One Possible Explanation For The Plunging Euro:

Zero Hedge ^ | 8/13/10 | Tyler Durden

[Grim]

One Possible Explanation For The Plunging Euro:
Pension Accounting Change To Impact European Deficit Calculations

There has been no explanation for this sudden weakness, although a reader proposes a very troubling explanation:

As you might have heard 9 mainly EU-newbies sent a letter to the EC demanding to change the current system of account deficit calculation. They argue their pension reforms should be accounted for in the calculation. The letter was obtained by dpa-afx. Could be a reason for the dropping Euro.

Of course, should this "reform" be enacted, Europe's deficits are likely to surge materially overnight, extinguishing any optimism that Europe has managed to avoid the crash. We can't wait until this hits the major newsstreams.

IN THE COMMENTS SECTION

by william the bastard
on Fri, 08/13/2010 - 11:32
#520105

More evidence for the Hindenburg Omen. The indicator may suggest “a savage equity downturn is imminent,” said Albert Edwards, a London-based strategist at Societe Generale SA

---

I've never heard of the Hindenburg Omen.

Here's what Wikipedia says about it:

Hindenburg Omen

Apparently, one occurred yesterday, Aug 12

And, incidentally, the last one occurred July 2008. See below how that turned out.

Crash Landing

[Moonman62]

Technical indicators are a great waste of time. The problem with our economy is the government. If the government would get out of the way, the economy would take off like a rocket. I don’t see that happening any time soon, though. I think the economy will tread water at best.

[Deagle]

Mercy, isn’t that the truth!

[familyop]

Many investors sold their bonds in Europe and bought US bonds for the commonly known reason.

[Deagle]

Heh... the worst thing is that US bonds are going to be going down shortly...and where will they go then?

[familyop]

Agreed. At least some of them will probably move their investments to Asia or South America.

[Deagle]

Heh, aren’t we all...

[Deagle]

Really, it is much worse that I am joking about. One, our bonds are going to be down and we are not going to be able to respond appropriately. Anyone invested is going to lose money. There are really few alternatives except the foreign market. Who will be the winner in this market is still up for grabs. India, China, South Korea, even Japan, who knows at this point. Good luck fellows...

[ReleaseTheHounds]

If the government would get out of the way, the economy would take off like a rocket.

While I'm sure I agree with your sentiments, at this point, the government can't just "get out of the way" -- it has to have major structural reforms for most of its entitlement programs otherwise the country goes bust in about 5-10 years. So we need more than just gridlock -- we need to rollback government, get government spending and programs under control and get a tax system that promotes private sector growth -- all that will require much reform similar to Congressman Ryan's Roadmap.

Technical indicators are a great waste of time.

I disagree with you here, too. Technical indicators what has been happening in the markets -- the strength and weaknesses in prices; the trends; the volatility and uncertainty. Interpreting technical indicators may be a "waste of time" but I would challenge that as well. But I think I would agree that with all of the government manipulation and interference, it makes technical analysis very difficult because of the confusion and obfuscation inherent in government interference: price discovery is thwarted and investors are lured to due stupid things. JMHO.

PS: I like your screen-name. I use something similar on another website

[Moonman62]

PS: I like your screen-name. I use something similar on another website

Thanks. You wouldn't believe how many times I've been called Moonbeam by people I've pissed off.

I like using charts and indicators like moving averages when I look at a stock, but when it comes to making money, it's hard to beat strategies like dollar cost averaging, fundamental analysis and diversification. I've known people with rooms full of computers and monitors who still couldn't make money in the long run. You can start a company and hire Phd Quants to shave a penny here and a penny there, but it seems like they always get snagged by something they didn't account for.

The best way to make money is to take advantage of the law, such as what Warren Buffet does by shielding his capital gains from taxes by keeping them in insurance companies. Bribes and other influences over lawmakers is probably a sure fire way to make money too. A person could have made a fortune in commodities stocks by studying W early on.

There was a story recently about how Steve Jobs lost about $10 billion dollars because he got his options repriced a few years ago. (He took fewer shares in exchange for a better price). Not even the top guy knows for sure what's going to happen.