Andrew Busch

Triggers for Troika Action on Europe

Andrew Busch — Thu, 17 May 2012 15:14:04 +0000

Quiz Time: In 5 seconds or less, name a Spanish bank that is trading above €5 a share.

BEEP! (Sound of bug zapper)

Trick question, there isn’t one….SAN 4.40

BBVA 4.72
BKIA 1.43
POP 1.88
SAB 1.49
CABK 2.19
BKT 2.93

Triggers for Troika Action

The point of this little quiz farce is to highlight the Spanish banks’ delicate condition, and this is likely where the true battle for the Euro zone lies. While Greece appears ready to implode, the ECB, the IMF, and the EU (Troika) will be mapping out a contagion ring fence plan for Spain. The … ...READ MORE

Today’s top market events

Andrew Busch — Thu, 17 May 2012 15:10:49 +0000

1. ECB – President Draghi announced the ECB will exclude four Greek banks from regular liquidity operations, a move to protect the Central Bank against losses from a possible Greek eurozone exit. The Euro Stoxx 50 is -1.19%, led by financials, which are -2.73% on the session. The euro’s one-day spot return against the USD is -0.08%
2. Spain – Bankia’s depositors have removed a reported EUR 1 bln since last week’s effective nationalization. The stock has lost nearly 50% since 30 April. The IBEX is -1.36% on the session, led by financials, -2.69%. Look for a Moody’s downgrade of … ...READ MORE

Global View: US n Japan best in laundry

Andrew Busch — Tue, 15 May 2012 15:39:35 +0000

Today’s good US economic data helped stabilize the US equity markets today despite the negative news out of Europe and Greece. The US economy continues to show why global investors prefer (See Milken Conference commentary) to put money into equities here and reduce exposure to Europe. This is also why there is limited downside to how much Europe impacts what happens in the United States. The key question for the markets is whether there will be a global financial contagion created by the entire Euro zone breaking up versus a just reduced growth environment for Europe due to austerity.

From … ...READ MORE

Look Back in Anger: Money-in-Motion trade went south

Andrew Busch — Tue, 15 May 2012 15:29:25 +0000

Friday on the show for Up All Night, I advocated going long EURJPY ahead of the Euro zone GDP numbers today. I was anticipating a better-than-expected number out and wanted to fade all the negative newsflow that was surrounding Europe. Here was the structure:

CNBC Trade for Money In Motion

MIM Up All Night

Date Time Event

May 14th 21:30 PM ET RBA board minutes

May 15th 05:00 AM ET Euro zone Q1 GDP

May 17th 19:50 PM ET Japan Q1 GDP

Euro zone playbook

Scenario Trade

If EZ GDP< -0.4% Sell EUR/Buy GBP

If EZ GDP-0.2% Buy EUR/Sell JPY

Trade

Buy EUR/Sell … ...READ MORE

Hoosier Loser Lesson

Andrew Busch — Thu, 10 May 2012 13:55:29 +0000

On Tuesday, Indiana Republican voters turned away from a senator who had been in Congress for 36 years by voting out 80 year old Richard Lugar and voting in Tea Party backed Richard Murdock. This was not a close race and Murdock won with over 60% of the vote. Yet, Lugar didn’t acknowledge that the electorate had sent a clear message and instead lashed out at his opponent. “His (Murdock) embrace of an unrelenting partisan mindset is irreconcilable with my philosophy of governance and my experience of what brings results for Hoosiers in the Senate. In effect, what he has … ...READ MORE

Simple truism: the more you regulate, the less you get

Andrew Busch — Wed, 09 May 2012 13:55:04 +0000

Last night, former Bank of England governor Sir John Gieve said that the regulatory drive for banks to strengthen their safety buffers is dragging down lending and holding back the recovery. This is the conundrum for regulators in banking as they attempt to strengthen the financial system by making banks hold more reserves, which creates the unintended consequence of lower lending that undermines the economy and spirals back into undermining the financial system. … ...READ MORE

The AB currency trade disclaimer

Andrew Busch — Wed, 09 May 2012 13:50:39 +0000

The currency trades I put forward today are outlines and not intended to be precise. Please remember, you must adjust to new information and price movements that occur. These trades are not meant to be set in stone and followed dogmatically. The best traders are those that stay disciplined with their stops while adjusting their entry points and profits to reflect new information. … ...READ MORE

Canadian Unemployment Trade:

Andrew Busch — Wed, 09 May 2012 13:47:43 +0000

Playbook for how to trade Friday’s Canadian unemployment numbers.

April Canadian unemployment is out on Friday at 8:30 AM ET

Market expectations are for 7.3% up from 7.2% in March.

The net change in employment is expected to be +10k, down from 82.3k in March.

The Canadian dollar has been beat up this week with oil dropping to multi-week lows and has lost 2% since April 30th.

Playbook:
1. If Canadian UE<7.2% and oil > $98.00, then sell USD/Buy CAD.
2. If Canadian UE7.3% and oil < 96.00, then buy USD/Sell CAD.

I think #1 is best for the biggest move and allows us to trade the 0.9800-1.0050 … ...READ MORE

CNBC EUR/USD Trade for Squawk on the Street

Andrew Busch — Wed, 09 May 2012 13:43:51 +0000

Today at 10:25 AM ET, I’ll be appearing on CNBC’s Squawk on the Street discussing the political uncertainty in Europe and how to trade it. Below is the outline for the trade and appearance.
• Today, the EUR/USD put in new lows as concerns over European political instability weigh on the currency: Greek exit and Spanish banks.
• There is no path forward for growth in Europe as the ECB won’t ease and the new governments are unable to provide new fiscal stimulus.
• This translates into further economic weakness, falling tax receipts and reduced ability to service debt.

Trade: … ...READ MORE

Topics for this week’s Money in Motion

Andrew Busch — Thu, 03 May 2012 16:15:13 +0000

Topics for Money in Motion:
Here are the potential topics for Friday’s show.

Send me a note if there’s another area you want to see explored.

1. Elections in France and Greece.
2. The US Unemployment Rate.
3. Will the Fed go for QE3 is #2 is weak?
4. Bank of England meeting.
5. Ron Paul and his FT article “Our Central Bankers are intellectually bankrupt”

Tweet back and let me know what you think…..… ...READ MORE