Thursday, August 25, 2016

JP Morgan Direct Beneficiary in Nigerian Central Bank Forex Debacle

Central Bank of Nigeria, Image credit: TheGuardian


Nine Nigerian financial institutions (United Bank of Africa, First Bank of Nigeria, Diamond Bank, Sterling Bank, Skye Bank, Fidelity Bank, Keystone Bank, First City Monument Bank, Heritage Bank) were suspended on Tuesday from the inter-bank Forex market by the Central Bank of Nigeria (CBN) for failing to remit $2.3 billion to the government’s Treasury Single Account (TSA). The TSA was established last year in a bid to combat corruption and to bring more transparency to government finances.

President Muhammadu Buhari’s administration imposed strict rules on how banks needed to remit funds, one of those rules stipulates that Nigerian banks must send government dues in US dollars.



This policy decision by Buhari’s administration may not seem very problematic at first glance, but the scarcity of dollars in the country has placed many banks in an untenable position.

In June, the CBN decided to allow the Nigerian naira to float on the open market. The move was aimed at stimulating foreign investment, but president Buhari’s continued opposition to the devaluation has scared off foreign investment. Political instability and uncertainty has created very difficult foreign exchange conditions for banks in Nigeria. The naira has taken a sharp nosedive the last few months and outside investment in the country has been minimal.

A representative from Diamond Bank, Mike Omeife, explained that many banks in Nigeria were looking to pay the CBN in naira, given the shortage of dollars in the country, “Because of the crash in the local currency, the banks expected the CBN would have allowed them to pay in naira instead of dollars,” said Omeife, in a phone interview with Bloomberg.

According to a report by This Day Live, Fidelity Bank representatives also confirmed Omeife’s sentiments regarding the inadequate dollar liquidity in the country:
“We got a repayment schedule which we have been meeting. Our original indebtedness was about $500 million and it was only in June we were unable to make a refund based on the schedule due to the dollar scarcity,”
United Bank of Africa managed to pay its $530 million dollar debt to the CBN yesterday and was allowed back into the inter-bank forex markets today. Diamond Bank, which owes about $287 million, is still in discussions with CBN, according to statements by Mike Omeife.

Image credit: Ramin Talaie / CORBIS - Jamie Dimon, CEO of JP Morgan


While some of the affected banks have been scrambling to appease the CBN with rapid repayments, some market analysts have begun to question why the CBN is taking such heavy-handed measures against Nigerian banks.
One analyst tells news outlet This Day Live:
“I do not understand the benefit of taking dollars from Nigerian banks and sending them abroad to the CBN’s account with JP Morgan.”
Not only does JP Morgan benefit directly from this whole debacle, the inter-bank FX penalties will deprive Nigerian banks of trading fee revenue, as well as loan origination fees as less capital is available for lending.
“So by asking the banks to refund the dollar deposits to the TSA, the government must understand that the CBN does not domicile dollars and will have to export it to JP Morgan abroad, effectively strengthening those banks and weakening Nigerian banks,” he adds.
The CBN was very quick to impose harsh penalties, yet the central bank completely ignored the dire foreign exchange conditions - which the president himself is partly responsible for - that have forced these 9 banks into a corner. Is this analyst correct to question the motives of the CBN?

Image credit: TheGuardian

Wednesday, August 24, 2016

New AMD Zen Processors to Make BOINC Computing & Gridcoin Mining More Competitive?



AMD recently unveiled some key specs about its new “Zen” processor architecture at the Hot Chips 28 convention. The new Zen “Summit Ridge” desktop processor will feature 8 cores and 16 simultaneous threads, while the “Naples” enterprise server version will sport an impressive 32 cores, with a total of 64 threads of processing power.

AMD officials staged a Blender rendering demo that pitted the 16-threaded Summit Ridge processor against Intel’s 8-core i7-6900k, both processors ran at 3Ghz. The new AMD chip outperformed the i7 by just a second:



The new Zen chips will be about 40% more efficient than previous generations, so 40% more instructions per clock cycle. A massive improvement compared to the FX line of processors. AMD’s current generation of processors have cores that are more akin to modules with a shared floating point core, but the Zen chips have standalone cores, much like Intel’s designs. AMD has stated that the Summit Ridge line will be available to consumers in the first quarter of 2017, with the behemoth 32-core Naples coming out by the middle of 2017.



Will these new Zen CPUs impact Boinc distributed computing and cryptocurrencies like Gridcoin?



Electricity costs are a huge factor in the field of Boinc distributed computing, especially in European countries that have some of the highest power costs in the entire world. Zen’s 40% efficiency boost over previous generations of processors will sound very appealing to the Boinc cruncher paying $100-200 in electricity costs on a monthly basis.

CPU-only Boinc distributed computing projects like Universe@home, LHC@home and Rosetta@home will likely become more competitive as enthusiasts begin to upgrade their hardware.

While AMD has not officially released any TDP specifications for the Zen line, or any estimates on retail pricing, it's very unlikely that the Summit Ridge chips will have a significantly higher power draw than, say, FX-8350 Vishera-based chips. In fact, Digital Trends reports that AMD is aiming for a TDP of 95-100 watts for Zen. Given the whopping 40% hike in performance, many Boinc participants - even diehard Intel fans such as myself - may be tempted to upgrade their power-thirsty, aging rigs with AMD’s new workhorses.

The temptation will be even higher for the thousands of miners on Gridcoin, a blockchain-based digital currency where miners mint coins by computing Boinc scientific work units. The Gridcoin network spits out 48,000 coins/day - about $250 at current exchange rates - with the largest slice of the daily pie going to the miners with the biggest Boinc contributions.

Leave a thoughtful comment on this story, along with your Gridcoin wallet address bellow the comment, and receive a 10 GRC reward.

Important Price Levels on Major Forex Pairs for Aug 24/2016

EUR/USD: 1.13 and 1.1255

GBP/USD: 1.316 and 1.305

USD/CAD: 1.2858 and 1.281

USD/JPY: 100.92

EUR/JPY: 113.25

GBP/JPY: 132 and 130.40

XAU/USD: 1356 and 1333



Did you like this article? Tip Me:

Tuesday, August 23, 2016

New All-Time Highs in LocalBitcoins Volumes in Russia and the United States



Russians have really started to warm up to Bitcoin this year. Charts from Coin.dance show a new all-time high volume on LocalBitcoins for the week ending 2016-08-20: 215,548,659 Roubles ($3,353,277 at the current USD/RUB exchange rate of 64.28) in digital currency trades.

The rising interest in the digital currency has even spurred some LocalBitcoins traders to open physical trading venues in Russia. For example, BTC24pro.com, an established seller on LocalBitcoins, has opened an office in Moscow that allows locals to convert their digital currency to Russian Roubles. According to a SiliconAngle report, BTC24pro charges a 4% premium during regular hours and a 10% premium during off-hours.

While the outfit is not currently registered with any monetary authorities within the Russian Federation, the owners have expressed their willingness to cooperate with regulators if the need arises.

Despite the rise of reputable & licensed digital currency trading platforms in the United States like Coinbase, Kraken and Gemini, LocalBitcoins trading volumes have continued to surge in America as well. Last week, LocalBitcoins turnover in the US came in at $8,099,706 - an new all-time high!


One might assume that the rise of regulated exchanges will render venues such as LocalBitcoins obsolete, but that doesn’t seem to be the case. Many of the established digital currency exchanges like Poloniex, Bitstamp, Gatecoin and ShapeShift have been hacked at least once already, and the addition of the recent Bitfinex hack to the growing roster of compromised exchanges will likely steer even more users to venues like LocalBitcoins and decentralized P2P platform, Bitsquare.

Did you like this article? Tip Me:

Saturday, August 20, 2016

The Impending Global Negative Interest Rate Regime Bodes Well for Bitcoin

Image credit: historyofbitcoin.org


The widely-publicized Bitfinex heist, which is the second biggest Bitcoin exchange hack after MtGox in 2013, may have a short term negative impact on the way general public perceives the novel technology. However, the Bitcoin blockchain - the backbone of the digital currency - was never compromised and the network continues to function without a hitch. The same could not be said for the world’s financial system!

Big brokerage houses like Interactive Brokers have already begun implementing negative interest rates on clients holding EUR, CHF and SEK balances. And negative interest rates have also begun to creep into corporate banking as well. Today, Royal Bank of Scotland announced that starting Monday, corporate clients such as fund managers and pension funds will be charged for holding cash in certain foreign currencies, including the euro. According to a Daily Mail report, RBS stated that negative interest rates may also be applied to small business; that is if the Bank of England decides to cut interest rates into negative territory to stimulate the sagging British economy.

Most of Europe and Japan are already in a negative interest rate regime, with the US and UK very likely to follow suit in the coming months. Consumers have so far been spared the direct sting of negative interest rate as banks have tried to absorb some of the cost by increasing fees on some services, but as the RBS has already demonstrated today, this will not be the case for much longer:
“Until now RBS has absorbed these costs and imposed a zero per cent minimum on deposit rates. But it said this was no longer sustainable.”
It is precisely at this point that digital assets and currencies like Bitcoin will begin to gain serious traction with small businesses and consumers. Bitcoin has a fixed supply and can’t be inflated away at the stroke of a pen. The coming global negative interest rate environment bodes very well for the future of Bitcoin and digital assets outside the legacy financial system.



Bitcoin Price Analysis:

Bitcoin took a big hit in the aftermath of the Bitfinex hack, where close to 1% of all Bitcoin in existence were stolen, but the digital currency has stabilized over the past two weeks. The Bitcoin exchange rate has been hovering around $580 for the past two weeks. In fact, the $580 level has been used as support about three times in August, and once as resistance on the 16th.



Bitcoin broke above $580 today and this pivot zone may start to now act as support and prop-up the market. It seems that another rally towards $600 may materialize over the next few days.

In case $580 doesn’t hold as support and price breaks south again, the $565 area may come into play as support due to its prior history.

Did you like this article? Tip Me:

Friday, August 19, 2016

FXCM Fights Back Against CFTC Charges, Says Firm a 'victim of the SNB Event'


(Image Credit: Bowe King/The Mill Chicago)


The US Commodity Futures Trading Commission hit New York-based Forex broker Forex Capital Markets (FXCM) with a lawsuit yesterday, but FXCM issued a very strongly-worded statement today that disputes the allegations and rejects outright some of the claims the regulatory agency has made.

Jaclyn Sales, Corporate Communications and Investor Relations for FXCM, states that the CFTC is mistaken when it claimed that FXCM did not inform regulators of the capital shortfall in a timely manner.

According to FXCM, the CFTC and the NFA were immediately notified of the massive capital shortfall that resulted from the SNB decision on January 15, 2015:
“Equally unwarranted is the CFTC's claim that the Company did not timely notify the CFTC of its net capital shortfall. As noted above, the regulators were fully apprised of the capital shortfall and, within hours of the SNB Event, the CFTC and the NFA were on site at FXCM's offices.”
Yesterday, the CFTC also charged that FXCM misled clients by leading them to believe that they were protected from incurring negative balances, but FXCM says that is not the case and that the company went out of its way to make sure traders were fully informed of the risks:
“To the contrary, FXCM repeatedly represented to and warned its customers of the significant risks of trading FX and that such trading is appropriate only for individuals who can assume risk of loss in excess of their investment and margin deposit.”
FXCM went on to explain that all clients were required to sign waivers prior to engaging in any currency trades.

As far as FXCM is concerned, the brokerage was a "victim of the SNB Event" and the CFTC has no grounds to file an undercapitalization violation claim in such unprecedented circumstances.

The Disgusting Censorship at reddit.com/r/forex on Full Display



Two days ago I decided to post one of my articles (Alpari UK clients to get 80 cents on the dollar after 19 months of bankruptcy proceedings) to reddit.com/r/forex, thinking it was the appropriate place as it was a subreddit dedicated to Forex trading.

My post was well received and got 14 upvotes and 8 comments. This post remained on the HOT page for close to two days and generated good discussion. Having good results with my article, I decided to make another post with a new article (http://razorsforex.blogspot.com/2016/08/cftc-hits-biggest-us-retail-forex.html), however, my post was immediately flagged as spam and was removed. I decided to contact the moderators regarding the reason for the swift removal.

Moderator reply #1:


So, apparently I was "blog spamming" according to the assessment of this moderator. But if that is really the case, why was my first article allowed to stay on the front page for close to two days? If I am such a bad spammer, why wasn't that first article removed immediately?

Little did I know how foolish I was to pose this exact question to this so-called moderator:


This was the mod's 2nd reply:


I had dared to ask why my first post was left untouched while my second post about the CFTC fining one of the largest Forex brokers in the US, FXCM, was immediately removed. Neither of these two articles had any commercial agenda, it was merely a report on current events in the industry, which apparently the moderator of /r/forex decided was SPAM! The posts were not commercial in nature and were not pushing on the reader any service or product. The only advertisement on my blog is a small 250x250 box in the upper right corner.

This little banner in the corner of my blog was so offensive to this moderator that my second post had to be immediately removed. This moderator was so infuriated by my questioning, he also deleted my first article that had 14 upvotes from the community and was on the front page for close to 2 days. This post is no longer visible on /r/forex after my brief exchange with this power-hungry mod:


The community on /r/forex decided that my content was decent and that it deserved to be seen by others, but this particular moderator did not share their view and decided to censor me, even threatened to permanently blacklist my blog.

I posted this same article on Steemit and earned about $5! Will I be posting on reddit.com/r/forex anymore?? HELL NO!

Image credit: itproportal.com

Thursday, August 18, 2016

CFTC Hits Biggest US Retail Forex Broker FXCM With Lawsuit



Forex Capital Markets LLC, the largest retail Forex broker in the US, was hit with a civil lawsuit today by the CFTC.

The complaint filed by the CFTC alleges that "FXCM had an advertised policy of zeroing out negative customer balances, effectively guaranteeing customers against loss in contravention of CFTC regulations."

CFTC rules forbid Forex brokers to make such claims. FXCM clients took a $200-million hit when the Swiss National Bank decided to abandon its euro peg on January 15, 2015. The New York-based brokerage was forced to seek a rescue loan the following day, which came from Leucadia National Corp.

Forex brokers like Alpari UK were wiped out that day and clients managed to get back about 80% of their funds, with the rest going to legal and bankruptcy administrative fees.

The agency also took issue with the fact that FXCM did not report a critical capital shortfall in the aftermath of the SNB debacle and that regulators found out about the infraction after initiating a formal request:
"The Complaint also alleges that FXCM failed to immediately notify the CFTC when it knew or should have known that its adjusted net capital was less than that required under the applicable CFTC regulation and that it was, therefore, undercapitalized."
According to current regulations, FXCM is required to keep at least $25 million in operating capital, but the firm experienced a much larger shortfall. The regulatory agency is seeking monetary penalties and FXCM has not made any public statements regarding the lawsuit at this time.

Wednesday, August 17, 2016

Alpari UK clients to get 80 cents on the dollar after 19 months of bankruptcy proceedings


Following 19 months of creditor meetings, progress reports and client notices, clients of bankrupt Forex broker Alpari UK will be receiving between 78-80 cents on the dollar. Alpari UK went into receivership due to massive losses incurred when the Swiss Franc jumped 30% on the 15th of January, 2015, as a result of the Swiss National Bank announcing it was no longer going to support the euro peg.

Netherlands-based financial auditing firm KPMG was appointed to manage the bankruptcy process. While KPMG managed to recover most of the client deposits ($98.2 million) - even deposits in held in various online payment services - only about $77 million will come back to clients of Alpari.

According to the latest KPMG report, the auditing company will pocket close to £10.5 million in legal and administrative fees, down from the original £11.89 million estimate that was given prior to negotiations with the Creditors’ Committee:
“As a result of discussions with the Creditors’ Committee, there is a maximum cap on our fees of GBP 10.5 million directly relating to our work as joint special administrators. This figure does not include legal fees, disbursements or VAT.“
The Alpari UK bankruptcy process took close to 2 years and most clients will get about 80% of their assets, with preferential creditors already being paid in full.

Image credit: seputarforex.com

Monday, August 8, 2016

Important Price Levels on Major Forex Pairs for 09/08/2016

EUR/USD:

Market now trading between two major pivots: 1.11 & 1.105!

GBP/USD:

The range between 1.309-1.31 is a huge pivot area. This level is now acting as resistance.

USD/CAD:

Market now trading between 1.3185 on the top end, and 1.3135 on the lower end. Look for a break of either of these level for future direction.

USD/JPY:

Mark 101.58 and 102.70 on your charts; these area have been used as support/resistance multiple times.

AUD/USD:

The 30-minute chart shows that 0.7625 has been respected a number of times over the past four trading days.

EUR/JPY:

The Eur/Jpy is also trading between two important pivot levels: 113 & 113.62!!

GBP/JPY:

Last week, the market plunged under 134; this area is now acting as resistance. You might also wanna keep an eye on the 135.16 area in case 134 is broken this week.

NZD/USD:

The Nzd/Usd has been moving between major pivot zones since July. Mark 0.707, 0.7145 and 0.7225 on your charts, and look for interesting candle patterns around these pivot level - that's where the good trades happen!

XAU/USD:

The 1346 area was broken last week, so this pivot may now act as resistance. The 1331 area is now acting as support as well; just as it did at the end of July.


Did you like this article? Tip Me:

Monday, August 1, 2016

Russia, Venezuela and Thailand See Record Highs in Bitcoin Trading


Russia:

Despite the ongoing uncertainty regarding digital currency legislation in the Russian Federation, the volume of bitcoin trades in the country hit an all-time high last week. A total of 193,450,980 Roubles of trades took place on LocalBitcoins in Russia, according to charts provided by Coin.dance, which tracks LocalBitcoins activity in multiple countries.
Last month, deputy finance minister Alexei Moiseev told state-owned new outlet Rossiyskaya Gazeta that Russian citizens may be allowed to use bitcoin as a foreign currency for transactions that take place outside the country. LocalBitcoins volumes in Russia have been rapidly rising since the beginning of 2016, even in the face of multiple bills proposing the outright ban of the digital currency in the country, so it’s difficult to tell of Moiseev’s comments last month have had any tangible impact on Russian investor confidence in bitcoin. Declining oil prices do not bode well for the Russian economy or currency. An alternative asset like bitcoin, which is beyond the iron grip of the Kremlin oligarchy, may explain the rising tide of interest in bitcoin coming out of Russia.

Thailand:

It’s common to see heightened interest in bitcoin inside developing countries when the price of the digital currency is in an upswing and the financial press is pumping out daily articles. But it is rare to see spikes in LocalBitcoins trading volumes when the price of the digital currency is declining, and that is precisely what last week’s all-time high reading shows: 10,552,220 Thai Baht worth of trades.

Venezuela:

The economic situation in Venezuela is getting worse by the week and the desperate citizenry has resorted to butchering zoo animals for meat, according to a report by Inquisitr. The hyperinflation in Venezuela is now close to 700 percent and plunging oil prices aren’t helping either. Internet censorship in Venezuela has been taken to a whole new level by Maduro’s administration. As the PanAmPost reports, 372 portals and 43 domains have been blocked by Venezuelan ISPs:
“Of those, 44 percent are web pages related to black market dollars. An additional 19 percent of the pages are news media and an additional 12 percent feature blogs critical of Nicol├ís Maduro’s administration.”
The country is now close to total collapse and LocalBitcoins volume in Venezuela hit another all-time high in the last week of July, surging to 117,116,539 Bolivars:
The big question in Venezuela is: Will the Maduro administration start blocking access to bitcoin-related domains like LocalBitcoins.com in the near future?

Wednesday, July 27, 2016

Bitcoin Trading Spikes in Malaysia as the Ringgit Takes a Hit

Image credit: 1


Bitcoin’s popularity seems to be rising in Kenya, Malaysia, Russia and Venezuela - at least according to trading data coming out of LocalBitcoins.

Two weeks ago, bitcoin trading on LocalBitcoins in Kenya reached at all-time high of 10,576,927 Ksh, however, for the week ending 2016-07-23, bitcoin trading volumes in the country totaled 10,239,393 Kenyan Shillings - second best week since 2013.
LocalBitcoins volume data coming out of Russia for the week ending 2016-07-23 also showed the second-highest figure at 185,250,939 Roubles.
The biggest surprise this week came out of Malaysia, where bitcoin trading is off the charts. LocalBitcoins volumes for the past week showed a new all-time high of 737,218 Malaysian Ringgits worth of bitcoin turnover in the country.
So, one might pose this question: why is bitcoin so hot in Malaysia?
For starters, the ringgit has been on a losing streak since the US authorities announced a major money laundering and embezzlement investigation into state-owned 1Malaysia Development Bhd, which allegedly laundered about $1 billion of the misappropriated funds through banks in the U.S. The Malaysian ringgit dropped about 2.7% last week - the biggest drop since September - due to the negative press surrounding the international investigation, TheMalayOnline reports. Low oil prices are also having a negative impact on the outlook of the Malaysian economy and currency, as Malaysia is Asia’s only major net oil exporting nation.

It really isn’t surprising that bitcoin is increasingly seen as a safe-haven asset. A similar pattern was also observed in Norway. In the aftermath of the Brexit vote, the Norwegian krone took a massive hit and LocalBitcoins volume in Norway spiked immediately:
Like Kenya and Russia, bitcoin trading in Venezuela is thriving. Another all-time high was recorded for the week ending 2016-07-23:


Charts source: Coin.dance