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Monthly Archives: December 2010

The Decline of the Dollar: An Explanatory View

The US economy has been depressed with the prevailing notion that the market value of the US dollar has been viewed as dismal for a number of years now.  Starting in 2002 when the exchange rate for the dollar reached its last peak at 112.1853(DXY: IND) against other major currencies, the dollar has steadily declined ever since (Federal Reserve); as of the last trading day of November 2010 the dollar currently stands at 84.0201(DXY: IND).

The wealth and stability of a nation depend on strong financial markets, stable monetary and fiscal policies and, not surprisingly, strong currency as well.  Keys factors- such as the budget deficit, a reduction in foreign investors holding US currency in reserves, and the current account deficit, along with our growing dependence on foreign credit- are the major contributors for the decline of the dollar.  And while there are other sub-factors in deed, only the main driving forces will be discussed in detail for the sake of this report. (more…)

ETFs Gaining in Growth and Doubt

With the low volume in U.S. securities trading, onset by the declining dollar and plunging economy, investors are looking for alternative financial vehicles.  Exchange-traded funds, or ETFs, are fast becoming that vehicle of choice.

ETFs have doubled in popularity since the market meltdown; although they have been around since the 1990s.  According to a Barron’s report on ETF growth, “[d]uring the past 12 months [of 2010], ETF assets shot up by more than 30%, hitting nearly $1 trillion. That’s rapidly gaining on the $5 trillion now invested in stock mutual funds, a total that grew only about 8% in the past year.” Additionally, this growth “accounts for 25% of the volume on U.S. exchanges.” (more…)

Insider Trading Makes for Fascinating Drama

Backroom deals, smokescreen lunches and coded communications: all the makings of a late-night TV movie plot, but, this however can describe the real-life melodrama of insider trading.

Since the not-so-long ago days of Enron and ImClone (can you say, Martha Stewart), media frenzy and public backlash against corporate executives who blur the line between business ethics and personal gain continues to shine the spotlight on shady financial misdeeds.

The financial industry, in particular, continues to be marred by those who take the Gordon Gekko investment approach. (more…)