Trichet says signs of renewed credit crunch disturb ECB
CFA Institute Financial NewsBrief | 02/24/2009

Jean-Claude Trichet, president of the European Central Bank, said the financial system in the eurozone is under "severe strain" as troubles in the "financial sector are spilling over into the real economy." The ECB is concerned that banks have stopped lending to solid borrowers, renewing the credit crunch. "There are indications that falling credit flows reflect tight financing conditions associated with a phenomenon of deleveraging. If such behavior became widespread across the banking system, it would undermine the raison d'etre of the system as a whole," Trichet said. Telegraph (London) (23 Feb.)

Trichet says signs of renewed credit crunch disturb ECB - Related Stories - CFA Institute Financial NewsBrief

Interesting comments from a guy who said there was no credit cruch. I think the EURUSD goes lower from here do to the Eurozones dependence on exports to the U.S. and Bernanke's acknowledgement that the U.S. consumer is still very weak here.

EURUSD .95

The economists are forecasting growth in Q3 and Q4 so his opinion is shared by the majority if that means anything. Earnings comparisons will be easy for those quarters and some stimulus will kick in. I am more interested in the stock market and that always turns before unemployment peaks if you look at the data. So it is highly likely that the stock market and riskier currencies will rise along with rising unemployment. Clearly the Obama plan provides miniscule stimulus. The consumer will be dead for years to come. And GDP growth will be muted.

Also Obama says he wants pay go. His party ran on establishing pay go. Of course they did not put pay go in place until they has wasted $800 billion dollars on their pet projects. Pay go is code word for tax increases, that will likely come sooner than most think. And his plan to fix social security will hit higher income earners as he raises the income level on which you have to pay social security taxes. This is one reason why the high end consumer will not come back anytime soon. All stock rallies are selling opportunities for at least the next four years. I wouldn't discount the possibility of a huge bear market rally here though.

Pay go will mean you pay more when you go to fuel up at the gas pump. More when you sell a stock. More when you sell a house. More...more...more...


Get ready for the government spending bubble.

exactly the reasons for me asking you guys why the world in general keeps on bashing the relative strenght of the usd!!!

EUR fist target 1.29 if it breaks above 1.315 next target

You are so funny, last time you said that EURUSD will be 1.33 then 1.4. It's back to 1.26ish, now, you just saw a slightly up (in fact, FLAT), target it back to 1.315 Optimistic is good!

the moron who thinks europe can still compete. Moron Euro has weakened over last few moths yet they are importing more from China.

I suggest you double check EUR/$ chart before you starting calling names.

EURUSD 240 minute chart

Price has broken through Ichimoku resistance at 1,286 and appears to be moving higher.. It has also pierced the Ichimoku cloud which had caused resistance and held the price down. That resistance line may bring price back down, we will have to see where this bar closes before knowing if a bull signal

I have found it handy to use Ichimoku for support and resistance based on the 26 bar average of the chikou sen.

Another indication of uptrend in this time frame is that price is well above Chikou sen

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"Regulation Fear Rises as FXCM-CFTC Bang Heads"

$17,014 may not be a large amount of money, but fears are growing that a dispute involving retail FX broker FXCM and the US Commodities and Futures Trading Commission (CFTC) over just that amount may have repercussions for the wider FX market.

FXCM has been accused by a client, Robert ----ten, of “arbitrarily setting prices without any correlation to the prevailing spot prices on the interbank market; setting arbitrary and unreasonably wide bid-ask spreads; arbitrarily "spiking" prices to trigger stop orders and margin calls; and filling market orders that routinely suffered from substantial and unjustifiable slippage.”

The CFTC has fined FXCM $2,425 having found it guilty of “defrauding” the client during the initial solicitation for his business although other charges were dropped. ----ten told the CFTC that he continued to trade with FXCM in spite of growing doubts over the firm’s practices in order to gather sufficient evidence for a complaint.

Market sources tell Squawkbox that disputes between liquidity providers and clients in the retail space are “nothing new” but there is an acceptance that allegations by ----ten that FXCM’s platform arbitrarily quoted spreads of “double and triple-digits”, do the industry no good.

Banking sources spoken to by Squawkbox agree that spreads on the bank platforms – which FXCM uses on occasions to lay off risk – went to double digits during the height of the credit crunch, but apart from markets that are already quoted on a wide basis – typically emerging markets – at no time did spreads hit three digits.

The CFTC states that: “----ten has established that FXCM's website misrepresented and omitted various material facts. FXCM's claim that customer funds were "safe" because FXCM was "regulated" distorted the fact that forex dealers are lightly regulated. Thus, the funds of forex customers are not legally required to be subject to segregation and may be subject to claims by the creditors of a forex dealer. FXCM's guarantee that trading was slippage-free was deceptive because forex dealers such as FXCM have not proven the capability, during inevitable volatile market conditions, to consistently fill stop and limit orders at or near the stop or limit price.

“More importantly, FXCM's website did not clearly disclose the conflct that arose from the fact that FXCM made money on the mark-up or pip-spread on trades, and did not clearly disclose the size of the mark-up or its detrimental effect on profitability,” the CFTC adds. “Finally, the disclosures in FXCM's account-opening package were sufficiently weak and misleading that they failed to correct the website deceptions. FXCM's disclosures similarly failed to cure the misleading nature of the trading forex with FXCM, because the contest featured narrower bid-ask spreads than those imposed by FXCM. The recklessness of FXCM's various misrepresentations and omissions was underscored by their blatantly baseless and deceptive nature.”

There is a degree of disquiet in the foreign exchange industry over the case because FXCM is questioning the authority of the CFTC to pass judgement. The firm says that as the trades in question are spot OTC deals they are outside of the CFTC’s jurisdiction – a claim the CFTC refutes. Should the CFTC succeed in establishing its jurisdiction in this case, industry sources believe that the wider foreign exchange market is one step closer to regulation.

“We have seen the lines blur between retail and wholesale over the past couple of years,” says a banking source. “If the authorities can establish themselves as a regulator of the OTC retail FX market – as opposed to the FCMs which are futures shops – the market may face a choice. Accept it is only a matter of time before the wholesale market is subject to the same oversight, or establish definable barriers between retail and wholesale FX markets.”

answer my question, the facts say something else in terms of trade deficit.

yes sir we are seeing the doomed dollar taking a nose dive into oblivion while europe and the mighty euro head to 2.0

oh wait a minute, my charts upside down

<-------- makes note to check to be sure Cody has chart right side up when he discusses technicals.... lol

Told you that Yoga in front of your monitor is not such a good idea...

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