Euro Fails to Launch as Greece Seals Debt Deal

Michael Smith at foreign exchange specialist Pure FX.

So last night Greece announced that its debt swap had been a roaring success.

95.7% of its private creditors had participated in the deal, which sees 70.0% of the value of their existing bonds snatched out from under them to pay down Greece’s debt. The so-called triumph means Greece remains on course to receive its €130bn bailout, and avoids the catastrophic option of defaulting and leaving the euro (catastrophic not just for Greece, but for European banks and governments, which have billions invested in Greece.)

Officials ranging from Greek finance minister Evangelos Venizelos to EU Commission head Oli Rehns have praised the deal to high heaven. So how come the euro has not gained? How come in fact it has lost more than percent against the US dollar and half one against UK sterling?

The devil it seems is in the detail. For although the debt swap means Europe has once again averted its financial apocalypse, it has done so by alienating the very markets it must have on side. In many ways after all, this deal came about only because of legal trickery.

For instance, the Greek parliament retroactively inserted clauses into its bonds (i.e. after investors had bought them) enabling them to cut their value and refuse payout. That’s a little like borrowing some money from the bank, then altering the terms of the loan after you’ve both signed it to let you pay back less. It’s bankrupt by any other name!

Furthermore a significant portion of Greek bondholders didn’t sign up this swap, but had the value of their bonds changed involuntarily. This might cause problems because it could trigger costly insurance payouts (up to €3bn.) But more importantly, it amounts to a massive violation of the trust between governments and markets.

This then is the reason the euro has not gained, but lost, following the Greek debt deal. In addition it’s possible the euro might have more losses to endure, as the consequences of the market betrayal concerning Greece come into effect. What happens, for instance, if other countries currently implementing austerity programmes need to make a debt swap?

To be sure, EU officials have repeated again and again that Greece is a one-off case, but what guarantees Ireland and Portugal not repeating what happened here? Indeed, the fact that it happened here at all makes it more likely it will happen elsewhere, because markets will factor the Greek betrayal into their borrowing costs elsewhere in Europe.

There’s also the fact that, this debt swap aside, Greece faces massive hurdles before it returns to growth. Just last quarter for instance the economy shrank more than forecast, contracting -7.5% against -7.0% predictions. Does this strike you as a nation about to bounce back from recession? It would be optimistic at best to say so, and foolish at worst.

Hence in short, I don’t see the euro strengthening in the short-term. In spite of its perceived success, I believe the Greek debt swap has exacerbated the situation, and this will be reflected in weeks to come.

Spread Trading Currencies

Spread trading currencies is becoming increasingly popular thanks to straightforward and accessible brokers offering great deals to new account holders. These deals include low spreads, money-back guarantees and low-stakes trading. Trading currencies has also become easier and much more accessible with many online brokers providing cutting-edge technology with free tools and charts previously reserved for premium account holders. These online brokers provide simple, online access to their platforms, fast ways to deposit into your account and excellent charting packages. Spread trading is fast becoming the most effective way to trade without risking large sums of money and trading FOREX is the most profitable way to use technical analysis to make large profits from currency price fluctuations.

Spread trading currencies using technical analysis is seen as one of the purest forms of applying this analytical technique. Due to the fact that currencies are highly liquid and trade with no ceiling or floor in the market, they are influenced only by the influences of supply and demand. This creates an excellent basis to apply technical analysis as most participants spread trading currencies are also looking at specific chart patterns to determine the direction of price. Technical analysis consists of analysing these patterns and trends through historical reflection of what has gone before. Markets such as forex markets operate in cycles and patterns can be seen repeating constantly with a high probability that the outcome will be the same.Spread trading currencies using technical analysis allows bets to be placed either long or short against these price movements and, although no currencies are actually bought or sold in the process the market, and the patterns which occur, follow the underlying market very closely.

Using technical analysis to spread trade currencies is one of the most popular strategies employed by professional and amateur traders alike. From very simple analysis, allowing anyone to quickly analyse charts and spread bet on currency movements, to advanced analysis using complex indicators, this technique can provide profitable trading strategies. The different variations in approach using technical analysis ranges from focusing exclusively on charts for trend lines and recognition of patterns, to using indicators designed to show when a market is either trending or reversing.The multitude of ways in which technical analysis can be employed in currency spread trading offers many possibilities to traders to develop a successful trading strategy incorporating the analysis of the highly advanced charts available free from most brokers.

Another form of analysis which is helpful for longer-term bets is fundamental analysis. This is used in currency spread betting to show the large, underlying trends in a market. Often, these are dictated by large data releases or interest rate decisions by central banks. The most important information for spread trading currencies using fundamental analysis are these interest rate decisions and GDP figures which directly impact on the supply and demand of individual currencies. Methods employed by currency spread traders using fundamental analysis to spread trade currencies are either short-term bets which trade the news release directly; anticipating the result and taking a position as soon as this is known whilst markets are volatile. For the more sedate trader a spread bet can be placed on the currency pair after release with a view to holding this position for several days or weeks as the demand for the currency slowly trends lower or higher. Spread trading currencies using fundamental analysis can be highly effective and the largest gains can often be seen with long-term position trading.

The availability of currencies available to spread trade provided by most brokers is vast and generally range from the major and minor currencies to the exotic and specialist pairs. Trading the major pairs with any online broker is guaranteed to provide you with a competitive spread. Spread trading currencies considered major, including the main USD pairings, offers highly liquid markets with spreads as low as 0.8 points for the EUR/USD. This is one of the major benefits of the growing popularity in currency spread betting as both spreads, and the services and tools provided by online brokers improve to compete with one another. This means that offers and promotions for new members are likely to improve and makes currency spread trading platforms a consumer-orientated market.

One of the major benefits of spread trading currencies, and the major attraction for many traders from traditional currency trading, are the tax-free gains available in the UK. Although this loophole may not exist forever, the current status of spread trading currencies are that any profits made fall under ‘gambling’ income according to UK law. It goes without saying that spread betting on currencies cannot be considered pure gambling but speculation based on analysis of risk but the nature of placing a ‘bet’ on price movements puts currency spread trading in this category. Many traders take advantage of this to make large gains and higher profits than traditional currency trading.

 

Dealing with debt: which approach is best?

Debt. It’s a small word, but it can have potentially big consequences. Borrowers can end up in very different situations, depending on how much they’ve borrowed, how many different lenders they have, what type of debt they’ve taken on and how healthy their overall finances are.

Some people may have a few reasonably sized debts they’re managing to repay comfortably every month – and just want a bit of help making them slightly easier to manage, or repay faster.

Others may be concerned that their debts are getting the better of them, and need some help budgeting and/or improving their debt management skills.

Still others may be in the position where they can no longer afford their agreed monthly repayments to their unsecured lenders – and need to find a way of lowering their repayments ASAP.

They’re all very different scenarios, yet they all have something in common: getting professional debt advice – from http://www.debtadvicenow.co.uk/, for example – could help you find the best way of getting on top of things.

What situation are you in?

The most suitable approach for your debts all depends on what situation you’re in.

Are you repaying your debts well every month, but want to make them simpler to keep on top of? If this is the case, a debt consolidation loan could be the best option. By combining your existing debts into the loan, you’d only have one monthly payment to make to one lender, which could be much easier to keep track of (though you’ll have to commit to regular payments until the total amount is repaid).

Alternatively, you may no longer be able to afford your unsecured debt repayments as agreed per month. Here’s where a debt management plan could help. You could agree smaller monthly repayments with your unsecured lenders over a longer period – so you should be able to repay everything you owe at a realistic rate (or at least until you can start making your original repayments again). Just bear in mind that repaying your debts over a longer period could be more expensive overall (as interest will accrue for longer), and making smaller payments will damage your credit rating for six years.

Get advice

Not sure which approach to take? In a different situation with your debts from the ones discussed here? A professional debt adviser could help you find a suitable solution.

 

Insuring your van in 2012

2012 is finally here, which means is time to review our finances and find places where we can save money on. If you are getting ready to renew your commercial van Insurance policy, there might be a good chance that if you do a little bit of research and shop around you will be able to save some money on your premium. Here are a few tips that are going to help you do just that.

Shop Around for Better Prices

If you have been with your Insurance provider for a while, there is a possibility that their rates may not be the most competitive at the moment. Take some time and do a little bit of research, ask for a few quotes from other providers. You may be surprised to find that some of them will offer you the same quality coverage for a much lower price.

Before deciding to switch providers, make sure that the new company you are switching to has a good, stable reputation and great customer service.

Choose a Different Deductible

A deductible is the amount of money you will have to pay out of pocket in the event of an accident. This will result in a lower premium, which will mean lower payment. However, you have to make sure that in the event something happens you are going to be able to afford the deductible you set, if not, you will find yourself in a pretty bad situation. Find the right balance between a deductible you can afford and one that will lower your premiums.

Get Discounted Rates

If you do your research, you will most likely be able to get discounted rates that will save you a lot of money. For example, using the same provider as the one you use for your personal insurance will result in a discount. You can join both your personal and commercial insurance policy and save a good deal of money.

The way you make your payments could also result in savings. For example, many companies will give you a special discount if you set up automatic payments every month. This means that your payment will be automatically deducted from your bank account, and you will not have to worry about sending a check, being late or having to deal with paying on the website.

Paying your policy in full will also save you some cash. If you are able to afford it, some companies will give a nice percentage in discounts if you take care of your premium in a single payment.

Conclusion

Saving money any way you can is definitely a very smart idea, especially in the challenging times we are going through. Your commercial van insurance does not have to break the bank; do a little bit of research and you will be happy with how much you will save.

Analysing Your Business For Profit Holes

It is extremely important to analyse your business for profit holes, which are shortcomings due to a lack of revenue or the failure to properly manage expenses. The first step most companies take in analysing their businesses is determining whether they are maximizing their revenue. Take a look at your current client or customer base, if you are a retailer. Notice what common characteristics or demographics they share. For example, determine if you are primarily focusing on smaller companies within a certain industry, or certain types of clients. Analyse your consumer target market to determine what age or income groups you mostly service. Focus on building your customer base by advertising to businesses or consumers who are most likely to use your products.

Your expenses may also be out of line with typical companies in your industry. For example, your restaurant labour expenses may be too high. You may need to pinpoint peak periods of your day and determine when you need to have fewer workers on hand. You may also waste inventory by ordering too much. Some of the items you order may be slower sellers. You may also be spending too much money on overhead, such as utilities. Your plant may not be producing up to its capabilities. Take a detailed look at your business for any expenditure you can cut. Your ability to minimize expenditures will increase your profit margin.

The entire process of keeping up with clients, revenue and expenses can be tedious. You may have thick volumes of forms for which you are manually keeping records, such as sales, inventory and customer reports. You may be spending too much time analysing your business when there’s an easier way. And that easier way is accounting software.

You will be much more efficient operating your business with accounting software. Most accounting software provides up-to-date and even up-to-the-minute reports on sales, labour and profits. Retailers and restaurants, for example, sometimes study hourly reports to determine the best operating hours. Accounting software can also relieve the frustration of counting vast quantities of inventory, or poring over manual revenue and expense forms which take hours to complete.

Accounting software packages can provide you with virtually any type of information your business requires. Use it to keep track of inventory you have on hand as well as potential out-of-stock situations. Most of these packages allow you to input data electronically. Retailers can scan shelf tags for example and immediately print out inventory reports. Some accounting software provides you will updates of suppliers. You can also maintain electronic records of sales invoices, accounts receivable and accountable payable. Speed and accuracy are some of the key advantages to owning and using these types of software packages. The sales analysis, which may have previously been a major burden, becomes virtually a cinch. You can also use this type of software to update customer accounts or create income statements and balance sheets. Maintain your records online for other financial employees. You can also print the reports at any give time for meetings or a quick analysis.

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