ColinTwiggs, Author at the patient investor

March 1, 2012

Five Largest Banks ‘Should Be Broken Up’: Fed’s Fisher – CNBC

The five biggest banks in the United States are too powerful and should be broken up, Dallas Fed President Richard Fisher said on Wednesday.

The financial crisis has left the five biggest banks even more powerful than before, he said at an event in Mexico City……

“After the crisis, the five largest banks had a higher concentration of deposits than they did before the crisis,” he said. “I am of the belief personally that the power of the five largest banks is too concentrated.”

via Five Largest Banks ‘Should Be Broken Up’: Fed’s Fisher – US Business News – CNBC.

March 1, 2012

Gold falls as Fed gives no signs of new stimulus | Marketscope | Investing | Financial Post

The dollar rebounded after Fed Chairman Ben S. Bernanke, in congressional testimony, gave no signal that the central bank is considering additional measures to spur the economy. He said the inflation outlook is “subdued.” The greenback gained as much as 0.5 percent against a basket of competing currencies.

via Gold falls as Fed gives no signs of new stimulus | Marketscope | Investing | Financial Post.

March 1, 2012

Heard on the Street: China Shifts Out of Dollars, World Doesn’t End – WSJ.com

In the 12 months to June 2011, dollar purchases accounted for just 15% of additions to China’s reserves.

That confirms hints from Beijing and Europe over the past year that China has ramped up purchases of European debt

via Heard on the Street: China Shifts Out of Dollars, World Doesn’t End – WSJ.com.

March 1, 2012

Forex: Aussie Dollar, Canadian Loonie and South African Rand

The Aussie and Canadian Dollar mirror the CRB Commodities Index, testing resistance at their long-term highs. The Aussie encountered resistance at $1.08. Breakout would confirm a primary up-trend — already signaled by 63-day Twiggs Momentum above zero.

Aussie Dollar

* Target calculation: 1.08 + ( 1.08 – 0.96 ) = 1.20

Canada’s Loonie is similarly testing resistance at $1.01. Breakout would offer a target of $1.06*.

Canadian Loonie

* Target calculation: 1.01 + ( 1.01 – 0.96 ) = 1.06

The South African Rand is fairing slightly better, with the Aussie testing medium-term support at R8.00. Failure would warn of a correction to the long-term rising trendline at R7.50.

South African Rand

* Target calculation: 8.00 – ( 8.50 – 8.00 ) = 7.50

March 1, 2012

Forex: Europe and Japan

The Euro is in a primary down-trend despite the latest rally, headed for a test of the descending trendline. Expect retracement to test support at $1.32; breach of $1.30 would warn of another test of primary support (at $1.26).

Euro/US Dollar

* Target calculation: 1.32 – ( 1.42 – 1.32 ) = 1.22

Pound Sterling broke its descending trendline several weeks ago and is headed for a test of resistance at $1.62. Upward breakout is unlikely at present, but recovery of 63-day Twiggs Momentum above zero would be a bullish sign.

Pound Sterling/USD

The US Dollar is retracing to test the new support level after breaking long-term resistance at 80 Japanese Yen. Recovery of 63-day Twiggs Momentum above zero, after a long-term bullish divergence, indicates a primary up-trend. Expect a test of the 2011 high at ¥85.

US Dollar/Japanese Yen

* Target calculation: 80 + ( 80 – 75 ) = 85

March 1, 2012

Commodities find resistance

Copper broke resistance at $8600/tonne; follow-through would signal continuation of the primary up-trend and point towards economic recovery. 63-Day Twiggs Momentum holding above zero strengthens the signal.

Copper Grade A

* Target calculation: 8000 + ( 8000 – 7200 ) = 8800

Brent Crude found resistance at $126/barrel — again while the dollar tests support. Breakout would offer a long-term target of $150*. Reversal below $115 is unlikely, but would warn of trend weakness.

ICE Brent Crude Afternoon Markers

* Target calculation: 125 + ( 125 – 100 ) = 150

The broader CRB Commodities Index is testing resistance at 325. Breakout would signal a primary advance to $350*, while recovery of 63-Day Twiggs Momentum above zero would strengthen the signal.

CRB Commodities Index

* Target calculation: 325 + ( 325 – 300 ) = 350

March 1, 2012

Gold encounters resistance as Dollar finds support

Spot gold ran into resistance at $1800/ounce and is testing medium-term support at $1700. Recovery of 63-day Twiggs momentum above zero signals a primary up-trend but we will not have confirmation until there is a clear break through $1800.

* Target calculation: 1800 + ( 1800 – 1500 ) = 2100

The Dollar Index is conversely testing support at 78.00. 63-Day Twiggs Momentum may be slowing but the dollar remains in a primary up-trend. Respect of support would signal continuation — and weaker demand for gold.

US Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

February 29, 2012

Contrarian view: ECRI’s Lakshman Achuthan says economy is slowing

ECRI’s Lakshman Achuthan says the economy is slowing:

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February 29, 2012

EconoMonitor : Note from Athens: Feeling on the Ground Has Palpably Changed

Despite the clear sense of despair and anger in Greece, politicians and members of the public continue to think that the alternative—default and EZ exit—would be even worse.

……Among the increasingly popular fringe left- and right-wing parties, the only party actually advocating a EZ exit is the communist party, or KKE. The KKE will have just over 10% of the vote in the election in April according to most estimates and refuses to cooperate with any other parties in a coalition. For now, the rest of the political establishment advocates doing whatever it takes to remain in the EZ.

….. most Greeks express desperation to stay in the EZ. This is reflected in recent opinion polls: according to a poll conducted in February for Skai TV and Kathimerini, 70% of respondents said a EZ exit and return to the drachma would make Greece’s situation worse and 61% said they viewed the euro favourably.

via EconoMonitor : RGE Analysts » Note from Athens: Feeling on the Ground Has Palpably Changed.

February 29, 2012

ECB Allots €529.5 Billion in Long-Term Refinancing Operation – WSJ.com

LONDON—The European Central Bank said it handed out €529.5 billion $712.7 billion in cheap, three-year loans to 800 lenders, the central bank’s latest effort to arrest a financial crisis now entering its third year. Wednesday’s loans were on top of the €489 billion of similar loans the ECB dispensed to 523 banks in late December. The ECB’s goal is both to avoid an escalating crisis as banks struggle to pay off maturing debts and to mitigate a sharp pullback in bank lending to customers across ailing European economies……about two-thirds of the loans went to banks in three euro-zone countries — two in the “periphery,” likely Spain and Italy, and one in the “core,” likely France or Germany.

via ECB Allots €529.5 Billion in Long-Term Refinancing Operation – WSJ.com.