NEW YORK (AP) -- A potential $3 billion in new capital still might not be enough to keep Ambac Financial Group Inc. from being downgraded, a Bank of America Securities analyst said Monday.
"In our view, there is still a meaningful risk of downgrades for Ambac," analyst Tamara Kravec wrote in a research note. "Moreover, the question would remain: is $3 billion enough?"
Ambac (ABK) could reach an agreement as early as Monday with a group of banks to provide capital to help the beleaguered bond insurer, The Wall Street Journal reported.
The Wall Street Journal said Ambac could raise about $3 billion as it looks to bolster its capital reserves to cover any potential spike in claims, as a portion of the bond insurance market is expected to sour.
Banks providing funding for the new capital raise could include Citigroup Inc. (C, Fortune 500), UBS AG (UBS), Wachovia Corp. (WB, Fortune 500) and Royal Bank of Scotland Group PLC, (RBS) the paper said.
Bond insurers pay out claims when issuers fail to make payments. Ratings agencies have worried in recent months that a sharp rise in defaults among mortgages could spark a wave of defaults among bonds backed by the troubled loans - bonds insured by companies like Ambac. That rise in claims could become unmanageable for the insurers and has forced them to look for outside sources to raise cash to cover potential future defaults.
Fitch Ratings already downgraded Ambac from its crucial "AAA" financial strength rating. Moody's Investors Service said it would complete reviews of ratings on bond insurers by the end of the month.
Bond insurers essentially need a "AAA" rating to book new business.
Even if the capital is enough for Ambac to maintain its "AAA" ratings from Moody's and Standard & Poor's, it will be dilutive to shareholders.
"An equity capital raise of $2.5 billion would be about 20% to 25% dilutive to book value," Kravec wrote in the note.
Kravec maintains a "Neutral" rating on Ambac with a price target of $7.
Shares of Ambac rose 38 cents, or 3.6 percent to $11.09 in premarket trading.
Monday, February 25, 2008
Stocks flat at the start
NEW YORK (CNNMoney.com) -- U.S. stocks were little changed at Monday's open as investors awaited a report on existing home sales and a week's worth of comments from Federal Reserve officials.
The Dow Jones industrial average gained 0.1 percent. The Nasdaq composite index and the Standard & Poor's 500 index each rose less than a point.
The Dow Jones industrial average gained 0.1 percent. The Nasdaq composite index and the Standard & Poor's 500 index each rose less than a point.
Tuesday, February 19, 2008
Treasurys fall as stocks advance
Treasury prices dropped Tuesday as investors heartened by Wal-Mart Stores Inc.'s earnings report moved funds back into the stock market.
Wal-Mart, the world's largest retailer, is viewed as a bellwether not only of the retail sector, but of consumer spending. The fact that it managed an improved profit was taken as a sign that the beleaguered consumer may still be active, despite recent indications to the contrary.
The stock and government bonds often trade in opposite directions. Treasurys tend to sell off when investors are feeling confident enough to buy equities and other assets carrying more risk. That was the case Tuesday as investors returned from the Presidents Day holiday and poured money into stocks.
The benchmark 10-year Treasury note fell 7/32 to 97 with a yield of 3.86 percent, up from 3.77 percent late Friday. Prices and yields move in opposite directions.
The 30-year long bond lost 13/32 to 95 16/32 with a yield of 4.65 percent, up from 4.58 percent at the end of last week.
The 2-year note lost 1/32 to 100 8/32 with a yield of 1.99 percent, up from 1.92 percent late Friday.
Worries about inflation also contributed to the selling pressure on Treasurys. Investors were taken aback by a vigorous commodities market rally that put crude oil just a short distance from the closely watched $100 a barrel level. Higher energy prices are one of the main drivers of inflation.
Bond investors fear recent heavy interest rate reductions by the Federal Reserve have put the economy on an inflationary spiral.
The bond market has an ambivalent attitude toward rate cuts, which are considered positive because they cheapen the cost of money and stimulate market activity. At the same time, cheaper money generally produces higher prices over time and inflation erodes the value of fixed income investments.
The Federal Reserve has lowered the overnight Fed funds target by 1.25 percentage points since the start of 2008 and signaled that more rate cuts are being considered. This has led to worries that a Fed overly focused on stimulating troubled financial markets has grown lax about inflation.
"Traders are worrying more and more about inflation, especially when the Fed seems to be content with driving short-term yields lower and lower," said Kevin Giddis, managing director of fixed-income trading at Morgan Keegan.
Numerous recent vigorous Treasury market rallies in recent weeks have driven yields to levels that many bond market investors believe are too low. Some fear the market has priced in an excessively negative scenario for an economy that is weakening but is not in free fall.
Action Economics said that there are concerns in the market that the Treasury market is "overbought" and noted market speculation that bank and mortgage accounts Tuesday were aggressively selling longer-term bonds.
Wal-Mart, the world's largest retailer, is viewed as a bellwether not only of the retail sector, but of consumer spending. The fact that it managed an improved profit was taken as a sign that the beleaguered consumer may still be active, despite recent indications to the contrary.
The stock and government bonds often trade in opposite directions. Treasurys tend to sell off when investors are feeling confident enough to buy equities and other assets carrying more risk. That was the case Tuesday as investors returned from the Presidents Day holiday and poured money into stocks.
The benchmark 10-year Treasury note fell 7/32 to 97 with a yield of 3.86 percent, up from 3.77 percent late Friday. Prices and yields move in opposite directions.
The 30-year long bond lost 13/32 to 95 16/32 with a yield of 4.65 percent, up from 4.58 percent at the end of last week.
The 2-year note lost 1/32 to 100 8/32 with a yield of 1.99 percent, up from 1.92 percent late Friday.
Worries about inflation also contributed to the selling pressure on Treasurys. Investors were taken aback by a vigorous commodities market rally that put crude oil just a short distance from the closely watched $100 a barrel level. Higher energy prices are one of the main drivers of inflation.
Bond investors fear recent heavy interest rate reductions by the Federal Reserve have put the economy on an inflationary spiral.
The bond market has an ambivalent attitude toward rate cuts, which are considered positive because they cheapen the cost of money and stimulate market activity. At the same time, cheaper money generally produces higher prices over time and inflation erodes the value of fixed income investments.
The Federal Reserve has lowered the overnight Fed funds target by 1.25 percentage points since the start of 2008 and signaled that more rate cuts are being considered. This has led to worries that a Fed overly focused on stimulating troubled financial markets has grown lax about inflation.
"Traders are worrying more and more about inflation, especially when the Fed seems to be content with driving short-term yields lower and lower," said Kevin Giddis, managing director of fixed-income trading at Morgan Keegan.
Numerous recent vigorous Treasury market rallies in recent weeks have driven yields to levels that many bond market investors believe are too low. Some fear the market has priced in an excessively negative scenario for an economy that is weakening but is not in free fall.
Action Economics said that there are concerns in the market that the Treasury market is "overbought" and noted market speculation that bank and mortgage accounts Tuesday were aggressively selling longer-term bonds.
Thursday, February 14, 2008
Expose Yourself! A Powerful Technique for Breaking Emotional Patterns in Trading
Traders love patterns. We trade chart patterns, oscillator patterns, historical patterns, cyclical patterns—you name the pattern, chances are there’s someone trading it. Much of trading boils down to pattern recognition and the ability to quickly identify and act upon profitable patterns as they occur. This is particularly challenging for active futures and options traders, who must read the patterns, make their decisions, and place their orders within a matter of seconds.
Processing market patterns in the midst of our own emotional patterns—our tendencies toward impulsivity, hesitation, frustration, and regret—is one of the greatest challenges of active trading.
It is always sobering for traders to realize that they are every bit as patterned as the markets they’re trading—and sometimes far more so. In this article, I will draw upon two decades of experience as a clinical psychologist to illustrate a powerful technique for interrupting and changing repetitive emotional and behavioral patterns that disrupt trading. The technique is a cognitive-behavioral method known as exposure, and—in the Ranger tradition described by Brace Barber, Linda Rashcke, and me in September’s issue—it is a powerful tool for challenging oneself for exemplary performance...
Processing market patterns in the midst of our own emotional patterns—our tendencies toward impulsivity, hesitation, frustration, and regret—is one of the greatest challenges of active trading.
It is always sobering for traders to realize that they are every bit as patterned as the markets they’re trading—and sometimes far more so. In this article, I will draw upon two decades of experience as a clinical psychologist to illustrate a powerful technique for interrupting and changing repetitive emotional and behavioral patterns that disrupt trading. The technique is a cognitive-behavioral method known as exposure, and—in the Ranger tradition described by Brace Barber, Linda Rashcke, and me in September’s issue—it is a powerful tool for challenging oneself for exemplary performance...
The Laws of Charts
Great Ebook, explains in details al types of charts used in technical analysis, from the ebook: A typical 1-2-3 high is formed at the end of an up-trending market. Typically, prices will make a final high (1), proceed downward to point (2) where an upward correction begins; then proceed upward to a point where they resume a downward movement, thereby creating the pivot (3).
There can be more than one bar in the movement from point 1 to point 2, and again from point 2 to point 3. There must be a full correction before points 2 or 3 can be defined.
The number 2 point of a 1-2-3 high is created when a full correction takes place. Full correction means that as prices move up from the potential number 2 point, there must be a single bar that makes both a higher high and a higher low than the preceding bar or a combination of up to three bars creating both the higher high and the higher low. The higher high and the higher low may occur in any order. Subsequent to three bars we have congestion. Congestion will be explained in depth later on in the course. It is possible for both the number 1 and number 2 points to occur on the same bar.
There can be more than one bar in the movement from point 1 to point 2, and again from point 2 to point 3. There must be a full correction before points 2 or 3 can be defined.
The number 2 point of a 1-2-3 high is created when a full correction takes place. Full correction means that as prices move up from the potential number 2 point, there must be a single bar that makes both a higher high and a higher low than the preceding bar or a combination of up to three bars creating both the higher high and the higher low. The higher high and the higher low may occur in any order. Subsequent to three bars we have congestion. Congestion will be explained in depth later on in the course. It is possible for both the number 1 and number 2 points to occur on the same bar.
The Difference Between Forex & Shares
Advantage and favorable currency dealings first, is the continuation of dealing 24 hours a day. This leaves room for each dealer to devote part of his time, as circumstances allow for that. While some believe to do the job, while others see career professionally proficient in additional income lactation. They can spend a few hours in the afternoon or evening, regardless of the country or region where they live. The shares Treating the doomed Greenwich country belonging to him. In America, for example believe that the deal begins at 9:30 am and ends at 4:00 pm New York time.
2-in the currency market available at every moment trading conditions, regardless of the state of the economy generally. This situation imposes on the stock market retreat has long-lasting impossible to work. In currencies, a dealer can sell in the market and buy passiveness in the market is high. This provides the possibility of a profit in the case.
3-easily traded currencies due to the small number, Valeraesseh of not more than six pairs, and this offers the possibility of focus and analysis. It also raises the incidence in defining the goal and reduce the error rate, while the shares that are dealing with more than hundreds of thousands, confounding dealer sometimes opted to different ways unsafe side to identify and hand work.
4-in the currency market, you can obtain the free illusory deal, which trained on the progress of work, while not in the stock market. You can also obtain market news periodically and continuous, and the graph too. 5-in the currency market, you can start with the "Arab Online Brokers" deal in a mini-account gives you the danger of trains because Khsartk limited to one point in this account equal to the loss in the extreme case one dollar. This is impossible in other markets.
2-in the currency market available at every moment trading conditions, regardless of the state of the economy generally. This situation imposes on the stock market retreat has long-lasting impossible to work. In currencies, a dealer can sell in the market and buy passiveness in the market is high. This provides the possibility of a profit in the case.
3-easily traded currencies due to the small number, Valeraesseh of not more than six pairs, and this offers the possibility of focus and analysis. It also raises the incidence in defining the goal and reduce the error rate, while the shares that are dealing with more than hundreds of thousands, confounding dealer sometimes opted to different ways unsafe side to identify and hand work.
4-in the currency market, you can obtain the free illusory deal, which trained on the progress of work, while not in the stock market. You can also obtain market news periodically and continuous, and the graph too. 5-in the currency market, you can start with the "Arab Online Brokers" deal in a mini-account gives you the danger of trains because Khsartk limited to one point in this account equal to the loss in the extreme case one dollar. This is impossible in other markets.
Forex Trading Systems
The foreign exchange currency market is the largest market in the world because it trades up to $1.9 trillion daily. There is an enormous scope of trade in Forex because it is global, and is open twenty-four hours a day, making the presence of buyers and sellers constant, and the fluidity of the market, grand. The market is ever present because it does not have a central venue like Wall Street or Tokyo. It is a series of internet and telephone communications between buyers and sellers and it is not overseen by any one main authority like the Securities and Exchange Commission. The Forex is made available to traders through platforms. Traders of Forex commonly favor Forex trading systems. Forex trading systems are methods of trading currency based on ideas that have rules associated with them. Forex trading systems are a merging of theory and practice that have been tried and tested over and over, and the results of the tests have been documented. Some Forex trading systems are based on the idea of going against trends. Other Forex trading systems are based on the idea of going with trends. Some Forex trading systems are based on the idea of tracking breakouts of a particular currency and these Forex trading systems rely heavily on the averages of a currency s highs and lows, and utilize Bollinger bands that track the average highs, the average lows and the moving average of the two. Traders utilize Forex trading systems in order to work against human characteristics that can hamper trading, like greed, addiction, impulsivity, compulsivity and fear.
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