[Archive!] FOREX - Trends, Forecasts and Consequences (Episode 6: August 2011) - page 99
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I've told all mine to put in a second-hand shopping spree
Who sold the shares? (the owners will not) (the Feds themselves sold - they will buy cheaper and sell again in batches - bring the price down)
2011.08.08 22:01:02 *US stock indices collapsed before trading closed; DJIA -602 points
When the stock fell like that a year ago, the euro was flying in sync with it.
And the euro was not ordered. (I wouldn't be surprised if that Bernanke guy did the rating and the collapse).
I look at AUDUSD and wonder who thought of selling AUD to buy USD.
The wonders of the forex market.
Technical analysts at UBS expect the AUD/USD to decline. In their view, the Australian dollar will fall well below parity with its US competitor.
Experts note that S&P's decision to downgrade the credit rating of the United States will greatly increase investors' risk aversion in the next few days.
The Aussie will come under significant negative pressure due to declining stock markets and commodity prices as well as a general increase in volatility in the currency market.
US President Barack Obama has said that the US is still a safe place to invest. The White House chief said this on Monday, 8 August, in a special press statement, Reuters reported.
"The markets continue to confirm that we remain one of the most reliable places in the world in terms of creditworthiness... We always have been and always will be a AAA-rated country... But our main task is to reduce the budget deficit in the long term," Obama said.
The U.S. president stressed that the reason for downgrading the U.S. credit rating was the lingering differences of opinion in Congress, and urged lawmakers to consider what has happened as a call for speedy action to deal with the budget deficit.
According to Obama, the USA is aware of the need for a balanced approach to reducing the budget deficit. He also confirmed that the country's government is currently considering several measures to reduce the budget deficit in the long term, which will not harm economic growth.
US government debt
S&P on the night of August 5 to 6 downgrades the US rating from AAA to AA+ amid concerns over rising budget deficits - a) US securities are now second to the UK, Germany, France and Canada b) the outlook for the new rating is negative, i.e. further downgrades are possible within a year and a half.
China, the largest holder of US Treasuries, has lashed out at the US, saying again that the world needs a new reserve currency; the decision could prompt China to look urgently for other targets for investment. China's reserves are $3.2 trillion, most of it in Treasuries.
South Korea: we will not dramatically change our reserve policy; Seoul has not lost confidence in US sovereign bonds.
Russia (Sergey Storchak, deputy finance minister): a one-notch downgrade may be ignored if you are a long-term investor.
France: we doubt S&P's actions are justified at all.
Alan Greenspan, AUSTIN Goolsby criticise S&P for mathematical error.
The US Treasury believes that S&P made a $2 trillion error in its calculations (GDP estimates and key US congressional data); such a gross error casts doubt on the agency's competence.
Alan Greenspan: US government bonds are a reliable instrument, very reliable.
G7 (ministers of finance and heads of central banks) will hold an emergency discussion of the US rating situation at the weekend. An official meeting of G7 leaders is scheduled for September in Marseille.
On the back of the collapsed US government debt market test, the profits of Goldman Sachs and Morgan Stanley's debt divisions could fall.
Investment houses:
Nomura Holdings (1 of 20 primary dealers): the US downgrade is more of a warning that the United States needs to get its affairs in order; very important that S&P has affirmed the US short-term rating.
JPMorgan: the decline in Treasuries after the downgrade will not be sustained.
Citigroup: Dollar selling on rating news could be momentary.
Barclays: downgrade should not cause 'significant' effects in markets.
UBS: keeping the short-term U.S. credit rating at its highest level will keep money markets from selling and collapsing.
Bonds
The US municipal bond market ($2.9trn) could get a good shakeup on the back of further credit rating revisions by S&P.
S&P's decision to reaffirm the US short-term credit rating at the highest level of A1+ could help stabilise the money market early in the week.
Technical analysts at UBS expect the AUD/USD to decline. In their view, the Australian dollar will fall well below parity with its US competitor.
Experts note that S&P's decision to downgrade the credit rating of the United States will greatly increase investors' risk aversion in the next few days.
The Aussie will come under significant negative pressure due to declining stock markets and commodity prices, as well as a general increase in volatility in the foreign exchange market.
"Analysts are bullshit, the important thing is to hit the can."
Rekker
)))
"Tests are rubbish, it's all about getting into the jar."
Rekker
)))
At the market, not only can you hit the can, but you can't even unzip your trousers in time...