Soros: European recession next year "almost inevitable"

Europe faces almost inevitable recession next year and years of stagnation as policymakers' response to the euro zone crisis causes a downward spiral, according to billionaire investor George Soros.

Flaws built into the euro from the start had become acute, Soros told a seminar, warning that the euro crisis could have the potential to destroy the 27-nation European Union.

"The commercial paper market, for instance, in America is now refusing to lend to European banks so there is even a funding crisis and the ECB (European Central Bank) has to step in and the banks are unwilling to lend to each other," he said.

The entire post can be read here:


http://www.reuters.com/article/idUSTRE65E5K520100615?loomia_ow=t0:s0:a49:g43:r2:c0.108588:b34914706:z0

FELIX ZULAUF: THE MARCH 2009 LOW WON’T HOLD

Felix Zulauf is a respected market forecaster who has had a great last few years. Zulauf is terribly bearish and believes the debt deflation environment is far from running its course. He believes we are currently at a major turning point in the markets where investors are beginning to realize that government spending is not the solution to all our problems. He says the fiscal austerity measures will only increase deflationary pressures and that the pain is inevitable and unavoidable:

“The world is at a major crossroads. Some countries are at the end of a dead-end street. Greece has hit the wall. Spain and Hungary probably will be next. The Greek debt crisis was the beginning of markets refusing to finance irresponsible public-sector indebtedness. It will travel from the periphery to the center in coming years. The common denominator in the housing crisis, the euro crisis and the banking crisis is that industrialized economies carry too much debt. These crises show that we have to rewrite our system. We have been living a fiction for the past 20 years in order to enjoy a greater standard of living. Hard times are ahead, and the steps that Europe has announced to contain its crisis are only the beginning. Governments must cut spending and promises, such as entitlement programs, and raise taxes. At best this means stagnation for some years, but it could be much worse. Deflationary pressures will increase.”

The entire article can be read here:
http://pragcap.com/felix-zulauf-the-march-2009-low-wont-hold

Nifty breaks out of range

• We have come out of the range 4900-5200

• FIIs have been buyers for the past 7-10 days

• Nifty VIX has declined from 35 to 23…so there is less fear in the market


If traders are looking at playing the short term momentum the trend is clearly UP and they can look at going long with 5150 as SL

5398 which we reached on 7 April has to be taken out to confirm intermediate trend of higher tops and higher bottoms

5150-5200 which acted as a strong resistance should now act as a support

George Soros: Financial Crisis Entering Act Two

George Soros one of the most savvy bears around has predicted that we are entering Act II of the Bear Market.


What does Soros see that makes him so bearish? For one thing he believes that the financial crisis in Europe will worsen and attempts to cut budget deficits will push the global economy back into a recession.

According the Bank of America (BAC), Europe's debt ridden nations will need to raise 2 trillion euros within the next three years. Already the crisis has wiped out $4 trillion from global stock markets.



The entire post can be read here:

http://www.bloggingstocks.com/2010/06/11/george-soros-act-ii/

Google's Latest Launch: Its Own Trading Floor

While prop trading in wall street banks is looking at being banned other firms seem to be starting the same.

Google, it turns out, has launched a trading floor to manage its $26.5 billion in cash and short-term investments.

The entire story can be read here:
http://www.businessweek.com/magazine/content/10_23/b4181033582670.htm

Nifty Update

Volatility continues in the Nifty

We are still around the region of the 200 DMA. Its normal to be volatile around this region for a bit before the bears take charge. There is a huge fight between bulls and bears at this region. Ultimately which camp wins remains to be seen but the bias is downwards.

Globally there is a lot happening:
1. Euro continues to get hammered
2. China remains very bearish
3. Korea uncertainty
4. PIIGS joined by Hungary
5. US - The Dow has broken the psychological barrier of 10000

Market has been in this region of 4900 to 5150 and the next big explosive move is going to happen once we move out of this broad range. As mentioned earlier this morning on NDTV Profit, the bias is on the downside below 5200. Above 5200+ I would look at going long.

Housing risk in China greater than US, UK

An interview with the Financial Times by Li Daokui, who serves on the Chinese central bank’s monetary policy committee, included an uncharacteristically candid comments on the state of China’s housing market and by implication, the direction of Chinese interest rate movements. From the Financial Times:

“The housing market problem in China is actually much, much more fundamental, much bigger than the housing market problem in the US and UK before your financial crisis,” he said in an interview. “It is more than [just] a bubble problem.”…

The entire post can be read here:

http://www.nakedcapitalism.com/2010/06/chinese-monetary-official-housing-risk-greater-than-in-us-uk-pre-crisis.html