a significant advantage, at least from a corporate accounting, tax, and regulations perspective. Yet the competition must be fierce, hence that email. So who regulates forex? The CFTC (Commodity Futures Trading Committee), The NFA (National Futures Association), and the FSA (Financial Services Authority), plus various national bodies. It’s a dog eat dog world, better stay nimble.

The UK has such a vibrant forex market because spread betting profit is not taxed as income. Forex trading appears to go hand-in-hand with spread betting. In fact forex pair trading can theoretically be viewed as a ‘spread’, true enough. Here’s a decent comparison between the two. On the other hand, when you consider leverage and expiration, spread betting closely resembles the futures and options market, though there are a few major differences: in the UK you won’t pay capital gains on spread betting profits because the tax authorities have designated it as gambling, the trading is off-exchange, it’s not limited to exchange hours, and new products can be created quickly and easily. Is spread betting gambling or isn’t it?  Less than 2 in 5 spread betters actually make money and that corresponds well to the markets I know. The weighty question I really have is: are futures and options traders NOT gambling just because they pass through an exchange?

To be fair, person that got me thinking about all this is somehow connected with Alpari, though I have no idea how. Alpari looks to be one of the leading players in forex/spread betting. They have a rich educational offering, and offices juggling legal regulation in Japan, UK, Russia, Cyprus, Dubai, US, India, and Germany, even a nice sales person named Leila. Maybe I can get some more information from Paul Kiff, their global head of trading. (But he needs to update his bio and delete MF Global.) I’m curious how this industry, technically a gambling industry, treats it’s best clients, do they roll out the red carpet for French residents? Why do the executives come from the financial derivatives markets? Why are the regulators futures/commodity authorities? That mix looks contradictory to me. In any case, thanks for the email Jake, Alpari looks like a very serious outfit.

If you’re in the UK and weighing forex and spread betting they look as good a place as any to start. If you’re in the US you might be better sticking with the CBOE and NYMEX.