Car accidents in 1930 80 years ago .. Photos reveal for the first time!?
الأحد، 9 سبتمبر 2012
Too Big To Jail: Wall Street Executives Unlikely To Face Criminal Charges, Source Says
New York Attorney General Eric Schneiderman, accompanied by Attorney General Eric Holder, speaks at the Justice Department in Washington, Friday, Jan. 27, 2012, after Holder announced the formation of the Residential Mortgage-Backed Securities Working Group. (AP Photo/Cliff Owen)
A last-ditch effort by federal and state law enforcement authorities to hold Wall Street accountable for nearly bringing down the U.S. economy is unlikely to lead to any criminal charges against big bank executives, according to a source close to the investigation.
Barring a "hail mary pass," said the source, who spoke on the condition of anonymity because the investigation is still ongoing, the members of a task force President Barack Obama formed in January to investigate fraud in the residential mortgage bond industry will instead most likely bring civil lawsuits against some of the banks involved, though it isn't clear when these cases might come.
That means any penalties for those accused of fraud or other misconduct would be measured in dollars, not jail terms.
A spokesman for New York Attorney General Eric Schneiderman, a co-head of the task force and the driving force behind its formation, declined to comment.
Adora Andy, a Department of Justice spokeswoman, said in a statement that "all appropriate remedies, civil and criminal, are on the table."
"As always, if working group members uncover evidence of fraud or other illegal conduct, we will pursue such conduct aggressively," Andy said.
The subprime mortgage bubble popped more than five years ago, triggering a full-fledged economic meltdown. Since then, the question confronting regulators and government prosecutors has been whether the banks that drove the market's expansion simply made terrible business decisions, or committed fraud in order to reap short-term profits.
The Securities and Exchange Commission, in a number of civil lawsuits, has alleged the latter (as a regulatory agency, the SEC cannot bring criminal suits). But with the exception of one failed case against Bear Stearns in 2009, the Department of Justice, which historically would lead any criminal effort, has declined to criminally prosecute those who created the financial instruments built out of toxic mortgage loans.
By pooling investigative resources, it was hoped that the Justice Department, the SEC and a handful of state attorneys general, led by Schneiderman, could accomplish what the agencies had mostly failed to deliver on their own: a sense of justice, however fuzzily defined.
But from the start, the task force -- officially, the Residential Mortgage-Backed Securities Working Group -- has been dogged by critics questioning the seriousness of the effort, and by concerns that the legal timeframe in which investigators must bring cases is coming to a close.
Civil cases, if and when they are filed, could lead to large financial penalties and possibly aid for struggling homeowners. Yet it seems unlikely that such a result will satisfy those whose anger sparked the Occupy Wall Street movement, or even many middle-class Americans who may wonder how, in contrast to other financial crises, this one could end with none of the people who seemingly helped orchestrate it behind bars.
"Without accountability, the unending parade of megabank scandals will inevitably continue," Neil Barofsky, the former watchdog over the $700 billion bank bailout fund and a frequent critic of the Obama administration's response to the financial crisis, recently told The Huffington Post.
How and why the government chose this path will be the subject of debate for years to come. Some say prosecutors lacked resources. Others assert that the complexity of the financial transactions makes it virtually impossible to prove criminal intent in court, where prosecutors must convince a jury of guilt "beyond a reasonable doubt." In a civil action, by contrast, the bar is lower: jurors need only conclude that "a preponderance of evidence" indicates guilt.
One former prosecutor said a simpler human dimension may also be preventing government lawyers from filing criminal charges: the basic fear of losing a big case.
"Losing has a chilling effect, because no one wants to take a spin like that and come out on the short end," said Cliff Stricklin, a former prosecutor who worked on theEnron task force and also successfully prosecuted Qwest Communications chief executive Joseph Nacchio for accounting fraud. (Nacchio is currently serving a seven-year sentence in a federal prison.)
"[Losing a case] makes you wonder if there was indeed a crime, and if so, how you go about proving it," Stricklin said. "It is a signal to the public that either the government is jumping to conclusions or isn't competent."
CATASTROPHE OR CRIME?
Mary Jo White, a former U.S. attorney for the Southern District of New York, adheres mostly to the view that the financial crisis was a catastrophe, but not a crime. Now a prominent defense attorney at the law firm Debevoise & Plimpton, White said she thinks calls from some quarters for more criminal prosecutions are unwarranted.
"The financial crisis was so expensive and so many people were injured that one's instinct is to think that there must have been massive wrongdoing from the top on down," she said.
But criminal cases must be built on compelling evidence, not suppositions, and evidence of broad-based misconduct that would rise to that level doesn't exist, White said.
"I don't think the criticism is fair," White said.
William Black, a law professor at the University of Missouri-Kansas City and a prominent former bank regulator, is in the camp that thinks prosecutors have missed a massive opportunity.
"They don't get the whole concept of looting," he said.
Black, who worked with prosecutors to develop some of the 1,100 criminal cases that emerged from the Savings & Loan crisis of the late 1980s and early 1990s, said that Wall Street accounting fraud flows from a simple recipe: grow by buying high-interest loans, leverage the business by borrowing lots of money and keep next to nothing in reserve against losses.
"You are mathematically guaranteed to report record profits," he said.
But those profits are based on a fiction, he said, one that costs investors when the bank collapses -- and in some cases, can cost taxpayers too.
Financial firms like Goldman Sachs profited tremendously by purchasing loans described widely in the industry as "liar's loans," Black said. These loans were made without the borrower having to prove income, or even that he or she had a job.
"It makes no sense that an honest lender would ever make liar's loans," he said. Nor does it make sense that a sophisticated bank like Goldman, which runs an entire business based on the ability to calculate risk, would purchase such dangerous loans without knowing that they were toxic, he said.
Indeed, the Financial Crisis Inquiry Commission produced evidence last year which suggests that Goldman Sachs traders knew these investments were more dangerous than they were letting on to their customers. Internally, they characterized offerings as "junk" and "monstrosities" even as they offloaded the mortgage bonds onto investors, according to the report.
The SEC came to the same conclusion when investigating whether the bank had misled investors about a product known as Abacus. That probe led to a $550 million settlement in 2010.
The SEC has won $2.2 billion in penalties stemming from financial crisis-related cases, though it has been dogged by complaints -- most notably from federal judge Jed Rakoff -- that its fines are too small and that it doesn't target individuals often enough. An SEC spokesman declined comment.
Still, the agency's efforts to pursue financial crisis fraud far outstrip those of the Justice Department.
The government's lone criminal case related to the creation of complex mortgage investments came in 2009, when a federal jury declined to convict two former Bear Stearns hedge fund managers accused of lying to investors about the soundness of the securities they were selling.
Last month, the Justice Department announced that it had dropped a probe of Goldman Sachs, launched after the Senate’s Permanent Subcommittee on Investigations found that the bank sold investments "in ways that created conflicts of interest with the firm’s clients and at times led to the bank's profiting from the same products that caused substantial losses for its clients.”
There was "not a viable basis" to bring criminal charges against the bank or its employees, the Justice Department said in a statement explaining its decision.
LAST CHANCE FOR PROSECUTORS
Obama's multi-agency mortgage task force was supposed to succeed where previous investigations had failed.
"This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans," Obama said in his State of the Union address in January.
The goal of the new unit was to drill down into the sophisticated financial instruments the banks created to package and sell mortgages in a search for fraud. But the group was met with skepticism from many legal experts, who wondered how this effort would be any different from previous investigations.
The group got off to a rocky start. Three months after its formation, it had failed even to secure office space. In May, Schneiderman told the Wall Street Journalthat he wanted more resources and wished that investigators at his partner agencies would pick up the pace.
According to the Justice Department, the investigation is now in full swing.
More than 200 investigators are on the job, "devoting significant resources to investigate and prosecute misconduct by financial institutions in the origination and securitization of mortgages," the agency said in a statement.
The DOJ has issued 30 civil subpoenas in the past four months, it said, and the SEC has issued more than 300 -- though that number includes pre-existing investigations.
The New York attorney general's office, HuffPost previously reported, is now investigating several major institutions.
But if none of these cases yield a criminal indictment, who, if anyone, is to blame?
Schneiderman, though he never promised criminal cases, is likely to attract some criticism for the lack of prosecutions due to his aggressive advocacy for the task force. Last year, Schneiderman led an insurgency against a robo-signing settlement shaping up between state attorneys general and five large banks. His goal, he said, was to preserve his ability to continue an investigation he had opened in the spring into possible fraud that led to the housing bubble and crash.
The states leading the negotiations dispute that Schneiderman's ability to continue his investigation was ever in doubt. Nevertheless, his initial opposition to what became a $25 billion deal led directly to the creation of the task force
Schneiderman co-leads the task force, along with Robert Khuzami, the enforcement director of the SEC; Lanny Breuer, the head of the criminal division at the Justice Department; Stuart Delery, the head of Justice's civil division; and John Walsh, the U.S. Attorney for the District of Colorado.
Though each of these entities are sharing documents and resources, it is up to the individual agencies to file charges.
The biggest challenge for Schneiderman, who took office in January 2011, was the ticking clock. Most mortgage bonds were packaged and sold in 2006 or earlier, and the statute of of limitations on most types of fraud cases is five years from the commission of the alleged wrongdoing.
It is possible to extract "tolling" agreements from a business or individual under investigation that effectively extends the allotted time in which to bring a case, in exchange for more lenient treatment. But Schneiderman would have had to enact tolling agreements in very short order after taking office. It isn't clear whether a bank or an individual would accept such an agreement in a criminal case if they knew the statute of limitations was about to run out.
It is also true that while the New York attorney general's office has the authority to bring criminal fraud cases, it historically almost never does. Like the SEC, the office instead typically files lawsuits with the expectation of wringing a settlement -- and political bragging points -- out of a Wall Street firm. It's part of the recipe that both Andrew Cuomo and Eliot Spitzer used to pave their way to a governorship.
Instead, the attorney general's office typically defers to the Department of Justice, which has a large team of experts parked in the U.S. attorney's office just a few blocks away in lower Manhattan. But instead of taking on Wall Street's top executives, that office has focused on alternate cases -- such as the recent prosecution of hedge fund king Raj Rajaratnam, who was convicted of insider trading.
Stricklin, now in private practice at the Bryan Cave law firm in Denver, said that he doesn't know whether there was criminal conduct in the run-up to the financial crisis.
"The truth is more complicated than can be explained in sound bites," he said.
But he has seen, he said, a decline in the talent level of those working white-collar cases at agencies like the Federal Bureau of Investigation and the Justice Department, which over the past decade have diverted some of the most talented people over to counterterrorism.
"The government needs to decide if it is really going to tackle white-collar crime or not, and if so it needs to allocate resources," he said.
Otherwise, the result will be fewer cases, and more losses, Stricklin said.
"It always matters to bring solid criminal cases where you are holding people accountable," he said. "But the worst signal is not to do nothing, but to do something partway."
New York Attorney General Eric Schneiderman, accompanied by Attorney General Eric Holder, speaks at the Justice Department in Washington, Friday, Jan. 27, 2012, after Holder announced the formation of the Residential Mortgage-Backed Securities Working Group. (AP Photo/Cliff Owen)
A last-ditch effort by federal and state law enforcement authorities to hold Wall Street accountable for nearly bringing down the U.S. economy is unlikely to lead to any criminal charges against big bank executives, according to a source close to the investigation.
Barring a "hail mary pass," said the source, who spoke on the condition of anonymity because the investigation is still ongoing, the members of a task force President Barack Obama formed in January to investigate fraud in the residential mortgage bond industry will instead most likely bring civil lawsuits against some of the banks involved, though it isn't clear when these cases might come.
That means any penalties for those accused of fraud or other misconduct would be measured in dollars, not jail terms.
A spokesman for New York Attorney General Eric Schneiderman, a co-head of the task force and the driving force behind its formation, declined to comment.
Adora Andy, a Department of Justice spokeswoman, said in a statement that "all appropriate remedies, civil and criminal, are on the table."
"As always, if working group members uncover evidence of fraud or other illegal conduct, we will pursue such conduct aggressively," Andy said.
The subprime mortgage bubble popped more than five years ago, triggering a full-fledged economic meltdown. Since then, the question confronting regulators and government prosecutors has been whether the banks that drove the market's expansion simply made terrible business decisions, or committed fraud in order to reap short-term profits.
The Securities and Exchange Commission, in a number of civil lawsuits, has alleged the latter (as a regulatory agency, the SEC cannot bring criminal suits). But with the exception of one failed case against Bear Stearns in 2009, the Department of Justice, which historically would lead any criminal effort, has declined to criminally prosecute those who created the financial instruments built out of toxic mortgage loans.
By pooling investigative resources, it was hoped that the Justice Department, the SEC and a handful of state attorneys general, led by Schneiderman, could accomplish what the agencies had mostly failed to deliver on their own: a sense of justice, however fuzzily defined.
But from the start, the task force -- officially, the Residential Mortgage-Backed Securities Working Group -- has been dogged by critics questioning the seriousness of the effort, and by concerns that the legal timeframe in which investigators must bring cases is coming to a close.
Civil cases, if and when they are filed, could lead to large financial penalties and possibly aid for struggling homeowners. Yet it seems unlikely that such a result will satisfy those whose anger sparked the Occupy Wall Street movement, or even many middle-class Americans who may wonder how, in contrast to other financial crises, this one could end with none of the people who seemingly helped orchestrate it behind bars.
Civil cases, if and when they are filed, could lead to large financial penalties and possibly aid for struggling homeowners. Yet it seems unlikely that such a result will satisfy those whose anger sparked the Occupy Wall Street movement, or even many middle-class Americans who may wonder how, in contrast to other financial crises, this one could end with none of the people who seemingly helped orchestrate it behind bars.
"Without accountability, the unending parade of megabank scandals will inevitably continue," Neil Barofsky, the former watchdog over the $700 billion bank bailout fund and a frequent critic of the Obama administration's response to the financial crisis, recently told The Huffington Post.
How and why the government chose this path will be the subject of debate for years to come. Some say prosecutors lacked resources. Others assert that the complexity of the financial transactions makes it virtually impossible to prove criminal intent in court, where prosecutors must convince a jury of guilt "beyond a reasonable doubt." In a civil action, by contrast, the bar is lower: jurors need only conclude that "a preponderance of evidence" indicates guilt.
One former prosecutor said a simpler human dimension may also be preventing government lawyers from filing criminal charges: the basic fear of losing a big case.
"Losing has a chilling effect, because no one wants to take a spin like that and come out on the short end," said Cliff Stricklin, a former prosecutor who worked on theEnron task force and also successfully prosecuted Qwest Communications chief executive Joseph Nacchio for accounting fraud. (Nacchio is currently serving a seven-year sentence in a federal prison.)
"[Losing a case] makes you wonder if there was indeed a crime, and if so, how you go about proving it," Stricklin said. "It is a signal to the public that either the government is jumping to conclusions or isn't competent."
CATASTROPHE OR CRIME?
Mary Jo White, a former U.S. attorney for the Southern District of New York, adheres mostly to the view that the financial crisis was a catastrophe, but not a crime. Now a prominent defense attorney at the law firm Debevoise & Plimpton, White said she thinks calls from some quarters for more criminal prosecutions are unwarranted.
"The financial crisis was so expensive and so many people were injured that one's instinct is to think that there must have been massive wrongdoing from the top on down," she said.
But criminal cases must be built on compelling evidence, not suppositions, and evidence of broad-based misconduct that would rise to that level doesn't exist, White said.
"I don't think the criticism is fair," White said.
William Black, a law professor at the University of Missouri-Kansas City and a prominent former bank regulator, is in the camp that thinks prosecutors have missed a massive opportunity.
"They don't get the whole concept of looting," he said.
Black, who worked with prosecutors to develop some of the 1,100 criminal cases that emerged from the Savings & Loan crisis of the late 1980s and early 1990s, said that Wall Street accounting fraud flows from a simple recipe: grow by buying high-interest loans, leverage the business by borrowing lots of money and keep next to nothing in reserve against losses.
"You are mathematically guaranteed to report record profits," he said.
But those profits are based on a fiction, he said, one that costs investors when the bank collapses -- and in some cases, can cost taxpayers too.
Financial firms like Goldman Sachs profited tremendously by purchasing loans described widely in the industry as "liar's loans," Black said. These loans were made without the borrower having to prove income, or even that he or she had a job.
"It makes no sense that an honest lender would ever make liar's loans," he said. Nor does it make sense that a sophisticated bank like Goldman, which runs an entire business based on the ability to calculate risk, would purchase such dangerous loans without knowing that they were toxic, he said.
Indeed, the Financial Crisis Inquiry Commission produced evidence last year which suggests that Goldman Sachs traders knew these investments were more dangerous than they were letting on to their customers. Internally, they characterized offerings as "junk" and "monstrosities" even as they offloaded the mortgage bonds onto investors, according to the report.
The SEC came to the same conclusion when investigating whether the bank had misled investors about a product known as Abacus. That probe led to a $550 million settlement in 2010.
The SEC has won $2.2 billion in penalties stemming from financial crisis-related cases, though it has been dogged by complaints -- most notably from federal judge Jed Rakoff -- that its fines are too small and that it doesn't target individuals often enough. An SEC spokesman declined comment.
Still, the agency's efforts to pursue financial crisis fraud far outstrip those of the Justice Department.
The government's lone criminal case related to the creation of complex mortgage investments came in 2009, when a federal jury declined to convict two former Bear Stearns hedge fund managers accused of lying to investors about the soundness of the securities they were selling.
Last month, the Justice Department announced that it had dropped a probe of Goldman Sachs, launched after the Senate’s Permanent Subcommittee on Investigations found that the bank sold investments "in ways that created conflicts of interest with the firm’s clients and at times led to the bank's profiting from the same products that caused substantial losses for its clients.”
There was "not a viable basis" to bring criminal charges against the bank or its employees, the Justice Department said in a statement explaining its decision.
LAST CHANCE FOR PROSECUTORS
Obama's multi-agency mortgage task force was supposed to succeed where previous investigations had failed.
"This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans," Obama said in his State of the Union address in January.
The goal of the new unit was to drill down into the sophisticated financial instruments the banks created to package and sell mortgages in a search for fraud. But the group was met with skepticism from many legal experts, who wondered how this effort would be any different from previous investigations.
The group got off to a rocky start. Three months after its formation, it had failed even to secure office space. In May, Schneiderman told the Wall Street Journalthat he wanted more resources and wished that investigators at his partner agencies would pick up the pace.
According to the Justice Department, the investigation is now in full swing.
More than 200 investigators are on the job, "devoting significant resources to investigate and prosecute misconduct by financial institutions in the origination and securitization of mortgages," the agency said in a statement.
The DOJ has issued 30 civil subpoenas in the past four months, it said, and the SEC has issued more than 300 -- though that number includes pre-existing investigations.
The New York attorney general's office, HuffPost previously reported, is now investigating several major institutions.
But if none of these cases yield a criminal indictment, who, if anyone, is to blame?
Schneiderman, though he never promised criminal cases, is likely to attract some criticism for the lack of prosecutions due to his aggressive advocacy for the task force. Last year, Schneiderman led an insurgency against a robo-signing settlement shaping up between state attorneys general and five large banks. His goal, he said, was to preserve his ability to continue an investigation he had opened in the spring into possible fraud that led to the housing bubble and crash.
The states leading the negotiations dispute that Schneiderman's ability to continue his investigation was ever in doubt. Nevertheless, his initial opposition to what became a $25 billion deal led directly to the creation of the task force
Schneiderman co-leads the task force, along with Robert Khuzami, the enforcement director of the SEC; Lanny Breuer, the head of the criminal division at the Justice Department; Stuart Delery, the head of Justice's civil division; and John Walsh, the U.S. Attorney for the District of Colorado.
Though each of these entities are sharing documents and resources, it is up to the individual agencies to file charges.
The biggest challenge for Schneiderman, who took office in January 2011, was the ticking clock. Most mortgage bonds were packaged and sold in 2006 or earlier, and the statute of of limitations on most types of fraud cases is five years from the commission of the alleged wrongdoing.
It is possible to extract "tolling" agreements from a business or individual under investigation that effectively extends the allotted time in which to bring a case, in exchange for more lenient treatment. But Schneiderman would have had to enact tolling agreements in very short order after taking office. It isn't clear whether a bank or an individual would accept such an agreement in a criminal case if they knew the statute of limitations was about to run out.
It is also true that while the New York attorney general's office has the authority to bring criminal fraud cases, it historically almost never does. Like the SEC, the office instead typically files lawsuits with the expectation of wringing a settlement -- and political bragging points -- out of a Wall Street firm. It's part of the recipe that both Andrew Cuomo and Eliot Spitzer used to pave their way to a governorship.
Instead, the attorney general's office typically defers to the Department of Justice, which has a large team of experts parked in the U.S. attorney's office just a few blocks away in lower Manhattan. But instead of taking on Wall Street's top executives, that office has focused on alternate cases -- such as the recent prosecution of hedge fund king Raj Rajaratnam, who was convicted of insider trading.
Stricklin, now in private practice at the Bryan Cave law firm in Denver, said that he doesn't know whether there was criminal conduct in the run-up to the financial crisis.
"The truth is more complicated than can be explained in sound bites," he said.
But he has seen, he said, a decline in the talent level of those working white-collar cases at agencies like the Federal Bureau of Investigation and the Justice Department, which over the past decade have diverted some of the most talented people over to counterterrorism.
"The government needs to decide if it is really going to tackle white-collar crime or not, and if so it needs to allocate resources," he said.
Otherwise, the result will be fewer cases, and more losses, Stricklin said.
"It always matters to bring solid criminal cases where you are holding people accountable," he said. "But the worst signal is not to do nothing, but to do something partway."
Mitt Romney Criticizes Defense Cuts That Paul Ryan Voted For
Mitt Romney criticized defense spending cuts that were part of last year's debt ceiling deal in an interview that will air Sunday on NBC's 'Meet The Press'.
"I thought it was a mistake on the part of the White House to propose [the defense cuts]. I think it was a mistake for Republicans to go along with it," Romney said.
Among the Republicans who supported the deal was Paul Ryan, the chair of the House budget committee and Romney's running mate. Paul not only voted for the cuts, he bragged about them afterwards.
"What conservatives like me have been fighting for, for years, are statutory caps on spending, legal caps in law that says government agencies cannot spend over a set amount of money," Ryan told Fox News last year, according to TPM. “And if they breach that amount across the board, sequester comes in to cut that spending, and you can’t turn that off without a super-majority vote. We got that in law.”
He also called the cuts "an important step in the right direction."
Ryan has since walked back his support of the sequester. Last month, he even criticized Obama over the cuts.
"When those budget negotiations were going on, it was the president and his party leaders who insisted on this makeup," he said. "Defense spending is not half of all federal spending, but it's half of the cuts, approximately, in the sequester. We disagreed with that then and we disagree with it now."
This isn't the first time Romney has inadvertently criticized a policy measure supported by Ryan. His campaign has aired several ads attacking Obama over Medicare cuts that seemed simliar to ones proposed in Ryan's budget plan.
As TPM's Benjy Sarlin points out, "So Romney now running against Ryan's own Medicare cuts, own debt ceiling deal -- why did he pick him again?
الخميس، 6 سبتمبر 2012
Forex Broker Reviews
The single most important decision in your plans for trading forex is choosing the right broker. Forex brokers have huge advertising budgets and that allow you to see their sales pitches everywhere you look. In these reviews we will separate the sales pitch from the reality of trading with these brokers.
Best Features
- No Minimum Opening Deposit
- Custom Lot Sizes
- Trade Directly on the charts
- Custom News Feed
- Demo Accounts Never Expire
- Sub Accounts
Least liked features
- no hedging
Demo Accounts
The Oanda demo account is virtually identical to the live account. The price feed is exactly the same as the live account and demo accounts never expire.
Customer Service
Oanda provides customer service by email, chat, and phone. Oanda seems to typically be responsive to request for service via any of the 3 methods. Emails sometimes take up to 24 hours to be returned depending on the issue.
Spreads
Oanda provides variable spreads, which means that spreads can change depending on market conditions. Most of Oanda’s spreads are extremely competitive during normal market conditions. The only time that the spread jumping will usually prove to be a problem is if you are trading directly around a major news release. For example, the EUR/USD typically trades with a spread of 0.9 – 1.9 pips under normal market conditions. During a news release the spread for the EUR/USD can go as high as 10 pips.
Leverage
Oanda only allows 50:1 leverage. Many traders might consider this a disadvantage, but I consider it to be like selling a gun with a safety on it. 50:1 leverage is sufficient for forex trading. Leverage set at 100:1 and higher can be dangerous and cause you to make oversized trades just because you can.
Top Features
- Full Hedging (FXCM UK)
- Funding by Credit Card
- Microlot Trading (FXCM Micro)
Least Liked Features
- No trading on US holidays (FXCM US)
Demo Accounts
The FXCM demo account is very easy to open. It performs very much like the live account. It is sadly limited to only 30 days.
Customer Service
FXCM offers customer service by email, phone, and live chat. The customer service at FXCM has been a little slow the few times I have needed to contact them by email. Overall the customer service speed is fair, but not great.
Spreads
FXCM provides variable spreads, which means that spreads can change depending on market conditions. Spreads can widen without warning. In the case of FXCM, not all of their spreads are competitive and their spreads can expand widely depending on which markets are open and which currency pairs you are trading.
Leverage
FXCM allows 100:1 for standard accounts, 200:1 for mini accounts, and 400:1 for micro accounts
Forex Reviews - Reviews of Forex Products
There are so many forex products out there with convincing sales pages. It's hard to tell the difference between real worthwhile products and a crafty sales pitch. Here we will be reviewing all sorts of forex products. We will take a look at brokers, software, forex books, videos, and any other forex products we can get our hands on.
Forex Broker Reviews
The single most important decision in your plans for trading forex is choosing the right broker. Forex brokers have huge advertising budgets and that allow you to see their sales pitches everywhere you look. In these reviews we will separate the sales pitch from the reality of trading with these brokers
Forex Software
There are so many pages out there selling forex software promising that the software will aid you in getting huge returns in the forex market. Many of these companies promise that their software is the new breakthrough in forex trading. In this section, we will review forex software in detail. We will look at what software is useful and what software is an outright scam.
Technical Analysis
echnical analysis has long been used in traditional markets like the stock market. Technical analysis methods rely on price history in order to predict the future. There are numerous methods used in the predicting, but the bottom line is that they always rely on price movements of the past. Technical analysis takes a few different forms and many methods of use.
Introduction to Forex Technical Analysis
Technical analysis has long been used in traditional markets like the stock market. Technical analysis methods rely on price history in order to predict the future. There are numerous methods used in the predicting, but the bottom line is that they always rely on price movements of the past. Technical analysis takes a few different forms and many methods of use.
One method of technical analysis is the use of technical indicators. A technical indicator is a graphical representation of the price action that is usually displayed along the bottom of the screen. One famous example is a technical indicator called MACD. You can see an example of the MACD in use in the first forex trade tutorial.
There are also other methods for using technical analysis. You can use trend lines, or measuresupport and resistance. Both methods rely on looking at the chart and reviewing recent history. Is the price following a pattern? Is it moving in a range? No matter what price is doing, it usually falls into one of those two categories. If the price is moving in a pattern and in one direction, you can use trend lines to analyze where the price should go. If the price seems to be bouncing back and forth in a range, you can use support and resistance lines to make note of where the price should change direction.
Technical analysis can be great, but like other trading methods, it isn’t perfect. Trading decisions are always up to the discretion of the trader making them. There are some great technical tools and indicators that are widely available for use. With so many traders using similar tools, even having slightly different interpretations, technical analysis can become a self fulfilling prophecy. If many traders are seeing the same price area as a buying point, the price could bounce as everyone makes similar moves. The question always remains how lasting those moves will be and that is where personal discretion comes in.
How technical analysis applies can be different for each trader. Every trader has their own interpretation of where they see trends and support. They also have their own ideas on setting up their indicators. These differences are called having your own trading system. You can take 10 different traders and you will probably get 10 different systems that give different signals. These differences are what make a market work.
Technical analysis is very useful in forex trading. It makes up only one portion of what you need to know when trading, but it is a very important thing to learn. Understanding technical analysis will give the charts some meaning when you look at them and help you understand why certain price movements occurred.
The concept of support and resistance is simple. Support can be thought of as a floor for the price while resistance can be thought of as the ceiling for the price. When the price breaks through a resistance, that level becomes the new support level. The reverse is true when the price breaks through a support level.
The best use of support and resistance is during trend trading. If the trend is up, you want to go long at support and take profit at resistance. If the trend is down, you want to go short at resistance and take profit at support.
Support and resistance levels are sometimes not exact price levels. Many times, they will be a small range of prices. Once the price clearly breaks past that range of prices, support or resistance is to be considered broken.
Support and resistance should be used as reference points when looking at a forex chart and trying to make a decision. They can give you a good idea of where to put your stop loss or take profit orders.
Currency Analysis
Currency analysis can be a complicated process. There are two primary methods for analyzing currencies and their values. Those methods are fundamental analysis and technical analysis.
hat is fundamental Analysis?
Fundamental analysis is basing the valuation of an asset on important economic reports. Inforex trading, we refer to these reports as economic indicators. Comparing the employment reports from two countries and making a trade based on that information would be an example of using fundamental analysis.
What is an Economic Indicator?
An economic indicator is an important piece of financial data in relation to the asset. In forex trading, the assets are the currencies of different countries. For countries, some important economic indicators are: interest rate announcements, employment numbers, Consumer Price Index, and Trade Balance numbers. While some reports are constantly valuable in fundamental analysis, others will sometimes be very important and other times, they will be much less important. For instance, if a country is having solid growth and experiencing inflation, the Consumer Price Index will be highly watched and considered important by the market.
Trading the News
Trading based on fundamental news can be a tricky matter. You can have a situation where the numbers come out very good for the asset that you want to buy, yet the asset will drop in value. This happens because the participants in the market have certain expectations of what numbers will be in the report. They will speculate on the outcome before the economic report comes out and place their trades early. If the report does not live up to their expectations, it won’t matter whether the news is good or not, the market can seemingly move in the wrong direction as the early speculators dump their positions. Trading the news is very risky and should only be done after several years of forex trading experience.
Summary
Fundamental analysis is an important part of learning to understand the markets. In the short run, the results are not always straight forward, they can even seem backwards. In the long run, currencies will always move along with fundamentals. Learning to use fundamental analysis will help you to understand the reasons behind trends and give you insight into currency movements.
Economic Indicators
Economic indicators are pieces of data from important economic reports. Most of economic indicators are published by government agencies or select private groups. When taking multiple economic indicators into account for a country, traders can get a well rounded sense of a country's financial health.
Major Economic Indicators
- Employment Reports
- Reports on Inflation and Money Supply
- Interest Rate Statements
- Retail Sales Reports
- Gross Domestic Product
Using Economic Indicators in Forex Trading
Economic indicators can help you get a sense for the general economic trend of a country. For example, an employment report that shows more jobs being created month after month, can show that an economy is becoming more productive. While a falling retail sales report can be a warning that growth is starting to contract.
Over the longer term, these trends can be the basis for a trade. You can invest in countries that are showing strength and trade against countries that are slowing down. This is the most basic element of fundamental analysis.
Doing the Foreign Exchange Carry Trade
Foreign exchange trading is a great alternative way to invest and make money. It has it's caveats, but as long as you treat it with respect and not as a fly by night get rich scheme, it can serve you well.
One of the easiest, or seemingly easiest ways to make money trading foreign exchange is to do a carry trade. A carry trade is a trade that pays interest into your account every day. When you hold trades for more than a day, your broker will add or deduct interest from your account depending on the trades you have open.
In order to have a successful carry trade, you need to pick a high interest currency and trade it against a low interest one. Every day, your broker will deposit a small amount of money into your account depending on how large of a trade you are holding and which pair.
So, you may wonder, what is the big win of this situation. Foreign exchange trading through a broker allows the use of leverage. Leverage allows you to make trades much larger than the actual money that is in your account. The interest that you get paid is based on that inflated trade size, not the amount of capital that you are using to open the trade. If your leverage were 5:1, it would take $200 to open a trade of $1000. You would receive interest on the $1000. Even at a few percent a year, that would be a phenomenal amount of interest paid on the $200.
So, if it's that easy, why aren't there more millionaires exploiting this little loophole. Mainly because there are some side effects to doing carry trading. One big one is that you can't really use the full value of your account to open trades, it would be too dangerous to be that leveraged on a constant basis.
The other thing is that carry trading is a "fair-weather" sort of sport. That is to say, that if things get uncertain in the global markets, hedge funds usually take their money out of these little interest machine trades and there is usually a blood bath. This doesn't really happen in big severity often, but the pairs that pay are usually the first to suffer when things get ugly.
The other thing is that when these pairs move backward, they do with a large amount of force usually, at least in comparison to other currency pairs. This means, you have to be prepared to sit on losses sometimes and also you have to have room to absorb them. Carry trades are rather unpredictable due to their nature, you may get a knee jerk reaction on bad news, or if it's scary enough, you can see thousands of pips of distance made in hours.
How to use carry trading to your advantage
Carry trading still has it's place. It's not just an easy answer to trading altogether because of it's dangers, however, it's a good add on method for trading(see: Methods of Forex Trading). That is, something else you can do along side of your regular forex trading strategy. You could either add some trades in your regular account, or open an additional account and make some long term holders. The main thing is to keep in mind that these trades are risky, so you either need to setup disaster stops, or make your trades small enough that you can handle substantial hurt.
The method that you choose is up to you. Everyone has their own risk tolerance. The main thing is that you keep a plan for what you want to do should things go unexpectedly wrong.
5 Ways to Fail at Forex Trading
Normally I'm out to save your bacon. I typically want to keep you from making any mistakes while trading and keep you going. Here I'd like to present a way to fail at forex trading without a doubt.
One: Use Money that you need for day to day living.
If you have some savings that you might be depending on as a safety net, or even as what you plan to use to pay the bills in the near future, use it to fund a forex account, this will insure that you feel some pressure to succeed and feel highly emotionally attached the money.
If you have some savings that you might be depending on as a safety net, or even as what you plan to use to pay the bills in the near future, use it to fund a forex account, this will insure that you feel some pressure to succeed and feel highly emotionally attached the money.
Two: Sign up with any broker
Who wants to waste time with broker shopping. Just pick one from a random internet search or from a random forum recommendation from a stranger. No need to research, or use a demo account. Open an account with a random broker, no need to worry about what country they are based in or whether they have to follow the regulations of your country.
Who wants to waste time with broker shopping. Just pick one from a random internet search or from a random forum recommendation from a stranger. No need to research, or use a demo account. Open an account with a random broker, no need to worry about what country they are based in or whether they have to follow the regulations of your country.
Three: Don't waste time practicing
Practicing just sharpens your skills, it doesn't let you cut through the chase and just get to the trading. Start trading with real money immediately. You can learn as you go.
Practicing just sharpens your skills, it doesn't let you cut through the chase and just get to the trading. Start trading with real money immediately. You can learn as you go.
Four: Trade Wild West Style
No need to think before pulling the trigger. That takes all of the fun out of trading. Make trades completely on impulse. Trade any lot size you want.
No need to think before pulling the trigger. That takes all of the fun out of trading. Make trades completely on impulse. Trade any lot size you want.
Five: Don't bother worrying about risk
Life is short, why worry about what you're risking. Who cares about using stops, or worrying about how much risk exposure you have. Worrying about these things is such a waste of time. It's better to fly by the seat of your pants and figure it out as you go.
Life is short, why worry about what you're risking. Who cares about using stops, or worrying about how much risk exposure you have. Worrying about these things is such a waste of time. It's better to fly by the seat of your pants and figure it out as you go.
What did you just read?
With any luck you've read the above and realized how ridiculous any of it would be to use as advice. The problem is, the existing information out there, typically trains you to act this way even if they don't promote it directly. As humans we are prone to certain behaviors, and without better information, the above is what we are likely to do without any prior experience in financial trading of any kind.
With any luck you've read the above and realized how ridiculous any of it would be to use as advice. The problem is, the existing information out there, typically trains you to act this way even if they don't promote it directly. As humans we are prone to certain behaviors, and without better information, the above is what we are likely to do without any prior experience in financial trading of any kind.
Forex is great because it's accessible to the average person very easily, but it also means that people come to the table with an untrained mindset. That can be a recipe for disaster for people that want to start trading.
If you want to get started with trading forex, do research, do take time to practice, and don't use money that you need. Honestly, the best way to get started is to take a small amount of money that you could care less where it ends up, put it in a live account and start learning. You will probably lose it, but you will learn exactly what not to do, and you won't get hurt in the process.
How Much do Currency Traders Make?
Question: How Much do Currency Traders Make?
Answer:
Currency traders are a bit of a rare breed. What they make can vary widely depending on what type of trader they are and how much experience they have.
In general, how much money you make depends on what currencies you trade, what leverage you use, and how much capital you have.
Here is how your earnings are affected:
First: How much money you have
Forex is fairly risky, whether you are trading high or low risk, the amount of trading you can do will always depend on how much money you have to trade with.
Forex is fairly risky, whether you are trading high or low risk, the amount of trading you can do will always depend on how much money you have to trade with.
Second: How much leverage you use
In forex trading, brokers offer leverage, which basically means you can put on trades for more than you have. Might be a good thing, or might be a bad thing, but either way, it affects your trading. If you like to take heavy risks you can see heavy account fluctuations in the positive or negative.
In forex trading, brokers offer leverage, which basically means you can put on trades for more than you have. Might be a good thing, or might be a bad thing, but either way, it affects your trading. If you like to take heavy risks you can see heavy account fluctuations in the positive or negative.
Third: What kind of currencies you trade
Some currencies are slow movers. They are good for beginners, or large traders. Obviously, if you are trading fast moving currencies it can make a big difference in what you make.
Some currencies are slow movers. They are good for beginners, or large traders. Obviously, if you are trading fast moving currencies it can make a big difference in what you make.
What you make is up to you, but the currency market is risky, and it's not for everyone. It takes a trader that can take an honest look at themselves and learn from their mistakes.
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