Forex -eurousd in M formation?

Seem like in the making of a M formation. Go for a short with stop loss 1.38891 which is breaking of the top.

forex-eurousd

Euro broke trendline.

Forex -Eurousd :Wait for better confirmation if want to be on the safer side.

Higher probability of it going up. On a safer side, one could wait for it to break the trendline which is around 1.376.

Fear of 'Catastrophic' Crash Rising Despite Bull Market

In an unprecedented move, the number of investors fearing a catastrophic stock market crash is rising even with the stock market at 2 ½ year highs.

The unusual dislocation comes from two distinct reasons: a lack of trust in the U.S. financial markets following the so-called Flash Crash last May and the collapse of Lehman Brothers in 2007.

This means the Flash Crash Advisory Commission that met on Friday has a long way to go in restoring confidence to the point that will bring the individual investor back into a market still ruled by high frequency trading, exchange-traded funds and leveraged hedge funds.

The Yale School of Management since 1989 has asked wealthy individual investors monthly to give the “probability of a catastrophic stock market crash in the U.S. in the next six months.”

In the latest survey in December, almost 75 percent of respondents gave it at least a 10 percent chance of happening. That’s up from 68 percent who gave it a 10 percent probability last April, just before the events of May 6, 2010.

“Even though the market is firing on all cylinders, that fear of big losses still looms large for investors in a way that it didn’t prior to the last bear market,” wrote analysts from Bespoke Investment Group in a report citing the Yale data. “Clearly, the financial crisis and the collapse it caused has impacted investor psyche in a big way.”

In the past, fears of a stock market crash in the Yale survey rose as the market declined because investors lost confidence in the economy and companies as share prices declined, and expected a capitulatory end to a bear market. For example, in March 2009 close to 85 percent of investors gave a crash at least a 10 percent chance of occurring. That record high in distrust and low in confidence marked a 12-½ year low in the S&P 500. Read more

Euro Rises After Bini Smaghi Says ECB May Raise Rates as Inflation Climbs

The euro reached a one-week high against the dollar after European Central Bank Executive Board Member Lorenzo Bini Smaghi said the bank may need to raise interest rates as global inflation pressures mount.

The shared currency erased earlier losses that followed data showing producer prices inGermany rose 1.2 percent, faster than forecast. The pound remained higher against the euro and the dollar amid speculation that inflation may soon force Bank of England policy makers to raise interest rates.

“Yield plays are and have been the main focus of the foreign-exchange markets,” said Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London. “These guys are ratcheting up their rhetoric and are clearly concerned about what weakness in currencies can do to imported inflation.”

The euro rose 0.1 percent to $1.3627 at 9:10 a.m. in New York and touched $1.3646, the highest level since Feb. 10. Earlier it dropped as low as $1.3546. The common currency gained 0.3 percent to 113.69 yen, from 113.37 yesterday. The dollar was little changed at 83.34 yen, compared with 83.31. Read more

For Germany’s Banks, a Grim Future

Want to buy a money-losing bank with a damaged business model in an overcrowded market? Neither, it seems, do many other people.

Germany may have Europe’s largest and most robust economy, but investors are not clamoring for a piece of its banking market.

An auction for WestLB, a publicly owned institution in Düsseldorf that was once Germany’s third-largest lender, has attracted just two bidders, a lawyer hired to sell the bank said on Wednesday.

The woes of WestLB, which has received $11 billion in taxpayer support since 2009, are symptomatic of a larger problem in the German economy.

Many of its biggest banks are still on government life support after making bad lending bets during the bubble years.

And with their access to cheap capital long gone, their prospects of becoming profitable again are dubious.

“The fragility of the German banking sector poses a substantial threat to sustained economic recovery in Germany,” said Jörg Rocholl, a professor at the European School of Management and Technology in Berlin. “The excellent economic situation is not mirrored by the banking system.” Read more

Federal deficit on track for a record this fiscal year Government debt to exceed U.S. economy

President Obama‘s budget, released Monday, was conceived as a blueprint for future spending, but it also paints the bleakest picture yet of the current fiscal year, which is on track for a record federal deficit and will see the government’s overall debt surpass the size of the total U.S. economy.

Mr. Obama‘s budget projects that 2011 will see the biggest one-year debt jump in history, or nearly $2 trillion, to reach $15.476 trillion by Sept. 30, the end of the fiscal year. That would be 102.6 percent of GDP — the first time since World War II that dubious figure has been reached.

And the budget projects the government will run a deficit of $1.645 trillion this year, topping 2009’s previous record by more than $230 billion. By contrast, 2007’s deficit was just $160 billion altogether.

Still, amid the other staggering numbers in the budget Mr. Obama sent to Congress on Monday, the debt stands out because Congress will need to vote to raise the debt limit later this year, and because the numbers are so large.

In one often-cited study, economists Carmen Reinhart and Ken Rogoffhave argued that when a nation’s gross debt passes 90 percent it hinders overall economic growth. The government measures debt several ways. Debt held by the public includes the money borrowed from Social Security’s trust fund.

President Obama speaks Monday at Parkville Middle School and Center of Technology in Parkville, Md. At right is Jacob Lew, Office of Management and Budget Director. (Associated Press)

Actual debt held by the public will reach 72 percent of GDP in 2011 and will climb as the Social Security trust fund’s finances continue to deteriorate.

Republicans argued Monday that the Obama administration‘s new budget fails to appreciate the depth of the country’s fiscal plight. Read more

US Trade Deficit Widens to $40.6 Billion in December

The trade deficit widened in December, closing out a year in which America's trade gap ballooned by the largest amount in a decade.

AP

The Commerce Department says the deficit in December increased 5.9 percent to $40.6 billion. It grew because a 2.6 percent gain in imports outpaced a 1.8 percent rise in exports.

For all of 2010, the U.S. trade deficit rose to $497.8 billion, a 32.8 percent surge. It was the biggest annual percentage gain since 2000. In 2009, the deficit had fallen to the lowest point in eight years as demand for imports plunged.

Economists believe the deficit will keep widening in 2011 but that U.S. manufacturers will benefit from a weaker dollar, which makes their goods more competitive in foreign markets. Read more