Should He Stay Or Should He Go?
Less than 24 hours remains before Bank of Canada governor Mark Carney decides whether or not Canada will become the first G8 nation to increase interest rates since the economies around the world were hit from the aftermath of the credit crunch. There appears to be a general consensus amongst Canadian economist that a 0.25% increase is imminent. The futures market is currently pricing in an 83.96% probability of the move. The bigger unknown is the language that accompanies the decision. Should Mr. Carney take a more hawkish tone, one which the market anticipates further hikes soon, expect yields to jump across the curve. Should ...
Has The Dow Peaked?
[caption id="attachment_166" align="alignnone" width="500" caption="Dow Jones Industrial Average on April 15 2009"][/caption] On March 6th 2009 the Dow Industrial Average (DJIA) bottomed out at 6,469.95. As we write this commentary, the Dow has risen to 7,960, an increase of 23% in just 40 days. Of course, compared to the 52 week high of 13,136.69, the Dow is still down about 40%. So the question is: Has the Dow peaked? Looking at the attached chart, we can see that market has been in a defined downward trend. The technical analyst in all of us would then look to see if there is any evidence that the downward ...
How To Become A Trader On The Street
I always get a lot of question asking how someone becomes a trader. The truth is that there is no simple answer, it is a combination of education, ability, personality, drive & luck. I'll quickly go over them below: Education At a minimum a University Bachelor in Commerce/Economics and preferably some industry courses. All the large institutions recruit at the major Universities in September for positions beginning after graduation in June/Aug. There are usually two types of positions, Analyst & Associate. Analyst is for Undergrads and Associates for MBAs.
Troubled Ratings Agency Moody’s Caught Red Handed.
I've said it before and I'll say it again: The mess in the credit market is the fault of the rating agencies. Had they not misled investors by giving high ratings to toxic investments, things would be very different today. The Financial Times has a great article on an "error" found in the rating algorithms of rating agency Moody's. Apparently once Moody's discovered the problem, they decided it was best to keep the investment's inflated rating instead of adjusting it downward to the correct level. Here is the evidence, the proof, that ratings agencies have fundemental biases and flaws. The system doesn't work if they are not honest, much ...
Why Technical Analysis is Junk and Why it is Still Important
When I first got interested in markets I thought technical analysis was a great tool. It was easy to learn, made logical sense and most importantly, appeared to work. I was fooled by this cunning, seductive mistress. Technical analysis is the fools gold of finance. It is an illusion that is as real as Michael Jackson's face. But to quote Levar Burton's Reading Rainbow: "You don't have to take my word for it".
Latest at INVESTIZMO
BREAKING NEWS: BANK OF CANADA HIKES RATES 0.25%
Via Reuters: 08:59 01Jun10 RTRS-BANK OF CANADA RAISES KEY RATE BY 25 BASIS PTS TO 0.50 PCT, SAYS WILL CAREFULLY WEIGH FURTHER HIKES AGAINST DOMESTIC, GLOBAL ECONOMIC DEVELOPMENTS 08:59 01Jun10 RTRS-BOC SEES “CONSIDERABLE UNCERTAINTY” SURROUNDING OUTLOOK, CITES POSSIBILITY OF RENEWED WEAKNESS IN EUROPE 08:59 01Jun10 RTRS-BOC SAYS MOVE STILL LEAVES CONSIDERABLE MONETARY STIMULUS IN PLACE... [Read more]
Should He Stay Or Should He Go?
Less than 24 hours remains before Bank of Canada governor Mark Carney decides whether or not Canada will become the first G8 nation to increase interest rates since the economies around the world were hit from the aftermath of the credit crunch. There appears to be a general consensus amongst Canadian economist that a 0.25% increase is imminent. The futures market is currently pricing in an 83.96%... [Read more]
A New Post? How Novel!
So I haven’t posted in over a year. Tsk tsk tsk. I guess I’m writing this as justification of my annual domain costs…. Or maybe just an excuse to play with the blackberry wordpress app. I love my crackberry…. Read More →
Surviving The Axe On The Street
Being a trader for an investment bank has never been a stress free job. Besides the usual demands to generate profit, you are either looking ahead at your next opportunity, or over your shoulder to see if an axe is heading your way. It is not uncommon for some firms to over-hire in the good times, then conduct mass layoffs when things eventually turn sour. This time around, everyone is a little more... [Read more]
BREAKING NEWS: BANK OF CANADA CUTS RATES 0.25% (Updated)
From the wire: -BANK OF CANADA CUTS KEY RATE BY 25 BP TO 0.25 PCT; NARROWS OPERATING BAND TO 1/4 POINT FROM 1/2 PT BOC - WILL PROVIDE FRAMEWORK ON THURS FOR NONCONVENTIONAL POLICY, DOESN’T COMMIT TO IMMEDIATE ACTION BOC-OVERNIGHT TARGET RATE BECOMES DEPOSIT RATE, WHICH IS LOWER LIMIT OF OPERATING BAND -KEY RATE CAN BE EXPECTED TO STAY UNCHANGED UNTIL END Q2 2010, CONDITIONAL ON INFLATION OUTLOOK -BOC... [Read more]
Will They Cut? Bank of Canada Decision Tomorrow
One year ago, the Bank of Canada cut interest rates by 0.5% to 3%. Today we sit at a target rate of 0.5% and the question on every-one’s mind is: what will they do tomorrow? In truth, it’s more like what can they do. With rates already at historical lows, another 0.25% cut will likely have a small impact on lending. Most economists are predicting the bank will stand pat and not cut.... [Read more]
Economic Reports Are Usefull Tools
Many individual investors are completely unaware that some of the industry’s most powerful and meaningful tools are available free online. One of those tools is bank written economic reports. While most financial research written is intended for client use only, economic reports tend to be public. One of the major driving factors behind this is media exposure. Business journalists need access... [Read more]
GM Has Only One Option Left To Avoid Bankruptcy
Future economists will look back on the slow death of General Motors and marvel at how the story evolved. Books will be written and perhaps even a movie made about the collapse of the greatest industry in America. The latest chapter in this hallowed story will be completed before April 27th. That date appears to be the deadline for GM’s planned all-equity offering for bondholders. GM currently... [Read more]
Has The Dow Peaked?
Dow Jones Industrial Average on April 15 2009 On March 6th 2009 the Dow Industrial Average (DJIA) bottomed out at 6,469.95. As we write this commentary, the Dow has risen to 7,960, an increase of 23% in just 40 days. Of course, compared to the 52 week high of 13,136.69, the Dow is still down about 40%. So the question is: Has the Dow peaked? Looking at the attached chart, we can see that market... [Read more]
What A Difference A Year Makes
We're 1 Today! One year ago today INVESTIZMO was launched, and what a ride it has been. Looking over some of our early posts, one has to wonder who could have predicted the outcome of the past 365 days. We had some correct calls, some, not so much. Highlights: Tutorial on Asset Backed Commercial Paper Foreshadowed US Economic woes Silly, Bubbly, then Insane Oil Prices Unfortunately, markets... [Read more]
