Business

Euro Shorts Scurried When ECB Declared It Was Ready To Do ‘What Ever It Takes’

Being short the euro was a popular position recently. In addition, being short Spanish and Italian debt and long treasuries and Bunds was the way to go.

That was then, this is now.

The European Central Bank’s mandate allows it to fight excessive borrowing costs for eurozone countries, Mario Draghi, its president, said last Thursday.

He went on to say the ECB was “ready to do whatever it takes” to preserve the single currency.

The euro strengthened and the bond prices of debt issued by stressed eurozone countries rallied after Mr Draghi warned … "Believe me, [my actions] will be enough [to hurt the shorts]."

Here is link to the comments that sent shorts scurrying.

While traders know not to fight the Fed … there are not many “bullets in Draghi’s gun”. Of course, threatening to do something major was one of them. He just used it. If there is no follow-through, his credibility drops and there will be ramifications.

Related Articles

Back In December, Mario Draghi Gave A Speech That Explained Everything That's Happening In Europe

Draghi Overpromised What the ECB Could Achieve

The Best Theory For Why Markets Are Booming After Yesterday's Disaster

There be Draghis

Yanis Varoufakis: Draghi Greatly Diminished the Office of the ECB, Sacrificed the Fiscal/Monetary Distinction, and Didn't Do Much for the Euro While He Was At It

Draghi allows time for eurozone politics to prepare for Spanish bail-out

August 5, 2012
Here Are Some Links for Your Weekend Reading
Having just come back from the Jersey Shore, where Cheesteak sandwiches seemingly grow like grass …

Here are some of the posts that caught my eye. Hope you find something interesting.

Lighter Links:
- Integrate Data into Products, or Get Left Behind. (Harvard Business Review)
- Confessions of an Ex-Mormon. (TheNewRepublic)
- How To Win an Olympic Event. Great Interactive Graphic series. (NYTimes)
- How To Win Marathons? Hint. It doesn’t involve fancy footwear. (TheGlobalMail)
- The Strongest Man in the World. A new era of strength competitions tests the limits of the human body. (TheNewYorker)
Trading Links:
- Was the Financial Crisis a Male Syndrome? (Businessweek)
- Why I Rarely Short Anymore. (UpsideTrader)
- Amazon ‘Robo-Pricing’ Sparks Fears. (FT)
- Is the Postal Service About to Default on Its Bills? (Wall Street Journal)
- The Scam Wall Street Learned From the Mafia. How America's biggest banks took part in a nationwide bid-rigging conspiracy. (RollingStone)
August 5, 2012
212° – The Extra Degree (a motivational video)
Too many times, a brainstorming session to figure-out how to do something turns into a discussion about how or why it can't be done.

Here's to getting it done anyway!

Sometimes a little extra is all it takes.

It's the extra degree of effort that often separates the good from the great.

For example, at 211°, water is hot. At 212°, it boils.

The one extra degree makes the difference. It's that extra degree that can power a locomotive.

This simple analogy reflects the ultimate definition of excellence. Because it's the one extra degree of effort, in business and life, that can separate the good from the great.

Here is a video.

212: The Extra Degree.

It is from Mac Anderson's Simple Truths. I'm a fan of their work, which takes a simple idea and presents it in a memorable way … with lots of great quotes and stories to illustrate the concept even better.

Yes, they have an iPhone/iPad app.

It's your life … You are responsible for your results. It's time to turn up the heat! Are you content with just being pretty good? Or are you ready to go the extra degree?
Related articles
- Executive Coach's Tip: Problems … What Problems? (careersuccess.typepad.com)
- TGIF ~ Another Superb Inspirational Movie (rainsoftottawa.wordpress.com)
July 24, 2012
Here is a Comparison of Global Markets’ Performance So Far This Year
The world has faced tough conditions so far this year … and yet somehow the major indices have held-up reasonably well.

In addition, the up-coming election will impact markets. Clearly, the Democrats would love to see a rally. In contrast, I've heard Republican CEOs admit that they are consciously casting doubt on the economy.

Despite the onslaught of scary news stories and political maneuverings, the S&P 500 managed to gain approximately 7% in the first half of this year. Pretty impressive considering …

So, how does that compare to other markets around the world? Here is an interactive chart to answer that question.

In the first half of the year, Germany's DAX and India's BSE Sensex did quite well. Meanwhile, France's CAC and London's FTSE were relatively flat … while Canada, Brazil, and Spain haven't kept up.

According to Business Insider, Venezuela had the biggest percentage gain (115%) while Cyprus had the biggest loss (-52%). Not surprisingly, smaller European nations clutter the bottom of the list.
Related articles
- Ray Dalio of Bridgewater: Global Economy is Weakest Since 2009 (valuewalk.com)
- Asian Stocks Fall as Bernanke Warns on Economy (abcnews.go.com)
- Watch How Germany Ate Everyone Else's Lunch After The Euro Was Created (businessinsider.com)
July 21, 2012
Some Links for Your Weekend Reading
China won the first Olympic gold … by manufacturing uniforms.

Here are some of the posts that caught my eye. Hope you find something interesting.

Lighter Links:
- Patent Trawler Aims to Predict Next Hot Technologies. (NewScientist)
- The 10 Things Economics Can Tell Us About Happiness. (TheAtlantic)
- In Age of Twitter, NBC Rewrites Olympic Playbook. (Wall Street Journal)
- Salt, We Misjudged You. We Only Think We Know the Truth About Salt. (NYTimes)
- 'Sterilization Team' Cleans Away Madonna's DNA. Here's a diva demand you probably haven't heard before … (Newser)
Trading Links:
- Top 100 Respected Companies, Ranked By Investors. Apple is No. 1 (LATimes)
- Frenemies: Small Retailers Forced to Compete with Amazon on Amazon. (WSJ)
- Investors Cast Doubt on End-of-World Hedge Strategies. (Reuters)
- The Choice in 2012: Social Darwinism or a Decent Society? (RobertReich)
- Wealth Funds Step Up Their Activities. Sovereign wealth funds are becoming more active. They made investments worth 42 percent more in 2011 than in 2010. (FT)
July 21, 2012
Here Are Some Links for Your Weekend Reading
Here is a graphic that explains how what matters changes over time. Do you agree?

via I Love Charts.

Here are some of the posts that caught my eye. Hope you find something interesting.

Lighter Links:
- 6 Questions for the Man Who Invented the iPod. (Inc.)
- What is Big Data? – An Introduction to the Big Data Landscape. (O'Reilly)
- Cheetahs Attack Woman as Husband Snaps Photos. Surprised? (Video)
- In Libya, the Captors Have Become the Captive. Strange to imagine. (NYTimes)
- The Gruesome History of Eating Corpses as Medicine. (Smithsonian)
Trading Links:
- Heads I Win, Tails You Lose. Hedge funder bets on colossal failure. (TheDaily)
- Europeans Ambivalent to the Euro, Survey Finds. (Time)
- Gold Bar Demand in China Surged 51% to 213.9 Tons In 2011. (ZeroHedge)
- Robert Shiller's Mission to Redeem Finance. (Chronicle)
- Dallas Fed Proposes Ending "Too Big To Fail", Urges Removal of Failed CEOs, Breakup of Banks. (GlobalEconomicAnalysis)
July 7, 2012
Understanding Cyberspace Is Key To Defending Against Digital Attacks
Government and business leaders in the United States and around the world are rushing to build better defenses — and to prepare for the coming battles in the digital universe.

To succeed, they must understand one of the most complex, man-made environments on Earth: Cyberspace

More at WP

It is naïve to ignore the risks of cyber-attacks. For someone to find something valuable, they just have to get lucky once; to stay safe, we have to be vigilant and good all the time.
Related articles
- Cyber-warfare gets big Pentagon push (sfgate.com)
- U.S. Lacks Adequate Defense Against Cyber Attacks, Experts Warn (huffingtonpost.com)
- Confirmed: US and Israel created Stuxnet, lost control of it (arstechnica.com)
- With Plan X, Pentagon seeks to spread U.S. military might to cyberspace (vaticproject.blogspot.com)
July 3, 2012
Here Are Some Interesting Links to Read This Weekend
An Undeniable Truth: If You Do It — It Will Be Done!

via Laura McCann-Ramsey

Not the only way … but it works.

Here are some of the posts that caught my eye. Hope you find something interesting.

Lighter Links:
- For the 3rd Time, Facebook is Poised to Build a Phone. (Newser)
- Major Movements in Philosophy as Minimalist Geometric Graphics. (Brainpickings)
- Bloomberg Plans a Ban on Large Sugared Drinks. (NYTimes)
- Wide Screen. All baby boomers should get tested for hepatitis C, CDC says (TheDaily)
- Chart Detailing How Many iTunes Downloads, Spotify Streams, and So Forth It Takes For a Musician To Make Minimum Wage. (VillageVoice)
Trading Links:
- Too Many Seed Investment Choices. A good sign for economy … (Feld)
- Amazon.com Has Altered the VC Business as We Know It. (Geekwire)
- Why Investors Should Take a Long, Hard Look at Southeast Asia. (SGEntrepreneurs)
- A Rich Backlash. An influx of the super-wealthy begins to annoy Singaporeans. (Daily)
- Eurozone Equities Panic Sale Warning. Private investors have been warned not to panic-sell their shareholdings in the deepening crisis in Europe. (FT)
June 30, 2012
Debt Levels Relative to GDP of PIIGS and Some Other Major Countries
Debt to GDP of PIIGS plus Major Countries

For some perspective on the European sovereign debt crisis, this chart illustrates the forecasted 2012 debt to GDP ratio for each of the PIIGS (red bars) plus a handful of today's major economies (blue bars).

While the PIIGS are currently enduring relatively high debt loads, it is noteworthy how some of the relatively safe nations/bond markets (e.g. United State and Germany) are not far behind.

These relatively high debt loads are of concern as they could lead to higher taxes sometime in the future and can risk fiscal crises if bond holders sense an increasing risk of default.

The current crisis in Europe provides a clear example of the bond market's reaction (i.e. higher bond yields) to increased default fears.

This leads to a very interesting case study that is Japan. With a debt to GDP ratio of over 200%, the Japanese 10-year bond yield is a relatively low 0.83%. Why? At the moment, the bond market feels that the Japanese have the ability to repay their debts — in part due to Japan's perceived ability to raise taxes. To that end, Japanese Prime Minister Yoshiko Noda just won opposition support for the doubling of the nation's sales tax to 10% by 2015.

So it's not just the amount of debt but also convincing your banker that you are good for it.
Related articles
- Forget the PIIGS, the EU as a Whole is Insolvent (zerohedge.com)
- In the Parallel Universe, Credit Risk Is Interest Rate Risk (minyanville.com)
June 25, 2012
Here Are Some Interesting Links to Read This Weekend
Ah, the joys of over-thinking.

Here are some of the posts that caught my eye. Hope you find something interesting.

Lighter Links:
- The To-Don’t List: Things You Will NOT Do. (TheNextWeb)
- A Carefully Selected List of Recommended Tools on Data Visualization. (DV)
- Misfortune Teller: Stats Prof Says He Can Predict Crime Before It Occurs. (TheAtlantic)
- The History of the Paper Clip. Invented in 1899 & hasn’t been improved since. (Slate)
- Why We Lie. (Wall Street Journal)
Trading Links:
- CEO Pay. Average Corporate CEO Paid $9.6M last year (TheDaily)
- Pandora Internet Radio: More Listeners, More Money. (BGR)
- The Tyranny of Numeracy. Interesting blog post. (PsyFiTec)
- Asia’s Message to Europe. Bite the Bullet and Implement Reforms (CNBC)
- Rush for havens as euro fears rise. German two-year bond yields fell to zero, meaning investors were willing to lend to Berlin for no return. (FT)
June 16, 2012