FED warns of currency volatility

[Martinghoul]

Central banks have always talked about the undesirability of excessive swings in exchange rates. They'll continue to do so going fwd. Trichet mentions exchange rate volatility almost every single time he opens his mouth.

This has nothing whatsoever to do with the concept of leverage and even less with leverage of retail FX punters.

 

[Ivanovich]

Honestly, I cannot - for the life of me - understand why limiting margin to 100:1 is a bad thing.

 

[Devin Brady]

Quote from Ivanovich:

Honestly, I cannot - for the life of me - understand why limiting margin to 100:1 is a bad thing.

Why does the government need to meddle in any of this. It is amazing how hard it is to get an account open, yet I could blow millions in Vegas without them even asking my name.

 

[peilthetraveler]

Quote from Ivanovich:

Honestly, I cannot - for the life of me - understand why limiting margin to 100:1 is a bad thing.

Its not like people do 100:1 in one currency though. 100:1 lets people speculate in multiple currencies.

 

[marketwizards]

there could be no leverage to 'anyone'. The FED central banks own the interbanks.

trading forex or speculating on forex with no leverage...everybody would leave the forex market.

Quote from Martinghoul:

Central banks have always talked about the undesirability of excessive swings in exchange rates. They'll continue to do so going fwd. Trichet mentions exchange rate volatility almost every single time he opens his mouth.

This has nothing whatsoever to do with the concept of leverage and even less with leverage of retail FX punters.

 

[Martinghoul]

Quote from Devin Brady:

Why does the government need to meddle in any of this. It is amazing how hard it is to get an account open, yet I could blow millions in Vegas without them even asking my name.

Hmmmm, wasn't this sorta reasoning behind the deregulation of the banking industry?

I am sorta with Ivan here... Isn't "leverage is bad" supposed to be the main lesson that came out of the crisis? Or is there such a thing as "good" leverage (retail FX) and "bad" leverage (banks, housing mkt, consumer debt)?

 

[Martinghoul]

Quote from marketwizards:

there could be no leverage to 'anyone'. The FED central banks own the interbanks.

trading forex or speculating on forex with no leverage...everybody would leave the forex market.

Nooooo! Say it ain't so!!! The "interbanks", owned by the FED!!!! Who woulda thunk it?

And then everybody "would leave the forex market"? NOOOOOOOO!!!!!!! Surely, someone will stick around? We can't have the forex mkt all empty-like!

 

[marketwizards]

Do you know how 'regulated' the Casinos are in Canada?

The markets are not a Casino. if it was it would be heavily regulated. Casinos have to pay minimum percentage of revenues to Gov't and donate to charity.

What happened in the subprime and Banking crisis of the US in 2002-2008 was deregulation gone bad. Too much leverage and risk by the banks. etc.




"Why does the government need to meddle in any of this. It is amazing how hard it is to get an account open, yet I could blow millions in Vegas without them even asking my name. "

 

[Devin Brady]

Quote from Martinghoul:

Hmmmm, wasn't this sorta reasoning behind the deregulation of the banking industry?

I am sorta with Ivan here... Isn't "leverage is bad" supposed to be the main lesson that came out of the crisis? Or is there such a thing as "good" leverage (retail FX) and "bad" leverage (banks, housing mkt, consumer debt)?

I understand having rules that protect our economy from systemic risk, but this road to socialism and having big brother intervene wherever they chose is frighting.

Deregulation of the banking industry was only a small part of our banking/real estate collapse.

Government knee jerk reactions usually turn into a debacle---Sarbanes Oxley

 

[Ivanovich]

Quote from Martinghoul:

Hmmmm, wasn't this sorta reasoning behind the deregulation of the banking industry?

I am sorta with Ivan here... Isn't "leverage is bad" supposed to be the main lesson that came out of the crisis? Or is there such a thing as "good" leverage (retail FX) and "bad" leverage (banks, housing mkt, consumer debt)?

I was going to reply, but Martinghoul said it for me.