Q9550maximus Ii Formula

"deflation or hyperinflation?, What's next? Interview with Sergio Marchionne

If our investment objective is to at least preserve the capital base is trying to decipher the type of scenario that lies ahead, if it is a deflationary or inflationary scenario.

It's pure logic that the credit crunch and global financial meltdown do not contribute to rising prices. The current risk aversion prevents purchases carried out by another were possible, due to difficulty of access to finance, contributing to lower prices. This occurs at all levels. The venture capital fund previously performed leveraged buyouts of companies can not do it with the same ease as any corporate operation becomes more complicated. The same financial collapse also carries the liquid and deleveraging in the stock markets, with downward pressure on prices. At

property is the same. It is no longer viable real estate company that was dedicated to engulf other real estate companies, paying for them absurd multiples of NAV. And on another level, and only a last anecdote was getting home buyer to borrow more than 50% of their income, 50 years, and loans to 100% of the inflated appraisal. Sanity returned and with it the most sensible approach to the loan fee not to exceed 30-35% of revenue and loans not exceeding 80% of the valuation realistic.

Risk aversion has also produced a slump in fixed income, especially in the case of banks. Given the risk of failure of most global financial institutions, the prices of bonds fall to pace up your CDs.

All these are factors that favor the fall of prices of financial assets and real estate.

consumer level, we can be guided by several indices that can help us predict future inflation.

One is the price of oil, we all know that from the more than $ 140 to play last year, is now little more than $ 40. It is true that those $ 40 are well over what was paid until a few years ago, but it means a lower inflationary pressure over recent prices.



Another index
interesting for the evolution of prices is the Baltic Dry Index, which we mark the price of shipping for freight dry. As we see, has simply collapsed after a spectacular rise in recent years.



As expected, the CRB index of commodities, which also indicates falling prices due to slumping demand.



A very good leading indicator of inflation is the ISM prices paid, which is also falling sharply.






They tell us downward pressure on prices, although neither the oil nor the majority of commodities are at levels as low as it seems indicate their recent collapse. We see historically been steadily cheaper over the years.

Based on all this seems obvious deflation diagnose a clear future.

But if we see in the chart below the U.S. monetary base, with Bernanke as world champion in the sport of throwing money from helicopters, it can cause real panic potential inflation that could be generated.




Today we should be concerned that no exceptional increase in the money because the markets being frozen, the money does not flow and therefore can not lead to inflation. However, if you normalize the situation, the inflation potential is tremendous. Central banks should not overlook the great risk involved in not acting forcefully draining liquidity if the market performance return to normal.

What we were then?, "Deflation or hyperinflation?

We will look at an important clue to help us reach a conclusion. In the U.S. (and in most European countries) the treasury sells bonds with inflation protection. They update their nominal bonds and coupon depending on the evolution of inflation. The interest rate offered is lower than a regular bond, and difference between the two should coincide approximately with the expected inflation. The yield difference between the bonus offered by traditional and real returns (without inflation) of the TIP is called TIPS spread. Then a graph of 10-year TIPS spread:





see as usual there was a spread between two bonds, which came to be the inflation expected by the market. However, at this time the market says he does not expect inflation for the next 10 years. This information provides the market could be distorted by excessive demand for traditional bonds, the usual institutional, but the fact is that it is curious that the market is discounting almost deflation for the next 10 years.


Let's see if the same applies to emissions to 30 years.


Incredible. Against the correlations of the past, today the bond market completely disregards the possibility of inflation for the next 30 years. Does the market go wrong this time?

Images Veins On Vulva Pregnancy

(of compulsory reading) Bankinter

then I bring the interview to Sergio Marchionne gave a few weeks ago Automotive. Sergio Marchionne is Fiat group CEO and architect of the rescue of it, sound in just four years after its entry in the firm. The interview is before it became public input on Chrysler Fiat, and was published in the letter bag.

not be missed. Interview is essential reading. About

car manufacturers, said in trap and dividend per following:

carmakers. PER Another example of very low today. It is obvious that during recessions greatly reduces the consumption of durable goods. Historically considered a leading indicator of recession, a slump in car sales by 2% as usual is always growth. We see now car sales are falling around 40% compared to last year. More than a fall is a cataclysm. Not to touch either sector based on its low PER, it is very difficult to estimate future profits. not be able to own brands. They are in a process of drastic reduction of activity and costs, in a wait and see.

I leave you with the interview:

P. What is your mood given the current crisis facing the automotive industry?.
R. I'm really pessimistic. What we are seeing is unprecedented. I have 56 years and have never seen anything like it.

P. What is wrong?.
R. There is no one thing that explains the entire problem. I acknowledge and understand parts of the problem, particularly in areas where the system has failed, because we've lived these situations before. But I've never seen the simultaneous failure of many systems at once.

P. How will this crisis to sales in Western Europe in 2009 and 2010?
R. I honestly do not know. Not that I refuse to make a forecast. I have not just a trusted context with which to forecast. The items included to predict the demand in a normal and rational world are no longer present. So I refrain.

P. What does it mean to "abstain"?.
R. I abstain to establish commitments in terms of volume. I really do not know how to make a credible assessment of the next couple of years. Not trying to be alarmist or to painting a dark future. I think we will emerge from this. But I think that traditional and even avant-garde methods for estimating volumes, market shares, effective marketing techniques, brand repositioning, all these things, all these elements, require that at least one or two reliable benchmarks.

P. "As CEO of the Fiat group, what their short-term response to this grim scenario?.
R. I revisited totally what we do in the first part of 2009. We're just going to tread the brakes all the way, use as many temporary regulations as necessary, trim everything down to basics. I'll have a week of production between now and early January.
After that, everything will be dark because I have no idea about demand. No idea. It is like swimming without ever knowing when you can walk because the fund is so unstable that simply can not know when you've achieved.

P. If you have no idea where the bottom of what could happen to this industry within the next 24 months?.
R. We need to all sit down at the table and say, "Look guys, the party is over. Has anyone seen our bluff and not everyone is going to get, arreglémoslo so. " It may be painful. It may be ugly. But if we do the right thing for the industry, let's do it now. Our industry partnerships strategy was a step to get there. But given where demand is and where it goes, is too slow. Maybe I'm completely wrong, but now my instinct is to be truly draconian. For when we're done with this in the next 24 months, in regard to high volume manufacturers, we will end with an American home, a German, a Euro-Japanese, probably with a significant expansion in the U.S. , one in Japan, one in China and other potential European player. (...) I can not continue to work on cars myself. I need a much larger machine to help me. I need a shared machine.

P. How can you move to a "common machine" when it has yet to develop its future products?.
R. I'm throwing the brakes on everything. I'm holding back the development of models that have not already spent 80% or 90%. The Alfa 147 will substitute, will not change. But if you ask me whether they will invest in a new SUV for Alfa independently, the answer is "No!". (...) If we do not think in this industry as an industry Wal-Mart, we will pay the price of thinking that we are so far Luxurious business. The problem with car is that people always thought they were on top of the food chain and, unfortunately, we are all sitting in the background. And now the world we made that clear.

(...) When I made those comments on the six global manufacturers of what was really talking about is there a difference between being Wal-Mart and Neiman Marcus (a highly exclusive distributor). Ferrari may be Neiman Marcus, can Maserati, Porsche can.
probably has another layer of relatively high-class players, but it is limited. And then there are the rest of us, the Wal-Marts of the world.

P. How does low-cost brand in Western Europe in this vision?
R. It's part of our global restructuring. We are Wal-Mart, but we've been living like Neiman Marcus! The low-cost brand is a natural extension of our market coverage.

P. How will this crisis to suppliers?.
R. It will also be painful for them. We have been streamlining the supplier base but you have to do more because we created these incredibly bad habits. We support our suppliers in this process. We have never forced the majority to fix it. We chose the wrong supplier base. In Fiat's most obvious work is done. We have done cleaning. But we must do much more.

(...)

P. Does this mean that banks, after being recapitalized, they are not recovering operations, such as borrowing money to keep the system working?.
R. That's exactly the problem. The banks will continue taking your money. But to reduce their risk exposure have become much more rigid their lending practices. The depositor can feel more secure because the bank is not at risk and the bank is happy because it has reduced its risk. But this triggered a severe credit problems. Banks are going to be incredibly selective in what they fund. They will not feel any obligation to maintain industrial companies service, arguably because they believe their very survival is at stake. But what makes matters worse is that capital markets are also closed. The ability to obtain financing through debt or equity with a distribution process in the broader financial markets, has declined severely, and in some instances is nonexistent.

P. What about the funding of private consumers?.
R. Funding for private consumers is based on your ability to compensate. After all this happened, getting credit is much more difficult. We're starting to mess ourselves in a vicious circle. We are tightening the credit to the point that at the end of the day, we are denying everyone. We are killing demand. If there is demand, I have no reason to be. Whatever they produce is not going to sell.

Sergio Marchionne tells us that nobody can make predictions at this point, since nothing is known about the future, not even the most immediate. When a business is a progression you can make, but when it suddenly breaks, the only thing you can do is adapt to new circumstances as best as possible. And these new circumstances have nothing to do with growth, and of course the benefits increase.

What can we assume that automakers do to adapt? A lower sales seems obvious that after the temporary production halts permanent closures could come from plants. So decide which plants to close before?: Plants in their country of origin?, "Plants located outside their country of origin, or do plants outside their country of origin in emerging markets with labor costs much low growth markets?

Pokémon Heartgold Vba

Clips Bankinter is a financial product that Bankinter and describes itself on its website :

BANKINTER CLIPS: DESCRIPTION
	Bankinter A Clip is an innovative product created for all its variable interest financing is protected against higher rates. In this way, you can mitigate the financial risk of all your loans and manage the cost of debt, whether or not that debt is Bankinter.
	A Clip applicable Bankinter to every specific need and every market situation, which can offer the best at all times. When it comes to holding something, there is nothing simpler and more effective than a Clip Bankinter.

We see that at all times Bankinter Bankinter Clips describes her as a hedge against rising rates. Well, it seems that is not only a hedge against rising rates. According to many of its customers, which was sold as a hedge against higher interest rates was not only that, but a derivative contract (I guess Euribor swaps) that required to pay if the Euribor down instead of up. And not only that, but the cancellation is substantial payments.

In inverforo can read testimonies of people affected as follows:

Originally Posted by clip

hi all! I have a serious problem with this product bankinter: it is a safe interest rate that you sold as a hedge against rising interest rates, so that if you pay the Euribor up and if your low pay. In my case, I practically "forced" to hire and while the Euribor has risen in the past year I have had settlements Quarterly 80 - 100 euros for me (except one of 200 euros on me.)

It turns out that with the descent of euribor the next settlement of 1,150 euros will be against me (and the remaining 8 will be even worse), and when I say I want to cancel, they tell me he would pay the equivalent of all pending settlements with an estimated euribor that make them (even the Euribor for within two years!), which results in the beautiful figure of 15,500 euros.

Originally Posted by noclip

Hello, me interested in this topic, I too have been "clipped" by Bankinter, just put a complaint through their website. In my case I hired him in June, as renewed in October with the Euribor to stop and ask me to cancel now € 8,000, and that this year I returned € 100, but I want to cancel as soon as possible, because according to what I have read, the cancellation is rising higher and the next renewal and I do not care.

Originally Posted by Gargi

clipper42,
Thursday will contact my lawyer with me to aclarme the situation and possibilities, etc. .. When talking with him I get in touch. In my case claim two things. One is the amount of cancellation (which I reported) not that way I recommend, and the other is that I canceled April and I have a copy of the cancellation and the trade had no idea and I was told that I could cancel it at the windows available without cost (except the winding slope) was so startled to see that I had to say that I was going to charge 4000 euros (then, now will lead the 14000-imagining, because I still do not clarified where does the amount), which did not cancel the product (whether it was the adviser, was frightened, imagine the information you gave me, and he to imagine the shock that we have given all.) So I think the amount would not go back to that date (I say) and a proportionate and justified cancellation. But wait for the opinion of an expert.

Originally Posted by musete77

We are in the same situation a week ago I approached my office Bankinter, to ask my "advisor" about the cancellation of the clip, he said he had no idea but was informed and would call me the next day. If my wife does not call today, no noses to call it, we said we would have to pay 5000 € ... White has left us. I wonder what path you are following, for better uniting in a common complaint, or individual.

has all the earmarks of being a typical product that will sell one speaking only of their virtues, but without explaining their "buts." There is nothing else to do their website. However, suppose that the contract would spell out what the product and explain the risks. We will see how this ends.




Upgrade to July 9, 2009 to include a link to a news Cotizalia.com that surely will appeal to those affected: The Bank of Spain gives reason to those affected by the mortgage clips Bankinter.

Colgate Duraphat 2800 Reviews

Clips Back on the news the bank systemic risk

He commented on 12 January (those quiet days) in the Crash of 1929 entry , responding to a reader the following:

My personal opinion is to take no position yet in equities, but as a human I am I can be wrong. It would not take positions until we see some sign of improvement in employment, or the indicator HMI ECRI. While it is found that is getting worse, I prefer to stay the margin. My maxim is to preserve capital and I think that buying now is no danger of losing much of it. I agree with you that the stock market has proven to be the most liquid asset, but I'm not in relation to the assessments have been completed. Much remains to be settled according to the situation from getting worse and need to obtain cash.

In general, regardless of the bag, I do not think the financial system the situation is now calm after the turbulence passes. Being a very leveraged business, the expected worsening of the entire economy will result in further losses, which again can have rescue. I also consider an error where governments save all banks, for that is because the banks still running excessive risks, assuming that someone will save it back. Not be protected by governments the interests of banks, but those of savers. It makes no sense to reward that has proved to be an irresponsible and do not measure risk. That the Governments pledge to save every possible bank troubles, far from reducing the problem of the financial system, which sharpens and moves directly to the risk taken by banks to the States, so that future solvency problems may have as protagonists the same . I think the bill for this crisis will be huge and will have to pay for many many years.

Little has lasted peacefully and as expected we go again with the second wave of bank systemic risk. The news is disquieting to the utmost, then a sample:

Major UK banks are "technically insolvent"

Bank of Spain expects first-half figures to decide whether an entity involved

"There are a dozen entities that do not meet the solvency ratio, and some are in bankruptcy."

guru Roubini crisis is not cut: "The financial system is bankrupt"

Jaime Guardiola, Banco Sabadell: "We are halfway to the system default"

"also has not ruled that the State enter the capital of some financial institutions "

The truth is pretty scary to think of the tremendous leverage of financial institutions and that losses can be assumed about their capital. And be very clear that the financial sector on the brink economic recovery and no recovery of the bags as possible. This is not solved from one day to another.

I can not understand how reassuring that the states saved any troubled bank. If there is no room to save all, not really save anyone. The only thing you should ensure are the deposits of savers, to prevent bank runs, but then to try to save hopeless ... The problem is that being the whole web of credit derivatives as interconnected, not a big one would save the collapse of the entire system, thus saving all banks almost becomes an obligation. We pray not to exploit the hoax of the CDS, that it is a weapon of mass destruction. Save

all banks at any price moves all risk to the States. Following the bankruptcy of Iceland, it seems that Ireland is now in all the pools: McWilliams "or declare us in default or go out of Europe," and in general, seem to be at the forefront of countries with respect oversized financial system to its GDP. One was Iceland, another Ireland, and the third makes very good watches.

After Iceland, is it Swiss?

October 31, 2008 (LPAC) .- The German Telepolis website quoted Richard Portes of the London Business School today, warning that Switzerland and Britain, with large financial sectors, could share the fate of Iceland. Only the bank holdings are 7 times higher than the GNP of Switzerland and "obligations short-term Swiss banks," he said, "are 13 times greater than the GDP of Switzerland. In the case of Iceland, this factor was 5, which is lower. This is potentially dangerous for Switzerland. His banking sector is currently too large for the Swiss national bank rescue him. "
One should add that Switzerland is also heavily exposed via the carry trade, in loans in emerging markets, which only that, accounting for 50% of the GDP of Switzerland.

And about our beloved country, I am disappointed with our government when I read things like this: Aido spends almost € 60,000 in furniture budget auteur

say that man reacts only when you are on the brink. I thought so, and I thought that something good would this recession, depression, and would return to sanity in government spending. But I'm beginning to think I was wrong when I read news like that, or squandering as more than two million euros each year comprises 27 consultants in Alcorcón councilman. Also naively thought that the necessary merger of the banks would reduce the cost structure supports its oversized, but it is not, that instead of merging banks Castilla-León and reduce costs, we create a new society on them to increase it. Very well. Are you aware of our political class that government revenues will continue to decline for many years? All this vast expenditure was only tolerable in a climate of maximum revenue that will not return, or spending adapts to new conditions or when we want to respond there will be no solution.

Calories In A Chinese Chicken Curry

Yes, Solbes knew.

English Not a few have criticized the lack of foresight of our leaders: do not see perhaps what was coming?, did not realized that he was forming a huge housing bubble ?, were not able to see the excessive indebtedness of the population?, were not aware that the economic model based on cyclical sectors of low productivity was not sustainable?.

And I wonder how with so many data available were not going to come see something we anticipated many of the followers of economic news?


's go back to the year 2003 . Solbes at that time was not part of the government team, but held the post of European Commissioner for Economic Affairs. Although almost no one remembers, the media said then that: "Solbes warns of" great crisis "would come to Spain if rates rise"

European Commissioner for Economic Affairs, Pedro Solbes, warns of "great crisis" economic would happen in Spain if interest rates go up, which would have "little impact" due to "high level of indebtedness" .

In an interview with financial daily La Gaceta, Solbes said that "there are several countries with the same problem. These are the states that have had a fall in interest rates very strong, increasing demand, a supply developments also very good and a situation where prices are not always justified "he adds.

" Obviously, the risk of this is that there is a great crisis "Solbes warns, for whom there is no doubt that Spain has benefited from an expansionary monetary policy over the years by falling rates, while there has been an expansion " very strong "private consumption and construction, reference to the housing bubble.

But this pattern of growth, according to Solbes, "has its risks and the other side of the coin will come when policy changes money "because," obviously a rate increase will have much impact due to the high level of indebtedness. "

He already felt that there was real estate bubble, too much debt and danger of serious crisis if rose rates, which at that time were minimal.

funny thing is that since then we have continued to feed the beast of debt, and more and more bloated housing bubble country. And of course, without stopping to think or a minute to replace the unsustainable economic model based on the brick speculative and unpayable debt.

If already said Almunia when asked why not slowed the housing bubble:

" Avui: not prick the housing bubble in time, is an irresponsible government of Aznar and Zapatero?, Did it not through ignorance or because did not vote?
Almunia: Click the housing bubble was as difficult as removing the cups half-holiday. And there was no way to do it. But the responsibility is shared, not just the fault of governments but also companies and citizens who participated in the joy of inflating the bubble, and the monetary authorities and supervisors and regulators of financial markets. We knew that the real estate sector growth in Spain was not sustainable in the medium term and that sooner or later be adjusted in a disorderly manner, but we did not imagine that a financial crisis would accelerate much. "

This link find another interesting article year 2003 . In this case, Miguel Sebastian, who is the subject of the housing bubble. I note the following:

By contrast, economists are beginning to express concern, as they would like to see more investment physical and technological capital, which determines our future revenue generation. The low productivity English economy is a reflection of the shortage of productive capital. Much brick, little chip and screw. [...]

But there are two objections. The first is that prices may fall at some point in the future, causing a "wealth effect" negative. The expectation of such a drop could cause a sale of housing, feeding the cycle counter. The second is that mortgage indebtedness has reached such a level that a drop in these prices could adversely affect the financial system . [...]



In Spain, the Government has shown irritation to hear about the estate bubble, a tic undemocratic reminiscent of the Chinese government denied entry to SARS and could only begin to tackle it with its public recognition. Second, additional stimuli avoid the lawsuit "aid for home purchase ", common in election campaigns.

Yes, yes, I promise you I wrote Miguel Sebastian. I know hard to believe.

Well to start trembling. If the overvaluation of 2003 could affect the financial system, the overvaluation of 2007 ...



I bring also a curiosity, Domain Registration www.crisis.es :




Yes, domain registered by the Presidency of the Government. Yes, in February 2006!.

How To Instal Matlab 2006b In Windows 7

oil ETFs (2) Crash of 1929

Following the entry " oil ETFs, I decided to write this second part. In that I focused more on leveraged ETFs, the differentiation between ETFs and TNCs, and the difficulty of achieving an alleged revaluations oil market in contango (plus bass).

I read the comments, which unlike what I meant, more people are interested in long-levered ETFs, among which the most widespread are USO and DBO.

there are many oil ETFs. The one I try either is basically for being the best known and therefore liquid, but the existing supply is immense. Liquid ETFs recommend looking for us to come and go as they pay as little as possible between the bid and offer prices. USE fork is now at 0.03%, and BOD about 0.5%. The difference is quite important for those who use them for trading. For those who think about taking long term positions is not as important. Regarding the costs of trading, also is good to note that there are many brokers that charge a percentage by size of operation, but a fixed cost per share. To make trading in ETFs through these brokers would be more appropriate to an ETF with a higher price than an ETF with a lower price.

The management fee is 0.5% in BOD and 0.45% in USE. As we see, almost identical. Then we must add the cost of fees the fund, a value much lower.

What is USO? Is the United States Oil Fund, whose business card can be found here , which has a portfolio of WTI futures March 2009.

What is BOD? Is the PowerShares DB Oil Fund, whose business card can be found here , which replicates the behavior of DBLCI-OY CL, and therefore must take WTI futures portfolio maturing in June 2009.

below includes comparison charts DBO, USO and USL, both during the bull market, as in the current bearish. USL explained what it was in " oil ETFs."






During the bull market we see as not very different behavior, although performance is somewhat lower USE. USL behavior appears to replicate more USO faithfully for most of the movement, but on top of the USL market profitability is well above the USO, and similar to the BOD.

During the bear market is more apparent the worst performance of the USO, and here it is definite that we believe the effect of contango, and that USO has a portfolio of futures maturing, while USL has a portfolio of futures of the next twelve months and the BOD is due June 2009. The contango situation accentuated the bill seems to happen in the long term USE. Anyway, the USO would be chosen for short trading, as its minimum fork allows us to operate at lower cost. Yes, keeping oil prices current contango disappear, USO would benefit, while BOD and above all, USL, would depreciate their contracts beyond. Widen further the contango would be preferable BOD or better USL. USL, as we noted, has the problem of relatively low liquidity, with a range too wide at times.

As soon as I said a reader, "Oil ETFs " I did not mention the effect of currency risk. I did for two reasons. First, because I am convinced that everyone is aware that oil priced in dollars, and second, because I do not usually cover foreign exchange transactions in commodities, because usually their price bears some correlation with the EURUSD, which cover can be counterproductive. I mean, to buy "X" oil, buy dollars. What must I do to cover it? Buy "X" EURUSD. In this way I suppose if the dollar down (my investment in oil), rising from my EURUSD is going to compensate the effect of the devaluation of the currency of my investment. But it often happens that gold and oil rise when the EURUSD rise, and fall as low. With what is easily when going up the dollar (euro low, my low coverage), oil is also down, and that when the dollar falls against the euro (my cover up) Oil rises as well. I'll try to explain it more simply, suppose that oil go up exactly the same as the EURUSD. Oil rises, but as my currency, the euro, rises as well as the oil price in euros does not change. Then we would not need coverage. Obviously false that they are fully correlated, but loosely correlated to causes that I usually do not use currency hedges with oil or gold.




(See also: The curious behavior of ETFs)

The Best Wishes Birthday In Arabic

Let's put ourselves in the shoes of an investor who lived the famous crash of 1929.

This will help us a chart of the Dow Jones from September 1929 until April 1930.

Just before the crash, the DJ played the maximum of 386 pts. Just over two months later, in November 1929, were the 195 pts, down 50% from recent highs. Blanching

: Buying now? You're crazy, If you are plummeting in two months and has lost 50%!, This happened to know where to arrive within two months!

December 1929 was not a bad month. It closed at 248 pts compared to 195 at least November. Had risen a 27%! from minimal. In January it climbed another 7.5% in February and March being months also bullish.

In March 1930 our investor "Scalding" go public again. It is clear that the worst is over, and standing outside already lost too much rise.










below the chart from the crash of 1929 to 1934. We see how effectively between November 1929 and April 1930 climbed 52.3%. Enough so that many were convinced they had seen the worst.



There were other increases
important, such as took place between December 1930 and February 1931, 27.5%, or June 1931, 17%.

All of them were able to make traps for investors because the minimum was reached in July 1932, DJ 40.6 pts. A loss from highs of 90%. not see new highs again until December 1954. Waiting 25 years to reach the same level, and regardless of inflation.




Now let's take a look at a chart of the DJ today:




Surely the worst is over already? I think not. Or even go up much more would believe if other indicators do not show positive signals. True that the overvaluation of the DJ prior to the crash of 1929 is not comparable to the DJ the end of 2007, and not insinuating that will fall 90% as then. Just my opinion that it is too early to get into equities, because currently it seems that is getting worse. It is normal with such brutal falls occur equally strong rebounds, proportional to the falls, but that does not mean anything. So far, only short trading. The long-term portfolio will have to wait.

Wishing A Friend Happy Journey Sms

oil ETFs

During these days has aroused great interest in the oil ETFs, seeing its price below $ 40 compared to almost $ 150 that came to see. Raw materials there are out there, and when we return to the path of growth 'll meet again price increases.


An ETF is an ETF, but some people mistakenly confuse ETFs and TNCs, and their difference is very important. Specifically discuss the two most popular products leveraged on oil: PowerShares DB Crude Oil Double Long ETN (DXO) and Ultra DJ-AIG Crude Oil ProShares ETF (UCO) .

Both products promise us a twice daily return of the underlying variation, only the first is done through the Commodity Index-Oil of Deutsche Bank, formed for a given basket of futures contracts, and the second doubles the daily performance of the Dow Jones Crude Oil Sub-Index. But the biggest difference between the two is that the first of them is not an ETF but a TNC, and the second one it is an ETF. How does this affect us? Therefore, that if you buy an ETF you are buying an investment fund contributions, with independent legal personality, while TNCs in what we are buying are some notes issued by a third, and in case of bankruptcy of this, we could lose our investment . Moreover, even a lowering of the rating of the issuer of the Notes may affect the price of the ETN.

I focused the explanation in long and leveraged products (which are those that are "fashionable"), but there are usually four products for every marketer, two for long positions and two for short positions, being in two leveraged one x2. Mention that the four products PowerShares (DXO, OLO, SZO, DTO) are TNCs and ProShare are ETFs. PowerShares also offers unlevered long BOD, and that it is ETF.

The management fee for these products is 0.95% per annum in the case of ProShares, 0.75% per annum in the four TNCs from Powershares and 0.5% for the PowerShares ETF BOD.




But what we are really buying when you buy, for example, UCO? We are buying oil futures on a short maturity, but not immediate. In particular portfolio now consists of CLH9, the future of March. So it is with most oil ETFs have nearly all maturities coming future. Consider how different maturities traded:

• CLH09 (March 09) $ 51.99
• CLJ09 (April 09) $ 54.11
• CLK09 (May 09) $ 55.55
• CLH10 (March 1910) $ 64.17
• CLH11 (March 11) $ 69.45

Suppose now buy an ETF for a long operation term because we believe that within a year the oil will be $ 64. What would win if the current contango oil and actually is $ 64 within a year? Not win anything, as being the future in a contango situation like the present, our ETF would have to pay the future of each maturity more expensive every time you rollover. This issue is very important for long-term operations, as we think that if oil prices rise, our ETF rises, and is not necessarily the case. Yes it is short term but not long.

there an ETF that is the exception to almost everyone else. This is the unlevered USL and it has a portfolio of futures with maturities over the next 12 months. Thus not every rollover affects, and if the situation is accentuated contango will benefit, but will be affected if the contango decreases, which is what is happening these days, because today the USL has purchased maturities throughout the year.

The contango situation is not as unusual as some think, not necessarily a market failure. It is logical in a situation of market saturation that future delivery is more expensive. It's not just because the market believes that future price will be higher, in fact sometimes that is not the case. What happens is that if the market is so busy it is difficult to find storage for overproduction, and that has a cost. Take advantage of the situation some oil companies, which store oil futures sold today and the chances of losing are zero (if the stock is insured).

Other products themselves would buy oil futures, but with the need to purchase a minimum of 500 barrels to 1000 barrels minis or regular, rollover and discomfort for long-term positions, and options.

oil stocks dismiss because although the benefit of oil rises, usually do not rise to the same extent that it, and because I bearish in equities.

Yes, I know that I miss CFDs, but I hate for anything beyond pure speculation in the very short term, what I have when I buy a CFD? I do not know. In the other products do not know.

Finally a warning: do not forget that leveraged ETFs are leveraged. Seem obvious, but just looks better with an example. Buy now a leveraged ETF and oil falls to $ 27. "$ 27 impossible?, Why?. Oil is $ 48.76, if you come down to $ 27 we could lose about 90%! of our investment in a leveraged long ETF.


Second part of article: Oil ETFs (2)