Forex Managed Accounts

Exchange rates for such currencies are likely to change almost constantly

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The raising of capital (in the capital markets);
The transfer of risk (in the derivatives markets);
International trade (in the currency markets)
– and are used to match those who want capital to those who have it.
Typically a borrower issues a receipt to the lender promising to pay back the capital. These receipts are securities which may be freely bought or sold. In return for lending money to the borrower, the lender will expect some compensation in the form of interest or dividends.
In mathematical finance, the concept of a financial market is defined in terms of a continuous-time Brownian motion stochastic process.
In economics, a financial market is a mechanism that allows people to easily buy and sell (trade) financial securities (such as stocks and bonds), commodities (such as precious metals or agricultural goods), and other fungible items of value at low transaction costs and at prices that reflect the efficient-market hypothesis.
Financial markets have evolved significantly over several hundred years and are undergoing constant innovation to improve liquidity.
Both general markets (where many commodities are traded) and specialized markets (where only one commodity is traded) exist. Markets work by placing many interested buyers and sellers in one "place", thus making it easier for them to find each other. An economy which relies primarily on interactions between buyers and sellers to allocate resources is known as a market economy in contrast either to a command economy or to a non-market economy such as a gift economy.
If a currency is free-floating, its exchange rate is allowed to vary against that of other currencies and is determined by the market forces of supply and demand. Exchange rates for such currencies are likely to change almost constantly as quoted on financi market.
Market convention from the early 1980s to 2006 was that most currency pairs were quoted to 4 decimal places for spot transactions and up to 6 decimal places for forward outrights or swaps. (The fourth decimal place is usually referred to as a "pip"). An exception to this was exchange rates with a value of less than 1.000 which were usually quoted to 5 or 6 decimal places. Although there is no fixed rule, exchange rates with a value greater than around 20 were usually quoted to 3 decimal places and currencies with a value greater than 80 were quoted to 2 decimal places. Currencies over 5000 were usually quoted with no decimal places (e.g. the former Turkish Lira). e.g. (GBPOMR : 0.765432 - EURUSD : 1.5877 - GBPBEF : 58.234 - EURJPY : 165.29).

Borrowers would have difficulty finding lenders themselves

2009-10-29T03:07:00.000-07:00

Many individuals are not aware that they are lenders, but almost everybody does lend money in many ways. A person lends money when he or she:
puts money in a savings account at a bank;
contributes to a pension plan;
pays premiums to an insurance company;
invests in government bonds; or
invests in company shares.
More complex transactions than a simple bank deposit require markets where lenders and their agents can meet borrowers and their agents, and where existing borrowing or lending commitments can be sold on to other parties. A good example of a financial market is a stock exchange. A company can raise money by selling shares to investors and its existing shares can be bought or sold.
The following table illustrates where financial markets fit in the relationship between lenders and borrowers
To understand financial markets, let us look at what they are used for, i.e. what is their purpose?
Without financial markets, borrowers would have difficulty finding lenders themselves. Intermediaries such as banks help in this process. Banks take deposits from those who have money to save. They can then lend money from this pool of deposited money to those who seek to borrow. Banks popularly lend money in the form of loans and mortgages.
In economics, typically, the term market means the aggregate of possible buyers and sellers of a thing and the transactions between them.
The term "market" is sometimes used for what are more strictly exchanges, organizations that facilitate the trade in financial securities, e.g., a stock exchange or commodity exchange. This may be a physical location (like the NYSE) or an electronic system (like NASDAQ). Much trading of stocks takes place on an exchange; still, corporate actions (merger, spinoff) are outside an exchange, while any two companies or people, for whatever reason, may agree to sell stock from the one to the other without using an exchange.
Trading of currencies and bonds is largely on a bilateral basis, although some bonds trade on a stock exchange, and people are building electronic systems for these as well, similar to stock exchanges.
Financial markets can be domestic or they can be international.

The most common form of company used for business ventures

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A company limited by guarantee. Commonly used where companies are formed for non-commercial purposes, such as clubs or charities. The members guarantee the payment of certain (usually nominal) amounts if the company goes into insolvent liquidation, but otherwise they have no economic rights in relation to the company .
a company limited by guarantee with a share capital. A hybrid entity, usually used where the company is formed for non-commercial purposes, but the activities of the company are partly funded by investors who expect a return.
a company limited by shares. The most common form of company used for business ventures.
an unlimited liability company. A company where the liability of members for the debts of the company are unlimited. Today these are only seen in rare and unusual circumstances.
There are, however, many specific categories of corporations and other business organizations which may be formed in various countries and jurisdictions throughout the world.

English joint stock company established by royal charter by James

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Companies law (or the law of business associations) is the field of law concerning companies and other business organizations. It is an establishment formed to carry on commercial enterprises.[1] This includes corporations, partnerships and other associations which usually carry on some form of economic or charitable activity. The most prominent kind of company, usually referred to as a "corporation", is a "juristic person", i.e. it has separate legal personality, and those who invest money into the business have limited liability for any losses the company makes, governed by corporate law. The largest companies are usually publicly listed on stock exchanges around the world. Even single individuals, also known as sole traders may incorporate themselves and limit their liability in order to carry on a business.
According to one source, "it may be formed by Act of Parliament, by Royal Charter, or by registration under company law (referred to as a limited liability or joint-stock company)."In the United Kingdom, the main regulating laws are the Companies Act 1985 and the Companies Act 2006.[3] Reportedly, "a company registered under this Act has limited liability: its owners (the shareholders) have no financial liability in the event of winding up the affairs of the company, but they might lose the money already invested in it",In the USA, companies are registered in a particular state—Delaware being especially favoured—and become Incorporated (Inc).
In North America, two of the earliest companies were The London Company (also called the Charter of the Virginia Company of London)—a English joint stock company established by royal charter by James I of England on April 10, 1606 with the purpose of establishing colonial settlements in North America—and Plymouth Company that was granted an identical charter as part of the Virginia Company. The London Company was responsible for establishing the Jamestown Settlement, the first permanent English settlement in the present United States in 1607, and in the process of sending additional supplies, inadvertently settled the Somers Isles, alias Bermuda, the oldest-remaining English colony, in 1609.

Ownership interests in large corporations

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Law schools typically offer either a single upper level course on business organizations, or offer several courses covering different aspects of this area of law. The area of study examines issues such as how each major form of business entity may be formed, operated, and dissolved; the degree to which limited liability protects investors; the extent to which a business can be held liable for the acts of an agent of the business; the relative advantages and disadvantages of different types of business organizations, and the structures established by governments to monitor the buying and selling of ownership interests in large corporations.
The basic theory behind all business organizations is that, by combining certain functions within a single entity, a business (usually called a firm by economists) can operate more efficiently, and thereby realize a greater profit. Governments seek to facilitate investment in profitable operations by creating rules that protect investors in a business from being held personally liable for debts incurred by that business, either through mismanagement, or because of wrongful acts.

Businesses that follow certain guidelines

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As theorists such as Ronald Coase have pointed out, all business organizations represent an attempt to avoid certain costs associated with doing business. Each is meant to facilitate the contribution of specific resources - investment capital, knowledge, relationships, and so forth - towards a venture which will prove profitable to all contributors. Except for the partnership, all business forms are designed to provide limited liability to both members of the organization and external investors. Business organizations originated with agency law, which permits an agent to act on behalf of a principal, in exchange for the principal assuming equal liability for the wrongful acts committed by the agent. For this reason, all partners in a typical general partnership may be held liable for the wrongs committed by one partner. Those forms that provide limited liability are able to do so because the state provides a mechanism by which businesses that follow certain guidelines will be able to escape the full liability imposed under agency law. The state provides these forms because it has an interest in the strength of the companies that provide jobs and services therein, but also has an interest in monitoring and regulating their behaviour.

It was an impressive

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It was an impressive week for forex trading sentiment-based forecasts, as our SSI-based currency systems went heavily short the US Dollar and Japanese Yen ahead of the pair’s sharp drops through recent trade. A more recent moderation in US Dollar and Japanese Yen losses has meant that forex trading crowd sentiment is far less one-sided, and our forecasts have accordingly become less clear. Traders aggressively bought the US currency as it continued to decline, and our contrarian trading systems presciently faded sentiment extremes on the USD’s tumble. Some of those systems have now covered US Dollar short exposure, and we await sentiment clarification before taking aggressive stances on all but a select few currency pairs.

Banks in the United States

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Banks in the United States are poised to make $38.5 billion in customer overdraft fees this year, the Financial Times said, citing research by Moebs Services.

A large portion of the revenue is likely to come from the most financially stretched consumers, according to the paper.

It said the research showed that many banks have increased charges on overdrafts and credit cards in order to boost profits.

The median bank overdraft fee rose this year by one dollar to $26, the paper said, citing the Moebs data.

"Banks are returning to a fee-driven model and overdraft fees are the mother lode," Mike Moebs, the company's founder was quoted by the paper as saying.

Overdraft fees accounted

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Overdraft fees accounted for more than 75 percent of service fees charged on customer deposits, the paper cited Moebs as saying.

Last year the U.S. Federal Reserve approved credit card rules to curb "unfair" practices such as surprise fees and interest rate hikes, and new mortgage lending rules are expected this summer.

It is also mulling rules to give bank customers the chance to opt out of overdraft schemes that can involve fees.

The dollar made the bearish

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The dollar made the bearish break to new lows for the year last Monday, but it was not catalyzed by any specific fundamental driver nor supported by a meaningful trend in risk appetite. To reverse the currency's fortunes and potentially change its future, a true bull trend requires an underlying fundamental driver, meaning either a break the dollar's ties to investor sentiment (as a safe haven currency) or a collapse of risk appetite.

The Indonesia Composite

2009-10-26T13:05:00.000-07:00

The Indonesia Composite Index, which extended gains following the announcement of the economic data, ended the day at 2,389.56. It earlier touched 2,394.32, the highest level since June 2008. Bumi Resources, the coutry's biggest coal producer, surged 7.6 percent, and the largest listed plantation firm, Astra Agro Lestari, jumped 9.3 percent. Malaysia's index edged up 0.3 percent, Thailand's inched down 0.07 percent, the Philippine index rose 2.4 percent and Vietnam's climbed 2.2 percent. In Bangkok, optimism that the economy of the United States had got over the worst and that the Thai economy would recover later this year bolstered market sentiment, Stock Exchange of Thailand chairman Pakorn Malakul Na Ayudhya said on Monday. "There are signs that the Thai economy has touched bottom and this has led to expectations that Thai GDP will recover from the fourth quarter," Pakorn told reporters. "Normally, the performance of the stock market leads actual economic data by about six months," he said. Thailand's SET index gained as much as 1 percent earlier to touch its highest since Sept. 15, 2008. It rose 3.1 percent last week, its fourth straight week of gains. Among the losers, Banpu, Thailand's top coal miner, dropped 3.3 percent, falling back after an early surge to a 13-month high. After the close, it reported a 73 percent jump in second-quarter earnings, better than expected, due to higher coal prices and strong income from a power plant. Seventh-biggest lender Siam City Bank shot up 5.6 percent on reports the Finance Ministry was likely to allow foreign investors to buy more than 49 percent of the bank. In Kuala Lumpur, gainers were led by a 1.3 percent rise in Axiata Group and a 0.5 percent gain in KL Kepong while Malayan Banking lost 0.3 percent. In the Philippines, Manila Electric surged 11.7 percent after San Miguel Corp said it was keen to take a majority stake by buying 13.4 percent from the Lopez family in a deal that could be worth as much as $840 million. In Hanoi, advancers were led by a 4 percent rise in steel maker Hoa Phat and a 4.6 percent gain in real estate developer Sudico. See for a Vietnam stock report Singapore was closed for a market holiday. ($1=34.00 Baht) (Additional reporting by Saranya Suksomkij in Bangkok; Editing by Alan Raybould) ((viparat.jantraprapaweth@thomsonreuters.com; +66 2 648 9733; Reuters Messaging: viparat.jantraprapaweth.thomsonreuters.com@reuters.net)) FACTORS TO WATCH: Malaysia June factory output down 9.6 pct on yr Affin upgrades Malaysian banking stocks to overweight Citi ups Preuksa Real Estate target price Manila's San Miguel may raise stake in Meralco Palm up 2.0 pct as stock data outweighs poor exports Indonesia Q2 GDP growth slowest in six years For South East Asia Hot Stock reports, click; SOUTHEAST ASIAN STOCK MARKETS Change on the day Market Current Prev Close Pct Move Singapore 2549.35 2549.35 (closed) Kuala Lumpur 1188.00 1184.88 +0.26 Bangkok 643.75 644.20 -0.07 Jakarta 2389.56 2349.13 +1.72 Manila 2850.58 2782.98 +2.43 Ho Chi Minh 491.20 480.65 +2.19 Change on year Market Current End prev yr Pct Move Singapore 2549.35 1761.56 +44.72 (closed) Kuala Lumpur 1188.00 876.75 +35.50 Bangkok 643.75 449.96 +43.07 Jakarta 2389.56 1355.40 +76.30 Manila 2850.58 1872.85 +52.21 Ho Chi Minh 491.20 315.62 +55.63 Stock Market Volume (shares) Market Current Volume Average Volume 90 days Kuala Lumpur 96,369,600 387,907,947 Bangkok 4,719,548 3,762,440 Jakarta 15,914,163,500 8,783,816,050 Ho Chi Minh 48,041 44,279 ASIA-PACIFIC STOCK MARKETS: Pan-Asia........ Japan....... S.Korea... S.E. Asia....... Hong Kong... Taiwan.... Australia/NZ.... India....... China..... OTHER MARKETS: Wall Street.... Gold ....... Currency.. Eurostocks..... Oil ........ JP bonds... ADR Report ..... LME metals. US bonds.. Stocks News US.. Stocks News Europe DIARIES & DATA: IPO diary & data Asia earnings diary U.S. earnings diary European diary Singapore diary Wall Street Week Ahead Eurostocks Week Ahead TOP NEWS: For top Asian company news, double click on: U.S.

Foreign exchange

2009-10-26T13:04:00.000-07:00

Foreign exchange or most common called Forex now become very popular in the world. Many people have joined this kind of market to get higher income by trading the currency. Inside this market actually will be many tricky conditions that may be to complicated and difficult to understand and especially for newbie. Gathering the information also can be very difficult after you join this market if you don’t know the trick. For that reason, for you new players in this market should have good ability and deeper understanding before you join. Money can make money, yes this is can happen in Forex. You can buy money and sell it again with your own price.

You can gain information about this Forex in many places actually. For instance, you can go to fabforex.com. In this website you are able to read and learn information about Forex. You can get more information that you can call as Forex notes. Those Forex notes will be very useful for you before you join the real Forex. You can read article about real estate and correlation about Forex. And may be you wishing to read the impact of Forex to your business. All Forex notes are available for you to be your best information. In this market, information will be very important. If you missed any single information you can loose and bankrupt.

Beside the Forex notes, you can also get the link for several important website for example Global Forex Trading and Forex Trading Free Demo. Or may be you still having no idea about what and how you can join Forex. All those information will be available from this website. Just open this website now; get more information about Forex, Forex notes and try the demo if you want to feel.

Forex currency trading

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Forex currency trading is done is pairs and these are known as crosses. These pairs are always against the US dollar and the main crosses you will find when trading forex are the USD/EUR and the USD/GDP. The most popular crosses are known as majors and these can make forex traders great profits. Currencies change on a regular basis and are based on the how the world financial markets see the value of the currencies. You can sell or buy these currencies and forex brokers do not charge commission fees.

Forex trading until recently was reserved for banks and other large financial industries but thanks to the power of the internet and online currency trading, forex has now become feasible for everyday people. The forex market has become the largest trading market in the world and each day there is an estimated turnover of over $1.5 trillion dollars. Another added bonus is available 24 hours a day, 5 days a week unlike most other markets that operate on an 8 hour day. This means that people wishing to trade forex can do so at any given time.

There are two types of forex accounts

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There are two types of forex accounts; a mini forex account and a regular forex account. Mini forex trading is an excellent way for small investors to learn about and take part in forex trading and with the most forex brokers offering a leverage of 100:1, mini forex trading will allow you to control a $10,000 currency position with a deposit of only $100. Mini forex trading is a great way to get a feel for forex trading and learn the tricks and skills needed to succeed without having to go to great expense. Why not try mini forex trading now and see just how easy it is to profit with forex trading.

Forex trading is the new way to make money through online currency trading. With a worldwide market and over 60 currencies for you to trade there has never been an easier way to make money online.

With this type of forex dollar exchange

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With this type of forex dollar exchange, you can purchase currencies from around the world. A common currency change is from the US dollar to the European currency. Yet, other countries, especially developing countries can be even more profitable to invest in to make a profit. It takes a lot of time and study to learn how to invest in this type of market. The forex market is much like the stock market, but instead of trading stocks and bonds for companies, you are trading currencies from countries around the world.

When investing in forex, dollar changes like this should be complete using a high quality piece of software. Many online programs are available to help you learn how to trade with forex as well as to help you make the trades happen. When you use these systems and software products, there is likely to a fee to use them. Yet, for someone that makes a sizable amount of money off the forex dollar exchange, chances are good it is well worth the investment.

Forex dollar exchange is a great way for the investment savvy person to make a sizable return on their investment. Yet, it is one of the most challenging of all methods and therefore needs to be complete with caution.

Fundamental News for the Euro vs Dollar

2009-10-26T13:02:00.002-07:00

Although there is a detailed analysis of the fundamental news for this pair on the main euro to dollar site today traders should focus on the German ZEW Sentiment Index, a diffusion index based on a survey of German institutional investors and analysts. In fact the survey asks around 350 German institutional investors and analysts to rate a 6 month eonomic outlook for Germany. It is considered a leading indicator of economic health as the participants are considered highly qualified by virtue of their job, and changes in their sentiment can be an early signal of future economic activity. If the actual is better than forecast then we can expect the Euro to benefit accordingly.

My trading suggestion for today is to wait for the release of the German ZEW and if, as expected, it comes in better than expected to look to profit from an upturn in the Euro.

USDJPY closed

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USDJPY closed @ 9455 which was BELOW the open and was within prior day's trading range. The High was 30 pips from Precise Trader's Res Zone 1 and the Low was 30 pips from Precise Trader's Sup Tgt 1. The Hourly Oscillators are Turning Bullish and the price is Within the MA, so the Bears have to be CAUTIOUS. Hourly Trend is Sideways Down while 9535 holds and Daily Trend is Down while 9670 holds, so expect the price to be Choppy with a Downside bias. The Price Patterns on the Hourly is creeping higher but the signals are not clear, on the 5 min is along the Channel but the upside should be capped to 9535-70 level in order to maintain our bearish outlook. Conservative traders should look to be Sidelined or strictly trade only at Precise Traders Report levels. Aggressive traders should look to do the same or SHORT Cautiously on pull back near 9535- 70 for a quick profit.

Level to maintain

2009-10-26T13:02:00.000-07:00

EURUSD closed @ 14085 which was BELOW the open and breached the previous day's low. The High was 30 pips from Precise Trader's Res Zone 1 and the Low was 25 pips from Precise Trader's Sup Tgt 2. The Hourly Oscillators are MIXED and the price is Below the MA, so CAUTIOUS approach is needed. Hourly Trend is Sideways Down while 14230 holds and Daily Trend is also Sideways Down while 14450 holds, so expect the price to be Choppy with a Downside bias. The Price Patterns on the Hourly is creeping higher but the upside is limited and expect the price to break the prior low @ 14005 , on the 5 min is along the Channel but the upside should be capped to 14170-14230 level to maintain a bearish outlook. Conservative traders should look to SHORT on pull back near 14170-14230 level or strictly trade only at Precise Traders Report levels. Aggressive traders look to do the same with 14005-13965 levels having in mind for potential profit targets.

HPQ – Hewlett-Packard

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HPQ – Hewlett-Packard Co. – The global technology company has experienced a more than 1.5% decline in shares today to $43.26 ahead of its third-quarter earnings release, which is scheduled to follow the closing bell on Tuesday afternoon. At least one investor was seen bracing for bad news or at least for continued declines in the price of the underlying. The trader established a ratio put position by purchasing 5,000 puts at the August 42.5 strike for approximately 89 cents apiece, spread against the sale of 10,000 puts at the lower August 40 strike for 25 cents per contract. The net cost of the bearish transaction amounts to 39 cents and yields maximum potential profits of 2.11 if the stock slips to $40.00 by expiration this Friday. Shares must fall about 3% from the current price in order for the trader to begin to amass profits beneath the breakeven point at $42.11. Maximum profits of $1,055,000 will be retained by the investor if the stock falls to $40.00 and the lower strike puts remain out-of-the-money. If shares were to slip lower than $40.00, the trader may have shares of the underlying put to him at expiration given the ratio of 2 short put options to each long contract in his possession. Investor uncertainty has marched steadily higher throughout the day from 33% this morning to the current reading of 37% -- a sign of building tension ahead of the firm’s third-quarter profit report.

ALGN – Align Technology, Inc. – Investors in the maker of the Invisalign system are surely all smiles today as shares have exploded more than 30.5% higher to $13.20. The manufacturer of Invisalign, which is a proprietary method for correcting the misalignment of teeth, has nearly breached its 52-week high of $13.74 on today’s rally. Positive news regarding a settlement over patent litigation involving ALGN and Danaher Corp.’s Ormco unit, prompted one analyst at Northcoast Research to raise the stock to ‘neutral’ from ‘sell’. Bullish traders, hoping for continued gains in the stock, purchased approximately 1,000 calls at the September 15 strike price for an average premium of 23 cents apiece. Shares of ALGN must climb an additional 15% in order for call-buyers to begin to amass profits at the breakeven price of $15.23. Additional near-term optimism was observed at the August 10 strike price where traders shed 1,000 puts for 21 cents each. Other investors appeared to be banking gains on the rally by selling about 2,000 calls at the now in-the-money August 12.5 strike for a premium of about 80 cents. We note that 15,656 option contracts exchanged hands on Align Technology during the trading session, which comprises more than 53% of the existing open interest on the stock of 29,119 lots.

Recent commentary

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Recent commentary was that “the entire rally from 1.0782 has now been retraced. However, the drop below 1.0782 may be wave Y in a complex W-X-Y corrective decline from 1.3068. Daily RSI has turned up from oversold (which was also divergent with the low). The USDCAD rally has picked up steam and cleared initial resistance at 1.0940. The advance has the characteristics of an impulse and the decline has stalled at the 61.8% of the rally. If the USDCAD is to turn up, then this is a good place for it to do so.” The pair did turn up and price has now cleared 1.1108. A 3rd wave is probably underway from 1.0791. Dips should be bought against that level. 1.0972-1.1027 is a support zone.

Forex Technical Analysis for the Euro vs Dollar

2009-10-26T13:01:00.000-07:00

Forex Technical Analysis for the Euro vs Dollar

Yesterday's relatively wide spread down bar on the euro vs dollar chart was significant for two reasons: firstly prices opened gapped down from Friday's close suggesting that the bearish sentiment which is currently evident may have some impetus. Secondly prices closed below the 40 day moving average which would tend to reinforce this view. However, this analysis has to be counterbalanced against the performance the equity markets which although have seen dramatic falls in China and an almost 2.5% fall in the S&P500 has not really translated as strongly as we would have expected into dollar strength but appears simply to expanded the euro vs dollar trading range to between USD1.38 and USD1.43. Whilst this expanded range will provide trading opportunities for swing traders and scalpers, longer term position trading may prove difficult and may have to wait until there is a clear and sustained breakout either side of the current range.

United States

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United States – Productivity in Q2 jumped 6.4%, surpassing the consensus estimate of 5.5%. Unit labor costs diminished 5.8% while hourly compensation climbed 0.2%.

The U.S. trade deficit rose from $26.0 billion to $27.0 billion in June, short of the consensus estimate of $28.7 billion. The swell was due to a $3.9-billion increase in the petroleum deficit, driven by higher oil prices. The deficit excluding petroleum retreated from $12.7 billion to $9.8 billion, an 11-year low.

The FOMC kept its target range for the Fed funds rate unchanged this week at 0% to 0.25%. The Fed clarified its plans for the Fed Treasury purchases: Only the $300 billion previously committed will be spent and the program will expire by the end of October. In our opinion, the target range will need to be adjusted upward, possibly by yearend, for the sake of the Fed’s balance sheet.

U.S. retail sales flagged 0.1% in July, for a first setback in three months. However, the underlying trend is not as bad as this might suggest. Sales excluding gas stations and grocery stores, a better indicator of consumer discretionary spending, were actually up 0.2% for a third monthly increase in a row.

U.S. headline CPI was flat in July while core CPI rose 0.1%. Year-over-year headline CPI slipped to -2.1% from - 1.4% while core inflation slowed to 1.5% from 1.7% a month earlier. However, the year-over-year headline CPI has now probably reached its trough: Price momentum has shifted upward, as evidenced by the annualized 6-month rate of change back in positive territory.

The Canadian trade balance

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The Canadian trade balance registered a slim $55-million deficit in June, down from a $1.0-billion deficit in May. Exports rose $0.7 billion or 2.3%, driven by energy products (+$0.8 billion) and industrial goods and materials (+$0.4 billion). This was partially offset by declines in machinery and equipment and automotive products.
Imports sagged $0.4 billion, owing mostly to machinery and equipment (-$0.5 billion) and industrial goods and materials (-$0.3 billion). In real terms, the trade deficit shrank $0.5 billion to $4.5 billion thanks to an 11% increase in energy exports.

Manufacturing shipments outdid expectations in June with a 1.9% rise, 80% of which was due to the aerospace products sector, where sales rebounded (+61%) from an abnormally low level the previous month. The record surge on the month of 20.5% in the volume of new orders was particularly impressive.

Within our firm

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Within our firm, Charles is the major proponent of the Schumpeterian view, and this thinking was apparent in his and Steve's recent ad hoc, A V-Shaped Recovery in Profits. Due to the quick reflexes that new technologies allow, corporates are managing their cash flow better than ever. Rarely ever, for instance, have companies (ex-financials) remained in such strong positions during a recession, which is yet another reason why we believe that capital spending, rather than consumption, will spark the recovery.

Indeed, the scale at which corporates have been able to cut costs and return to profitability, has laid the groundwork for a deflationary boom of epic proportions (which would be a major surprise for those who fear an easy-money inflationary nightmare). Of course, there is a major threat to this deflationary-boom scenario-and that is the increased government intervention we are seeing in most corners of the world. If government intervention manages to kill off return on investment capital, as it did in the 1930s, then the current opportunity will go up in smoke. Regular readers know we tend to err on the side of optimism; at this point we still hold out hope that a major lurch to a big-government era can be resisted-as exemplified, for example, by the unexpectedly strong fight we are seeing against the health-care bill, or the ability of so many US financials to pay back their debt to the US Treasury, thus lowering the extent of government influence on their business decisions. Thus, in our view, a period of deflationary boom is the likeliest scenario, and investors should focus on sectors and countries that will see the largest resurgence in capital spending.

Gas production in the Gulf

2009-10-26T12:59:00.001-07:00

Where did all the economic optimism go? Just a week ago we were celebrating the end of the recession and now we look like we are running for cover. Banks have been failing like crazy yet the Colonial Bank failure late Friday afternoon, on top of sinking consumer confidence and retail sales, was a reminder that while the economy is on the mend we still have some significant problems ahead.

Weak demand for oil and ample supply in storage means that oil is less concerned with the three storms that have developed in the Atlantic. With global spare production capacity at the ready and lessons learned from past hurricanes, the market at this point is less concerned about the hurricane threats than it has been in the past. Of course at the same time these storms may not be a threat to oil production anyway. Ana, Bill and Claudette are the names of these storms. Claudette is a tropical storm that has already hit the Florida coast. The National Hurricane Center says that the center of Claudette was 25 miles west of Panama City, Florida, at 10 p.m. Central Daylight Time, the center said.
The storm was moving northwest at 12 mph with winds of about 50 mph, the latest advisory said.
Claudette has not impacted any oil or gas production in the Gulf.