Author Archives: Andrew Busch

CNBC Squawk on the Street Trade:

By Andrew Busch | Published: February 22, 2012

Today at 10:25AM ET, I’ll be appearing on CNBC’s Squawk on the Street discussing the EUR and Friday’s UK GDP data.

Here are the major points:
• EUR/USD is stalling and looks to be developing a new short term range between 1.3025-1.3325.
• The near record EUR CFTC position shorts as well as EUR/JPY short covering is currently containing any downside for EUR/USD.
• EUR/GBP is also rallying today as the Bank of England minutes showed 2 members wanting more QE and the pair appears to have broken out of its 0.8250-0.8425 range.
• This sets up an opportunity to … …READ MORE

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Why the Republican debates are like votes in Greece

By Andrew Busch | Published: February 22, 2012

So far, the Republican primary has contained these candidate themes:
• The rise and fall of Newt Gingrich.
• The rise, the fall, the rise again of Rick Santorum.
• The persistent meandering of Mitt Romney.
• The inconsistent voter appearing to make a decision in the booth.

In January, I wrote that I thought this primary would go all the way to the convention due to voter uncertainty and was my major call for US politics. With each shift in sentiment by the Republican base towards the current field, this call looks more and more likely with even the … …READ MORE

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US Fin Reg could hurt this week

By Andrew Busch | Published: February 21, 2012

US financial regulation could hit this week
To provide some perspective on the history of US financial regulation, here are the major pieces and their legislative page length.
• 1864: US banking system created with 29 pages.
• 1913: US Federal Reserve System created with 32 pages.
• 1933: US Banking Act or Glass-Steagall Act created with 37 pages.
• 2010: US Wall Street Reform and Consumer Protection Act created with 838 pages.
Within the Wall Street Reform act or Dodd-Frank, there is a section of 11 pages dealing with the so-called Volcker Rule. Last number, four US regulators put … …READ MORE

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CNBC Money in Motion Japanese Yen update:

By Andrew Busch | Published: February 21, 2012

Here was the information from Friday’s show:
Original trade: BUY USD/JPY 76.40
TARGET 81.45
BUY 76.40
STOP LOSS 74.90

• For USD/JPY long, I recommended buying on 1/27.
• On 1/30, the market traded to 76.40. It traded as low as 76.05 on 2/1.
• Today, it’s put in a new high (from the low) at 79.84.

What to do now?

• The concept was to trade the range that existed until the slight downtrend channel pattern changed.
• USD/JPY has now broken above the top end of that channel at 78.10 with the 10/31/11 high at 79.55 in play.… …READ MORE

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BU Special: Volcker Rule

By Andrew Busch | Published: February 17, 2012

BU Special: Volcker Rule
In an effort to restrict risky trading activities at banks that operate with federal guarantees, the 2010 Dodd-Frank Act included a section named after former Federal Reserve Chairman Paul Volcker that banned proprietary trading. According to Bloomberg, t he proposal included a series of exemptions for permissible market-making trading, underwriting and hedging transactions. “Lawmakers exempted market-making from the rule, along with certain forms of hedging and underwriting, because of concerns that a broad ban on proprietary trading could bring some U.S. and world markets to a halt.”…….

- Read More -… …READ MORE

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Full BU with Apple pic, US data, and Fast Money Trade

By Andrew Busch | Published: February 16, 2012

Thursday February 16th, 2012

Apple Impact: For those that missed it, yesterday the WSJ had a nice graph of Apple’s impact on the market…..
Greece Drive-by: My view remains that the risk is for the negotiations between Greece and the EU to continue all the way up until March 20. Why? Because it’s only via this threat of default can the EU force Greece to enact their austerity measures. With an election coming up in April, the risk is that one of the candidates states they will renegotiate the terms to win over the electorate…..
US Econ Data: BMO’s Jennifer … …READ MORE

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US year end train wreck

By Andrew Busch | Published: February 14, 2012

In a somewhat stunning turn of events, the House Republican leadership has decided to add $100 billion to the US deficit by passing a 10-month extension of a Social Security payroll tax cut without finding offsets to pay for it. This comes within 24 hours of hyper-criticism (much deserved) of President Obama’s budget. (One of my favorite parts of the Obama budget is the use of a peace dividend stemming from ending the wars in Iraq and Afghanistan. Sounds great, until you realize that both wars were not paid for and therefore there is no honey pot of money to … …READ MORE

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Engage China’s note for Xi Jingping

By Andrew Busch | Published: February 13, 2012

While in the United States meeting with President Obama, China’s Vice President Xi Jingping will be receiving a letter from a coalition of 12 financial serivce trade associations called Engage China. This group wants to get China to open up their financial services sector (among other things) and allow US companies to compete for the domestic Chinese banking/insurance/brokerage dollar.

Here are their main points:

“The fastest way for China to acquire the modern financial system it needs is to open its
financial sector to greater participation by foreign financial services firms. We look forward to
working with you and your … …READ MORE

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Currency Markets=overall market direction

By Andrew Busch | Published: February 13, 2012

With the Greece parliament passing the new austerity measures, the foreign exchange markets are buying risk with AUD, NZD and ZAR the top performers. The US dollar is down against 15 of the 17 major currencies. The EUR rallied from 1.3180 to 1.3280 on the Greek news and the comments from Chinese Premier Wen Jiabao saying that they would “fine tune” their economy starting this quarter.

- Read More -… …READ MORE

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And the big China one says, “Roll-over”:

By Andrew Busch | Published: February 13, 2012

China has instructed its banks to embark on a mammoth roll-over of loans to local governments, delaying the country’s reckoning with debts that have clouded its economic prospects according to the FT. “China’s stimulus response to the global financial crisis saddled its provinces and cities with Rmb10.7tn ($1.7tn) in debts – about a quarter of the country’s output – and more than half those loans are scheduled to come due over the next three years.”

This will allow these entities to avoid a default and allow these banks from having to write-down the debt. Like most fiscal legerdemain, the cost … …READ MORE

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