May 14, 2011
The following graph of the US Dollar Index tells a story that can be summed up in the following terms. There seems to be change in sentiment regarding the way people perceive their positions relative to the US Dollar. This is all translating into a major change in the way Forex traders are positioning themselves regarding the future of the US Dollar.
Recent economic news on each side of the Atlantic have heavily influenced the strength of the American currency. In the US, it is clear that talks by the Federal Reserve to end of quantitative easing, QE2 on time, and that there probably is no QE3 in sight. Economic data on employment is improving and recent speeches by Fed's Chairman Ben Bernanke lead to think that the US economy is getting stronger.
Expect for the specific cases of Germany and France, economic data for Europe is coming in short of expectations and the continued Greek sovereign crisis is weighting on the Euro. As long as the market has no certainty as to what will happen with Greece's debt, forex investors will keep expecting the worse as time passes by and will fly back to the US Dollar.
Looking at the chart at the beginning of this post, there a long term reversal is in place for a comeback of the US Dollar that should last many weeks. Shorting the Euro and getting long on the US Dollar will prove to be a winning trade as long as a bond crisis still looms over Greece.
May 13, 2011
I recently fell on a pretty interesting article from the Street.com: The 5 Dumbest Things on Wall Street: May 13 - TheStreet. It is about major blunders made by big public companies or people employed by them.
I was mostly intrigued by the article relating to Google (GOOG) and their newly issued Chromebook, described by Google on the Chromebook website in the following terms:
A Chromebook is a mobile device designed specifically for people who live on the web. With a comfortable full-sized keyboard, large display and clickable trackpad, all-day battery life, light weight, and built-in ability to connect to Wi-Fi and mobile broadband networks, Chromebooks are ideal for anytime, anywhere access to the web. They provide a faster, safer, more secure online experience for people who live on the web, without all the time-consuming, often confusing, high level of maintenance required by typical computers.
It will come in two models, one manufactured by Samsung and the other by Acer and will be available on June 15th. The author of the article on TheStreet.com discusses the fact that the Chromebook comes at a time when mini-notebooks are simply outdated and that linking the product to a 3 years contract on a data plan was a silly move to take.
This point of view seems to be adopted a long time before the product has even had a chance to get going in the marketplace. The target costumers of the Chromebook are people who spend most of their time on the web and do not us their computer for much other use. Google seems to be targeting a niche market and it is reasonable to think that the people in the marketing department saw at least a medium term opportunity for Google.
These notebooks will be well adapted for people who are already accustomed to the Google product line but they still need to offer some features that many people are still looking for when acquiring a computer. First, Java is not supported by the Chromebook. If it is supposed to appeal to regular Internet users, this is a functionality that will have to be addressed.
The Chromebook doesn't yet support networks that require security certificates and this is an issue considering that most enterprise wireless networks are secured. As noted on TheStreet.com, it's not currently possible to transfer owner privileges of your Chrome notebook to another user account unless it is set back to back to it's set back to it's initial state, loosing all previously recorded data.
There are only some of the few drawbacks of the Chromebook but I am pretty sure it will provide Google with a business segment that will constantly expose it's users to the advertising distributed by the company, thus increasing revenues.
Full Disclosure: The author does not have a position in GOOG.