Month: January 2012

Obama call for tax hikes met with resignation at Davos

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Chief executives of some of the world

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Greek default: Why Europe thinks it may not be so bad

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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European leaders are beginning to accept the idea that Greece will be forced to default on its debt, causing a long-feared “credit event” that triggers billions of dollars of credit default swaps.

Financial markets have been worried for months about such an event, fearing that it would spark another financial crisis similar to the one that was triggered by the collapse of Lehman Brothers in 2008.

But European leaders are becoming less worried about the impact such an event would have on the global financial system. There are two reasons for this: an involuntary Greek default would not come as a surprise to financial markets, and the amount of money involved would be relatively small.

Back in September 2008, almost no one believed the government would allow Lehman to fail, and when it did, it took market participants by surprise. Greece on the other hand has been a train wreck in slow motion.

That`s significant, because as a default becomes increasingly likely, more and more credit default swaps-insurance politices that pay out if there`s an involuntary Greek default-have to be collateralized.

The International Swaps and Derivatives Association says the total net exposure of market participants who have sold CDS credit protection on Greek sovereign debt was about USD 3.7 billion as of Oct. 21, 2011. At this point, the group estimates that more than 90% of Greek CDSs have been collateralized. In other words, most of the insurance has already been paid.

In a first-on CNBC interview on Tuesday, the lead negotiatior for private-sector Greek debt holders, Charles Dallara, raised the possibility of a credit event in the case of Greek debt.

“We remain committed to a voluntary accord,” said Dallara, head of the Institute of International Finance. But “I am not entirely clear at this point all parties are committed to a voluntary accord and I hope that is not the case.”

Talks have broken down with private Greek debt holders and Euro Zone finance ministers over how much of a “haircut”-or loss-the debt holders must take to restructure Greece`s debt. Even if a “voluntary” deal is struck soon, not all bondholders may participate, which could trigger an “involuntary” default.

Standard and Poor`s also signaled Tuesday that a Greek default may not be so calamitous.

The rating agency said it will likely downgrade Greece`s ratings to “selective default” when the country concludes its debt restructuring, but that won`t necessarily destroy the credibility of the European Union, an official with the ratings agency said on Tuesday.

“It`s not a given that Greece`s default would have a domino effect in the euro zone,” John Chambers, the chairman of SandP`s sovereign rating committee, said.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Will it be a fierce Dragon year for the markets?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China`s Lunar Year or Spring Festival begins today, marking the start of the Year of the Dragon. Will the dragon, a symbol of good fortune in Eastern culture, breathe fire into the stock market in 2012?

The Chinese New Year is symbolized by a new animal from the zodiac calendar, determined in a 12-year cycle. Last year, for example, was the Year of the Rabbit and 2010 was the Year of the Tiger.

Since the start of the SandP 500 index in 1928, dragon years have been significantly strong for both the Dow Jones Industrial Average and SandP 500, with a yearly average gain of 9.65% and 7.34%, respectively.

Within the Chinese zodiac, the year of the dragon ranks as the sixth strongest year for the Dow industrials and fifth best for the SandP 500.

Historically, US markets appear to perform the best in the Years of the Pig – most recently celebrated in 2007, when the SandP 500 reached an all-time high – and fare the worst in the Year of the Snake, last observed in 2001.

Below are the average percentage changes for the Dow industrials and SandP 500 according to the Chinese calendar dating back to 1928. Pigs and tigers rule, while snake years tend to be the worst of all.

• Best Chinese New Year for the SandP: 1935, when it jumped 58%. It was the Year of the Pig.
  
• Best Chinese New Year for the Dow Industrial Average: 1933, when it soared 71% – it was the Year of the Rooster.
  
• Worst Chinese Year for the Dow Industrials and SandP 500: 1931, when both indices lost 53% and 49%, respectively. It was the Year of the Sheep.
  

bythenumbers.cnbc.com

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Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Oil can rally to $120/bbl over next few weeks: Charts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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There are two important changes in the price behavior of oil. Forget about the current sabre rattling in the Gulf of Hormuz. That will cause some temporary rally spikes but this is within the context of a change in the oil trend environment. These rallies and retreats provide short term trading opportunities but longer-term traders are well positioned on the long side.

The first and most important change is in the relationship with the Guppy Multiple Moving Average indicator. The indicator is made up of two groups of averages. The long-term group is used to infer the behavior of investors.

The short-term group tracks the inferred behavior of traders. The compression, crossover and separation characteristics provide significant information about trend changes and trend sustainability.

The short term GMMA, shown in blue, has moved above the long term GMMA and maintains good separation. This shows strong bullish support from traders. The long-term group in red has turned up and also begun to separate, showing increasing support from investors.

This is the first time since June 2011 that the short-term group has been above the long-term group. This is a significant change in the trend relationship and points the way to higher prices.

The long-term group of averages provides a support base for any priced retreat. This behavior was seen in February 2011 just prior to the rapid rise from USD 88 to USD 115 a barrel.

The second change is the move above the psychologically critical USD 100 level. This is a nice round number and media is fixated on this level although technically the main resistance level is near USD 98. The support resistance band between USD 98 and USD 100 is a powerful feature of oil pricing. A move above USD 100 changes the nature of price behavior.

When the oil price is below USD 100 the volatility and activity is relatively subdued. When the oil price moves above USD 100 the volatility increases and there is a greater potential for bubble behavior to develop. Oil typically moves in USD 12 to USD 14 rally bands above USD 100. A breakout above USD 100 brings a new resistance factor into play.

Trend line A acted as a support level from September 2010 until June 2011. The move below the trend line A saw the line act as a resistance level. Trend line A is projected forward into the future. This line will act as a new resistance level and cap the degree of price rise above the USD 100 resistance level. The value of this line is used to help determine the potential high points for any breakout rally.

If a strong breakout were to develop in the next week the price target is near USD 115. If the breakout above USD 100 is delayed for several weeks, then the price target is slightly higher, around USD 120. These breakout projection targets are consistent with the way oil price volatility develops after a move above USD 100.

These are rally targets and they may be driven by changes in the Gulf of Hormuz. Once the resistance level is reached then price will retreat, signaling a good time to take long side profits.

The chart and the GMMA relationships, suggests there is a high potential for the oil price to consolidate in the USD 98 to USD 100 region prior to a strong breakout with initial upside targets provided by the value of the long term trend line A.

Daryl Guppy is a trader and author of Trend Trading, The 36 Strategies of the Chinese for Financial Traders –www.guppytraders.com . He is a regular guest on CNBC`s Asia Squawk Box. He is a speaker at trading conferences in China, Asia, Australia and Europe.

If you would like Daryl to chart a specific stock, commodity or currency, please write to us at ChartingAsia@cnbc.com.

CNBC assumes no responsibility for any losses, damages or liability whatsoever suffered or incurred by any person, resulting from or attributable to the use of the information published on this site. User is using this information at his/her sole risk.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Stock market rally still missing one thing: A crowd

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The January stock rally has brought with it hopes that the market will rebound from last year’s middling performance, but it has lacked one key ingredient: enough investors.

The Standard & Poor

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow