Sunday, December 27, 2009
Friday, December 25, 2009
Christmas Forex: A Note For New Traders
This one isn't directed to the Forex vets out there, because you learned this one a long time ago.
This is for the new traders who haven't experienced Forex during the Christmas season before.
As I'm sure you've already noticed, the market has essentially ground to a complete halt. This happens every year, and the reason is simple: most participants are out and about doing other stuff and are not in the market, so the liquidity is quite low.
For microscopic retail traders (that would be you and I), this is actually a fairly hazardous time to be involved in this stuff. Low liquidity means sharp, exaggerated price moves. What looks like a trend can whipsaw on you and quickly run the other way, plunging your account into the red. There are distractions, distractions, and more distractions at this time of the year, too.
This just isn't the time to be that involved in this stuff. After trading all year long, take a break! You've earned it (even if you've been losing money - this is tiresome stuff whichever way your fortunes turn). Maybe you don't celebrate Christmas, but that doesn't change the fact of the conditions of the Forex market at this time, so go find something enjoyable to do while we all wait for the new year.
This is for the new traders who haven't experienced Forex during the Christmas season before.
As I'm sure you've already noticed, the market has essentially ground to a complete halt. This happens every year, and the reason is simple: most participants are out and about doing other stuff and are not in the market, so the liquidity is quite low.
For microscopic retail traders (that would be you and I), this is actually a fairly hazardous time to be involved in this stuff. Low liquidity means sharp, exaggerated price moves. What looks like a trend can whipsaw on you and quickly run the other way, plunging your account into the red. There are distractions, distractions, and more distractions at this time of the year, too.
This just isn't the time to be that involved in this stuff. After trading all year long, take a break! You've earned it (even if you've been losing money - this is tiresome stuff whichever way your fortunes turn). Maybe you don't celebrate Christmas, but that doesn't change the fact of the conditions of the Forex market at this time, so go find something enjoyable to do while we all wait for the new year.
Thursday, December 24, 2009
Planned Parenthood: Abortions Run $350 to $900
I've been reading through more stuff about the health care malformation, particularly the factors that will come into play in the House-Senate reconciliation process, now that the DNC has officially committed itself to marching us all off of a cliff.
I'm hoping that the whole thing falls apart over abortion, and to that end I've been reading up on Bart Stupak's efforts, a Democrat member of the House from Michigan. In the middle of this article, I found this piece of info:
Two things come to mind. The first is that this is yet another example of a problem of perception people have about health insurance that is in part driving this nonsense forward, that it's not insurance if it does not cover every single little conceivable thing. Insurance is only meant to be a backstop that aims to restore you to the state you were in before some calamity struck. If your house burns down, your insurance replaces what you had, you do not get a better one. If your car gets wrecked, your insurance is supposed to replace it with a car of equal value to yours at the time of the accident. Health insurance should only be there to catch you if you fall seriously ill such that treatment requires balance sheet breaking expenditures, NOT to pay for getting hangnails removed, etc. If the medical service in question is something that could reasonably be paid out of pocket, then it should be.
$300 to $950 is not a back breaking expense. It should be paid for by the individual seeking the procedure. This is the kind of cash that can be easily set aside in small amounts over time (and everyone ought to in general). Mandating the inclusion of such things in coverage only drives up the cost of everyone's insurance unnecessarily.
The second thing that comes to mind, is simply this: you cannot include abortion coverage in any plan with forced enrollment or you will be forcing those of us who object to the practice to pay for it. Let me make this very clear: I will not participate in any such thing, ever. If you want to buy murder, pay for it yourself.
I'm hoping that the whole thing falls apart over abortion, and to that end I've been reading up on Bart Stupak's efforts, a Democrat member of the House from Michigan. In the middle of this article, I found this piece of info:
Abortions in the first trimester typically cost between $350 and $900, according to Planned Parenthood.
Two things come to mind. The first is that this is yet another example of a problem of perception people have about health insurance that is in part driving this nonsense forward, that it's not insurance if it does not cover every single little conceivable thing. Insurance is only meant to be a backstop that aims to restore you to the state you were in before some calamity struck. If your house burns down, your insurance replaces what you had, you do not get a better one. If your car gets wrecked, your insurance is supposed to replace it with a car of equal value to yours at the time of the accident. Health insurance should only be there to catch you if you fall seriously ill such that treatment requires balance sheet breaking expenditures, NOT to pay for getting hangnails removed, etc. If the medical service in question is something that could reasonably be paid out of pocket, then it should be.
$300 to $950 is not a back breaking expense. It should be paid for by the individual seeking the procedure. This is the kind of cash that can be easily set aside in small amounts over time (and everyone ought to in general). Mandating the inclusion of such things in coverage only drives up the cost of everyone's insurance unnecessarily.
The second thing that comes to mind, is simply this: you cannot include abortion coverage in any plan with forced enrollment or you will be forcing those of us who object to the practice to pay for it. Let me make this very clear: I will not participate in any such thing, ever. If you want to buy murder, pay for it yourself.
Monday, December 21, 2009
Ancient Greek Philosophy and Modern U.S. Politics In Three Cartoon Panels
Where was this when I was teaching Philosophy 101 at Washington State U.? My classes would have been so quick and effective:
Brilliant!
HT: Right Mind
Brilliant!
HT: Right Mind
Sunday, December 20, 2009
The USD/TRY/CAD Hedge Carry: Month 3, Still Kicking
It's almost the end of the third month since I launched my live USD/TRY/CAD hedge carry account. Close enough to just call it three and write about it, I think.
First and foremost, the most important detail: the account continues to hum along!
Since I last wrote about this account on November 1st, two events transpired that really put my young hedge carry attempt to the test.
The first event was relatively benign, but it degraded the performance of the account nonetheless. It came about on November 20th when the Central Bank of the Republic of Turkey decided to follow the trend of central banks around the world and lower the interest rate of the Turkish Lira. It was only a one-quarter point cut, but little bits add up, and less is less. Somewhere along the line my broker, Oanda, also decided to adjust their bid rate for TRY while also raising their ask rate on USD and CAD. All of this together meant less cash from daily interest swap payments flowing into my account.
Primarily, the reduced interest income only affected the portion of the monthly total that I do not draw out. When I first launched this account, my intention was to draw $5 per $100 "in play" ($68.76 per $100 actually invested in both sides of the hedge carry, the remainder sitting in the account to provide margin). At one point it became necessary to reduce my monthly draw target to $4.50 per $100, which was disappointing but necessary to avoid taking more out of the account than it was generating. Thanks to subsequent adjustments to the ask rates Oanda is charging for USD and CAD, I've been able to restore the draw target to $5 per $100.
The other big test, and really the serious one of the two, was the Dubai debacle. When the news hit about Dubai's debt problems, USD/TRY short traders ran for the exits. In a single day my account swung to a -54% unrealized loss and the available margin plummeted to zero. As equity markets around the globe began to follow suit, the greenback began to rise as per the usual when this sort of thing occurs, and thus USD/CAD began to move upward somewhat. The move up was not anywhere near the scale of the move USD/TRY made, but USD/CAD did perform its intended role within the context of this method somewhat, serving as an offset to any rise in the greenback versus the lira. Combined with my deliberate keeping of free cash in the account to pad the margin, a margin call was avoided.
I looked into the whole matter and came to the conclusion that it was mainly a "headline crisis" without much meat to it, so I waited for the event to pass and for things to get back to normal. Within about 48 hours my account was showing available margin again as people began buying TRY and the unrealized loss in the account began to shrink. This is one of the potential difficulties of this trading method: the available margin must be at least equal to your intended monthly withdrawal at the moment you order it or you cannot get it out of the account. Following this event, I've begun buying into the trade with subsequent deposits slowly, putting the cash into play in smaller pieces when I see the chart formations I use as entry signals. This slows down the growth of the income of the account, and it lowers to total interest rate, but the benefit of the enhanced margin outweighs these minor issues. Ultimately, once the portion of the income I draw reaches my long term target, this is what I intend to allow to happen anyway, that the leverage and effective interest rate of the total account should fall as the interest portion I don't withdraw stacks up in the account, which will enhance the safety and stability of it all.
Finally, at the time of this writing, the effective interest rate of the account (what I call the interest divided by the amounts I've deposited, minus deposits not yet in play and exclusive of accumulated interest) is 62.14% annually, and on the present total balance of the account it is 53.89%. In three more months, when the account is six months along, I'll post an update.
First and foremost, the most important detail: the account continues to hum along!
Since I last wrote about this account on November 1st, two events transpired that really put my young hedge carry attempt to the test.
The first event was relatively benign, but it degraded the performance of the account nonetheless. It came about on November 20th when the Central Bank of the Republic of Turkey decided to follow the trend of central banks around the world and lower the interest rate of the Turkish Lira. It was only a one-quarter point cut, but little bits add up, and less is less. Somewhere along the line my broker, Oanda, also decided to adjust their bid rate for TRY while also raising their ask rate on USD and CAD. All of this together meant less cash from daily interest swap payments flowing into my account.
Primarily, the reduced interest income only affected the portion of the monthly total that I do not draw out. When I first launched this account, my intention was to draw $5 per $100 "in play" ($68.76 per $100 actually invested in both sides of the hedge carry, the remainder sitting in the account to provide margin). At one point it became necessary to reduce my monthly draw target to $4.50 per $100, which was disappointing but necessary to avoid taking more out of the account than it was generating. Thanks to subsequent adjustments to the ask rates Oanda is charging for USD and CAD, I've been able to restore the draw target to $5 per $100.
The other big test, and really the serious one of the two, was the Dubai debacle. When the news hit about Dubai's debt problems, USD/TRY short traders ran for the exits. In a single day my account swung to a -54% unrealized loss and the available margin plummeted to zero. As equity markets around the globe began to follow suit, the greenback began to rise as per the usual when this sort of thing occurs, and thus USD/CAD began to move upward somewhat. The move up was not anywhere near the scale of the move USD/TRY made, but USD/CAD did perform its intended role within the context of this method somewhat, serving as an offset to any rise in the greenback versus the lira. Combined with my deliberate keeping of free cash in the account to pad the margin, a margin call was avoided.
I looked into the whole matter and came to the conclusion that it was mainly a "headline crisis" without much meat to it, so I waited for the event to pass and for things to get back to normal. Within about 48 hours my account was showing available margin again as people began buying TRY and the unrealized loss in the account began to shrink. This is one of the potential difficulties of this trading method: the available margin must be at least equal to your intended monthly withdrawal at the moment you order it or you cannot get it out of the account. Following this event, I've begun buying into the trade with subsequent deposits slowly, putting the cash into play in smaller pieces when I see the chart formations I use as entry signals. This slows down the growth of the income of the account, and it lowers to total interest rate, but the benefit of the enhanced margin outweighs these minor issues. Ultimately, once the portion of the income I draw reaches my long term target, this is what I intend to allow to happen anyway, that the leverage and effective interest rate of the total account should fall as the interest portion I don't withdraw stacks up in the account, which will enhance the safety and stability of it all.
Finally, at the time of this writing, the effective interest rate of the account (what I call the interest divided by the amounts I've deposited, minus deposits not yet in play and exclusive of accumulated interest) is 62.14% annually, and on the present total balance of the account it is 53.89%. In three more months, when the account is six months along, I'll post an update.
Saturday, December 19, 2009
Memorial Legislation
Since some think that the memory of the late Senator Ted Kennedy is a reason to pass a massive train wreck of a piece of legislation, I propose that we make a theme of that and continue.
That is why I am drafting the Mary Jo Kopechne Memorial Swimming Lessons Funding Bill. I propose that secretaries throughout our nation be given the means of saving their own lives so that when car rides with their drunken idiot bosses end in water landings, the event will have a happy ending instead of a death and a cover up.
Do it for the secretaries!
That is why I am drafting the Mary Jo Kopechne Memorial Swimming Lessons Funding Bill. I propose that secretaries throughout our nation be given the means of saving their own lives so that when car rides with their drunken idiot bosses end in water landings, the event will have a happy ending instead of a death and a cover up.
Do it for the secretaries!
Hello New Taxes!
I tell ya, when I don't feel like blogging, I really don't. (Also, hey, Russ - look! A new post!)
Anyway, some of this health care malformation crap I've been reading about this morning got my interest in this thing fired up again (and possibly the fact that it's nearly the end of 2009 and the profits on my blog are pretty low this year, relative to the last). I guess Ben Nelson of Nebraska has been successfully bought off with our money. Just goes to show that if you offer a whore enough money, you'll eventually get whatever you ask for. I'd be pleased with the restrictions on abortion he sought, but someone please start the countdown clock to the inevitable legislative circumvention of this "victory" - it'll happen.
So here comes the crowing about being "on the right side of history," the savings that will magically result from reducing supply (so sorry, no hip replacement for grandma because she's old), the reduced deficits (because when you raise taxes now and provide no benefits until five years from now, you can claim a "deficit reduction" - and don't worry, they won't raid the cookie jar just like they never did with Social Security... what, what?!), etc. etc. The only good thing I can see in the current proposals (thousands of pages of which will be revealed probably 24 hours or less before any vote) is the establishment of private health insurance plans that can be purchased by anyone in any state. As far as insurance premium costs go, that has been the real problem all along - the state-by-state hobbling of the health insurance market by legislative mandates. We could have nailed that one a long time ago by actually using the commerce clause of the Constitution correctly, but there's no way to do that while also stoking class warfare and generally attempting to advance socialism. And, hopefully, when the trash gets taken out in 2010, all of this unconstitutional nonsense can be thrown out, except for that part (and you House and Senate hopefuls out there really should consider decoupling HSA accounts from high deductible insurance plans - just let people establish HSA accounts, period).
But the funniest thing I've seen so far is the sucker bait that Harry Reid and the rest of the Merry Band of Comrades are putting out there for those of you who pertain to that last little bit about socialism that I just mentioned. From that article I linked:
That stuff in the bill? Probably makes you feel good, doesn't it? Finally gonna sock it to those evil, rich insurance companies, won't it?
No, it won't. It's total fluff. Check it out:
See that green part on the right? That's what is ALREADY spent on actually providing care for each dollar spent on health insurance. 80 cents on the dollar for individual plans? Already done. 85 cents on the dollar for group plans? Way ahead of ya. Conclusion? This is meaningless legislation purposefully crafted to make you think the DNC just did something for you (which, ironically, may allow the insurance industry to spend less on care than they already do - lol!), when in fact not one thing is going to change in regard to your access to anything until 2014... but your taxes will go up in the meantime, and then be funneled into all kinds of special interest pet projects that have nothing to do with health care. That way, when it comes time to actually start doing stuff like doling out those subsidies millions of you are no doubt salivating over, they'll get to say "oops! The money isn't there, we need to raise taxes more!" Having trouble finding a job now? Just wait.
So, to sum it up: Congrats! You just got screwed again.
I presently pay $82 per month for what I consider to be very good health insurance, got an HSA, blah blah. I'll be watching my premium like a hawk though, as I'm sure this will reverse the trend of a 50% slowing of annual insurance premium growth that occurred in recent years without the government getting more in the way (it's true, read it and weep). I've made it a long term project and goal to seek shelter in some foreign locale one day, one that is running in the opposite direction of where we're going (which happens to be a lot of the formerly socialist/communist nations out there, ironically). It gives me some mental peace and quiet, the possibility of escape. Go ahead, destroy the system by "fixing" it. I'll be the guy off on the horizon watching the train derail from the comfort of a deck chair, umbrella drink in hand.
Anyway, some of this health care malformation crap I've been reading about this morning got my interest in this thing fired up again (and possibly the fact that it's nearly the end of 2009 and the profits on my blog are pretty low this year, relative to the last). I guess Ben Nelson of Nebraska has been successfully bought off with our money. Just goes to show that if you offer a whore enough money, you'll eventually get whatever you ask for. I'd be pleased with the restrictions on abortion he sought, but someone please start the countdown clock to the inevitable legislative circumvention of this "victory" - it'll happen.
So here comes the crowing about being "on the right side of history," the savings that will magically result from reducing supply (so sorry, no hip replacement for grandma because she's old), the reduced deficits (because when you raise taxes now and provide no benefits until five years from now, you can claim a "deficit reduction" - and don't worry, they won't raid the cookie jar just like they never did with Social Security... what, what?!), etc. etc. The only good thing I can see in the current proposals (thousands of pages of which will be revealed probably 24 hours or less before any vote) is the establishment of private health insurance plans that can be purchased by anyone in any state. As far as insurance premium costs go, that has been the real problem all along - the state-by-state hobbling of the health insurance market by legislative mandates. We could have nailed that one a long time ago by actually using the commerce clause of the Constitution correctly, but there's no way to do that while also stoking class warfare and generally attempting to advance socialism. And, hopefully, when the trash gets taken out in 2010, all of this unconstitutional nonsense can be thrown out, except for that part (and you House and Senate hopefuls out there really should consider decoupling HSA accounts from high deductible insurance plans - just let people establish HSA accounts, period).
But the funniest thing I've seen so far is the sucker bait that Harry Reid and the rest of the Merry Band of Comrades are putting out there for those of you who pertain to that last little bit about socialism that I just mentioned. From that article I linked:
The legislation includes new limits designed to limit insurance company profits and overhead, by requiring them to spend 80 percent of their premium income on medical care for individual insurance policies, and 85 percent for group policies. The industry says such a limitation is unnecessary because profits generally are in the single digits.
That stuff in the bill? Probably makes you feel good, doesn't it? Finally gonna sock it to those evil, rich insurance companies, won't it?
No, it won't. It's total fluff. Check it out:
See that green part on the right? That's what is ALREADY spent on actually providing care for each dollar spent on health insurance. 80 cents on the dollar for individual plans? Already done. 85 cents on the dollar for group plans? Way ahead of ya. Conclusion? This is meaningless legislation purposefully crafted to make you think the DNC just did something for you (which, ironically, may allow the insurance industry to spend less on care than they already do - lol!), when in fact not one thing is going to change in regard to your access to anything until 2014... but your taxes will go up in the meantime, and then be funneled into all kinds of special interest pet projects that have nothing to do with health care. That way, when it comes time to actually start doing stuff like doling out those subsidies millions of you are no doubt salivating over, they'll get to say "oops! The money isn't there, we need to raise taxes more!" Having trouble finding a job now? Just wait.
So, to sum it up: Congrats! You just got screwed again.
I presently pay $82 per month for what I consider to be very good health insurance, got an HSA, blah blah. I'll be watching my premium like a hawk though, as I'm sure this will reverse the trend of a 50% slowing of annual insurance premium growth that occurred in recent years without the government getting more in the way (it's true, read it and weep). I've made it a long term project and goal to seek shelter in some foreign locale one day, one that is running in the opposite direction of where we're going (which happens to be a lot of the formerly socialist/communist nations out there, ironically). It gives me some mental peace and quiet, the possibility of escape. Go ahead, destroy the system by "fixing" it. I'll be the guy off on the horizon watching the train derail from the comfort of a deck chair, umbrella drink in hand.
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