“Australia’s central bank resumed cutting its benchmark interest rate to revive demand outside of a resource boom that may crest at a lower level than previously expected, sending the nation’s currency to a three-week low.

Governor Glenn Stevens and his board lowered the overnight cash-rate target by a quarter percentage point to 3.25 percent, the Reserve Bank of Australia said in a statement in Sydney today. The decision to end a three-meeting pause was predicted by nine of 28 economists surveyed by Bloomberg News, while the majority had forecast no change.”

Full article

Want to know what some billionaires are doing with their pieces ?

Full article

Advocates of high frequency trading (HFT) like to point to the advantages it brings in terms of market efficiency.

The Futures Industry Association Principal Traders Group, a trade association, which includes high frequency traders, said in a September statement that “as markets have become more automated and competitive … trading costs are lower, markets are deeper and more liquid, and prices better reflect information about the value of stocks and commodities.”

But recent testimony before the US Senate Banking Committee and a new study by the Federal Reserve Bank of Chicago both paint HFT in a rather different light.

Read the rest here.

(Money Magazine) — Cracks are starting to appear in the municipal bond market. If you’re investing for income, it’s time to pay attention.

Consider: Three California cities filed for bankruptcy this summer — unusual in such a short period — and ratings agencies warn that more trouble is coming. “We expect local governments to be struggling with this through 2013,” says Robert Kurtter, managing director, public finance, at Moody’s Investors Service.

Berkshire Hathaway (BRKA,Fortune 500) recently disclosed it was terminating half its contracts that insure against muni bond defaults — a sign, perhaps, that Warren Buffett is increasingly worried about the public sector’s fiscal health.

Policymakers looking to shrink the federal deficit are discussing limits on the tax benefits of munis, normally exempt from federal and, in some cases, state income taxes.

Full article

“The dollar has dropped 5 percent against a basket of six major currencies over the past two months amid expectations, and now the fact, of additional easing by the Federal Reserve.

The concern is that the third round of quantitative easing will ultimately spark inflation. This worry could well continue, driving the dollar down further.

Experts have several recommendations for investors to deal with such a trend, SmartMoney reports.”

Read more

It’s been a while since I updated the Turnaround Tuesday study, so I thought I would do so today.The stats tables below all show results of buying at the close when SPX is down for a certain number of days and the exiting the following day.  The results are broken out by day of the week.  Note that the day listed is the trigger day – not the performance day.  So the Monday trigger tracks Tuesday’s performance.  Tuesday’s trigger tracks Wednesday’s performance… and so on.

See the results, and whether Turnaround Tuesdays are legit or not, here.

Normally i would not be too concerned over this type of accounting, but given all the fails Europe has gone through, and will likely go through, it behooves those to count the “Not Counted.”

Full article

There will be austerity…and those who oppose it.

Full article

Banks should be required to reduce by half the amount they can borrow against equity to make the financial system safer, according to former Federal Deposit Insurance Corp. Chairman Sheila Bair.

Bair called for a “hard-and-fast” leverage ratio of 8 percent in “Bulls by the Horns,” her memoir of the financial crisis published this month. That’s double the 4 percent ratio U.S. banks must adhere to currently and more than twice the 3 percent called for by new global rules on bank capital.

Lenders could borrow about 13 times their equity, based on Bair’s suggestion, compared with 25 times under existing U.S. rules. Bair, 58, who stepped down from the FDIC last year, was a proponent of the Basel Committee on Banking Supervision introducing a simple leverage ratio, which ignores the riskiness of different loans in setting minimum capital requirements. While the Basel committee agreed on including such a ratio, European countries have balked at implementation.

Read the rest here.

“Nearly one quarter of Americans have less than $100 in savings to cover an emergency expense, and many would not turn to family members for a loan, according to findings from a new survey from online lender CashNetUSA.com.

The data also show that a significant percentage of Americans are living paycheck to paycheck.

The survey was conducted in February by TNS Omnibus on behalf of CashNetUSA.com and included responses from a national sample of 1,000 Americans.”

Full article

“The Federal Reserve’s latest mortgage bond purchases so far are helping profit margins at lenders including Wells Fargo & Co. and JPMorgan Chase & Co. more than homebuyers and property owners looking to refinance.

Since the Fed’s Sept. 13 announcement that it would buy $40 billion more securities per month, the rates offered for new 30-year loans have fallen by just 0.11 percentage point, compared with a drop of more than 0.6 percentage point for yields on the bonds into which the loans get packaged, according to data compiled by Bloomberg and Bankrate.com.

The gap between the two, which typically signals increasing lender revenue when it widens, has reached a record of more than 1.6 percentage point.”

Read more

Politicians, business leaders, and waste all add up to more tax hikes for you no matter who is elected.

Fun times indeud.

Full article

“A man’s got to know his limitations,” says “Dirty Harry” Callahan, the gun-toting, rule book-ignoring cop immortalized by Clint Eastwood in “Magnum Force.”

It is a principle the U.S. Federal Reserve – which earlier this month embarked upon its own, third bout of “unorthodox” enforcement, “QE3” – could learn from, according to Stephen Jen, the former Morgan Stanley foreign-exchange guru turned hedge fund manager.

“The Fed officials are some of the smartest economists around,” he wrote in his most recent note to clients. The trouble is, said Mr. Jen, “they know everything except their own limitations.”

Barely two weeks on from Ben Bernanke’s announcement of potentially unlimited bond-buying by the Fed, and concerns like those of Mr. Jen are reverberating across the hedge fund industry.”

Full article

“ROME (Reuters) – Italian retail sales fell for the fourth month running in July, data showed on Wednesday, highlighting how austerity measures and unemployment are discouraging shoppers and deepening a year-long recession.

Sales dropped 3.2 percent in July compared to the same month last year, National statistics office ISTAT said, for their steepest fall since a 6.8 percent drop in April, the largest decline since the current data series began in January 2001.”

Full article

“BERLIN (Reuters) – Germany cleared the last legal hurdle to ratifying the euro zone’s new bailout fund on Wednesday with a cabinet declaration that addresses concerns raised by the country’sConstitutional Court.

Germany is the last country in the 17-member euro zone to complete ratification of the European Stability Mechanism (ESM), an important tool to stem the three-year debt crisis that has forced bailouts of Greece, Ireland and Portugal and now threatens big countries like Spain and Italy.

German ratification was held up for months by legal complaints against the ESM. The Constitutional Court finally gave the bailout fund the green light on September 12 but said the government must also meet certain conditions.”

Full article

” I think i’m turning Japanese …i really think so.” Bond holders take notice….

Full article

“Europe’s permanent rescue fund will invest the core of its assets in AA or higher-rated debt issued by governments, central banks, euro-area agencies and international institutions, with the power to diversify into bank debt as it grows, its draft investment guidelines say.

The European Stability Mechanism, set to go into operation next month, will keep at least 15 percent of its maximum lending volume — or 75 billion euros ($97 billion) out of an ultimate 500 billion euros — in “assets of the highest creditworthiness,” according to the guidelines obtained by Bloomberg News.”

Full article

In other words Spain has a lot of debt to cover and are probably looking for a colossal amount of aid.

Full article 

Technological change is as disruptive in financial markets as in any other. It creates new business models and threatens the profitability of established players, just as in the high street.

The rise of high frequency trading, powered by computer algorithms, is a case in point. Over the past five years, this has come to dominate trading, accounting for 60-80 per cent of volume, depending on the market. The high frequency traders have chased away the traditional market makers, and in doing so have substituted good liquidity for bad, according to some critics.

Read the rest here.

It was the fall of 2007, financial markets were collapsing, and Wall Street firms were losing massive amounts of money, as if they were trying to give back a decade’s worth of profits in a few brutal months. An investor named John Paulson somehow was scoring huge profits. His winnings were so enormous they seemed unreal, even cartoonish. His firm, Paulson & Co., would make $15 billion in 2007.

Mr. Paulson’s personal cut would amount to nearly $4 billion, or more than $10 million a day. That was more than the 2007 earnings of J. K. Rowling, Oprah Winfrey and Tiger Woods put together. At one point in late 2007, a broker called to remind Mr. Paulson of a personal account worth $5 million, an account now so insignificant it had slipped his mind.

Mr. Paulson, known as J.P., bet that the housing market would collapse and risky mortgages would tumble in value. The moves put the fund manager from Queens, N.Y., alongside Warren Buffett, George Soros, and Bernard Baruch in Wall Street’s pantheon of traders. And as one rival fund manager later would say, with equal parts envy and respect, “Paulson’s not even a housing or mortgage guy…. Until this trade, he was run-of-the-mill, nothing special.”

Read the rest here.