HAS GEORGE SOROS WRONGED ABOUT S&P 500?

Hi everybody it has passed a time since I write the last article.The import event that occured last week on the financial markets it's no doubt the evolution of S&P 500 index.S&P 500 hits historicall record high 2000 that's never been before.

In the couple of weeks I've heared a lot of economists which said that US stock market will back again in a bearish market.Moreover the legendary investor George Soros bet 1 billion $ against S&P 500.He is right or not will see what will going happen.

As for me I think he has wronged,the perspective that Federal Reserve could rise the interest rate.make me think that us dollar will continue his uptrend.Us economy has improved  considerably,especial labour market in the couple o years unemployment rate has decreased and now stands at 6,2 %  level that FED could rise interest rate more earlier .

Potential winners in my view I think will be us banks like (Citi Group,Wells Fargo,JP Morgan) .Back to our article title how George Soros has wronged technically speaking in 2014 SP 500 broke the resistance line level 1600 which correspond with maximum high in 2000 and 2007-2008.In 2000  S&P 500 hited in that time a historical high at nearly 1600.After 11 september 2011 S&P 500 crashed at a level point that something important will happen.

Starting with 2008 the world was shocked at the news that Lehman Brothers collapsed starting with this event the worls has entered in recession  stocks markets crasheds as well S&P 500.What has followed after that? .Federal Reserve launched series of measures to remove from recesion US such as lowring interest rate a record low at 0,25% which stands today and also un unprecedent quantitive easing.

Adoption of this measures devalued us dollar,peoples have loosted faith in currencies and back attention to commodities in special gold which hits a record high in september 2011  1920 $ per ounce.But situation will change soon us economy have improved FED starting taper in december 2013.

Starting of tapering program have produced euphoria on stock market S&P 500 stept by step move up and last week hits a record high that never been before.The question is when the S&P will stop and when the market will fall? Has George Soros right or not? 

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FISHING BALTENI 2014

There is no place  where make me fell more relax than fishing.At the initiative at one friend I decided to go to fishing.The place  where we choose was Balteni,I recognize that I never been there so it was something new for me.

At the begining I was skeptical about this fishing trip that because I knew that it wasn't yet the right time that because the Danube (Sfantul Gheorghe) was swollen and current was strong,so I couldn't resist temtation and i joined to my friends and i decided to go.

We gathering with all ,Bozo,Titi,Rila,Zoro,Mircea,Razvan and we went to Balteni.Balteni is located In Tulcea county about 25 km from Tulcea.When I left home i remember that it was a raining day that make to think twice when you take a decison,but I was determined to go to fishing no matter how long the rain will takes.We reached at destination the place where we choose to fish it was a pension court yard.At the begining it was uninspired decision that because we always choose wild places when we go to Danube Delta.

I choose the place where I follow to fish. My fishs targets where carp and crucian so I prepared my fishing rods I've choose to fish with 2 fishing rods and one feeder.I prepared a special groundbait (corn,wheat and grains).At prevoius fishing trips that I made at the Danube I knew what the important is to locate the carp.On the Danube and other rivers the location of the fish is tought that because the carps are looking  food differ much of how we fish on the lake.


So from my previous experience I knew how the important is the bait and what the important is that the bait to stand on the place where you fish.I learned from fishing tv chanells that the bait to stay on the place you must to mix the groundbait with ground clods in hopes that the bait will stay much more posible near the place you fish.I trew the bait in the water and after that the 2 fishing rods and I had left to wait the carps .Unfortunatelly for me the current was so strong even with 120 g lead my line was carried away by the current.

My consolation comes from feeder I done to catch some crucians and breams but no carps,but that it's fishing you never know what it's going happen,fishing it's not mathematics is something more probabilistic.That's for today bye-bye.

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BRICS THE MONSTROUS COALITON WHO THREAT THE WEST

When I've hear for the first time the acronym of BRICS,I didn't know what it's mean.First I try to explain for those who don't know the meaning of this acronym.So BRICS are countries who be part form emergent economies(B-Brazil,R-Russia,I-India,C-China,S-South Africa)

The person who invented for the first time this acronym was Jim O'neil.The main goal of BRICS countries is to create a viable alternative to developed countries (G7).

Initially I was sceptical about the evolution of BRICS projects and how this countries are ables to play  an important role of world economy.China is with no doubt the country who will drive BRICS.You can say why China? China because is the most important emergent economy,second largest in the world after US.Some economist forecasts that China will over take US,and began the largest economy in the world.

China's economic evolution was impressing in the last years,and now it's under stagnation with 7,5% GDP increase in second quarter of 2014.

Back to our today topic"How BRICS can threat West" with all know that CHINA want to make some changes in world financial markets.I wrote in one of my last article about how CHINA want to change the us dollar as world reserve currency,this is firs step.

And the second and most important the BRICS countries agree and create an alternative financial institution to World Bank and International Monetary Fund.In july at BRICS summit in Brazil the leaders of five emerging countries agree to create a new currency fund and development bank.The reserve fund will be 100 billion $ and bank 50 billion $.

In the couples of years among BRICS countries are born some frustration especial for CHINA who don't agree the presence of participation on World Bank and International Monetary Fund.

The economic growth of BRICS countries are projected to be 5,37 % this year.Brazil and Russia will grow 1,3 % and 0,5% this year.

The Brics fund will have an initial start up capital of 50 billion $ financed equal by the five countries and a capacity to lend 3,4 billion $ this year but is still far away by World Bank and International Monetary Fund which will lend 61 billion $ this year.

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DOES EURO WILL CONTINUE THE DOWN PREASURE?

Hi everybody this week is nearly to end.The euro currency continued his downtrend amplified by the importants economic indicators who seems to back up Euro area in recenssion again( will see if euro area has returned back into recession.Industrial production in euro area decreased by 1,1 % in may 2014 compared with  april 2014,but compared with may 2013 increased with 0,5

The ZEW of Economic Sentiment of Germany also decreased in july 2014 by2,7 points and now stands at 27,1 points which is much below economists forecasts at 28,9 for july.The Euro area inflation is at 0,5 % much below ECB targets.Uncomfortable level for ECB's officials which it seems they are ready to add new measures to combat low inflation.

Euro area reported a trade surplus in goods 15,4 billion euro in may 2014,compared with may 2013 which was 14,6 billion.In may 2014 seasonally adjusted exports rose by 0,6% and imports rose by 0,5 % compared with aprile 2013.

The current account also reported a surplus of 19,5 billion in may 2014.At the end of firs quarter of 2014 the net liabilities recorded at 1,2 trillion aproximately of 12% GDP of Euro area.The level of liabilities increased with 24 billion compared with the end of 2013.

                                                        Technical analysis

The euro currency reached at the end of last week at 1,3523 important level we could to say.Is important to see if the euro will continue his down.If the price find support at 1,35 we can enter  with buy orders.On h4 chart the price  has maked a bullish hide divergente(MACD indicator show this) with potential target profit 1,3590 up to line resistance.

For those who bearish views we can enter with short orders when the price through from 1,35 with confirmation.More important is to see if the price will broke weekly support area an important level which could make us an important view over the evolution of euro fore the next period.

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DOES ECB DO THE RIGHT THING IN DEFLATION THREAT?

Hi everybody this week come to end and we can summarize some of the key aspects what has happened on financial markets last week.Us economy continued to expand but a low pace harsh winter ban the evolution of the economy.Manufacturing sector expand in march for the 10 consecutive month and the overall economy expand to 58 consecutive month.Jobs in Us increased to 192 k new jobs in march after an increase to 197 k in february,unemployment rate remain a 6,7 %.

In the Euro area consumer price index fell to concerning 0,5 % in march much below ECB forecast.ECB keep interest rate unchanged at 0,25 % although was rumors that ECB will cut interest rate.ECB officials in front with Mario Draghi adopt a dovish language in deflation issue.

The low inflation problem appeared form january 2014 which was to 0,7%.But all this time Mario Draghi has enusred us that level of inflation is under control and ECB is ready to act if conditions will required.From january to march the consumer price index fells to 0,5 % the low level in more than 4 years.

As I said at the begining of the article the ECB keep unchanged policy.This approach has attracted some criticism to Draghi policy.A delay in adopt any stimuls could track again euro area in recesion.A persistance in low inflation could determinated in the medium termn growth a weight of debt.

I observed in the past of the weeks important ECB officials talking about some measures that they could take such:negative deposit rates and quantitive easing.Jens Weidman is one the ECB offical which agree of using QE.Last week in a interview to Market News said:"Quantitive easing is theoretically posible as long as it dosen't infringe tha ban on monetary financing governments.

As for me I think that such measures could be little complicated to adopt that beacuse the ECB dosen't know what king of bonds to purchase.Theoreticaly in the euro area are 18 different sovereign bonds.Thursday Draghi emphasized for the first time that ECB cold adopt at what so called "Forging different QE"

Why different? different beacuse the financial markets in the euro area depends much from loans,loans which are injected by the ECB.So the eventual of bond purchases couldn't provide liquidity to small and medium enterprize.

Draghi said: "The banking system is more esential to the euro area than other financial systems that are more marked based" So in the end we just have to wait to see what will going on.

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DRAGHI FACING DILEMA TO ACT OR NOT

Hi everybody it passed at time since I wrote the last article.This week the most important events are with no doubt ECB Meeting and US jobs reports. One of the big issue of Euro area is deflation.

Are Euro area in deflation or not? Though question that because some ECB officials memebers do not speak the same language.Mario Draghi ECB chairman told that they are ready to act if conditions will require.

Inflatio in the euro area has envolved from 0,8% in january 2014 and now 0,5% in march.At this level we can say that Euro area is in deflation.If we look to euro currency we observe that euro is at high level against the important currencies.In an interview last week ECB official Christian Noyer said :"He is not happy to see euro rise" First of all a strong euro could aggravate european companies in exports and second and the most important characteristic of deflation is falling of prices which can cause global debt crisis explode again .

So today ECB meeting is very important event and we are aeger to see if Draghi learn  something from japanese lesson.It's more evident that ECB will act today.

Negative deposit rate is probably the exact scenario.ECB Coeure declared a few time ago:"ECB is considering a negative deposit rate very seriously"

Also Jens Weidman ECB:" Negative interest rate could counter the impact of strong euro"

Negative deposit rate is not only the measure that ECB officials had in mind.Other measure is quantitive easing.Marcel Fratzscher german economic profesor at Institute for Economic Research demand 600 billion euro bond purchases each month to combat deflation.About this tool Jens Weidman ECB official said:" Quantitive easing is theoretically posible as long as it dosen't infringe the ban on monetary financing of governments.In  my view I think that this measure will be a little though to put in practice that beacuse will require a purchase of 18 different sovereign bonds.

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MARIO DRAGHI STILL KEPP EURO DREAMS

Hi everybody first article in 2014  the begining of the new year brings reasons to cheer for europeans.Euro zone dreams finally seems to take shapes.But despite this optimist atmosphere the main actor who charge the euro destiny ECB president Mario Draghi refused to say that the fight against euro zone debt is over, he told at Frankfurt European Central Bank Meeting.

One of the key factors that contribued to improving eurozone areas was exports growth ,german industrial production rose with 1,9 % in November and also retail sales who rose with 1,4 % in November compared with October 2013 acording to Eurostat,german industrial orders rose by 2,1 %.European stocks reach ath high level,Ireland,Portugal sold for the first time after many years bonds.

One thing can treaten economic recovery is inflation which was 0,8 in decmber 2013 much below of 2 % ECB target.Could 0,8 % inflation engage Europe in deflation shape? Is hard to say, will see what's going happen.Drahi ensure us the eurozone is not threated by deflation risk.

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