Showing posts with label market. Show all posts
Showing posts with label market. Show all posts

Saturday, July 23, 2011

Great Recession - 1930

The Great Depression of the 1930s is probably the most studied topic in American economic history. Contrary to some persistent myths conveyed by the opponents of the market economy, there is not yet consensus on its causes and its exceptional duration. So today begins our collaborator in the first two columns, to present another vision of the crisis as it was developed by Friedrich Hayek, Murray Rothbard, Milton Friedman, Robert Higgs and other liberal authors.

The Depression of the 1930s is invariably presented as the logical outcome of capitalism. Victim of its own contradictions that led to a crisis of overproduction and concentration of wealth in the hands of some exploiters, the market economy would have been saved by judicious intervention of the New Deal of Franklin Delano Roosevelt. This scenario, however, one big problem: it is supported by no historical data. We will therefore examine in this column a different view of the Great Depression, arguing that its severity can be explained largely by the policies of the U.S. Federal Reserve Board and the subsequent actions of Republican President Herbert Hoover, a man who is usually presents as an uncompromising liberal.

Thursday, June 23, 2011

The Private Equity, a market with strong growth driver - part IV

This dynamic cache, however, concerns related to the evolution of the activity. One of the first consequences of market development of private equity buyout is the generalization of so-called secondary, tertiary and even quaternary view, consisting of leveraged acquisitions of companies already owned by one or more other funds. In 2006, the third type of LBO acquisitions was made through these resale between funds. This type of assembly raises serious concerns particularly related to the high level of debt in these successive operations, which raised fears of a bubble bursting. Indeed, the succession of holding recovery strengthens the total weight of debt in financing the acquisition. But a classic LBO average 70% funded by debt. We can now understand the anxieties expressed about the level of debt when several successive LBOs are made on the same entity.

On the other hand, in a context of rising interest rates, the sector should experience difficulties, but still far from an economic downturn. Indeed, this market should continue to grow in the coming years, particularly in France where many companies are to sell, LBO funds have gained credibility recognized, will no doubt key players in the market.

The number of mega deals (ie acquisitions exceeding the one billion Euros) is more important, the private equity funds have no choice but to raise more funds. This requires, of course, on the one hand by increasing the resources collected from traditional capital providers. But also, for the sake of being less dependent on suppliers of capital and at the same time less sensitive to changes (particularly increased) interest rates on financial markets, the alternative "fund raising" on the stock market seems obvious. The money, usually so discrete and whose activity is based on the original financing of non hand, may now be found in the coast!

Monday, April 19, 2010

How good is Autamated trading system in Trading the Markets?

Automated trading system is a method that generates buy and sell signals based on mathematical calculation to trade the markets without any manual interpretation. The Mathematical calculation could be any formulae like RSI, ROC, Stochastic and etc.
Based on any single indicator or multiple indicators, the system generates buy and sell signals in Intraday, Short term and Long term. A trader by himself, without studying the technicals of the stock, can do buy and sell based on these signals. A manual study of these technicals is a cumbersome process. A trader no needs to experience this hardship to trade in the markets when he uses this Automated trading system.
Will this automated trading system really help a trader in buying and selling in the Markets? The Answer is simply no. Because, the first thing is, the market movements cannot be gauged in mathematical formulas. The market movements are random and it cannot come into the gambit of formulas.
Even if there is one, the discovery of that formula would have been already discounted by the Market. Unless you study the markets manually and understand the nuances by yourself, no one can make profit out of the markets.

Thursday, December 17, 2009

Economy and Stock Markets

Economy and Stock Markets
Are Economic growth and Stock Markets are interrelated. Half of the economists will say ‘Yes’ and half of them will say ‘No’.
According to me it is ‘Yes’. Stock Markets and Economic growth are interrelated because the rise of Stock Markets would attract small investors into the Market which will propel the stock Markets further, which in turn fuel the start of new companies and projects, which in turn help grow Economy.
A rising Stock Market would invite retail Investors and Foreign Investors to invest in the Stock Markets through secondary Markets and also through Initial Public offerrings. This process will infuse huge amount of idle money into the system
The money that came for circulation would be used by the companies to expand, backwared integrate and forward integrate. Thus the production capacities of all companies increases, so they produce more end products.
These end products has to be sold and this will be done by exploring new Markets locally or internationly. Thus the earnings of the companies will increase, which in turn means increased tax for Governments.
Thus a rising stock Market will surely propel a Economic growth.

Monday, December 7, 2009

Is a Bubble building in Gold?

In Financial Markets, herd mentality is in work. Investors always go by the herd.
Last year, they chased real estate and property prices shoot up world over and investors bought properties as though there is no tomorrow.

So, this effectively set up a stage for impending financial Bubble and that happened. Property prices fell all over the world. Many caught in the melee. Banks went bankrupt. Companies went bankrupt. Individual went bankrupt.

But still, herd mentality is in work. Now, the people are chasing Gold assets and it has effectively set the stage for the next financial Bubble, that is ‘Gold Bubble’.

Financial Bubbles are created when all of the investors who are interested in a particular asset want to get hold of it. Once the buying potential recedes, then a huge selling potential is created. Once prices start coming down, panic selling by all the investors push down the prices beyond its intrinsic value. This is how financial bubbles are burst.

The present price rise in gold reminds me of bubble is being built in it. It is likely to burst in another six months. The same story will happen again. Banks will go bankrupt. Companies will go bankrupt. And individuals will go bankrupt.

Let us see, if this happens shortly.