Elite E Services Newsletter March, 2007 Forex Disclaimer: WARNING! Foreign exchange is risky! There is a very high probability that you could lose some or all of your investment. Therefore, forex should be taken with a grain of salt, by only the elite, sophistocated investor. See Risk Disclosure
This above graph is based on a live account statement using our portfolio approach. In this account, you can see that it is not a straight line up. However the returns are undeniable – over 100% in a year. There are other accounts that have made 300% and others which have made only 50%. All the accounts are positive.
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Market Crash!The focus over the last 2 weeks has been waning global markets.
A great source of articles is WRH, featured on the right of our trader startpage:
http://www.whatreallyhappened.com/
http://www.whatreallyhappened.com/archives/cat_economy.html Economy page
We link to the economy page which filters out only economic articles that interest us.
http://trade.net.nz/trade.php Trader Startpage - News to the left and links on the right.
Crash - related articles
Why the subprime bust will spread
Suffering from dementia? Over 80? Need a mortgage? No problem
Sub-prime mortgage crisis could torpedo 2007 economy
Dollar Falls to Three-Month Low on Concern U.S. Growth Slowing
Real Estate in Certain Areas Will Go Down 40% to 50%
U.S. trade deficit a record 6.5% of economy
US Dollar Hit By Another Meltdown in the Dow
Kentucky Overrun With Unwanted Horses
London shares rocked by US crisis
Goldman Sachs Eating Off the Carcass of the Foreclosed
Europe's banks rattled by U.S. subprime troubles
Global markets drop after Wall Street’s dive
New Century Gets Default Claims, Says It Lacks Cash
Bloomberg to tell the story that Dateline didn't
Qwest still hiring India staff
Russian stock market plunges on Monday opening
US triggers $11bn HSBC fall-out
By Elif Kaban
MOSCOW (Reuters) - Commodities investment guru Jim Rogers stepped into the U.S. subprime fray on Wednesday, predicting a real estate crash that would trigger defaults and spread contagion to emerging markets.
"You can't believe how bad it's going to get before it gets any better," the prominent U.S. fund manager told Reuters by telephone from New York.
"It's going to be a disaster for many people who don't have a clue about what happens when a real estate bubble pops.
"It is going to be a huge mess," said Rogers, who has put his $15 million belle epoque mansion on Manhattan's Upper West Side on the market and is planning to move to Asia.
Worries about losses in the U.S. mortgage market have sent stock prices falling in Asia and Europe, with shares in financial services companies falling the most.
Some investors fear the problems of lenders who make subprime loans to people with weak credit histories are spreading to mainstream financial firms and will worsen the U.S. housing slowdown.
"Real estate prices will go down 40-50 percent in bubble areas. There will be massive defaults. This time it'll be worse because we haven't had this kind of speculative buying in U.S. history," Rogers said.
"When markets turn from bubble to reality, a lot of people get burned."
The fund manager, who co-founded the Quantum Fund with billionaire investor George Soros in the 1970s and has focused on commodities since 1998, said the crisis would spread to emerging markets which he said now faced a prolonged bear run.
"When you have a financial crisis, it reverberates in other financial markets, especially in those with speculative excess," he said.
"Right now, there is huge speculative excess in emerging markets around the world. There will be a lot of money coming out of emerging markets.
"I've sold out of emerging markets except for China," said Rogers, long a prominent China bull.
Even in China, the world's fastest expanding economy, Rogers said stocks were overvalued and could go down 30-40 percent.
But he added: "China is one of the few countries in the world where I'm willing to sit out a 30-40 percent decline."
The last stock market bubble to burst was the dot-com craze which sparked a crash from March 2000 to October 2002.
When the last bubble burst in Japan, said Rogers, stock prices went down 85 percent despite the country's high savings rate and huge balance of payment surplus.
"This is the end of the liquidity party," said Rogers. "Some emerging markets will go down 80 percent, some will go down 50 percent. Some will most probably collapse."
http://www.reuters.com/articlePrint?articleId=USL1470530620070314March 12, 2007 Here's an idea: when the securities markets go south along with the rest of the US economy in 2007, maybe the smoothies on Wall Street should receive end-of-year "cash-negative" bonuses, meaning instead of a check for, say, $25 million the day before Christmas, they get an invoice saying "please remit $25 million." Who to? Good question. One might suggest the nearest firefighters' or teachers' pension fund -- except the idiots who run those retirement funds bought mortgage-backed paper with their eyes open. Okay then, let's say the Wall Street boys send their checks into Amtrak. Maybe then the cafe car between Albany and New York City will re-open so that in the course of a 2.5 hour trip a person might get a drink of water. A tsunami of nausea seems to be sweeping across the media now in recognition that the Potemkin edifice of mortgage finance is imploding like a discarded Las Vegas casino. What it comes down to is that several species of newly-engineered financial Frankenproducts have been based on loans for houses that will never be paid back. Not just a few loans. Massive numbers. These, in turn, have been bundled, swapped around, and leveraged into other plays which now depend, for instance, on x-number of unemployed car dealers and underpaid busboys ponying up the "vig" for some piece-of-crap collateral that will soon be a third its previously appraised value. It will be easier for the car dealers and busboys to walk away from these deals than it will be for the smoothies who used all this bundled bullshit to hedge credit default swaps and play the yen-to-Euro carry trade game to wiggle out of their positions. And the unwinding of all this fraud will almost certainly leave the nation economically spavined. The amazing thing is how standards and norms for lending collapsed as completely as they did the past five years. One day you had bankers who retained a notion that lending per se required some prudent evaluation of the borrower's character and of the thing or enterprise borrowed for -- and the next day these protocols vanished. Once again I challenge the punctilious physicists out there by asserting that this astounding transformation is the product of entropy. Basically, you get a given system -- e.g. the US economy -- over-stoked on cheap energy (and even at $3 a gallon gasoline is cheap), and the system will throw off gobs of entropy. The more profligate the energy consumption, the more entropy results. It then expresses itself in various kinds of disorder, meaning anything from the immersive ugliness of the American built-up landscape to the behavior of people formerly attuned to such governing principles as moral hazard to retain the functional legitimacy of their livelihoods. It is really a sort of systemic disease, generating poisons that seep into the far corners of the organism affected, in this case the USA. It will be manifest in the personal ruin of individual families, the collapse of institutions, the rising crime rate, and the rapid physical decay of things built too carelessly to be worth caring for. I went around some neighboring towns here in upstate New York to look at the real estate yesterday. I was impressed by how uniformly crummy everything was -- and not only because it is nearly spring and layers of old dog shit are being revealed in the melting snowbanks. In the old houses priced above $300-K, the rotting sills and delaminating surfaces are plain to see. Of course, the buildings are worth something, but my guess is less than a third of the asking price by any realistic valuation. But at least these things were made of materials generally found in nature. The new houses were all glue and vinyl, and of course they were mostly built in places dissociated from any town itself, meaning the hapless owners will have to own multiple cars to live there and make multiple trips per day -- not a good prospect for the years ahead. The story will be the same all over the nation. The owners of these things will get into terrible personal financial trouble. The property market will re-value the buildings, discounting all the previous wishful thinking about price. And the financial markets will stagger and collapse as the process thunders through the mendacious operations that all this wishful thinking spawned.
http://jameshowardkunstler.typepad.com/clusterfuck_nation/
The Evolution of Cooperation is a 1984 book and a 1981 article of the same title by political science professor Robert Axelrod. The nine-page article is currently one of the most cited articles ever to be published in the journal Science ([1]).
In it, Axelrod explores the conditions under which fundamentally selfish agents will spontaneously cooperate. To perform this study, Axelrod developed a variation of prisoner's dilemma (PD), involving repeated PD interactions between two players (i.e., strategies written as computer programs) in a computerised tournament. This iterated prisoner's dilemma (IPD) format, he found, tends to offer a long-term incentive for cooperation, even though there is a short-term incentive for defection (the opposite of cooperation).
Axelrod invited academic colleagues all over the world to devise strategies to compete in an IPD tournament. The results ranged in many variables: algorithmic complexity, initial hostility, capacity for forgiveness, etc. After an initial tournament that simply compared pairs of strategies for success when paired in an IPD, Axelrod arranged a meta-tournament where strategies represented sub-populations in a large population of agents, and an agent could switch to another strategy if it noticed that one of its neighbors was using that strategy with greater success than its own. It should also be noted the simplest system, Tit for Tat, won the tournament.
Tit-for-tat had a number of important features as a strategy - it was "NICE" (it didn't defect first), and it was "provocable" (it fought back if it was attacked). Tit-for-tat never did better than its immediate opponent, but was able to cooperate very well with itself and with other "NICE" strategies - thereby harvesting the substantial benefits of mutual cooperation. Ironically, more fierce strategies tended to "canniblize" each other leading to fewer gains. They also could not take excessive advantage of Tit-for-Tat other than in their initial suprize defection - because Tit-for-Tat retaliated. (Tit-for-tat has been described as the "silver rule"). When Tit-for-tat represented a large enough proportion of the population, other "NICE" strategies could also effectively co-habitate.
The book included two chapters comparing Axelrod's findings to surprising findings in seemingly unrelated fields. In one of these, Axelrod examined spontaneous instances of cooperation during trench warfare in World War I. Troops of one side would shell the other side with mortars, but would often do so on a rigid schedule, and aim for a specific point in the other side's trenches, allowing the other side to minimize casualties. The other side would reciprocate in kind. The generals on both sides were satisfied that shelling was occurring and therefore the war was progressing satisfactorily, while the men in the trenches found a way to cooperatively protect themselves.
Considerable additional work has been done in this area. Repeated/Iterated prisoner's dilemma is one of the most important areas of game theory with implications for all the social sciences and for practical government policy. One of the key research findings in this area is the FOLK THEOREM - please see :
http://en.wikipedia.org/wiki/Talk:Folk_theorem_%28game_theory%29
http://en.wikipedia.org/wiki/Folk_theorem_%28game_theory%29 [edit] References
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