The Global Economy is in ‘Dangerous’ Situation Says Larry Summer

This week, in New York City, HSBC’s Global Investment Seminar is held and Larry Summers, a Harvard professor and economist talk about ‘secular stagnation’.

It was on 2013 when Prof. Summers had enlivened a peculiar phrase, which was made known globally – secular stagnation. Secular stagnation pertains to a slow growth rate of a global economy resulting from too much saving and lack of investment.

Summer said, “I would suggest that the defining financial development of the last year is likely to push things towards more secular stagnation. It is the substantial reduction in capital inflows to developing countries, and the substantial increase in capital outflows from developing countries.”

Along with his discussion is a graph presentation showing a decline in money coming into emerging markets. He said, speaking about the graph, “It means more and more funds seeking to purchase US assets — safe assets in the industrial world.”

He then added, “[Outflows] means more and more downwards pressure on those [emerging-market] interest rates; means more and more upwards pressure on [or weakening of] those currencies; means more and more disinflationary and deflationary pressure; means more and more tendency, because of lost competitiveness, towards reductions in demand, and towards increases in supply … I would suggest it is a dangerous world.”

This is not a mere thesis for Summers, but a present flight that emerging markets are suffering and it gets worse as we have seen in the global economy.

According to Deutsche Bank’s Binky Chadha, over the last few years, the emerging markets experienced a rush from developed markets and this is considered as great rotations in markets.

Moreover, he said that it is a tragic year for emerging markets citing the example of the fiscal crisis in Brazil and the slow growth rate of China’s economy. She also said that this year, emerging markets experience the greatest capital outflow since financial crisis was experienced.

UK Tops the US in the Best Countries for Doing Businesses

According to the World Bank, Britain has topped the US from being the top country in the G7 to do business.

The United Kingdom has jumped two places up in the annual Doing Business report. They are now the 6th easiest country in the world for business startups and operations; thereby bringing the goal of the UK government to be in the 5th spot within sight. This would also mean that they are the best country in the G7 for having a quality and efficient regulation, putting them ahead of the top advanced economies in the world like Canada and Germany.

The World Bank says that countries like Singapore, that retained the top spot for 2016, and the UK, that moved up, had taken actions on cutting the red tape and made it easier for entrepreneurs to do business in their respective countries.

The agency even praised the government of the UK for its drive to reduce the rate of corporation tax and reduce the employer’s national insurance bills.

Research shows that the number of days it would take to start a business in UK on average is currently at 4.5 days compared to 6 days last year. This is against the average of 20 days throughout the world. This, then, propelled the rankings of Britain to the 17th spot according to the ease of new business startup from the 45th place in 2014.

Sajid Javid, the Business Secretary, said, “This is international recognition of the UK’s strong and stable business environment, competitiveness and entrepreneurial spirit.”

The World Bank, however, noted that UK had room for improvement in their judicial system. They also suggest that UK should do more to make it a lot easier to trade with other countries overseas.

In addition, the World Bank also emphasized that the top countries are not those that have no regulation but those who was able to balance their rules and the growth of the private sector.

Kaushik Basu, the chief economist and senior vice president of the World Bank, said, “A modern economy cannot function without regulation and, at the same time, it can be brought to a standstill through poor and cumbersome regulation.”

He adds that, “The challenge of development is to tread this narrow path by identifying regulations that are good and necessary, and shunning ones that thwart creativity and hamper the functioning of small and medium enterprises.”

Multiple Red Flags for Fraudulent Forex Transactions

Fraudulent forex transactions are being checked and monitored by the Reserve Bank of India and Indian Banks’ Association (IBA) in the wake of the alleged Rs 6,100 foreign remittance scam through the Bank of Baroda.

Vigilance Commissioner T M Bhasin told reporters that, “We have written to Reserve Bank of India (RBI) to say that if smaller forex transactions of less than one lakh dollars are being made than it should come to your notice.”

“There may be attempts to camouflage generation of alerts by sending small amount of money through multiple transactions of foreign exchange abroad. We have told RBI and IBA that they should tell banks to red flag transactions of smaller amount from one account,” he added.

Red Flag Alerts

Currently, red flag alerts are made only when the forex remittance are more than 1 lakh dollars.

Bhasin also told IBA to alert all member banks that they have to follow Know Your Customer and Anti-Money Laundering guidelines in order to prevent recurrence of fraudulent incidents.

Forex Scam

The recent forex scam that involves Rs 6,100 crore that were remitted to Hong Kong was said to be misusing Bank of Baroda. According to Bhasin, Enforcement Directorate has been told to check the matter to ensure that they aren’t fraudulent transactions.

After the BoB incident has been reported to the Central Vigilance Commission (CVC), there had been requests for evaluation of forex transactions to the CBI and ED.

After CVC was alerted, the Ashok Vihar branch of BoB was checked and evaluated by the CBI. The CBI conducted raids at about 59 places and some people were arrested. Investigation on the case is still ongoing, and is said to be going on a 24/7 basis.

“The Bank hasn’t lost any money,” says Bhasin who is the former Chairman and Managing Director of Indian Bank.

I love Facebook Gains with eCommerce Announcement

Facebook, one of the underutilized marketing tools in the Binary Options and Forex industry, recently announced that there will be some changes on how advertisers can engage their prospective customers on their social media platform. These changes resulted to an increase in the value of shares of Facebook Inc (NASDAQ:FB); which is why those advertisers who need to engage their clients need to pay particular attention on them (changes).

What are the Changes according to Joshua Rodriguez?

  • Facebook soars on the changes in eCommerce

It is not a secret that Facebook is one of the biggest companies in technology and — by far — the biggest company in the social media industry. Currently, they are working on being one of the big players in online retail. Facebook’s announcement clearly got the attention of the investors, getting them hyped up.

  • Facebook is looking to bank on eCommerce

Facebook is currently making money in the eCommerce industry; but, it’s not that much. As a matter of fact, eCommerce only account for nearly 2% of the total revenue of the company. Nevertheless, the company is intent on changing that. Facebook announced on Monday that they are testing new features for advertisers who are looking to sell products to Facebook users. These features will enable businesses to post products for sale on their fan pages; thereby, eliminating the need for redirecting users to a new page when transacting, allowing users to buy straight on Facebook. Catherine Boyle, an eMarketer analyst, said, “From Facebook’s perspective, they’re addressing a paint point for retailers… they will attract serious ad dollars with this offering.”

  • What are the effects on Facebook shares?

If there’s something that we learned from history it’s that when there’s good news, we see good improvements on the company’s stock value. This is exactly what happened after the announcement.

  • What to expect as Facebook moves forward

Joshua Rodriguez believes that Facebook is doing more than just digging deep into eCommerce with their move. They are also showing their investors that they haven’t lost their touch in terms of technological innovation. One of the major concerns that investors have about Facebook is the fact that they’ve saturated the market already, making harder for them to grow. But with new advertising plans, Facebook sees the light and investors have realized that. With that being said, the new found confidence from the investors sends their stock value soaring. How long this will last? We don’t know. But for the moment, Rodriguez tends to have more bullish opinion on what you can expect to see from Facebook.

  • Turning trends to profits

With Facebook, it is easy to turn the trends they are setting into profit; thus, it is safe to say that we will be seeing gains. Some analysts believe that their stock will break the resistance at $95.31+ and find a new level of support from investors. Thus, this is now the time to start looking for stock opportunities in the short term. From there, be updated of the news to know more clues regarding the direction of the stock.

Trader Arrested for Bank of Baroda Forex Scam

New Delhi – On Wednesday, a raid was conducted after two days of the arrest of four middlemen in Bank of Baroda forex scam. On that said raid, another trader in the person of Manish Jain was arrested by the Enforcement Directorate (ED). Jain was suspected of being involved in an illegal foreign exchange trading in Hong Kong as well as in China with the use of different fabricated bank accounts.

Manish Jain is said to be a resident of Ghaziabad. This information was disclosed by Sanjay Aggarwal. Aggarwal was among the four middlemen arrested on Monday by the Enforcement Directorate. Along with Aggarwal were Kamal Kalra, who was working with the foreign exchange division of HDFC bank, Chandan Bhatia, Gurucharan Singh Dhawan.

An ED official in an interview said after the arrest that Manish Jain was working on with his two firms in Ghaziabad between 2006 and 2014, which was accordingly operated later by Aggarwal. Furthermore, he used at least 11 “bogus firms” to send out a total of Rs557 core of unaccounted cash during the said period. The entire statement of the official was quoted:

“Jain had two firms in Hong Kong — namely Tanvi Enterprises and Pacific Exim which was used for depositing unaccounted cash in the banks in India, its transfer to Hong Kong in HSBC Bank and onward transmission of the same to China to settle the unaccounted outstanding dues of various importers of India with Chinese suppliers.”

Accordingly, Manish Jain has able to avail bank services from several banks – Oriental Bank of Commerce, ING Vysya Bank, ICICI Bank, Indusind Bank, Kotak Mahindra Bank, Dhanlaxmi Bank, YES Bank and DCB Bank. Furthermore, the probe revealed that there were more than a hundred of fabricated accounts were opened by Manish Jain for him to wire foreign exchange amounting to Rs 557 crore.

Gold Declines 31/2- Month High, Still Set for Gain Every Week

For 3 ½-month high last Friday, the precious-Gold dropped while the dollar was able to recover some of its losses, but the metal on its second consistent weekly advanced was set.

As low as $1175.25 an ounce was hit by yellow metal while it trade recently at $1176.97, where it launched at $1182.30.

Due to the economic reports released in U.S on Thursday, it helped the dollar to recover as it indicated a 0.2% raise in core CPI for the month of September and a much better than prediction drop in the first jobless states for last week.

The dollar pays no attention to the lower than prediction manufacturing information and the fall by 0.2 in the CPI.

Gold is prepared for its major weekly jump in 4 weeks on the weekly basis, where it has earned about 2% on bets the Fed would hold-up its decision to liftoff.

China and U.S data released of this week increase the case the Fed would defer its rate of interest to next year, thus improving the yellow metal demand.

This week, the dollar dropped to a seven-week, prior to its recovery from several of its losses on Thursday.

Currently, the dollar is trading about 94.64, after hitting on Thursday a bottom of 93.82, set for third consistent drop every week.

Later in the day, industrial production, job openings information and consumer sentiment will be released by U.S,

Dollar restarts to rebound while gold decreases.

For three consecutive sessions on Monday, the precious-gold dropped while the U.S dollar continued its rebound after 7 weeks of being low following a buoyant U.S details at the end of last week.

The yellow metal attains a low of $1170.65 an ounce, whereas it’s trading at $1172.50 recently, where its launching amount is at $1176.30.

Based on the U. S economic reports released at the end last week, indicated a much better than prediction increase in consumer sentiment, fall in jobless claims and increase in core CPI.

Due to the upbeat numbers, the dollar was supported to rebound after 7 weeks low of 93.82, where it’s drifting recently at around 94.87, basing to the dollar index.

It’s pretty obvious that the opposite relation in between dollar and gold turn to be even stronger over the latest weeks.

Gold was able to managed to secure its second weekly advance the preceding week while the concerning information from China and anticipations of FED rate hike setback improved the demand on the metal.

Since 2009, China swelled at the slowest rate in the third quarter, but came faster than the projections of the analyst.

The economy of China posted an increase of 6.9% in the quarter throughout September from 7% three months earlier, as analyst had called for a 6.8% increased.

In the day later, Jeffery Lacker and Lael Brainard the members of FOMC will speak, where investors will search for whatever clues concerning the timing of the first interest rate rise of FED in about a decade.

EXNESS Implements IntelliMatch Operation Control

“As we look to grow our global presence, not only in emerging markets but also in more established markets, IntelliMatch Operational Control will play a key role in supporting EXNESS’ ongoing expansion and rising transaction volumes…” said John Taylor, the CFO of EXNESS Singapore.

EXNESS is an international foreign exchange broker that has headquarters in Cyprus and operates worldwide (with an office in Singapore and other parts of the world). The company has grown continually over the years since it has been established in 2008. During the 2nd quarter of 2015, their trading volumes have increased by $111 billion, exceeding $660 billion in total.

IntelliMatch Operational Control Solution

EXNESS implemented the IntelliMatch Operation Control solution by SunGard. It is designed to meet their new requirements in compliance and reconciliation, as well as to manage their rapid growth in volume. This highly advanced solution will be able to give critical back-office support for EXNESS as they continue to expand worldwide.

According to CFO John Taylor, the company chose to work with SunGard because its solution offers advanced capabilities. Aside from that, they have a proven track record and are widely known for establishing reconciliation best practices for the top financial institutions worldwide.

What the Solution Gives?

  • It provides EXNESS with high degree automation, multi-asset-class capabilities, as well as scalable infrastructure.
  • It encourages the broker to support growth, not only in terms of volume but also in the quality of the products that they can offer and control.
  • It helps to manage the transactional risks better.
  • It helps to achieve regulatory compliance in a global scale.

Currently, the solution is being set up initially to help reconcile the internal records of EXNESS with those of their various payment service providers. It will meet the key requirement of the brokers to support the client money segregation as well.

Prof. Angus Deaton – New Nobel Prize for Economics Winner

This year’s Nobel Prize for Economics winner is a Scot economist in the name of Prof. Angus Deaton. He is 69 years old and at present an Economics and International Affairs professor at the Woodrow Wilson School of Public and International Affairs at Princeton University, in New Jersey.

Prof Deaton received a cash prize of 8m Swedish krona ($966,000; £630,000) along with the greater recognition of his works and the fact that he is looked up by colleagues and peers.

How did he earn the prize?

According to the award-giving body Royal Swedish Academy of Sciences, Deaton’s work made a great transformation in various fields of economics. Furthermore, Deaton made an impact in the economic theory as well as in the practical application of data in the investigation of poverty and device economic policy.

“Consumption, Great and Small”

The headline “Consumption, great and small” was made as an announcement that Prof Deaton was this year’s winner. But, what does this headline means?

As far as economics is concerned, “Consumption means spending on goods and services by individuals and households.”

On the other hand, the academy said, “great and small reflects Prof Deaton’s analysis of consumer spending across a whole economy, and at the level of the individual and the household.”

The extensive use of data on spending taken from household surveys is the theme that the academy is looking into in analyzing Deaton’s work. Economists had previously working more from aggregate data for the whole economy.

With that, Prof Deaton was able to make a consistent theoretical approach on the fluctuations in consumer spending.

Angus Deaton
Nobel laureate Angus Deaton. www.thehindu.com

Moreover, Deaton also had able to bring his achievement beyond with the development of a theory of demand for goods and services, which he worked out with another economist John Muellbauer. The said theory states deals on how people allocate their spending between different products.

The academy defines him as “an important driving force in the transformation of this area of economics” – in moving from aggregate data to household surveys. Take as an example – his research that shed light on the question of whether rising incomes do lead to more calories being consumed, in other words to reducing malnutrition.

Prof. Deaton was born in Edinburgh, Scotland. He studied at Fettes College before entering the famous Cambridge University. After his university years, he was able to teach in CU and University of Bristol. After that, he continued his economics career in US. Now, Prof Deaton holds both American and British citizenship.

Nobel Prize for economics was established by the Royal Swedish Academy of Sciences and it was set up by Sweden’s central bank in 1968 as a memorial to Mr. Nobel, who died in 1896.

It is officially titled as the Riksbank’s Prize in Economic Sciences.

Binary Options Trading – The New and Much Better Version of Forex

Considering the continuous flow of money and good in the global economy that it was before, it is just to say that trading will continue to flourish even in times of temporary financial and political instability. In combination with consistent progress in technology, population growth across the world and the human nature to improve and search new markets, this turns to be especially true when it comes to online trading, where it’s simple to see why binary options trading has launched itself to be one of the most enticing financial tools of today.

Binary options have distinct features and sets of benefits. With these, aspiring traders of different experience levels were enticed, due to its simplicity, dynamic easy to comprehend features, however has a fresh approach towards market trading and can greatly profitable for end-users and operators alike.

Similar with Forex, the profit of binary options traders, or if unlucky lose, from stocks price trends, indices, commodities and currencies. But, what’s the main difference between them is shared or a certain assets is not being bought by options trading investors, however only invest in their prediction on whether the value of gold for instance will rise or decline over a predefined period of time. When the prediction is right, traders will quickly realize a profit. Yet more significantly they always know precisely when and how much their status of winning or losing. Such innovative means of trading and investing carries several significant benefits to options trading, which need practically no past trading experience or even deep knowledge on how trading works, unlike in Forex, where enough amount of knowledge is really a must. This, by itself, makes binary options very enticing to prospective customers and operators aiming to improve their portfolio.

The primary advantage of binary options over forex is that investors don’t attach themselves to a certain asset and buy it. They just invest in its fluctuation values. Take this as a great example; VW is the top car manufacturer in Europe. Furthermore, the company is set to take the worldwide lean from Toyota, as it’s the original company of very lucrative and expanding manufacturers like Bentley, Audi, Lamborghini, Skoda and VW itself. So think of this, you’ve gained a substantial VS shares amount, which appear good to bring revenue because of the growing company.

But, the Environmental Protection Agency have found out that VW influenced the harmful emission tests results, which affects millions of cars across the globe, whereas the DOJ informed that they will run a criminal investigation against the car company. The shares and the reputations of the company began to fall drastically. You can rationally guess that the investors of VW’s Forex have experienced sunny days. But actually, this condition will benefit more the binary options traders as they have all the signals around the globe that the company will prolong massive loses prior before beginning the long recovery. So why not go for this?

Prince of Pips: The Live Trading Competition

FCM Forex and Myfxbook break ground as they announced the launch of the “Prince of Pips” which is a live trading contest open to all traders where a winner can claim an extra $10,000 in capital.

The Trading Contest

Myfxbook, which is widely known for its history of co-sponsoring demo trading contests with various forex brokers, had recently announced that they will be having a live forex trading competition. According to several reports, this will be the first for the popular trading analytic and auto trader signal provider service (Myfxbook).

The competition is being sponsored by the Fidelis Capital markets who will be giving away a total of $17,000 for the top traders in the event. The Fidelis Capital Markets is a Cyprus invest firm which is being regulated by CySEC under the 208/13 license and is actually based in Limassol.

Winners of the Trading Contest

So what will the top traders get? The top prize for the competition is $10,000 in cash; second prize will be $5,000 in cash; and the third placer will get $2,000 in their live trading account. The Fidelis Capital Markets is naming the competition as the “Prince of Pips”. The questions that remained unanswered yet are: Will this be the first of a series of live trading competitions from this company? Are we going to see more reputable brokers that will sponsor various trading competitions that will stimulate volume? Well, stay tuned! For those who want to participate, best of luck!

prince of pips
Prince Of PIPS – Forex Live Trading Contest. Image: www.linkedin.com

Specifications of the Competition

Like any other contests, this competition has its own specifications.

  • There is a required initial minimum deposit equal to about $500.
  • The contest will be commencing on October 27th this year and will culminate by November 28, 2015.
  • Registration for the contest starts on September 28 and it will remain open until the end of the contest.
  • Registration would mean you should agree to the rules and regulations in order to be eligible for the prizes.
  • Each participant is only allowed with only one account. Having more than one account will mean disqualification.
  • Participants are allowed to utilize scalping, news trading, as well as robot trading.
  • There is a fix leverage for all contest trading accounts; 200:1.
  • Participants may continue trading even after the contest ends. Any P/L achieved after the contest ends will not be utilized for determining the winner.
  • Funds that will be deposited by the Fidelis Capital Markets on the accounts of the winners may be withdrawn anytime as desired.

How to Determine the Winner

The winners of this Live Trading Competition will be those who have top Time Weighted Return (TWR), as well as any floating P/L.

The Floating Profit and Loss at the end of the contest will be used in the regulation for TWR primarily to determine the winners of the contest and to station in a personality board.

Warning

It is important to note that trading in the foreign exchange market entails high speculation and significant amount of risk. Also note that FX trading may not suit everyone because even the expert traders experience significant losses. Before you decide to trade, you must seek advice from independent financial advisers.