Layoffs mount as crisis drags on--

 

The big job cuts are the evidence that the global financial crisis is unrelenting for any industry battered by heavy losses and weak markets. The 5,300 layoffs by the Swiss bank and a further 1,000 in London by Japan's biggest broker are the latest in the global financial sector .Of these, more than 50,000 were at Citigroup, which has made more write downs than any other bank in the world during the crisis. 

     It really cannot be predicted currently what’s in store for people next. It depends on sentiment, which will in turn drive credit markets, which in turn will weigh on banks or not. From the United States to Asian export giant Japan to European powerhouse Germany, the world's top economies is now in recession as the global crisis deepens. They are not the only ones with Singapore, New Zealand and Hong Kong also joining in. 

     The losses at banks are increasing continuously. Investment banking had a significant pretax loss, reflecting the challenging conditions in the financial markets in the quarter and the costs associated with risk reduction.

 

 

One lakh travel agents may lose jobs in New Year--

 One lakh travel agents or more could lose their jobs in the New Year if the problem related to fees on ticket sales is not solved soon. Many small travel agencies may be forced to shut down as airlines have stopped payment of transaction fees on ticket sales from December 1. This is in addition to the airlines’ stopping payment of 5% commission to agents from November 1. 

“Travel Agents Federation of India chairperson Vasuki Sundaram told ET that nearly one lakh agents will be on the road if the 'problem' is not resolved expeditiously.”There are around one crore travel agents in India. Of these, 50,000 are registered under the IATA Agents Association of India (IAAI). The agents account for 85% of the total tickets sold in the India. The remaining 15% are sold directly by the carriers. 

The dispute arose when Jet Airways, Air India and Kingfisher stopped paying 5% commission to the travel agents from November 1. The situation aggravated when the airlines implemented a zero-transaction fee regime from December 1.  

An analyst with a domestic brokerage firm said large players may survive, but small and individual agents are likely to be hit hard. 

 

 

Junk Bonds--

For many investors, the term "junk bond" evokes thoughts of investment. But don't let the term fool you - if you own a bond fund, these worthless-sounding investments may have already found their way into your portfolio.

In finance, a high yield bond (non-investment grade bond, speculative grade bond or junk bond) is a bond that is rated below investment grade at the time of purchase. These bonds have a higher risk of default or other adverse credit events, but typically pay higher yields than better quality bonds in order to make them attractive to investors.

Junk bonds differ because of the credit quality of their issuers. All bonds are characterized according to this credit quality and therefore fall into one of two categories of bonds:

·         Investment Grade 

·         Junk Bonds 

Junk bonds can be broken down into two other categories:

•  Fallen Angels - This is a bond that was once investment grade but has since been reduced to junk bond status because of the issuing company's poor credit quality. 
• Rising Stars - The opposite of a fallen angel, this is a bond with a rating that has been increased because of the issuing company's improving credit quality.

If you own such a bond fund, this is a good time to sell, because high-yield bonds offer scant refuge in today's volatile market. 

Journey through the Parachutes in Business--

Ancient alchemists tried to turn lead into gold. But here's an idea for a new, 21st century form of alchemy: Let's try turning golden parachutes into leaden parachutes. "Golden parachutes" are too often an illogical policy in normal times -- for example, when executives who run companies into the ground receive giant outgoing pay packages. A brief introduction to various parachutes is as below:

Golden Parachute

An employment contract or agreement guaranteeing a key executive of a company substantial severance pay and other financial benefits in the event of job loss caused by the company's being sold or merged. Golden parachutes are generally defined as those that exceed the IRS threshold for excessive severance payments, meaning that they equal or exceed three times the recipient's average salary for the prior five years. Silver Parachute Like golden parachutes--which are received by the top executives in the corporation--silver parachutesinclude severance pay, stock options and bonuses but are offered to a larger number of employees..

Less prevalent than golden parachute plans, and slightly less lucrative, are so-called "silver" parachutes, which are sometimes awarded to executives below the top level. Siske says these plans typically pay out about 1.5 to 2.5 times the recipient's annual bonuses. Often the last isn't a significant issue, since for ex salary, bonus and benefits; although they sometimes do not cover executives at these level bonuses tend to account for a much smaller percentage of total compensation than they do for CEOs and other senior managers.

 Tin parachute

Even less common than gold or silver parachutes are tin parachutes--severance plans that cover all of the employees of a company in the event it undergoes a change in control. The value of a tin parachute will vary significantly from company to company, says Siske, but will typically provide a severance payment linked to the recipients' years of service and/or their age, often with a cap, such as 1.5 times annual compensation.

 Platinum Parachute

In some cases, severance packages awarded to senior executives have been termed "platinum parachutes" by the business media, both because of the enormous size of the payments and because they haven't always been tied to a change in control of the company. Some of the most prominent recipients have included former Mattel Inc. CEO Jill Barad, who benefited from a deal valued at $50 million when she left the toy maker amid mounting losses.

Gold: The Next Reserve Currency Player

As it is known that the subprime crisis initiated and perfected in the United States has morphed into a full blown liquidity crush that has infected nearly every corner of the financial world.

 

 

 

The one corner that can remain functioning in a largely rational economic way are the Persian Gulf states known as the Gulf Cooperation Council (GCC). These include Kuwait, Saudi Arabia, Bahrain, the UAE, Qatar and Oman. All except Bahrain are ranked in the top 20 oil producing nations and Saudi Arabia alone made over 200 billion US$ in exports in 2008. 

 

The parabolic rise last year in oil prices gave them daily billion dollar payouts. The drastic fall has still left them able to pay off substantial social committments to their populaces and have enough left over to make forays into the Sovereign Wealth Fund arena. However, there is a future to consider and oil will not be around forever.

 

The solution to the two great concerns for the future - "What to do after oil?" and "How do we retain value from our Dollar payouts?" may rest with gold. It most certainly doesn't lie with an alternate paper currency. 

 

The answer? Initiation of a new payment regime - a 10% gold payment share between 2009 and 2012, 20% thereafter. The rest of the bill? Payable in US$. Gold has a long and very respected history in the Middle East. New gold, however, could be used to satisfy the region's concern for its following generations. It would form, literally, the foundation for mega banking centers and the stabilization of the currency they will still need to receive in mountain like proportions in the future.

 

The GCC states have developed some of the most lavish and technologically advanced cities in the world. They have shown the capacity to attract the most sophisticated financial and engineering work forces from around the world. Banking and gold are naturals for them, and the infrastructure and patience to realize this seismic shift in financial integrity are already in place.

 

Will this actually happen? The tipping point lies in the eventual landslide of liquidity, perhaps as much as the equivalent of 10 trillion US$ when various currencies are included (Euro, Yen, etc.) that will burst on the markets by Spring 2009. No matter what price gains oil delivers to the Kuwaitis and Saudis, at that point oil will be tainted by a realization it's being tallied in rapidly depreciating fiat money. 

 

Those holding ETFs such as GLD, DGP and even silver ETF SLV could see enormous profits. Miners will doubly prosper, as they always do in strong metal uptrends. 

W.D.Gann's Valuable Rules--

Some of today’s great trading philosophies actually date back to the early to mid1900s.And W.D. Gann, was considered "market mavens" of that time. He stressed hard work and preparation as pre-conditions for successful trading of markets. His  work is still valid and renowned by successful traders of all markets worldwide.

William Delbert Gann made an enormous contribution to analysis and trading throughout his long lifetime. The fact that his techniques are used by so many traders and investors today, almost 50 years after his death, is evidence enough of his enormous contribution. Even his few critics flatter him by repeating his never failing rules as their own, more than half a century after Mr. Gann first devised them.

Gann’s 28 Valuable Rules:

In order to make a success trading in the stock market the trader must have definite rules and follow them. Gann said "The rules are based upon my personal experience and anyone who follows them will make a success."  It is now more than 50 years since W. D. Gann documented his 24 rules, yet they apply today as much as they ever did.

1. Amount of capital to use: Divide your capital into 10 equal parts and never risk more than one-tenth of your capital on any one trade.

2. Use stop loss orders. Always protect a trade when you make it with a stop loss order 1 to 3 cents, never more than 5 cents away, cotton 20 to 40, never more than 60 points away.

3. Never overtrade. This would be violating your capital rules.

4. Never let a profit run into a loss. After you once have a profit of three cents or more, raise your stop loss order so that you will have no loss of capital. For cotton when the profits are 60 points or more, place stop where there will be no loss.

5. Do not buck the trend. Never buy or sell if you are not sure of the trend according to your charts and rules.

6. When in doubt, get out and don’t get in when in doubt. 

7. Trade only in active markets. Keep out of slow, dead ones.

8. Equal distribution of risk. Trade in two or three different commodities if possible.Avoid tying up all your capital in any one commodity.

9. Never limit your orders or fix a buying or selling price. Trade at the market.

10. Don’t close your trades without a good reason. Follow up with a stop loss order to protect your profits.

11. Accumulate a surplus. After you have made a series of successful trades, put some money into a surplus account to be used only in emergency or in times of panic.

12. Never buy or sell just to get a scalping profit.

13. Never average a loss. This is one of the worst mistakes a trader can make.

14. Never get out of the market just because you have lost patience or get into the market because you are anxious from waiting.

15. Avoid taking small profits and big losses.

16. Never cancel a stop loss order after you have placed it at the time you make a trade.

17. Avoid getting in and out of the market too often.

18. Be just as willing to sell short as you are to buy. Let your object be to keep with the trend and make money.

19. Never buy just because the price of a commodity is low or sell short just because the price is high.

20. Be careful about pyramiding at the wrong time. Wait until the commodity is very active and has crossed resistance levels before buying more, and until it has broken out of the zone of distribution before selling more.

21. Select the commodities that show strong uptrend to pyramid on the buying side and the ones that show definite downtrend to sell short.

22. Never hedge. If you are long one commodity and it starts to go down, do not sell another commodity short to hedge it. Get out at the market: Take your loss and wait for another opportunity.

23. Never change your position in the market without a good reason. When you make a trade, let it be for some good reason, or according to some definite rule; then do not get out without a definite indication of a change in trend.

24. Avoid increasing your trading after a long period of success or a period of profitable trades.

25. Don’t guess when the market is top. Let the market prove it is top. Don’t guess when the market is bottom. Let the market prove it is bottom. By following definite rules, you can do this.

26. Do not follow another man’s advice unless you know that he knows more than you do.

27. Reduce trading after first loss; never increase.

28. Avoid getting in wrong and out wrong;getting in right and out wrong: This is making double mistakes.

Types of mutual funds---

This guide for the various types of investment funds. A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.

When it comes to investing in mutual funds, investors have literally thousands of variations. Before investing in the fund on the feasibility of investment strategy and risk funds good opportunity for you. 

The first step for the success of the investment is to determine your financial goals and risk tolerance - whether in its own discretion or professional help financially. Once you know what you do if you need money, and how much risk you can tolerate, you can choose. 

Most mutual funds fall into one of the three main categories - money market funds, pension funds (also known as the "Fixed Income" fund), and stock funds (also called the "L" Equity Fund). Each type has its own characteristics and different risks and opportunities. Typically, higher yield potential, higher risk of loss. 

Money Market Fund: 

Money Market Fund, have relatively little risk compared with other investment funds. Investor losses have been rare, but they are possible. Money Market Fund to pay dividends, which generally reflect the short-term interest rates, historically funds and money market yields are lower than in bonds and securities funds. 

Bond Fund: 

Bond funds are generally more risk than money market funds, mainly because they tend to  achieve higher yields. Because there are many different types of bonds, bond funds can be very different in their risks and benefits. 

Stock Fund:

A stock fund is a fund that invests in Equities more commonly known as stocks. The objective of an equity fund is long-term growth through capital appreciation, although dividends and interest are also sources of revenue. Specific equity funds may focus on a certain sector of the market or may be geared toward a certain level of risk.

A small information for the new investors if they have a certain objective, they can invest accordingly---

Investors interested in:	Should invest in:
Growth	Stock Funds
Income	Bond Funds
Safety of Principal	Government Bond Funds
Immediate Liquidity	Money Market Funds
Tax Relief	Municipal Funds
Maximizing Current Income	Corporate Bond Funds