FED CUT ?

Gnutrade is all interesting. Its a new Financial Game

For the first time in more than four years, the Federal Reserve appears ready to lower interest rates to prevent a housing meltdown and a painful credit crunch from driving the economy into a recession. A rate cut would affect millions of borrowers, with the intention of getting them to spend and invest more, which would revitalize the economy.

If the Fed drops the rate, then the prime lending rate that commercial banks charge many individuals and businesses would fall by a corresponding amount. It now is at 8.25%.

Fed action would mean that borrowers who can obtain credit would see rates drop on a variety of loans. It would become less expensive for people to finance certain credit card debt and for homeowners to take out popular home equity lines of credit, which often are used to pay for education, home improvements or medical bills. But finally, the Federal Reserve cut its key lending rate Tuesday for a third time in a row and signaled that it is sufficiently worried about a financial freeze-up that it may be willing to make further cuts.

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Will U.S Dollar Crash ?

Gnutrade is all interesting. Its a New Financial Game

First the bad news: The U.S. trade deficit hit a record $666 billion in 2004, and the Euro is up 47% against the dollar since May 2002 and now compared it is totally declining. The dollars decline means slower economic growth, higher interest rates, a stagnant stock market and a slippage in the U.S. standard of living. All of which is enough to make me a pessimist.

Now the good news: The dollar isn't going to crash, and those market pundits urging you to short everything except gold and silver are wrong.

Don’t consider the extreme scenarios because they underestimate the feedback mechanisms in capitalist economies that kick in when a trend swings too far in one direction or the other. In the current case, these mechanisms will help limit the damage to the dollar -- and to the U.S. and global economies.

Thus U.S economies can be brighthened quickly.

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Thanksgiving for Bears, Christmas for Bulls

Here is an old Wall Street saying that while the bears have Thanksgiving, the bulls have Christmas. Since both November and December have recorded above-average monthly returns and below-average frequencies of monthly declines since 1945, one has to conclude that this saying relates to the days just prior to each holiday, not the entire month. I think it is fairly easy to figure out why optimism grows during the final month of the year: The current year is nearly behind us and the focus has shifted to the year ahead, complete with optimistic earnings growth projections and price appreciation projections.

IS --- US economy becoming a loss leader?

The U.S currency is already down and the sub-prime mortage is also becoming a more serious issue these days. The U.S stocks futures is also not doing well in the market. If we look at yesterday’s market of U.S stocks, there is a decline in the values of the shares. Standard and Poor's 500 Index futures fell by 3 points and the Nasdaq-100 also lost 3.50 points. The unemployment rate is increase day by day. Investors are concerned about the job market. Crude oil declined on concern an economic slowdown may cut demand in the U.S., the world's biggest energy consumer.

It is expected that the U.S economy will cope up by the time of Christmas and its not becoming a loss leader.

Dollar under Real Pressure

The U.S dollar is under real pressure these days. The dollar value is under going a deflation stage. The Asian currency is taking full advantage of this serious situation. The economy rate in US is decreasing and taking fuel to the problem the US sub-prime market is also sloping towards down. The downfall in the housing market and in the currency market has led the investors in U.S to rethink on their decisions. One US dollar is now equal to 39 Indian Rupee. It is expected that the dollar may fall in the near future and hollidaying in New york would be much cheaper than holidaying in Malyasia.

Inflation.. a constant worry

Inflation, is an economic concept. The effect of inflation is the prices of everything going up over the years. The effect of inflation is neutral on every economy. The impact is no loss no profit situation causing to Break Even Point. When the economy reaches saturation point, it ceases from side effects. And now Britain is under inflation status. Britain's inflation rate jumped over and above the Bank of England's 2 percent target to a sign higher interest rates have yet to wring price pressures out of the economy.

Consumer prices climbed an annual 2.1 percent making an increase of 0.5 percent on the prices in this month. There is fear that the British economy may face greater riks from gains in consumer prices or the little damage to their economy due to U.S subprime mortgage slump.

Whatever it is, but one thing is for sure, that the oil and food prices are under inflation magic and dealing with OIL in britain may be a little serious issue.

Oil climbed above $98 per barrel and food costs in British stores increased the most in almost two years.

I think spending on OIL and food are unavoidable and cant sit back without buying, but the purchase should be little sensible and reasonable. And when it comes to trading, beware is the best word to use.

Talk on USD

Just a Talk and USD is down against Euro. The talk that Federal Reserve would be cutting the interest rate added woes to the dollar. The U.S.D is down against the euro which has been trading about two U.S. cents off and indicating its all-time high. The U.S debacle session is still continuing because there is a slump in the housing market in United States.

The home sales have decreased steeply than anticipated. Adding to woes, the anticipation by the National Association of Realtors in U.S expect that the home-sales may be 10.8 percent below than last year. Forecast estimated that there is some 1.3% drop in the existing home sales, a slight improvement, but overall the housing market is still in slump mood.

but there is something good too.... On the other hand the Yen which is back into carry trade fashion has become an advantage to the U.S currency market. The dollar which rose very slightly purchased Yen at 117.29.

But the USD is in an unhealthy condition against the Euro and even against INR too. Indian Currency is becoming strong against the dollar. The current rate of 1 USD = 39 INR. Previously it used to be 45 INR.

I think the one solution where USD can be back in action is only when the housing market is again in boom.

Lets hope something best for USD.

Constant Worry Pick up’s Again on US Dollar

The US dollar is somewhat in bad condition. The dollar touched a new record low (1.4160) against the euro and sold off more than a cent against the Australian and New Zealand dollars. Given that consumer spending accounts for two-thirds of US economic activity, it is likely excepted by the excerpts that the US economy will continue to falter over the next 12 to 18 months as consumers retrench and rebuild personal wealth through investments and paying off debt rather than spending.

The markets are focused on the weakness in the US and what this means is that the US economy may be in rapid drop. The weak data from last week of September ‘07, and a 4.9% decline in August ’07, it is anticipated that the Federal Reserve will lower interest rates again in October, and as long as US interest rates are expected to fall further, relative to interest rates elsewhere, the US dollar will continue to fall.

How to Profit under Market Volatility

If the market is running in volatility, there are always moneymaking opportunities available - and if you use this remarkably simple and effective method, it's much easier and quicker to find them when needed...

Scan the markets.

Whenever the market soars or crumbles, always make a point of checking out the extensive list of stocks you have on your watch-list to see if you can take advantage of the move.

Many times, market volatility actually presents a great opportunity to enter positions at better prices. Keeping a watch-list is a simple, yet remarkably effective thing you can do. It keeps you focused, disciplined, and ready to take action faster than if you start from scratch.

The tools that will help you to be a better investor

Keeping a shortlist of potential companies to choose from still means you need to do your due diligence and revisit your reasons for buying. But if you can have candidates ready, you'll have a good head-start on the crowd. And when the market and individual stories change, you can add and delete from your list.

A Watched List Ensures No Opportunities Are Missed

Regardless of whether you go low-tech or high-tech, a watch-list is an incredibly useful tool. Not only will it help ensure you don't miss an opportunity in a stock that you're keeping close tabs on, it will help you evaluate your own strengths and weaknesses as an investor.

Be sure to review your list and your reasoning at least once a quarter (even the stocks you're no longer interested in). No doubt you'll have a few, "What the heck was I thinking?" moments as you'll have the benefit from a good hand-sight. But it's a good lesson that will only make you a better investor going forward.

I think this can help us to profit when the market is suffering from high volatility

A view on DAX

Germany’s DAX Index started sliding from July 10^th to July 11^th 2007 as the other stock symbols in Germany like Daimler Chrysler; the world’s fifth-biggest carmaker started decreasing from 2% to almost 2.5%, and the Siemens Europe’s biggest engineering company also decreased to round 2.2%. As the stock symbols in Germany were down, the DAX was also affected and declined to 1.2% that day.

On July 12^th as the DAX was down for consecutive two-days, the experts believed that the Dax may fall the following day too. But it didn’t. The DAX advanced as the Hypo Real Estate Holding raised their shares making the DAX to profit by 2%. The share prices were entirely justified by corporate earnings that time in German Stock market, that’s why there was some rise in the DAX index.

But again on July 25^th, the DAX had started to decline. Germany's benchmark DAX Index slumped for the two consecutive days, paced by Allianz SE as the company lost some shares in the quarter. The DAX dropped by 0.9%. The Germany’s DAX market was still in a consolidation, but not in a correction, and it is expected that expectations for corporate earnings have risen significantly since last quarter and smaller disappointments may cause big share price moves.''

That was the position of DAX in the previous month which had started to fluctuate at a very rapid speed. We have to see how DAX performs this month. And already four-days have passed, and the latest information on DAX is, it has moved down a bit in value as the Benchmark indexes in DAX like Allianz AG (ALV GY) Duetshe bank and Germany’s biggest bank and Continental AG Germany’s biggest manufacturing company have seen their share values in a depreciating condition. So the DAX has slipped to 1.3%.

I think the DAX position would be all fluctuating this week too as the Benchmark Index of the DAX is not performing well. Though, lets see how things will work for DAX.