Research Report November 30th, 2011
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Transcript of Research Report November 30th, 2011
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Research Report November 30th, 2011
Issue: Volatility due to Suspect Ratings
Author: Khalid Natto
Chief Market Strategist
The KIN Consortium
Jeddah, Saudi Arabia
Email: [email protected]
Mobile: +9665 686 100 43The KIN ConsortiumOpinion:
It is our view that the huge swings in the volatility of the markets will exceed thecurrent resistance and support levels that are programmed into the HFT High
Frequency Trading Algorithms.
In this report we are going to highlight a series of articles that will show youthe catastrophe that is about to happen in the near future.
DiscreditedRatingAgencies: ON November 25th, 2011:U.S. credit raters set back on First Amendment:
(Reuters) - A federal judge has said credit ratings are notalways protected opinion under the First Amendment, adefeat for credit rating agencies in a lawsuit brought byinvestors who lost money on mortgage-backed securities.The November 12 decision was a little-noticed setback for McGraw-Hill Cos'Standard & Poor's, Moody's Corp's Moody's Investors Service and FimalacSA's Fitch Ratings, which have long invoked First Amendment free speechprotection to defend against lawsuits over their ratings.These agencies had argued that the Constitution protected them from claimsthey issued inflated ratings on more than $5 billion of securities issued in 2006and 2007, and backed by loans from former Thornburg Mortgage Inc and otherlenders.But the judge said the ratings were shared with too small a group of investors
to deserve the broad protection sought.The court rejects the rating agency defendants' arguments that the FirstAmendment provides any protection to them under the facts of this case, U.S.District Judge James Browning in Albuquerque, New Mexico, wrote in a 273-page opinion.
1. SovereignDebtDowngrades
ON November 25th, 2011:1. HUNGARY DEBTS CUT TO JUNK BY MOODYS
2. S&P downgrades Belgium to AA on funding pressures
mailto:[email protected]://www.reuters.com/places/mexicohttp://www.reuters.com/places/mexicomailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected] -
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2. BankDowngradesand Upgrades
On November 29th. 2011Downgraded:Banco Bilbao Vizcaya Argentaria S.A.Bank of America Corp.Bank of New York Mellon Corp.Barclays PlcCitigroup Inc.
Rabobank NederlandGoldman Sachs Group Inc.HSBC Holdings PlcJPMorgan Chase & Co.Lloyds Banking Group PlcMorgan StanleyRoyal Bank of Scotland PlcUBS AGWells Fargo & Co.Upgraded:Bank of China Ltd.China Construction Bank Corp.
3. Market Perspective The markets are programmed by computer algorithms. The algorithms aredriving the markets up and down based on the subjective and politicized ratingsagencies. We are seeing huge moves in the market. This volatility is going toexceed the pre-programmed parameters in the computer. At some point we aregoing to see huge bankruptcies as a result of the volatility in the markets.
4. Our Forecasts We reiterate our earlier position that the lack of investor confidence in sovereigndebts and now bank debts, will lead to the rise of GOLD Prices.
5. Probability andTiming
The probability of Gold being the chosen underlying asset is rather high, since wehave seen that trend on a historical basis. In fact it has gone from 1705 in our lastreport on November 1st, 2011 to close to 1800 on November 8th, 2011.
Today on November 30th, 2011 Gold is at 1746.50
In terms of when we will see the money flow towards Gold again, that dependsupon the programmers of the leveraged computers traders. The Quants have toreprogram the computers with buy orders that are oriented towards buying thesafest commodity on earth.
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DISCLAIMER: This content is provided for educational and informational purposes only. Evaluate any strategy prior to use tounderstand risk and suitability. The KIN Consortium does not endorse or warrant any Market Analyst content, service or product. Usethis content at your own risk without guarantee or warranty of any kind from The KIN Consortium
