InformedTrades

[ytauto]http://www.youtube.com/v/kpg76VjTa58[/ytauto]

The Securities and Exchange Commission yesterday unveiled proposed rules to ban hedge funds and banks from assembling risky securities, marketing them to investors and then immediately betting against their own creations, reaping profits when they fail. The rule would also ban firms from setting up risky securities for the benefit of an undisclosed third party.

The Iranian government has recently approved a revaluation operation that is expected to mark the end of a hyper-inflation period. This plan will remove four zeros from the local old bank notes and replace them with new notes. The U.S. dollar is already worth more than 10,000 Iranian rials (IRR), while the euro is worth more than IRR 15,000. The plan to change the currency has been on the government's agenda for years, but only recently was it approved. Similar steps have been taken by other countries after hyperinflation episodes, for example, Turkey dropped six zeroes from its currency in 2005.

This summer, emerging market currencies seemed something of a safe haven in the latest global financial storm. While EM equities plunged, currencies held firm. Now, the latest blasts of bad news from the eurozone appear to have blown away EM currency confidence - and sent investors running for the traditional fastnesses of the US dollar, the Swiss franc and gold. On Tuesday, Asian currencies were mostly down against the US dollar, with the South Korean won falling by as much as 1.7 per cent, India's rupee by over 1 per cent and the Indonesian rupiah by more than 2 per cent.  Though the three currencies later clawed back some losses, there was no mistaken the nervous mood.

On September 15, 2011, beginning at 12:48:54.600, there was a time warp in the trading of Yahoo! (YHOO) stock. HFT has reached speeds faster than time itself. Up to 190 milliseconds into the future, or 0.19 fantaseconds is the record so far. It all happened in just over one second of trading, the evidence buried under an avalanche of about 19,000 quotations and 3,000 individual trade executions. The facts of the matter are indisputable. Based on official exchange timestamps, there is unmistakable proof that YHOO trades were executed on quotes that didn't exist until 190 milliseconds later!

Slovenia's government will probably fall at a confidence vote today, plunging the first former communist euro-region member into turmoil as it struggles to control public spending amid Europe's sovereign-debt crisis. Lawmakers in Ljubljana began debate on the confidence motion and are expected to vote later in the day as Prime Minister Borut Pahor presents five ministers to replace officials from two parties that left the government over disagreements on pensions and early elections. The Cabinet's ouster is likely to lead to a general vote as early as December.

Brazil called on the World Trade Organization to allow its members to protect their industries from trade imbalances prompted by currency fluctuations. The Foreign Ministry said global rules protecting against unfair trade practices date from when most exchange rates were fixed. Mechanisms including anti-dumping and safeguard mechanisms, as well as retaliation rights, need to be updated to deal with "steep fluctuations in exchange rates," the ministry said in a statement yesterday.

Yet China has since 2005 increased the value of the yuan by rougly 30%, from 12.1 U.S. cents to 15.7 U.S. cents (In inverted terms, this means that the dollar has dropped from 8.28 yuan to 6.38 yuan). So according to the estimates of the China bashers themselves, China has already ended the undervaluayion of the yuan and has in fact raised the yuan slightly above fair value.

Standard and Poor's downgraded its unsolicited ratings on Italy by one notch to A/A-1 and kept its outlook on negative, a major surprise that threatens to add to concerns of contagion in the debt-stressed euro zone. The single currency skidded over half a cent to $1.3606 after S&P said the cut reflected its view of Italy's weakening economic growth prospects.

US and European negotiators have urged Israel to refrain from taking punitive measures against the Palestinians if they press ahead with their bid to win recognition of a home state at the United Nations. The Israeli government is considering a range of retaliatory steps, including withholding customs revenues it collects on behalf of the Palestinian Authority under the terms of the Oslo accords. The amount, around 400m shekels (£69m), is forwarded to the PA each month.

The Financial Stability Board wrote a report in April this year saying that ETFs might present new, unexpected risks to financial stability. The full report is available for download by clicking here.

Wall Street's biggest bond traders are stockpiling Treasuries at the fastest pace since 2007 on speculation the Federal Reserve will announce a plan this week to buy longer-term debt to spur the faltering economy.

Investors have pulled more money from U.S. equity funds since the end of April than in the five months after the collapse of Lehman Brothers Holdings Inc., adding to the $2.1 trillion rout in American stocks.

Same Sunday, Different Day. As the FX market opens, the accrued rumors from this weekend, once again focusing squarely on Greece have come to a fore. The immediate result: a EURUSD which is down 100 pips from the Friday close.

The main event is the three-ring circus of the U.S., Europe and China and their respective currencies, the dollar, euro and the yuan. The dynamic is straightforward - all three would like a cheaper currency, relative to the others, to help exports. China has the least justification for cheapening, so it considers a peg the next best thing - at least their currency doesn't go up. The U.S. has the most clout - it has the leading reserve currency and a printing press so it can just print its way to devaluation. Europe desperately wants to depreciate but is dependent on China to buy its sovereign bonds and dependent on the U.S. for dollar liquidity in the form of swap lines so it has no leverage over the other two. Besides, Germany has a history of maintaining a strong export sector even with a strong currency because of its efficiency, homogenous culture and labor-management cooperation. This was true in the 1970's with the strong Deutschemark and it's largely true today. This dynamic plays out as you might expect. The U.S. devalues against yuan and the euro - it gets all of what it wants. China revalues upward against the dollar, but keeps a peg to the euro - it gets half of what it wants. And the euro remains strong against the dollar and pegged against yuan - so it gets none of what it wants. This has been the prevailing paradigm since June when the Chinese finally let the yuan appreciate against the dollar in a serious way.

President Obama on Monday will call for a new minimum tax rate for individuals making more than $1 million a year to ensure that they pay at least the same percentage of their earnings as middle-income taxpayers, according to administration officials.

It is our understanding that the Board Members of the Federal Reserve will meet later this week to consider additional monetary stimulus proposals. We write to express our reservations about any such measures. Respectfully, we submit that the board should resist further extraordinary intervention in the U.S. economy, particularly without a clear articulation of the goals of such a policy, direction for success, ample data proving a case for economic action and quantifiable benefits to the American people.

Just like Bank of America a few minutes ago, now Wells Fargo has been downgraded by Moody's. You know the drill by now. For all big banks, future government support is less likely.

Moslehi told IRNA on Sunday that the intervention of the Intelligence Ministry and the arrest of those cooperating with the BBC were aimed at preventing others from falling into the trap of the British spy agency. The Iranian minister said that the arrests were made as quickly as possible and marked the beginning of the intelligence ministry's involvement in this case. He warned that his ministry would act decisively and unrelentlessly. "While claiming to be an independent media they try to use the support of the US and UK governments and international organizations to obstruct Iran ['s path]."

Tripling IMF resources was part of the Group of 20 leaders' response to the global recession in 2009. As the European debt crisis threatens to spread and further damp the global recovery, the IMF was asked by its steering committee today to review whether its resources are sufficient.