FOREX TRADING

Ended the last year, Israel has softly amassed one of the world’s largest repositories of foreign exchange reserves. On the average, the Central Bank of Israel has bought $100 million worth of Dollars day-to-day since July 2008, bringing its total reserves to $52 Billion. The Bank’s goals are twofold: to sterilize the inflow of speculative money pouring into Israel in order to mitigate inflation, and to stem the appreciation of the Shekel.

Towards this latter, the Bank received a hike by the credit crisis, which caused an outbreak of risk aversion and sent investors rushing to shift funds into so-called safe haven countries/currencies. As a result, the Israeli stock market tanked, and the Shekel plummeted 30% in a matter of months. (more…)

The rally in stocks has been “excessive” and the financial system is still “very damaged” according to comments from Nouriel Roubini, the infamous New York University professor that has earned the nickname “Dr. Doom” for predicting the 2008 credit crisis and recession.

Key Overnight Developments

• Australian Manufacturing Sector Shrinks at Slowest Pace in 10 Months
• Japanese Workers’ Earnings Fell The Most in Over 18 Years
• New Zealand Economy Will Shrink in Third Quarter, Says Treasury
• Roubini Says Financial System “Very Damaged”, Stocks Rally “Excessive” (more…)

On that point was never much question about the fundamental causes of the credit crisis. In essence, combination of low interest rates and lax regulation fueled a leveraged credit expansion, which exploded spectacularly last fall. The primary issue has always been how to ensure such a crisis does not ever happen over again- at least not on the same scale. Towards that end, policymakers around the world have been busy over the last few months conducting hearings and soliciting expert testimony, and are now about passing sweeping inspection and repair of their countries’ respective financial systems.

Well, perhaps sweeping is (more…)