Opinion

The Great Debate

from The Great Debate UK:

Tides may turn in the forex market into 2010

JaneFoley.JPG-Jane Foley is research director at Forex.com. The opinions expressed are her own.-

The final weeks of 2009 have brought a sense that tides may be turning in the foreign exchange market reflecting broader developments in the global economy. The predominant changes relate to the dollar.

December’s 5 percent recovery in the USD index is linked to an improved outlook for the U.S. economy.

There are risks to this optimism, but short dated U.S. yields have pushed higher since late November allowing the dollar to shrug off the downtrend that characterised it during 2009 and potentially embark upon a cyclical recovery; at least against some currencies.

Better U.S. economic data in early December couldn’t have come soon enough for the Japanese authorities. In late November USD/JPY had fallen to a 14-year low.

from The Great Debate UK:

A year of austerity looms in 2010

david-kuo_motley-foolthumbnail-David Kuo is director at the Motley Fool. The opinions expressed are his own.-

If you thought 2009 was as bad as things will get, then think again: 2010 could be worse. It is likely to be a year of enforced austerity with both the government and households making obligatory cuts to their budgets.

High on the government’s agenda will be reducing the Budget deficit, if the UK is to avoid the embarrassment of having its sovereign debt rating cut by rating agencies. This will have a knock-on effect on households, which could see their disposable incomes slashed by hikes in both direct and indirect taxes.

There are two possible ways for the government to reduce the Budget deficit. The first is to increase tax revenues and the second will be to slash expenditure – both of which will have an adverse impact on the economy. There is a third, which is to raise revenue through the sale of state assets. These may include the Royal Mint, the nations stake in part-nationalised banks, and anything else the Chancellor might find lurking at the back of the wardrobe.

from The Great Debate UK:

2010: Another year, another crisis

copeland1- Laurence Copeland is a professor of finance at Cardiff University Business School and a co-author of “Verdict on the Crash” published by the Institute of Economic Affairs. The opinions expressed are his own. -

If the financial crisis were a theatre production of Hamlet, we would now be at the end of Act III.

But look . . . the audience is already standing up, applauding wildly and putting on their coats. They obviously think it’s all over. Little do they know how much blood remains to be spilled . . .
Look at the facts.

from The Great Debate UK:

Peering into a murky crystal ball for 2010

batstone-carr

-Jeremy Batstone-Carr is director of private client research at Charles Stanley. The opinions expressed are his own.-

It’s that time of year again!  The time of year in which the writer’s desk, never a pretty sight at the best of times, becomes clogged with the product of the investment community’s crystal ball gazing.

Needless to say the vast majority is effusive in its enthusiasm for risk assets (turkeys don’t vote for Christmas) and makes an aggressive and fairly convincing case as to why equity markets will never go down again…ever!

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