The reports about conditions on the US job market sent the dollar tumbling down as claims for jobless benefits increased, instead of decreasing as was expected, and nonfarm payrolls dropped a lot more than was forecast. The report about consumer credit showed better valued than Forex traders expected, but it was released too late today to have significant impact on markets. EUR/USD is trading now at about 1.3282.
Nonfarm payrolls declined by 131k in July, following the drop by 221k (revised up from 125k) in June. The analysts previously estimated decrease by 63k. The unemployment rate was unchanged at 9.5 percent.
Consumer credit in the US dropped by $1.3 billion in June after declining by $5.3 billion in May. The expected change of credit valued was $5.2 billion.
Yesterday, a report on initial jobless claims was released, showing from 460k to 479k last week.
If you have any comments on the recent EUR/USD action, please, reply using the form below.
Thursday, August 12, 2010
Purchasing Power Parity (PPP) in Forex Trading
I’ve received a rather strange spam message today from some crazy folks, explaining how messed up the global financial system (and Forex market in particular) currently is. Although it’s a mix of the laughable arguments and the paranoid conclusions of some conspiracy theory nuts, it caught my attention because one of the arguments used was the Purchasing Power Parity (PPP) between US and EU (not Eurozone but European Union for some reason). And I’ve thought that there is a lot of misunderstanding about PPP in the Forex community. I’m afraid there are too many people who know nothing about it, while there are also many traders who believe that Purchasing Power Parity is the main driver of the currency rate changes. In reality PPP is one of the great fundamental analysis tools that can be used in Forex trading among others if you know how it works.
Biggest Forex Scam Pt. II
In our previous article, we covered the story of Russell Cline and how he scammed his investors off $16 million that he used to enrich his own lifestyle. Today, we bring you the story of another such person named Richard Matthews Jr., who pooled in over $30 million from his investors.
White Pines Trust Corporation
Matthews founded White Pines Trust Corporation in 2000 in San Diego, and using his marketing skills, convinced investors to pool in $30 million. He promised them a cumulative return of 91% over a period of eight years, and also guaranteed that 75% of their investments were protected from loss by means of a number of different investments.
As it turned out, all those claims were fraudulent and he had absolutely no intention of ever returning them this money. In fact, he never even had any knowledge of the currency business. He went straight ahead, and instead, bought himself a large property off the coast of Belize.
The Lawsuit
When Matthews’ company WPT was sued, he tried to wiggle his way out by claiming things such has the CFTC (the suing party) had no jurisdiction over the matter and other minor technicalities such as the language used and the fact that Matthews had not himself sent the email that was presented in the court as evidence.
However, the court saw through the charade and considered major fallacies in the company’s claims such as ”WPT had been managing private assets through the Pinnacle Capital Fund since 1995, and that the Pinnacle Capital Fund had yielded double-digit profits on investments for each year since 1995,” and many others which clearly pointed out that the chief purpose of Matthews was to encourage people to invest in his company by giving the false information and providing fictitious references.
The Verdict
Matthews finally pleaded guilty to illegally soliciting funds from investors and mail fraud in April 2005 and admitted that he had spent millions of funds on other purposes unrelated to currency trading. He was ruled to pay more than $29 million in monetary penalties and restitution.
Upcoming Story
In the next article, we will cover the story of Joel N. Ward who is sentenced to nine years in Federal prison for fraud and money laundering. Learn how he coned more than 100 clients and later pleaded guilty, and calls himself “a financial serial killer.”
If you have some comments on this one of the biggest Forex scams, please, feel free to have your say using the form below.
White Pines Trust Corporation
Matthews founded White Pines Trust Corporation in 2000 in San Diego, and using his marketing skills, convinced investors to pool in $30 million. He promised them a cumulative return of 91% over a period of eight years, and also guaranteed that 75% of their investments were protected from loss by means of a number of different investments.
As it turned out, all those claims were fraudulent and he had absolutely no intention of ever returning them this money. In fact, he never even had any knowledge of the currency business. He went straight ahead, and instead, bought himself a large property off the coast of Belize.
The Lawsuit
When Matthews’ company WPT was sued, he tried to wiggle his way out by claiming things such has the CFTC (the suing party) had no jurisdiction over the matter and other minor technicalities such as the language used and the fact that Matthews had not himself sent the email that was presented in the court as evidence.
However, the court saw through the charade and considered major fallacies in the company’s claims such as ”WPT had been managing private assets through the Pinnacle Capital Fund since 1995, and that the Pinnacle Capital Fund had yielded double-digit profits on investments for each year since 1995,” and many others which clearly pointed out that the chief purpose of Matthews was to encourage people to invest in his company by giving the false information and providing fictitious references.
The Verdict
Matthews finally pleaded guilty to illegally soliciting funds from investors and mail fraud in April 2005 and admitted that he had spent millions of funds on other purposes unrelated to currency trading. He was ruled to pay more than $29 million in monetary penalties and restitution.
Upcoming Story
In the next article, we will cover the story of Joel N. Ward who is sentenced to nine years in Federal prison for fraud and money laundering. Learn how he coned more than 100 clients and later pleaded guilty, and calls himself “a financial serial killer.”
If you have some comments on this one of the biggest Forex scams, please, feel free to have your say using the form below.
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