More People Are Losing Their Jobs

There are also a lot of companies that are either bailing out or filing for bankruptcy. As a form of economic measure, they are currently cutting their expenses, such as those related to payroll. In turn, there are more Americans who are now jobless and a now making their jobless claims. The number of filers is considered to be the highest so far in the span of 16 years.

The Rise of the Yen

The gain of the yen may also be attributed to the worries that are enveloping the auto industry. The Big 3 in automotive industry in the United States have asked for financial assistance from the government in the form of bailout. However, this request was cancelled. On November 19, the value of the dollar against the yen eventually fell. However, the U.S. dollars earned a little over the euros. The shares on Wall Street also fell as many are quite uncertain on the rescue package that could have been extended to the automotive industry.

Recession to Go for a Year or More

The good news may not be long-term, though, as there are still so many people who believe that recession will not be over anytime soon. This is especially true in the United Kingdom, even if the Bank of England has already lowered down their interest rates to fight inflation.

In a survey conducted for a week, there are almost 60 percent of economists who predict that economic meltdown will last for more than a year, while the rest hope that it will be over soon, around 6 months to a year. Only 3 of them are optimistic that recovery will happen in less than half a year.

For the entire 2009, the world will still be under recession, but hopefully, countries will be able to pick up themselves slowly but surely in 2010, as inflation and interest rates are already low. There will also be stimulus packages such as that of China that will be released, which will also hasten global recovery.

In the UK, their economy had fallen down to 0.5 percent during the third quarter, after it has been stagnant for the entire second quarter. This, however, is the lowest that their economy went for the past 16 years. Economic experts believe that Great Britain will still have 5 more quarters before they will experience growth.

The rumors have been going on: Citigroup, one of the largest financial services companies in the world, is currently thinking of cutting back jobs, which means that there will be thousands of employees all over the world who will be losing their jobs before Christmas.

It is definitely such a huge threat, and for that, the government is thinking of helping the company to make sure that they can limit their losses in the forex market. Because the currency rates are falling, they have already garnered toxic assets. So far, the company has already garnered over $100 billion of it, after their shares have already lowered down and they eventually lost. This, in turn, definitely hurt the company, thereby forcing them to think of reducing the costs extensively.

As of the moment, the Treasury Department and the Federal Reserve are already in the talks with the Citigroup. There are also several U.S. regulators that have joined in the discussion. They have been in meeting during the entire weekend, and the results may be released this week, probably on Monday. Nevertheless, other pertinent details such as those who are really involved in the talks and issues that may have been reached are not known since they are left confidential. But to get an overview, the plan is to actually make sure that the assets of Citigroup will remain in the company and that the government will assume the losses, but only a portion of it.

Where It All Started

Citigroup suffered one of the greatest losses they ever have all throughout their lifetime: 60 percent of their market value. The sharp decline, which happened just last week, may be caused by the loss of investor confidence after the company continued to obtain losses rather than gains for four successive quarters. If the bank and the government will not do something about it and the value of the company will continue to slide down, there’s a huge possibility that this will be a major threat not only to their clients but to their employees as well. This will then pose a big problem in the operations of the bank.

The Benefit of the Plan
 
One of the foremost benefits of the rescue plan is to provide a good breathing room for the company. This will help calm down the nerves of investors, clients, and customers, most especially when they know that the company is getting support from the government. However, the plan may not be long-term, and the Citigroup should be more than prepared for the long days ahead. As mentioned, the government doesn’t absorb only a portion of the losses. Citigroup therefore must find ways on how to soften the impact of the remaining balance.

In the meantime, the company is doing its best to lift their image despite the financial turmoil. In a recent statement they released, they assured the public that they have excellent liquidity and very strong capital. The chief executive officer of the company, Vikram Pandit, already informed their employees that they will not be breaking the company and that there will be no brokerage unit that will be sold. 

It may take a while before consumers and businesses will be more confident on the economy again. Forex is in its worse shape. The value of your money in other countries will already be pennies, compared to what it was a long time ago. There are already a number of banks that are either closing or announcing their bankruptcy. On the other hand, there are several companies that are already shutting down, leaving thousands of workers without work, especially during the holidays.

Right now, the government is very busy coming up with rescue packages. For instance, China has already expressed their plans of launching a stimulus package in the form of reconstruction of areas damaged by earthquakes and rehabilitation of their old infrastructures. This will then boost the export of equipment, particularly those coming from California, Brazil, South Korea, Taiwan, and Japan, to name a few. The United States is currently opting for the approval of bailout plans and extending loans to companies in the hopes that they will be able to keep their businesses afloat and preserve as many jobs as possible.

Nevertheless, retail sales are in their ultimate down low. Just this October, the retail sales fell to 2.8 percent compared to the fall that happened in September, which was 1.3 percent. There are also a lot of employees who are now filing jobless claims in order to seek temporary support from the government.

What to Do in Times of Crisis

There are a lot of things that you can do so that you can better manage the crisis at hand. First of all, it’s very important that you can have total control of your spending. To make sure that you can do that, you can take note of the following tips:

1. Pay your debts. Make sure that the debt will become one of your monthly expenses and not just be an option that you have to pay up when you have extra cash. This is especially true when your interest rate is dependent on what is currently the rate in the market. If you don’t like to end up paying huge fees in the future, you’d better do this. This is also important to ensure that you don’t spend a huge chunk of your salaries in paying off penalties, which you could have controlled or prevented in the first place.

2. Save. Just like your debt, savings should be a monthly expense. This way, you will surely be forced to save some of your hard-earned cash for the rainy day. These days, when you aren’t really guaranteed that you will still have a job in the next months to come, your savings will be your contingency plan.

3. Start a business. Having a business seems to be a good idea these days, particularly when you settle for a home-based or online business. You can minimize your everyday expenses since you don’t need to set aside transportation and food expenses. You can also maximize your profits and have great control over them.

It may not be completely felt by everyone, especially for those who are not directly involved in forex, but for the past two weeks, it has been experiencing highs against several currencies all over the world. This may be brought to the fact that investors have become more cautious of their investments, and they would rather focus on less risky assets such as that of the greenback. There are a lot of forex traders who have lessened their hunger for any kind or risk.

The Gainers and Losers

According to Jessica Hoversen, an analyst for currency and fixed income in MF Global, the entire world will still going to feel the downfall of the economy, and the growth that everyone is expecting is still bleak. However, in the process, the U.S. dollars are actually considered to be the safest asset that investors would like to place their money in. Another gainer is the yen, which has been experiencing too much downfall because of the low exchange rate in dollars. On the other hand, the sudden boost in U.S. dollars has put a lot of pressure to the euros. In fact, for the two weeks that the dollar experiences some gains, euros have also fallen into the market.

Blame It on the Oil

The foreign currency market may have some relationship with oil prices. For example, while the drop of prices in oil has been particularly good for the United States and Japan forex traders because of the increase of their currency’s value, it may not be the exact condition for those who are trading in euros. In fact, it has experienced one of the session’s highs, around $1.2647 against the euro—up by 0.6 percent.

Limited Trading Capacities for Indonesia

On the other hand, rupiah, the official currency of Indonesia, continues to experience a slide of their money’s value that their central bank is already regulating the amount of foreign currencies that someone can purchase. Anyone who wants to buy some foreign currencies can only hold as much as $100,000. If they do have more than that, they have to offer underlying transactions. It takes effect on November 13.

With the new regulation, the financial sector and the government hopes that it will somehow provide a good balance between supply and demand in the foreign exchange market and prevent anyone from relying too much on speculation. It will also lessen the pressure on their currency.

Indonesia is currently adapting a free forex market system, where anyone is free to buy and sell currencies as long as they are following the rules and regulations when it comes to forex. Companies and even individuals can still buy other currencies, but before they can do so, they must present invoice for paying debts or goods importation. Unless they can present such, they are not allowed to purchase over $100,000.

With the new policy, moreover, the government will have more control on the free-flowing forex system in the country. Banks, for one, will be able to determine individuals who are doing speculative training. They will also conveniently manage the flow of hot money as it moves in and out of the country.

The world economy has been left in turmoil after a series of threats to the global economy had risen in the past few months. The alarm significantly rings as the world’s top nations struggle with their own economic dragons. Germany, Britain, and the rest of Europe experienced a drop in currency exchange against the world standard, the U.S. dollar. These countries are not the only ones to suffer recession as the United States, Japan, and other countries also saw swift decline in their economy. Because there is a need to create solutions to the global crisis, several nations have put their own solutions forward.

Sri Lanka

In Sri Lanka, to boost their forex, the central bank made sure that Ceylon Petroleum Corporation will hedge imports. Although the state-run petroleum company had already been hedging imports since 2007, this time the company had written instructions to do such to preserve the nation’s economy. CPC will buy 900,000 barrels—the volume of which is enough to be consumed until the middle of 2009. Hedging will aid the central bank in keeping its dollars at a level that it can easily manage. However, speculations of mis-selling have arisen although the banks that promoted hedging are quick to defend their stand.

China, Japan, and South Korea

As the world’s economy is in peril, China, Japan, and South Korea agreed to a currency swap deal expansion among themselves. This deal helps whoever among them is in danger of financial collapse or economic suffering. The old deal involves South Korea being able to borrow up to U.S. $4 billion and U.S. $13 billion from China and Japan, respectively. The expanded deal will help strengthen South Korea’s finances as it continues to suffer a decline in its foreign reserve.

South Korea is currently suffering from a shortage of dollar reserves mainly due to the fall of Lehman Brothers Holdings Incorporated, which led to turmoil in the economy with large banks and companies hoarding dollars to keep themselves stable.

Individual States

With United States also taking a blow on its economy, the individual states are also doing their best to develop ways to keep their own economy stable. One great example is the state of Minnesota where the old rule “buy local” is currently being encouraged. As people buy products made from their own state, the dollars will remain in the state that will effectively keep the dollar reserves of that state high.

For the Consumers

Something good has been brought about by the recession, though. Even as each nation as a whole suffers from a decline in its dollar reserves and income, the prices of commodities had fallen as the dollar exchange got higher. However, it could not be said that this will have a good impact on the economy in the long run, but consumers will be expecting further decreases in goods as traders will try to empty their warehouses to prevent huge losses as recession continues.

As the world’s economy is being battered, some good has resulted from it. However, to save the world’s economy, it is still necessary to enforce deals and trades to keep each nation’s reserves within ideal limits.

According to Shin Je-yoon, deputy minister of the country, believes that their country is not experiencing the usual financial troubles of other countries. In fact, they believe that they have strong liquidity when it comes to their liquidity. This positive outlook can be attributed to a number of factors. First they are able to hold off a lot of their monetary reserves, which means they really don’t easily ran out of their own currency should the exchange rate falls in the market. They have also set up a good forex arrangement (such as currency swap) with the United States. They are also thinking of swapping currencies with China and Japan. As of this time, they have foreign reserves amounting to more than $230 billion.

A Good Stimulus Package from China

Though China is not spared from the global economic meltdown, it has still managed to release a stimulus package as a proactive approach to curb the problem. In turn, it will alleviate the current negative economic effect of falling currency rates in the market.

The stimulus package, which was introduced on November 9, amounts to more than $800 billion. The fund that is good for two years will be used to improve the infrastructure of the country. They will also be reconstructing certain establishments such as offices and schools that have been destroyed by earthquakes. They are also planning to build communities and houses for their people. They will also be busy building railroads and power grids.

If all of their plans push through, this will have a profound effect on the economy of other countries. For instance, Japan can look forward to an increase in their sale of farm equipment. They will also be purchasing machine tools from California, or Brazil may sell their iron ore to China. Other countries that may benefit from this move will be South Korea and Taiwan. Suppliers of goods to china will also be happy to note that there will be tax deductions just so they will be more encouraged to make investments to the country.

The Economy of China

Ever since China has opened its doors to the rest of the world, it has experienced tremendous growth in its economy. Today it is now considered to be one of the super players.

However, there are still a number of economists and experts who are wondering about this move from China, especially when it comes to how much is really going to be spent for the plan. It could be that there will be more money that will be released very soon, but the amount has not been announced yet. One thing is for sure, though: whenever China experiences growth, their neighbors can also benefit from it. For instance, for every percentage of growth China experiences, the rest of Asia can look forward to an increase equivalent to half of what China gains.

Nevertheless, forex is also like the world. It is divided into different time zones. This is somehow sensible, considering that people in the world do not sleep and up all at the same time. Thus, at certain times, there are specific players, and as time changes, there will be movements (either up or down) on the currency rates. It is very important for you to know the different sessions that you can expect in various times of the day to ensure that you will know when to join or exit in the market.

If you wish to trade with euros more, you can join the European session. This will be participated by a lot of large countries in this continent, such as Germany, France, and Luxembourg. Their market usually opens at around 7:00 GMT. Any trader who does not like too much activity and pressure in forex trading may consider to trade after lunch. However, you may just want to stay and observe at least 2 to 3 hours after the market opens. At this time, a lot of fluctuations will happen because of the London market.

Calmer markets include Pacific and Asian sessions. With the former, the market appears to be more stable, and there are not a lot of fluctuations to monitor. On the other hand, the latter is very active, where you can expect Asian currencies being paired with the U.S. dollars. Yet, unlike, the European session, you can expect the Asian market to be relatively stable. There is also lesser pressure to be vigilant of.

Your browser may not support display of this image. Lastly, you have the American session, which starts when the banks of New York will open. It is going to be as hectic as Europe, but five hours after, once the European market has already closed, this is the only one that will remain alive. This is also considered to be a very important market, especially for Pacific and Asian players, since their currency is pegged against the U.S. dollar.

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait… C: wait… SD: wait…

While the rest of the world appears to be limping because of the continuous downfall of the U.S. and even European economy as well as the low dollar exchange, Canada, or at least a sector of it, remains undaunted and very much stable.

We are talking about their real estate. So far, it has not shown any sign of weakness even if there are already a lot of signs that are brought out because of recession. You may have noticed, though, that it has slow down or there is a decline from September to October. Nevertheless, the fall is not considered to be very sharp. Based on the report that has been released, there is a drop of a little over than 3 percent. It’s also lower than the previous year’s results by a difference of 6,800.

According to Bob Dugan, the chief economist, this decline doesn’t really mean that the market is suffering. It has remained strong. The decline will not have such huge impact in the industry, unlike the market slump in the United States. What’s more, the forecast that they have created in 2008 remains to be almost accurate, especially when you’re talking about home construction.

There were also times during the year when the real estate market reported a gain. We are talking about the months from July to August. There were only almost 200,000 units that were sold in July, but this increased incredibly during August with an increase of more than 10,000 units. As a matter of fact, the actual sales far exceeded their actual computation.

There are a lot of areas that have experienced the gain, the first of which is Ontario, Canada. There are more people who are moving in this province than in any other region of the country. The real estate market has experienced an increase in sale of multiple-unit complexes or those apartments or properties that are composed of several doors or homes.

What This Translates

If you want to make a sounder investment these days, you may want to seriously consider Canada for several reasons: first, it’s been experiencing massive influx of foreign workers and immigrants who will definitely be looking for properties that they can call their own. Second, you don’t need to spend a lot of U.S. dollars for your Canadian-dollar investment. You may also want to invest on multiple-unit complexes rather than on single-detached homes.

Internet has revolutionized Forex trading. It is no more a business that is run by certain financial institutions. More and more private investors are earning millions of dollars everyday. This hype has led to the increase of many brokerage companies. Since there is no centralized and regulatory body that operates this trading, finding out the authenticity of these companies has become very difficult. Moreover, deciding upon the right strategy and right system is another hassle for people who’ve just entered in this.

Surfing the internet and finding out the right communication platform is the first key to forex industry in such circumstances. There are many forex blogs online that not only help finding out valuable information but also serve as a great platform for communication between traders and help in analyzing the changing market as most of these blogs. There are many personal forex blogs where you can find professional Forex traders applying different trading methods and systems you have just known. It definitely gives a feel of practical experience in this risky business. You are able to communicate with thousands of fellow forex traders in the community across the globe.

An information rich and active forex blog can be used to learn from others’ mistakes as professionals read and discuss the trading issues. Many traders from different countries share their views and narrate their experiences. More interestingly, many of trickiest issues get resolved at these forex blogs. With the help of these Forex experts and the shared knowledge and experience of your peers, the realization of your own profit potential draws one step closer.

Forex trading is very risky indeed and all traders look for a common and active platform to share their thoughts, issues and opinions (No matter how competitive the forex market is, secrets are still revealed). A Forex blog serves this purpose exactly. Regular postings and comments in these blogs will give an insight of Forex trading and will keep you abreast of the updates of the market. This will help in taking right decisions in the right moment and make money in Forex trading. Good luck with your forex trading venture!

Tuesday morning and if ever you needed proof that we live in a symbolic world then yesterday was it. Forex trading online is just numbers moving in pairs that represent the money of the world’s biggest countries like the USA. There is a huge shortage of those two symbolic emotions that keep the forex trading system on an even keel; confidence and trust.

At 17.45 gmt the GBPUSD cable moved by 113 pips because the US house of representatives failed to ratify the Federal Reserve’s economic rescue plan. So currency trading cables will be volatile moving up and down and money can be made and lost.

In the long term the US are far more proactive in the markets than their British and Euro counterparts. It is a good bet that the US economy will recover earlier than the UK or the Eurozone. Hence the Dollar continues to be positive. In the very short term like yesterday at 17.45 extreme cable movements are signals to trade.

So what is your forex trading strategy in these interesting times? Look for the first candle bar to be wholly inside the preceding one. Yesterday, for the GBPUSD cable it was the very next one at 17.50 which had a high of 1.8121 and a low of 1.8069. These then are the trading points. You should buy at the upper one and sell at the lower one. Limit losses with 25 pips.

I call these ‘whiplash’ moves because they look like a waves moving along a whip when it is snapped. The only question is whether it is upward or downward and the inside candle limits are a good indicator of this. If you lose your 25 pips then trade in the opposite direction and take profit after about 4 hours. This is the normal length of time it takes for the whiplash to peter out.