Broker News

What do September 11^th have to do with Lehman Brothers and what does any of this have to do with global finance and European economy? Let's take a quick look:

Earlier this month, UBS Investment Research released a report detailing the consequences of a "?Euro breakup" where one or more eurozone countries drop the common Euro. Although it may not have been obvious that the eurozone was even considering such a breakup in the first place, the report poses some interesting points. Since it appears to focus in parts on the consequence of a strong European country such as Germany dropping the Euro, some bloggers have speculated that the institute may have insider information that Germany is, in fact, considering such a move. The report does not confirm this but does state that a breakup would incur significant costs and is therefore not a probable scenario. Instead, UBS sees the Euro moving toward fiscal integration and finds that "?popular discussion of the breakup option considerably underestimates the consequences" of a breakup"”hence the report, which intends to set the record straight here. Some have suggested that a breakup would have a significantly negative impact on UBS and that this is the real motivation behind the focus of the report and its encouragement of moving toward fiscal integration as an alternative to breakup.

The Bank of America has been in the news quite often with its need to settle a seemingly endless stream of lawsuits this year as well as the steady decline of its stocks over the last few weeks. The bank has largely maintained that it is not in trouble with meeting capital demands, despite the numerous legal settlements it has had to make, amounting to $12.7 billion that it has paid thus far this year.

With the excitement of August over and the rise and fall of gold almost behind us, many are looking to September for clues to the future health of the economy. Last week alone, we saw major US indices produce their best weekly gain of the last two months. Historically, however, September has been one of the most volatile months in the year with frequent swings from high to low percentages above 10%. September also historically sees poor performance for equities on the S&P 500.

Hurricane Irene pounded the American Eastern Seaboard this past week, though it's hardly the only such unusual weather event to hit the country or indeed the whole planet recently. In fact, over the past couple of years, we've seen a vast increase in droughts in some areas along with floods in other areas.

Forex trade volumes in Turkey top $18 billion on a daily basis, though little has yet been done by way of protecting the investors, and until now, there has been little recourse for traders who have been wronged by a Forex broker within Turkey's borders. The country's capital market regulator, however, has ruled that in the coming days, only regulated brokers will be permitted to offer Forex trading services within the country's borders. Vedat Akgiray, Persident of Turkey's Capital Markets Board, has noted publicly that with no regulations, traders in search of high returns for low investments often lose their money quickly and entirely. Regulations for Forex brokers in Turkey will prevent these widespread losses and protect the thousands of Turkish traders.

The Arab Spring has turned into a blazing hot summer where, as I write this, Libyan rebels are finishing up taking control of their capital city and Egypt is in the throes of convulsions following the start of Mubarak's trial and the recent terror attacks emanating from the Egyptian Sinai.

Industry experts have long touted the value of gold bullion as a safe investment during times of war or recession. Even when global currency values become erratic, gold has always been upheld as the ideal choice for the wary investor. Recent events, however, have turned this notion on its head. With the ongoing US debt crisis and uncertainty about the stability of the US economy plaguing the world, it was only natural to see gold in high demand. Bloomberg reports that the year 2011 has seen an increase in gold investment of 33% with a record peak on August 22: gold futures for December delivery closed at almost $1.891.90 per ounce on New York's Comex. Only two days later, however, investors decided to sell en masse, taking advantage of the record high and effectively dropping the value of gold to a level that has not been seen since December 2008.