http://www.1mtx.com/markets-trades/en/index.php?language=en&menu=TRADES&punkt=Floor_Trading&punkt2=Floor%20/%20OTC%20Trading&index=OTC%20Trading#Floor%20/%20OTC%20TradingOTC%20Trading Trades on the floor of the New York Stock Exchange always involve a face-to-face interaction. There is one podium/desk on the trading floor for each of the exchange's three thousand or so stocks. Floor/OTC : OTC Trading OTC (Over-The-Counter) trading is to trade financial instruments such as stocks, bonds, commodities or derivatives directly between two parties. OTC OTC Bulletin Board (OTCBB) Pink Sheets OTCQX ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... In the U.S.A., over-the-counter trading in stocks is carried out via market makers who use quotation services such as the OTC Bulletin Board (OTCBB) and the Pink Sheets. Latest Updates... Commodities/Derivatives List OTC Contracts : IntercontinentalExchange ICE Stocks Daily Statistics : OTC Bulletin Board Pink Sheets Latest Updates... The US over-the-counter market is monitored by the NASD. Because such trades are not traded on any major stock exchange and there is less research done on them in the financial market, they are considered to be risky. As there is very infrequent trading in such a market, the spread (which is the difference between the bid price and ask price) is large. OTC (Over-The-Counter) Over-the-counter (OTC) trading is to trade financial instruments such as stocks, bonds, commodities or derivatives directly between two parties. It is contrasted with exchange trading, which occurs via facilities constructed for the purpose of trading (i.e., exchanges), such as futures exchanges or stock exchanges. An over-the-counter contract is a bilateral contract in which two parties agree on how a particular trade or agreement is to be settled in the future. It is usually from an investment bank to its clients directly. Forwards and swaps are prime examples of such contracts. It is mostly done via the computer or the telephone. For derivatives, these agreements are usually governed by an International Swaps and Derivatives Association (ISDA) agreement. This segment of the OTC market is occasionally referred to as the "Fourth Market." The NYMEX (The New York Mercantile Exchange NYMEX - part of the CME Group - is the world's largest physical commodity futures exchange, located in New York City) has created a clearing mechanism for a slate of commonly traded OTC energy derivatives which allows counterparties of many bilateral OTC transactions to mutually agree to transfer the trade to ClearPort, the exchange's clearing house, thus eliminating credit and performance risk of the initial OTC transaction counterparts. The IntercontinentalExchange (ICE - an American financial company that operates Internet-based marketplaces) is also trading futures and over-the-counter (OTC) energy and commodity contracts as well as derivative financial products. ICE OTC Markets (All Contracts Available on ICE OTC; Energy - CDS - TheICE.com -website) OTC OTC Bulletin Board (OTCBB) Pink Sheets OTCQX ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top OTC Bulletin Board (OTCBB) The OTC Bulletin Board (or OTCBB) is an electronic quotation system in the United States that displays real-time quotes, last-sale prices, and volume information for many over-the-counter (OTC) equity securities that are not listed on the Nasdaq Stock Market or a national securities exchange. Broker-dealers who subscribe to the system can use the OTCBB to look up prices or enter quotes for OTC securities. The US over-the-counter market is monitored by the NASD (National Association of Securities Dealers). Because such trades are not traded on any major stock exchange and there is less research done on them in the financial market, they are considered to be risky. As there is very infrequent trading in such a market, the spread (which is the difference between the bid price and ask price) is large. Although the NASD oversees the OTCBB, the OTCBB is not part of the Nasdaq Stock Market. According to the SEC, fraudsters often claim or imply that an OTCBB company is a Nasdaq company to mislead investors into thinking that the company is bigger than it is. Companies quoted on the OTC Bulletin Board must be fully reporting (i.e. current with all required SEC filings) but have no market capitalization, minimum share price, Corporate governance or other requirements to be quoted. Companies which have been "de-listed" from stock exchanges for falling below minimum capitalization, minimum share price or other requirements often end up being quoted on the OTC Bulletin Board. Stock of non reporting companies (those without current SEC filings) may be quoted in the Pink Sheets. Most OTCBB companies are dually quoted, meaning they are quoted on both the OTCBB and the Pink Sheets. Stocks traded in OTC markets such as the OTCBB or Pink Sheets are usually thinly traded microcap or penny stocks and are avoided by many investors due to a well-founded fear that share prices are easily manipulated. The SEC issues stern warnings to investors to beware of common fraud and manipulation schemes. Microcap Stock: A Guide for Investors put out by the SEC is highly recommended reading for investors considering buying stock in the OTC market. more (Where Do Microcap Stocks Trade? - How Are Microcap Stocks Different From Other Stocks? - Risks - The Classic "Pump and Dump" Scheme, more... SEC.gov) OTC OTC Bulletin Board (OTCBB) Pink Sheets OTCQX ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top Pink Sheets The Pink Sheets is an electronic quotation system that displays quotes from broker-dealers for many over-the-counter (OTC-traded) securities. Market makers and other brokers who buy and sell OTC securities, can use the Pink Sheets to publish their bid and ask quotation prices. The name "Pink Sheets" comes from the color of paper the quotes were historically printed on prior to the electronic system. They are published today by Pink Sheets LLC, a privately owned company. Pink Sheets LLC is neither a NASD broker-dealer nor registered with the U.S. Securities and Exchange Commission; it is not a stock exchange. To be quoted in the Pink Sheets companies do not need to fulfill any requirements (e.g. filing financial statements with the SEC). With the exception of a few foreign issuers (mostly represented by American Depositary Receipts, or ADRs), the companies quoted in the Pink Sheets tend to be closely held, extremely small, or thinly traded. Most do not meet the minimum listing requirements for trading on a stock exchange such as the New York Stock Exchange. Many of these companies do not file periodic reports or audited financial statements with the SEC, making it very difficult for investors to find reliable, unbiased information about those companies. For these reasons the SEC views companies listed on Pink Sheets as "among the most risky investments" and advises potential investors to heavily research the companies in which they plan to invest. Buying Pink Sheets shares is supposed to be difficult. Broker-dealers are enjoined to weed-out unsophisticated investors who may get an e-mail or word-of-mouth tip about a small stock. Many Pink Sheets stocks may only be registered for sale in one state so that the only way to purchase the stock is to make a DRIP/business/unsolicited/accredited or other sophisticated form of investment. Many registered representatives do not even know how or if they can sell them. more (Premium Market Tier - Disclosure Categories) Pink Sheets Categories (Pinksheets.com) OTC OTC Bulletin Board (OTCBB) Pink Sheets OTCQX ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top OTCQX OTCQX is a premium market tier offered by Pink Sheets LLC that aims to raise the visibility of OTC-traded companies that, although not traded on a stock exchange, have operating businesses and provide substantial disclosure to the marketplace via Pink Sheets, LLC. Unlike most companies quoted on the Pink Sheets, OTCQX companies must provide audited financials and certain disclosures to Pink Sheets LLC but are not required to be fully SEC reporting companies (i.e. current with all SEC filings). OTCQX Website (OTCQX.com) Company List (OTCQX.com) OTC OTC Bulletin Board (OTCBB) Pink Sheets OTCQX ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top ...more Links ! ...more Links Over-the-Counter Markets (SEC.gov) '...Under the OTCBB's eligibility rule, companies that want to have their securities quoted on the OTCBB must file current financial reports with the SEC or with their banking or insurance regulators....' OTC Bulletin Board (OTCBB) Eligibility Rule (SEC.gov) '...The OTC Bulletin Board (OTCBB) eligibility rule required companies whose securities were quoted on the OTCBB to file updated financial reports with the SEC or with their banking or insurance regulators. If these companies failed to file current financial reports, their securities would be removed from the OTCBB, but could be quoted in another system, such as the Pink Sheets. ...' Pump and dump (wikipedia) '...Pump and dump schemes, involving use of false or misleading statements to hype stocks, which are "dumped" on the public at inflated prices. Such schemes involve telemarketing and Internet fraud...' Pump&Dump (SEC.gov) '..One of the most common Internet frauds involves the classic "pump and dump" scheme. Here's how it works: A company's web site may feature a glowing press release about its financial health or some new product or innovation. Newsletters that purport to offer unbiased recommendations may suddenly tout the company as the latest "hot" stock. Messages in chat rooms and bulletin board postings may urge you to buy the stock quickly or to sell before the price goes down. Or you may even hear the company mentioned by a radio or TV analyst. ...' STOCKS GLOSSARY A - Z Terms - Definitions - Exchanges TRADES GLOSSARY A - Z Terms - Definitions OTC OTC Bulletin Board (OTCBB) Pink Sheets OTCQX ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top ...| Reports | Analysis | Opinions | Comments |... | Reports | Analysis | Opinions | Comments | 'A typical pump and dump scenario' "Pump and dump schemes tend to take place either on the Internet including e-mail spam campaigns or through telemarketing from "boiler room" brokerage houses (for example, see Boiler Room (film)). Often the stock promoter will claim to have "inside" information about impending news. Newsletters that purport to offer unbiased recommendations then tout the company as a "hot" stock. Messages in chat rooms and email spam urge readers to buy the stock quickly. ..." Read more (wikipedia) 'Pink-sheet primer' " Seeking out foreign stocks unlisted on U.S. exchanges LOS ANGELES (MarketWatch) -- U.S. investors can tap into a wider variety of foreign stocks than ever before, but to do so they often have to leave the traditional exchanges behind. Investors are most familiar with American Depositary Receipts that trade on the New York Stock Exchange, the American Stock Exchange and the Nasdaq -- companies like Nokia OYJ or BP PLC. But an even deeper pool of foreign stocks exists in the pink sheets, also known as over-the-counter (OTC) markets -- a negotiated market where stocks aren't listed on an exchange. According to the Bank of New York, a depositary bank for ADRs, there are 489 U.S. exchange-listed ADRs and 899 pink sheets. ..." Read more (By Barbara Kollmeyer, Jan. 31, 2006 - MarketWatch.com) OTC OTC Bulletin Board (OTCBB) Pink Sheets OTCQX ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top New York City Pink Sheets LLC is headquartered in New York City Take a break... ...Take a Break...Just Relax... Hot Girl washing Car OTCBB: SPNG ...just relax... TOTC (Over-The-Counter) trading is to trade financial instruments such as stocks, bonds, commodities or derivatives directly between two parties. OTC (Over-The-Counter) trading is to trade financial instruments such as stocks, bonds, commodities or derivatives directly between two parties. ADVERTISEMENT OTC OTC Bulletin Board (OTCBB) Pink Sheets OTCQX ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top Sources: Wikipedia; MarketWatch.com; SEC.gov; .1MTX 2008
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US Market Commentary from Seeking Alpha   RSS

Monday, 11 April 2011, 22:54 GMT
Should the SEC Try to Boost the IPO Market?
Felix Salmon submits:
Clare Baldwin and Sarah Lynch are unambiguous: ?As U.S. regulators review rules on shares issued by private companies,? they write, ?they must not make it too easy for hot Internet companies such as Facebook or Twitter to avoid the scrutiny that goes along with an initial public offering.?
They?re talking, of course, about the letter which SEC chairman Mary Schapiro sent to Darrell Issa on Wednesday. It?s a long and pretty boring document, and it?s certainly not as revolutionary as some of the press coverage would make you think. Jean Eaglesham, who broke the news without printing the letter, set the tone of the subsequent discussion by saying that the SEC review ?could remake the way American start-ups raise capital,? ?would upend the normal path for fledgling companies to raise funds,? and ?could shut out many ordinary investors from one of the fastest-growing market sectors.?
But it?s hard to see
Complete Story »


Monday, 11 April 2011, 22:19 GMT
4 Stocks Snapped Up by Insiders Ahead of Earnings This Week
Kapitall submits:
Below we present you with a list of four companies releasing earnings this week that have seen significant insider buying over the last six months.

If you're interested in getting ahead of the market, this list might offer you an interesting starting point given that managers are buying into their own companies. Full details below.
Click for expanded images


1. Bank of America Corporation (
BAC): Banking Industry. Market cap of $136.43B. Earnings release scheduled for April 15. Net shares purchased by insiders over the last six months at 79,500 shares, which represents a 1.8% increase in insider ownership. Note that this is a risky stock that is significantly more volatile than the overall market (beta = 2.21). The stock has lost 27.53% over the last year.



2. SUPERVALU Inc. (
SVU): Grocery Stores Industry. Market cap of $2.0B. Earnings release scheduled for April 14. Net shares purchased by insiders over the
Complete Story »


Monday, 11 April 2011, 20:53 GMT
Weekly Market Outlook: Healthcare and Energy Sectors Stand Out
Price Headley submits:

The bulls just didn't have enough gas in the tank to make it three weeks in a row. The lack of gain, however, isn't even the alarming part; stocks only lost ground to a tiny degree. The red flag is the shape of the chart and the way things progressed over the last five days.
We'll look at that idea in detail below. First up though, a quick review of the major economic numbers.
Economic Calendar
Last week was minimal in terms of economic data flow, and only a small amount of the small amount we got actually meant anything. What's that? Unemployment claims ? both new and continuing ? sank a tad (not enough), while consumer credit levels soared well beyond expectations (up $7.6 billion versus the forecasted $2.0 billion increase).
The coming week will be more turbulent; here are the biggies to watch for, in that they actually

Complete Story »


Monday, 11 April 2011, 20:40 GMT
Today in Commodities: Reversal Day
Matthew Bradbard submits:
Perhaps an interim top in Crude as prices are down over 4% today with the front month trading back near $109/barrel. We expect to see some downside follow through in tomorrow?s session and have a first target at the 20 day MA, about $3 from current pricing. That should equate to a 15-20 correction in the distillates as well. In our opinion natural gas is a buy?we?re suggesting July futures or July bull call spreads. We feel there is roughly 20 cents of risk while we see 40 cents of potential profit?trade accordingly. The indices have lost ground for the last three sessions but there has been very little downside movement. We continue to like scaling into bearish plays as we feel the sentiment has become far too bullish. We anticipate a 3-5% correction is around the corner. Shorts in the Aussie are far from out of the woods as
Complete Story »


Monday, 11 April 2011, 20:29 GMT
Global Growth Is Heating Up, U.S. Growth May Slow
Financial Sense submits:
By Chris Puplava
Heading into 2011, the overall consensus was to overweight the U.S. versus emerging markets, as most emerging markets were undergoing monetary tightening, while the U.S. had a second round of quantitative easing still to come. The Fed's often repeated line was interest rates would likely stay low ?for an extended period of time.? The argument for overweighting U.S. equities makes sense, but that argument may soon be changing. Emerging market central banks are likely nearing an end to their tightening cycles and global growth appears to be heating up again, at the same time, rising inflationary pressures in the U.S. may begin to curb its growth.
The Doctors Weigh In?Global Growth is in Fine Shape
Economists are notoriously wrong, as they nearly always fail to see a coming recession or a major economic turnaround. One of the chief reasons for this is their tendency to look backwards

Complete Story »


Monday, 11 April 2011, 20:24 GMT
Stock Averages End Narrowly Mixed
Brooks McFeely submits:
4:14 PM, Apr 11, 2011 --
  • NYSE down 38.17 (-0.5%) to 8,445.77
  • DJIA up 1.06 (+0.01%) to 12,381
  • S&P 500 down 3 (-0.3%) to 1,324
  • Nasdaq down 8.9 (-0.3%) to 2,772

GLOBAL SENTIMENT
  • Hang Seng down 0.38%
  • Nikkei down 0.5%
  • FTSE down 0.04%

UPSIDE MOVERS

(+) LVLT buying Global Crossing.

(+) GLBC sold for $23.04 a share.

(+) AMMD sold to Endo Pharma for $30 a share.

(+) TYC reportedly shown bid interest.

(+) AA gaining ahead of earnings
Complete Story »


Monday, 11 April 2011, 20:20 GMT
As Goes Alcoa, So Goes the S&P 500 Index

As you may already be aware, blue chip aluminum giant Alcoa Inc. (AA) is slated to confess its first-quarter results after tonight's closing bell, marking the unofficial start of corporate earnings season. Analysts, on average, are looking for AA to report a profit of 27 cents per share, more than doubling its year-ago earnings of 10 cents per share. AA has performed reasonably well in the earnings spotlight, having surpassed consensus profit estimates in each of the past three quarters.
In anticipation of tonight's report, Senior Quantitative Analyst Rocky White crunched the numbers to see if there's any correlation between the market's reaction to AA's quarterly earnings and the near-term performance of the S&P 500 Index (SPX).
"Since 2005, if AA rises the day after their earnings release, then the
Complete Story »


Monday, 11 April 2011, 20:05 GMT
Monday Options Recap
Frederic Ruffy submits:

Sentiment

































Stocks are trading mixed on a relatively slow news day Monday. With no economic data or earnings of importance, some of the early focus was on deal news after Endo Pharmaceuticals bid for American Medical Systems and Level 3 said it was buying Global Crossing. The Dow Jones Industrial Average opened steady. However, a modest wave of selling pressure surfaced mid-morning and both the Dow and NASDAQ were in the red at midday. The tone of trading then took a wait-and-see attitude ahead of earnings from Alcoa (AA). The aluminum maker and component of the Dow unofficially starts the first quarter earnings-reporting season after the closing bell. The earnings calendar is relatively light until next week, however, and then investors will digest a flood of reports in the weeks that followed. Some pre-earnings jitters might be setting in. The Dow Jones Industrial Average is down 15 points and the
Complete Story »


Monday, 11 April 2011, 20:04 GMT
Overstating the Inflationary Impact of Commodities
Cullen Roche submits:
The inflationary impact of rising commodity prices is overstated, but -- and that?s a big but -- it doesn?t mean rising commodities are necessarily good or should be ignored by policymakers. The various Federal Reserve banks are out in full force in recent weeks in an effort to talk down the impact of rising commodity prices. Although they?ve denied that QE2 is leading directly to higher commodity prices (which is total nonsense according to the BOJ), it?s clear that the Fed is worried about the price increases enough to feel the need to defend itself.
The latest report is from the Chicago Fed. In what is actually a very good paper, its authors discuss the impact of rising commodity prices. They state:

The recent run-ups in oil and other commodity prices and their implications for inflation and monetary policy have grabbed the attention of many commentators in the media. Clearly,

Complete Story »


Monday, 11 April 2011, 19:58 GMT
Is the Public Ignoring Soaring Commodity Prices?
Brian Wesbury submits:
At the very beginning of 2010, Federal Reserve Chairman Ben Bernanke defended Alan Greenspan?s 1% interest rate policy of the early 2000s, saying that it did not cause the ?housing bubble.? At the time, we wrote that, reading between the lines, Bernanke was doing more than protecting the Fed?s integrity: He was preemptively absolving himself and his zero percent interest rate policy from causing any problems.

Since then, oil prices have gone from $80 per barrel to above $110, a jump of 40%. The Goldman Sachs Agricultural Index is up 55%. Gold is up more than 30%. But of course, the very top decision-makers at the Fed ? the ?three amigos? of loose money, Bernanke, Yellen, and Dudley ? do not see this as a problem that warrants a change in monetary policy. They are still dead set on using measures of ?core? inflation, which exclude food and energy.

In

Complete Story »


Monday, 11 April 2011, 19:58 GMT
3 Small Companies With Strong Earnings and Plenty of Room to Grow
StreetAuthority submits:
By Andy Obermueller

How does a $500 million company become a $1 billion company?
The same way a $10 billion company turns into a $20 billion company: One dollar at a time.
Investors have a lot of ways to count those dollars, or, more specifically, they have various methods to measure the growth of those dollars.
Two of the most common yardsticks in this regard come from the income statement: revenue growth and earnings growth

Complete Story »


Monday, 11 April 2011, 19:50 GMT
Why I'm Waiting for a Pullback to Buy More Genuine Parts Company Shares
Dividends4Life submits:
Linked here is a detailed quantitative analysis of Genuine Parts Company (GPC). Below are some highlights from the above linked analysis:
Company Description: Genuine Parts Co. is a leading wholesale distributor of automotive replacement parts, industrial parts and supplies, and office products.

Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description:

  1. Avg. High Yield Price

  2. 20-Year DCF Price

  3. Avg. P/E Price

  4. Graham Number

GPC is trading at a premium to all four valuations above. The stock is trading at a 14.6% premium to its calculated fair value of $46.81. GPC did not earn any Stars in this section.
Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:

  1. Free Cash

Complete Story »


Monday, 11 April 2011, 19:49 GMT
Healthcare, Popular Morality and GDP
Modeled Behavior submits:
By Karl Smith
Jim Hamilton has a post on health care that is excellent because it illustrates precisely what is wrong with conventional wisdom on this issue.
First he says:

The historical growth of federal expenditures on health care is unsustainable. Over the last 20 years, Medicare and Medicaid expenditures grew at an 8.4% continuously compounded annual rate (data source: CBO). That?s 3.75% faster per year than GDP grew, and for that difference in growth rates, federal health care expenditures as a percentage of GDP would double every 18.5 years. If those historical growth rates were to continue, federal health expenditures would rise from their current 5.4% of GDP to 10% of GDP by 2027 and 20% of GDP by 2045. Something has to give.

In a very tiny sliver of a way this is true. It is impossible for some segment of GDP to grow by more than GDP
Complete Story »


Monday, 11 April 2011, 19:38 GMT
PIMCO Goes Short - And So What?
Cullen Roche submits:
The financial media is making a big fuss over the report that PIMCO is now short U.S. Treasuries. This isn?t all that surprising, given the firm?s incessant fear mongering about government default. Of course, that hasn?t stopped it from buying instruments backed by the full faith and credit of the U.S. (as it's been riding the coattails of the real bond guru, Jeff Gundlach, into MBS), but who needs facts when you can make headlines by giving the appearance that you are sympathetic to the fears of the common man?
But more importantly, PIMCO?s big move is eerily reminiscent of QE1 when Bill Gross predicted surging yields. Of course, he top ticked the market to the day and yields immediately tanked. In early 2010, Gross said:

Won?t that (the end of QE1) put upward pressure on interest rates?
?I think it will. I mean, the mortgage market would be your

Complete Story »


Monday, 11 April 2011, 19:19 GMT
Congress Can Narrow Fed's Mandate Through Nominal GDP Targeting
David Beckworth submits:
I have a new article up at National Review Online where I argue that the best way for Congress to narrow the Fed's mandate is through nominal GDP level targeting. One point mentioned in the piece is that because a nominal GDP target ignores aggregate supply shocks it dominates an inflation target. This applies equally well to a price level target. Another way of thinking about this is that movement in the price level is a symptom of all underlying shocks, whereas movement in nominal spending is an underlying shock itself (i.e. an aggregate demand shock). The Fed will be far more effective if responds directly to the underlying shock over which it has influence -- the aggregate demand shock -- than responding indirectly to an imprecise symptom of that shock.
The importance of nominal spending shocks can be seen in the three figures below. The first figure shows the
Complete Story »


Monday, 11 April 2011, 18:29 GMT
8 IPOs Planned for the Week of April 11
Renaissance Capital IPO Research submits:
The following IPOs are expected to price this week:
Arcos Dorados Holdings Inc. (ARCO), the world's largest McDonald's (MCD) franchisee with 1,755 locations in Latin America and the Caribbean, plans to raise $874 million by offering 62.5 million shares at a price range of $13 to $15. At the mid-point of the proposed range, Arcos Dorados will command a market value of $3 billion. Arcos Dorados, which was founded in 1967, booked $3 billion in sales last year. ARCO is located in Buenos Aires, Argentina. BofA Merrill Lynch (BAC), J.P. Morgan (JPM) and Morgan Stanley (MS) are the lead underwriters on the deal.
Box Ships Inc. (TEU), a newly formed Paragon Shipping- (PRGN) and CEO-backed Greek containership owner, plans to raise $160 million by offering 10 million shares at a price range of $15 to $17. At the mid-point of the proposed range, Box Ships will command a market value
Complete Story »


Monday, 11 April 2011, 18:21 GMT
Is a New Reserve Currency Really Necessary?
Eddy Elfenbein submits:
Over the weekend, Nobel laureate Joseph Stiglitz called for a new global reserve currency.


The world economy needs a new global reserve currency to help prevent trade imbalances that are reflected in the national debt of the U.S., said Nobel-prize winning economist Joseph Stiglitz.
A ?global system? is needed to replace the dollar as a reserve currency and help avoid a weakening of U.S. credit quality, said Stiglitz, a professor at Columbia University in New York. The dollar fell to an almost 15-month low against the euro last week, and the U.S. trade deficit widened more than forecast in January to the highest level in seven months.
?By taking off the burden of any single country, we don?t have to have trade deficits,? Stiglitz said in an interview in Bretton Woods, New Hampshire. ?Things would be much worse if it were not the case that Europe was having even more

Complete Story »


Monday, 11 April 2011, 17:53 GMT
Allen Meltzer's Misguided View of the Fed Part 2
Tim Duy submits:
<< Return to Part 1
David Altig gives Allan Meltzer a more charitable read than I did:


Generally speaking, the Meltzer strategy offers what I perceive to be two critical criteria for a viable exit plan. One is that the winding down of the mortgage-backed securities (MBS) and long-term Treasury securities on the Fed's balance sheet should be conducted in a way that avoids market disruption and distortion as much as possible. The second is, of course, that the excess reserves held in the banking system ? the liability side of the Federal Reserve?s balance sheet ? have to be removed or "locked up" as needed to avoid an inflationary expansion of broad money and credit.

I take Altig seriously, but believe he is giving Meltzer far too much credit.
First off, there is nothing in the Meltzer plan that keeps the excess reserves "locked up." Instead, Meltzer claims that
Complete Story »


Monday, 11 April 2011, 17:34 GMT
Swedroe Is Limited Conceptually
Swedroe Is Limited ConceptuallyRoger Nusbaum submits:
Larry Swedroe was interviewed at Seeking Alpha and as always had some interesting things to say. I generally disagree with him on most things but he is usually interesting. Swedroe is an index investor who favors DFA funds (in many instances anyway) and does not think that any real value can be added with analysis in the context of making active decisions.
There are several points made in the interview that while they can be correct do not have to be universally correct, which calls for a little more detail for people to decide what is better for them based on both sides of these issues.
In pointing out the potential folly in economic forecasting, he notes that a year or so ago, the chief economist from Goldman Sachs said the biggest risk to the economy was deflation while the chief economist from Morgan Stanley was more worried about inflation.
Complete Story »


Monday, 11 April 2011, 17:24 GMT
Watching Oil, Inflation and Earnings
Chris Versace submits:
With the near government shutdown averted in the eleventh hour last week, all eyes have now turned to the inflation-related data due out later this week, as well as the kickoff to March 2010 quarterly earnings results. As we have come to expect, Alcoa (AA) will kick off earnings after the market close today, but the real meat in terms of earnings and economic data will not be felt until the second half of the week.
Oil Prices Continued to Climb; EIA Gas Expectations and Food Prices
As such, near term oil and its recent rise will once again be in the crosshairs as will goings-on in Libya and the rest of the Middle East. With oil crossing over $112 per barrel, investor concern over the ability of the consumer?s ability to continue to spend is likely to mount. Supporting this concern is the recent forecast offered by the U.S.
Complete Story »


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