Aridni | 2009 March
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Outliers: The Story of Success

This article written by Todd
Bookit,From Books We've Read,TCB

outliersMalcom Gladwell’s latest book has been out for a couple of months now, and I’ve got to tell you that it’s great. He has a really easy to read writing style. He mixes ideas with stories so seamlessly that really build and support his conclusions.

One important part of the book is having 10,000 hours of any activity to become truely proficiant at it. It doesn’t matter if it is writing programs and designing software all throughout software like Bill Gates, or if it is playing night after night nonstop in seedy establisments like the Beatles did.

Getting in that many hours would mean that whatever you wanted to completely master would have to be something that you absolutly loved doing. It would have to be a complete passion of yours.

Malcom Gladwell is very good at making things interesting, even if they normally wouldn’t be appealing to you he is great at crafting his words together.

This is a great book and I highly reccommend it; however I do believe that his previous two books Blink and The Tipping Point were better reads overall. They had more information that could be applied to life situations. In this book there are a lot of moments that will make you think “Oh, that’s cool.”

I haven’t been dissappointed by any of Malcolm’s books yet, and this one certainly lived up. I would also reccommend the audio versions of his books, you can load them up on your ipod and listen to them. Being read by the author, they have the inflections and dramatizations added to them percicly where Gladwell wanted to emphisize.

Pick up either Blink or Tipping Point first, and then don’t let this one go by.

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How the Credit Crisis Works

This article written by Todd
Aridni News

Here is a simple, yet thorough, explanation of the current credit crisis. If you had any questions about what was going on in the economy right now, this is a big player. Why is the economy so bad right now? Watch this video and find out.


The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

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Canadian Dollar Suffers from U.S. Slowdown!

This article written by Guest Writer
Investing,forex
Have you ever seen someone make a mistake and not only do they suffer for it but someone else does as a result also? Well, this is exactly what’s happening to Canada right now.  

You see, most of last year, you could say that the Canadian dollar was falling because of falling commodity prices. Since Canada exports so many widely used commodities like oil and lumber, when prices fall, so do their profit margins. It costs them about the same amount to produce the product but what they can get for it in the market is determined by where those commodities are trading at the time.  

USD/CAD Pushes Towards 1.30 Once Again!

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Last Year the Commodities Crash Killed the Canadian dollar. This Year it’s the U.S. Economic Crash that’s Killing Them! 

So that was what hurt them much of last year. Now we roll into 2009, and they get killed by another dynamic: the increasing slowdown of the U.S. economy! 

For three months in a row now, the U.S. economy has shed around 600,000 jobs or more back to back! The unemployment rate seems to be going somewhat parabolic at this point. It jumped from 7.6% previously to 8.1% now.  

On top of this, to buffer the blow of the slowdown, Canada’s central bank had to lower interest rates once again (to 0.50%) which put it at the lowest their interest rates have EVER been! 

While this is a dynamic that will eventually be good for their economy, it hurts their currency right now for sure.  

They also stated that they may implore “Quantitative Easing”. What the heck is that? Well, in simple terms it means that they will print money out of thin air and load up the banks with so much excess cash that they are more likely to lend money and thus spur economic growth.  

While that may eventually give their economy a boost, it kills their currency. Why? Look at it this way. Anytime something becomes more abundant, it becomes worth less. Anytime something becomes scarce, it becomes more valuable. (This is why a Corvette in the 1960’s may have gone for $3,000 then and would sell for $30,000 to $60,000 today. These days, they are scarce…yet they weren’t back then).  

So when the market is flooded with more money (Canadian dollars), that money gets devalued and is worth less. Therefore it takes more (Canadian) dollars to buy the same amount of goods.  

The U.S. is Printing Money too, but Right Now they are Saved Because they are the World’s Reserve Currency (and thus a “Safe Haven”). 

Now, you may say but isn’t the U.S. doing the same thing? After all, their economy is slowing down. They are printing money too.  

I would say, while I won’t deny that point, the U.S. dollar presently benefits from what is called the “safe haven bid”. What does that mean? It means that investors all over the globe are running to the safety of the U.S. dollar because it’s the world’s reserve currency right now.  

In other words, if there’s one currency on the face of the earth that you are most likely to keep and continue to use, it’s the one that most of the goods are priced in all over the world. For example, gold, oil, wheat, soybeans, lumber, etc. are all priced in U.S. dollars.  

Therefore in crazy times like this, it enjoys the benefit of being the world’s reserve currency. However, once the global economy finally does return to normal, then this “benefit” will suddenly go away and the dollar will just have to stand on its own fundamentals once again. We all know that once that happens, the buck doesn’t have that much to stand on. Therefore, the “dollar party” may come to an end ONCE the global economy normalizes.  

In the mean time, Canada’s currency (and economy) will continue to suffer as the U.S. lays off more workers and continues to slow down. Remember, they derive about 79% of their exports from the U.S. That’s huge! In fact, it’s so huge…it’s the largest trading relationship between two countries according to Canada’s trade department.  

This really is huge, because the U.S. hasn’t had three back to back months of layoffs this big since they started keeping records on it back in 1939. So from at least as far as our records go back, this has never happened on this scale before! 

So when you add all of this up, you come up with the fact that the U.S. dollar has a high probability of continuing to rise against the Canadian dollar. So with that said, I think you may find the USD/CAD rate to break the 1.30 barrier in the coming weeks to months.  

Therefore, if you would like to take advantage of this situation and profit from the pressure on the Canadian dollar, then take these three steps: 

  1. Get Educated about Currencies and What Makes them go up and down: You can get your an online education here that comes with live instructors that are there to answer your questions.
  2. Get a FREE demo account here that comes with REAL TIME quotes and charts. This way you can learn how to place trades before risking one cent of your money in the currency market.
  3. Then once you’ve gotten educated over the course of 8-10 days in your course and you are familiar with your demo trading station, then open up your live trading account here. If you start with a micro account, then I would suggest putting in $300 to $2,000 in the account. Start small. If you choose to start with a mini account, then you might fund your live account with $2,000 to $10,000. Start with enough capital to be practical while trading only 1-2 lots per trade at first.

Sean Hyman is today’s guest writer, he is the head instructor at MyWealth.com  
 

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120 Billion Reasons to Sell the Yen!

This article written by Guest Writer
Aridni News

This past year, one of the few financial instruments in the world was headed to the moon. Which one was that? The yen!

Yeah, the carry trade unwound which caused money to flow away from high yielding currencies and back into low yielding currencies like the yen.

Investors became risk adverse with their money. They poured it into things that had been beaten down for years because it seemed to be a safe place to run to. Thus the yen was a huge beneficiary during this ultimate “fear factor”.

However, recently I started talking to you about a possible turn coming in the yen and that the yen party was about to come to an end soon.

Things go from “Bad to Worse” in Japan

Since then, things in Japan have continued to unravel. They’ve had a 12 percent slide off in their GDP. The yen has risen 23 percent against the dollar which is killing their exporters. Toyota, Sony and Honda are all either doing layoffs or are about to do layoffs. In fact, Honda has even mentioned that if the yen stays at 100 to the dollar or under, that they may be forced to move some of their operations out of Japan. So this is serious stuff!

If that we’re enough, when the Japanese Finance Minister showed up at the latest G-7 meeting in Rome, he was accused of being drunk and unable to properly participate due to his inability to understand the questions being posed to him.

This caused him to have to step down from power just days later. This makes several finance ministers that Japan has gone through in just a short time. Governmental instability is never good for a currency. So these were all of the reasons lately that have surfaced as to why the party may be ending for the yen (in particularly against the U.S. dollar).

120 Billion Reasons to Sell Short the Yen and Stop Shorting Other Asian Currencies!

But now there’s a new reason to close out any long positions in the yen and to reverse course by shorting it.  Why? 13 Asian nations announced on the 22nd of this month that they were forming a $120 billion currency pool in order to defend their currencies.

This is a powerful alliance as these countries team up together. This should send a building wave of confidence across these Asian countries as they see governments teaming up and banding together for the support of their own currencies.

Japan, China and South Korea will provide about 80 percent of the funds for the pool and the other 10 countries will fund the remainder.

While many of these currencies have weakened significantly and funds may have to be used to buy their currencies, the Japanese could always use any extra resources to sell their strong currency.

With these countries banding together in such a strong, united way…it shows that the story may be about to change. Formerly in 2008 and up until now, you’ve had most of these currencies across Asia weakening unduly and the yen having an unreasonably high strength.

I think you are going to see this tide turn. These things happen like ships turning and not like speed boats. However, I think the yen is starting its turn even now and it won’t be long before these other Asian currencies start to strengthen once again.

I also think this massive currency pool could help to prevent another Asian contagion like happened in 1997-1998 as many of the Asian countries used of most all of their foreign reserves trying to defend their currencies and had to finally turn to the IMF for help.

It was a horrid problem that ended up causing a ripple effect all around the world. So they are being very preemptive this time around in trying to stop something like this before it gets that far.

USD/JPY “Prepares for Takeoff” on Yen Weakness!

Therefore, I think the sentiment is going to shift away from a strong yen while other currencies finally start to strengthen. You will likely see the yen weaken across the board but I’m most confident in the prospects for the USD/JPY exchange rate going up overall throughout the remainder of the year due to this new vote of confidence and also due to all of the previous problems plaguing Japan.

At the end of the year, I think you will find that the USD/JPY is back up over 100 and headed higher. This will help Japan’s economy, especially its exporters that are such household names here in America.

So get ready for more yen weakness and dollar strength against it. Also, it won’t be long before other Asian currencies start to strengthen as the yen starts to weaken.

Today’s Guest Writer is Sean Hyman the head instructor over at www.mywealth.com