One U.S. Dollar Could Soon Equal One Euro

One U.S. Dollar Could Soon Equal One Euro

The US Dollar is looking pretty mighty these days

Goldman Sachs believes the U.S. dollar will catch up to the Euro and may even be equal by the end of the year. euro to dollar

This is just one outcome of a resurgent America in comparison to the European Monetary countries that are having all kinds of difficulty.  While we ended our bond buying program, they’re just about to start.

This is good news for US travelers to Europe but bad news for big multi-national companies that do lots of business overseas as they convert back into US dollars.

Greenback Sours Against the Euro

Russian Ruble Crisis:  Don’t Panic like it’s 1998

Russian Ruble Crisis: Don’t Panic like it’s 1998

I remember the 1998 Russian crisis well.  It was near the end of the summer, and threatened to put a real damper on an otherwise excellent stock market year.   The “Moscow meltdown” bled over the S&P 500, which plunged 20%.Russia 98-14

There are reasons  1998 and today are different

  1. Tough sanction in place have somewhat isolated Western investors
  2. Russia has a war chest of $416 billion in currency reserves today, versus very little in 1998
  3. Russia’s currency is free floating, and not pegged to the US Dollar like in 1998.  External shocks can be absorbed by the currency markets.

There are other worries in the world we can be concerned about, but Russia collapsing and spilling over to us like 1998 isn’t one of them.

Dont Panic like it’s 1998 – Full Article

When Exotic Devices Create Exotic Problems

When Exotic Devices Create Exotic Problems

Iexotic devices love the below article, and recommend you read it.

Essentially it talks about the limits of complexity, and how exotic devices can create exotic problems.

The reason this is relevant is the applicability of this principal to finance.

  • Any financial model is only as good as the person or team using it
  • Complex strategies can create unforeseen complications
  • Some problems have no solution, so you have to choose which form of risk you want to deal with, risk now or risk in the future.
  • etc.

Really good article and I agree with all his points.

When Exotic Devices Create Exotic Problems – FULL ARTICLE

Federal Reserve Comments in 2013

Federal Reserve Comments in 2013

federal reserve comments in 2013

As I mention in my video, the price of bonds (in general) have decreased causing yields to increase. The above graph shows comments from the Fed which has led so many people to have speculated they’d cut back on the bond buy back.

As of last month, the Fed Chairman has stated the bond buy back will stay in place.

For more graphs and a discussion, here’s the full article.

Full Article and Graphs