Ireland under huge pressure

Forex Special :-
                            

Summary

• Ireland under huge pressure. 
• Introduction of senior debt burden sharing?
• Covered bonds taking a bigger chunk of wholesale funding.
• DONG Energy extends tender offer.

Market Comment

What a setback! In contrast to expectations, it took only a few minutes for investors to digest and ignore the announcement on Monday of the EU/IMF bail-out of Ireland before jittery markets took PIIGS spreads soaring again. In beautifully rounded numbers, currently Italy trades around 200 basis points, Spain 300bp, Portugal close to 500bp, Ireland close to a record-high of 600bp and Greece around 1,000bp. 

Now the big question is whether market participants will find the new Irish austerity measures credible, taking into consideration the fear surrounding the distressed banking sector. More dramatic measures in this respect are likely to be announced in the coming days. In context, S&P downgraded the sovereign rating of Ireland on Tuesday by two notches to ‘A’ with Negative Watch due to the troubled banking system and the need for further capital injections and supply of liquidity. `

According to www.Irishtimes.com, The EU/IMF delegation currently visiting Ireland is looking for a viable solution to include senior debt burden sharing in the rescue scheme for Ireland. The plan should be announced at the weekend, according to the newspaper. In order to avoid court objections to the proposal, the negotiators are seeking legal advice. Two different approaches are on the table: one for bank bonds to be converted to equity (bail-in) and one for bondholders to inject new capital or face haircuts. 

Whether this is feasible or not is difficult to predict, but the whole manoeuvre is having repercussions for both Irish debt and the broader financial bond markets, particularly the sub-debt markets. Anglo-Irish senior debt is down some four to seven full figures on the news and financial sub spreads have been hit hard.

Focus is now on the next peripheral in line – Portugal. Even if the current pressure on Portugal were to lead to unsustainable levels, we believe the EU would be able to cope with this. A stronger test for the eurozone would arise should Spain (due to the size of the economy) be the next PIIGS country to fall victim to heavy market turbulence, which we believe is likely. Consequently, we believe the ECB needs to reconsider its exit strategy from emergency measures, especially the withdrawal of bank liquidity support. The next ECB decision on the matter will be on December 2. Currently, the ECB provides unlimited liquidity for one week, one month and three months, at a fixed rate of 1%. 

As mentioned above, sovereign peripheral spreads continued to drift wider during the week with contagion to the broader CDS markets. The iTraxx Main and Crossover currently trade around 112bp and 497bp, which is 12bp and 42bp wider than Friday, respectively. As usual, when sovereign concerns resurface, iTraxx Senior Financials underperform and is 46bp wider at 172bp. An even more evident underperformance has been seen in the Sub Financials index which has increased 62bp since last Friday to 288bp. Today the multiple between the sub and  senior index is 1.70x – up from 1.44x just one month ago.

As always, developments in cash markets are steadier than indices but spreads are drifting wider and bid/offer spreads increasing.

The Primary Market

Primary issuance in corporate bonds has been rather subdued during the week due to market sentiment with a SEK1.5bn tap from Stora Enso and 8Y fixed maturities from ENI and Credit Mutuel the most interesting.

Increasing Covered Bond Issuance

While senior unsecured issuance has been modest recently, covered bond issuance has been more stable and the asset class is taking a relatively bigger chunk of the wholesale funding markets (see graph) below. Partly due to lower spreads for the issuer and partly spurred by new regulation. The liquidity coverage ratio and net stable funding ratio requirements in Basel III are benefitting covered bond securities in bank holdings of these instruments.

DONG Extending Tender Period

Following the announcement of DONG Energy's intention to tender its existing hybrid for either cash or a proposed new hybrid, DONG Energy this week announced that it was extending the tender period. Previously the tender offer was set to expire on November 23. On Tuesday DONG Energy announced that it had extended the tender period to today (November 26), at 17:00 CET. The extension is explained by technical issues causing DONG Energy to issue a prospectus supplement for the proposed new hybrid. 

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Trade Like Warren Buffett

Rule #1 of Investing
DON’T LOSE MONEY

Rule #2 of Investing
SEE RULE #1

Warren Buffett

Warren Buffett will be forever known as one of the greatest investing geniuses of all time. Most traders and investors are in sheer awe of his accomplishments and do not even try to emulate his approach to the markets on the assumption that Mr. Buffett’s strategy is simply too wise and complex to understand. But when you look at his track record more closely you realize that his success has as much to do with controlling risk as it does with reaping reward. In fact there are many years when Mr. Buffett underperforms the market earning less that the DJIA or the S&P. Yet in the long run he winds way ahead of the average investor. How does he do it? In the years when the market declines heavily Mr. Buffett generally loses very little money. For example in 2001 and 2002 when the broader averages were down by double digits each year, Mr. Buffett’s Berkshire Hathaway’s portfolio lost only a few percentage points. In the subsequent run up everyone else had to make up their loses before they got back to even while Mr. Buffett continued to compound his profits.

In trading the turtle really does beat the hare. Unless you able to print double digit returns for many years in a row, controlling your loses is much more important than maximizing your gains. Suppose you have two investors. The first investor generates 20% each year for three year running and then he hits a drawdown of 40%. The second investor makes only 5% each year and then in the fourth year he loses 5%. Who has more money at the end? That’s right the second investor with his paltry 5% returns actually outperforms the first investor who has the stellar hedge fund like numbers. It all reminds me of an old Smith Barney television ad with John Houseman growling into the camera as he utters, “It isn’t how much you eaaaaaaarn, it’s how much you keep!” 

As FX traders this is a lesson that we can all take from Mr. Buffett. While the majority of currency traders focus only on how much they can possibly make letting their greed run wild, we should instead pay much more attention to how much we can lose. That’s why I always believe that the single best decision a trader can make is to radically lower the leverage on the account. I myself trade only on 3:1 leverage and try to never exceed more than 10:1 at any given time. This approach by no means will guarantee you success, but it will provide you with a much greater margin for error and allow you more time to survive the market’s inevitable volatility.

One other strategy that few traders practice is the art of minimizing your loss. Whenever we make a trade we find ourselves in one of two scenarios. We are either ahead on the position or we are behind. When most traders get seriously behind on the trade they generally have only one thought, “God please let the trade get back to even and I’ll never do that again!” But trading gods are not that generous, they rarely provide you with a second opportunity to escape without a loss. However, the markets by their very nature often do retrace part of their move and often offer you a chance to exit the trade on a countertrend rally. That’s why when we are seriously behind on a trade, the question we should be asking ourselves isn’t –how am I going to make money from this? Rather it should be – how am I going to minimize my losses on this loser trade? In that way each and everyone one of us can be a little like Warren Buffett. 

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USD/CHF rallies toward barriers

Forex Special :-

                                     USD/CHF barriers at 1.00, 1.0020 and 1.0040... 0.9990s were already triggered.

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Swiss Franc plummets across the board

forex special :-
                        The Swissy is falling sharply on Wednesday and against the Dollar is trading at the lowest level in 8-weeks.

USD/CHF has risen almost 120 pips in the last hours and peaked so far at 0.9997. The pair currently is retreating from levels barely below parity but still holds upside momentum. 

GBP/CHF jumped 260 pips from 1.5725 to 1.5990, reaching the highest price in a month. EUR/CHF rocketed from 1.3460 and rose to 1.3580, highest level since November 5. Currencies tied to commodities are also rising considerably against the Swiss, that with the Yen, are the worst performers among the most traded currencies. 

• GBP/CHF
• USD/CHF
• EUR/CHF

GBP/CHF (Nov 18 at 17:16 GMT)

1.5981/86 (1.43%)

H 1.5994 L 1.5725

S3	S2	S1	R1	R2	R3
1.5604	1.5643	1.5682	1.5813	1.5853	1.5892

[?]Trend Index	[?]OB/OS Index
Strongly Bullish	Neutral
Data updated on Nov 18 at 17:00 (15-minute timeframe)

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History of pakistani currency RS 500

Its The History of pakistani currency RS 500

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National Leaders Be printed on Rupees!

Apart from the issue of the devaluation of the Pakistani Rupees due to the down sliding economy, the issue of the images of our national leaders be printed on the rupees is not something often discussed. All of our rupee coins and notes have the image of Quaid-e-Azam, and probably it is evident that so far Quaid-e-Azam is the only national figure that has able to survive in the minds of the youth and masses in general.

What if we have the images of our other national/ historical leaders???

“The minister for Defense Production Sardar Abdul Qayum Jatoi has urged for the print of Allama Iqbal image on 100-rupees currency note as this will be a good message for youth.

He said most of the countries have printed the images of their national heroes on currency notes so we must print the image of our national poet Allama Iqbal on 100-rupees currency note.

Having just Allama Iqbal’s image on 100 rupee will be a small step, but a better step. It is important more than ever in these times when the youth of Pakistan have absolutely no connection what so ever with creators and pioneers of Pakistan. In the United States, each note of a Dollar has an image of one of the unanimously great President. The first President George Washington is on the 1$ note, and then other Presidents. Although, we do not have any Prime Ministers that we can their images on, we do have plenty of national leaders who fought and shaped the image of Pakistan- The Land of the Pure.

I am here suggesting some of the names:

Allama Iqbal,

Liaqat Ali Khan,

Mohtarma Fatima Jinnah,

Choudary Rehmat Ali

Ali Brothers

If you think others should be please do write it in the comments, inshallah.

Our government should try to have one national leader per note of our Rupee. That way the illiterate people as well as many educated yet ignorant youth of Pakistan would also know or at least remember the names and faces of our great leaders, without whom Pakistan would never have existed!

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what is credit card

credit card, charge card, charge plate, plastic (a card (usually plastic) that assures a seller that the person using it has a satisfactory credit rating and that the issuer will see to it that the seller receives payment for the merchandise delivered)"do you take plastic?"

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how to return personal loan

With home equity borrowing vaporized and credit card limits tightening, some banks are going back to the past. But getting a loan isn't easy

Remember the personal loan?

A few decades ago, it was one of the most accessible ways to finance a big purchase, meet an unexpected expense or consolidate other debts.

Then came credit cards and home equity loans. Easy to get, even easier to tap and tax-deductible (in the case of home equity), they quickly trumped unsecured consumer loans, which often required an applicant to walk into a bank branch, bare his or her financial soul to a loan officer and jump through hoops to qualify.

Banks liked credit cards and home equity loans, too. They were much easier to underwrite and cheaper to manage. Until a couple of years ago, "most big banks would actually hand you a credit card application if you walked in asking for a consumer loan that was on the smaller side," says Gerri Detweiler, a credit adviser for consumer information Web site Credit.com.

But the real-estate crash and credit crunch vaporized home equity and credit card lines alike. Now, nearly 25% of American homeowners owe more on their mortgages than their homes are worth, according to First American CoreLogic. And in 2008 and 2009, credit card issuers have cut $1.5 trillion from consumers' available credit lines, according to research firm TowerGroup -- and will continue to cut through the end of 2012.

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Get lowest personal loan interest rate from HDFC, CitiFinancial And others

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