A Slap in the Face for Recent Lehman Investors

Source: Money CNN

"Lehman Brothers is accusing a Japanese trading company of perpetrating a massive fraud and plans to sue it for hundreds of millions of dollars, officials at the U.S. investment bank said Sunday.

Lehman is seeking to recoup US$350 million (euro221.58 million) in outstanding loans, which it provided to a unit of LTT Bio-Pharma, according to company officials who spoke condition of anonymity, citing the sensitivity of the case."

Please click above source link for entire article

It's really a slap in the face for recent lehman brothers supporters. After what was a vote of confidence by the markets after reporting good results, on comes a freight train carrying a bunch of useless loan agreements overunning everything.

Might see them testing $35 tonight if this news hit the market full steam.

Bear Sterns's Chairman Dumped Every Share After JP Morgan's New Deal

How amazing, so much for JP Morgan quadrapling their deal to US$10/share, you have their chairman dumping every single share.

Source: Money CNN

"Just a day after JPMorgan Chase quintupled its bid for Bear Stearns, James Cayne, the chairman of the troubled investment bank, dumped his entire stake in the firm, selling more than $60 million worth of company stock he owned.

Cayne sold over 5.61 million shares of company stock Tuesday at $10.82 a share, according to a company filing with the Securities and Exchange Commission on Thursday.

The filing also revealed that his spouse sold an additional 45,669 shares, worth close to $500,000."

China QDII Fund Goes Kaboooom!

So much for the hype of China's QDII fund being the next big thing to the world of equity. It seems that most of us are unaware of the liquidation clause that protects 50% of the initial invest. Please read news summary below:

"Minsheng Bank's (600016) QDII fund has been forced to liquidate after its NAV fell more than 50%. Minsheng sold 100 mn shs for the QDII fund at Rmb1/share in Oct 2007. Under the agreement, the fund was to be liquidated when its assets fell below 50% of their initial value or rose more than 18%."

Singapore Scamster Gets Slapped with 5 Months Jail Term

Source: ChannelNewsAsia Forum

March 24, 2008
Unlicensed fund manager jailed five months
By Khushwant Singh

TRAINING firm Zone Financial was set up to teach people how to trade in future contracts and indices. But it also acted as a fund manager between May 2004 and August 2006, collecting nearly $4 million from 32 people.

Its managing director, Kelvin Han How Yong, 28, was on Monday jailed five months after pleading guilty to allowing the firm to engage in fund management without a capital markets services licence from the Monetary Authority of Singapore (MAS).

Han would persuade participants at his training sessions to invest in a fund - called the Kelvin's Fund - for periods ranging from a few weeks to six months.

Between May 2004 and August 2006, he raised about $4 million from 32 investors as personal loans to him.

The money was used to trade in futures contracts and indices and he promised his clients returns of one to five per cent per month, depending on the amount they put in.

By the time he resigned as managing director in August 2006, he had lost about $718,000.

Read the full story in Tuesday's edition of The Straits Times.

Gold Rush "OUT"

via Money CNN (Source)

Gold prices tumbled Wednesday, as the dollar regained strength, to sink nearly $100 below its record high set Monday - leaving some traders wondering if this is the beginning of the end for gold's impressive run.

COMEX gold for April delivery fell $59 to settle at $945.30 an ounce Wednesday. Gold had set an intraday record of $1033.90 Monday.

Amazing it is, look at the way the market profit takes on whatever makes them money based on TREND. $59 drop in a day, i wonder how many stop orders have they triggered and how many margin calls have they caused.

Gold might undergo short-term weakness due to this massive correction. Be vigiliant.

Yen Trading @ Critical Levels

Please take note. Low 90s for USD/JPY spells trouble for Carry Traders.

Sell Crude Oil at US$120 ?

Many of us are baffled by the sudden rise in recent oil prices. When $100 oil was breached more than a month back, the world ridiculed the way it was orchestrated. 1 contract at $100 it came down back to the low $90s. Those people who laughed at $100 dollar oil being a fad should have their curve wiped off their face by now.

Now with oil touching $110, $120 seems like a near term possibility. The question is: Can the price of $120 dollar crude oil sustain ?

Natural laws of numbers pertaining to financial instruments often create natural resistances and support. A share which tests $0.885 often marks a move to $1.00 and successfully breaking above $1.05 often marks a test for $1.20. Nothing has been proven to such a pattern but often enough i noticed these. If a trade is out of the jurisdiction of fundamentals and technicals, what forms the basis? Numbers.

As such, i believe $120 is a possible resistance for the price of crude oil and with a 30% gain from its price of $90, i believe its a worthy short-term hold for SHORTS.

A Good Read ......

The announcement which moved the markets yesterday constitute pumping in a further 200 billion USD of liquidity in the US banking system. I recommend all to take a look at the article below.

via Forbes (Source)

Excerpts from the report:

"The new program lets the brokerages borrow for 28 days, but more significantly, it allows the brokerages to offload a broader array of mortgage paper, which has been the bane of their existence since the credit crisis began last fall. If they can get those mortgages off their balance sheets, even if for just a short while, they will have more flexibility to make new loans.

Significantly for the Fed, the new program (which it is inelegantly calling its "term securities lending facility") is designed to be "reserve neutral," meaning it won't increase the nation's money supply to the point where it sparks inflation."

Writing Again?

After a long hiatus, i have decided i am going to put some effort back into writing this trading blog. Maybe it will be days before my next post comes but rest assure it will be back. Thanks.